Sitting of 12 November 1964

Preamble
The House met at half-past
Two o'clock

PRAYERS
[Mr. SPEAKER in the Chair]

MESSAGE FROM THE QUEEN
The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:
I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I opened the present Session of Parliament.

ORAL ANSWERS TO QUESTIONS
  EDUCATION AND SCIENCE

    Married Women Teachers
    Mr. Wingfield Digbyasked the Secretary of State for Education and Science whether he is aware that, despite the shortage of teachers, the services of married women who are qualified teachers are being refused in certain areas; and what steps he proposes to take to make use of these offers.
    The Secretary of State for Education and Science (Mr. Michael Stewart): I am sure that local education authorities will do their best to offer employment to as many qualified married women teachers as they can. But I realise that the shortage is not uniformly spread, and there may not always be a suitable post for every applicant within convenient travelling distance, especially in country areas. My Department can best promote the return of married women teachers to the schools by publicity of the kind which it arranged earlier this year to support the efforts of the local education authorities.
    Mr. Digby: While recognising that there are difficulties here, may I ask
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    whether the right hon. Gentleman will do all he can to look at this question again? In view of the importance of the problem of teacher shortage in schools, this seems to be an awful waste.
    Mr. Stewart: Certainly, Sir.
    Mr. van Straubenzee: Would the Minister bear in mind that one of the ways in which this might be assisted would be by greater provision of nursery classes for those specifically returning to teaching, as has recently been pioneered in Berkshire? Would the right hon. Gentleman encourage that from his Ministry?
    Mr. Stewart: I will certainly look at it

    Further Education (Science)
    Mr. Hector Hughesasked the Secretary of State for Education and Science if he will state his plans for further education in science in schools under his authority.
    The Minister of State, Department of Education and Science (Mr. R. E. Prentice): Responsibility for the curriculum rests with the schools themselves and with the local education authorities. My Department is already promoting research into methods of teaching science in schools and will continue to cooperate with the new Schools Council and other agencies in this task. They will also continue to encourage local education authorities to place special emphasis, in compiling their building programmes, on the provision of science facilities.
    Mr. Hughes: While thanking my right hon. Friend for that reply, may I ask whether he realises that in this scientific age it is of the utmost importance to give every encouragement to teachers and to provide all possible amenities for them in their noble profession?
    Mr. Prentice: Yes, Sir. We are very much aware of that. This is part of the problem of recruiting teachers generally, but special attention is being given to recruiting science teachers and we are undertaking a recruiting campaign among undergraduates to persuade them, particularly in the science faculties, to make teaching their career.

    Secondary Education, Bristol
    Mr. Hopkinsasked the Secretary of State for Education and Science if he has received the proposals of the Bristol City Council for secondary education; and if he intends to approve them.
    Mr. M. Stewart: Yes, and I have discussed them with representatives of the Education Committee. I hope to let them know my considered views shortly.
    Mr. Hopkins: I thank the right hon. Gentleman for that reply. Is he aware that the proposals have engendered widespread opposition in Bristol from parents and teachers alike? Is he further aware that on educational grounds there are serious objections to the plan? May I ask whether in his view the plan will involve the closure of any grammar schools and whether he will not accept the plan on that aspect?
    Mr. Stewart: I am aware that there are differences of opinion on this matter. Before making the statement either my right hon. Friend the Minister of State or myself would be willing, if we were asked, to hear the representations of those who take a contrary view to that of the City Council. The question of actual closure of grammar schools does not at present arise.
    Mr. Palmer: Will my right hon. Friend avoid being misled by the political prejudice which has been injected into this matter and treat this excellent plan of the Bristol City Council strictly on its educational merits?
    Mr. Stewart: I shall consider the whole question on its merits, and I am sure that my hon. Friend will agree that I should be right to hear as many expressions of opinion as there are before making a decision.
    Mr. Hogg: Will the right hon. Gentleman realise that there is a genuine procedural difficulty here? I fully understand his own position in the matter, but is not the difficulty that he has to keep himself very much, as it were, sub judice until he has formed his decision and afterwards it is too late for the House to intervene? Will he consider making a general statement of the principles upon
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    which he wishes to act in these cases, of which there will be quite a number, in order that the House may participate with him in the formation of policy?
    Mr. Stewart: I think that a general statement will be needed, but I could not undertake to delay a decision in Bristol until I had made a general statement.
    Mr. Geoffrey Lloyd: Does the right hon. Gentleman recall the authoritative and non-dogmatic approach made by the Crowther Committee, which, considering the position where a comprehensive school could be established only at the cost of damaging a good existing school, came to the firm conclusion that we cannot afford to lose any good existing schools? Will the Minister be guided by this non-dogmatic and good principle?
    Mr. Stewart: When the right hon. Gentleman uses the expression "damaging an existing school", he is really begging the whole question. One of the points in argument is whether a desirable reorganisation can be carried out without damage.
    Mr. Robert Cookeasked the Secretary of State for Education and Science what effect the proposals of the Bristol City Council for secondary education will have on the future of the maintained grammar schools and the direct grant schools in the city.
    Mr. M. Stewart: The Bristol proposals represent a further stage in the development of a maintained system of secondary education in which there is no element of selection. The plan provides that, for the time being, five of the seven maintained grammar schools should continue, namely those in North and South Central Bristol, but they will draw their pupils from the areas in which they are situated and not from the whole city. The two grammar schools in East Bristol will become senior schools in a two-tier system, recruiting pupils at 13 instead of at 11 and exclusively from the East Bristol area. The Bristol Authority will cease to pay the fees of any pupils at the direct grant schools. These schools must, under the Regulations, offer at least one-quarter of their places free to pupils who have spent two years in a maintained primary school whether in Bristol or elsewhere.
    Mr. Cooke: Does not the Minister realise that this plan involves the eventual disappearance of both the direct grant and the maintained grammar school, that, as it stands now, it considerably restricts the choice of parents, and especially that the position of the church schools, Catholic schools in particular, is not safeguarded? With reference to what the Minister said about no closures being involved, is it not plain that, in the long term, Cotham Grammar School in my constituency, which is now a three-form entry boys' grammar school, is to become a six-form entry mixed comprehensive school? If that is not a closure under the guise of reorganisation, what is it?
    Mr. Stewart: It is quite well known from the terms of the Act what closure is, and what I said earlier was that, at present, it does not arise. If, at some future time, Bristol or any other authority appoaches me with proposals which involve the closure of a school, I shall then have to observe the provisions of the Act and consider it in that light. As to the rest of what the hon. Gentleman said, I take note of his views, as I have taken note of the views of many people on this matter, but I do not think that it would be suitable yet for me to make a final comment.
    Mr. Wilkins: Will my right hon. Friend bear in mind that parental choice is a figment of the imagination and that I myself was a victim of this system 50 years ago, as were two of my children recently, and will he bear in mind also that we would, in those days, have welcomed the scheme which the Labour Party is now proposing for Bristol schools?
    Mr. Stewart: I am well aware of what my hon. Friend says.
    Mr. Hogg: Will not the right hon. Gentleman concede that, so far from being a figment of the imagination, an element of parental choice is written into Section 76 of the 1944 Act? In relation to the Bristol scheme, what is the size of the new units proposed and in how many cases is involved the amalgamation of two existing schools some distance apart under a single head teacher?
    Mr. Stewart: I gave a description in my first Answer of what is proposed for the future of the grammar schools. As regards parental choice, the right hon. and learned Gentleman will have heard the views of both his hon. Friend the Member for Bristol, West (Mr. Robert Cooke) and my hon. Friend the Member for Bristol, South (Mr. Wilkins). One accepts, of course, the importance of parental choice, but under the selective system that choice is not absolute. A child cannot go to a grammar school merely because its parents wish it to do so. The application of the principle of parental choice is more complicated than the right hon. and learned Gentleman realises.

    Educational and Recreational Facilties, Redditch
    Mr. Danceasked the Secretary of State for Education and Science what progress is being made in discussions to ensure that adequate educational and recreational facilities are provided in Redditch to keep pace with its expansion as a new town.
    The Joint Under-Secretary of State for Education and Science (Mr. Denis Howell): Work is about to start on the plan for the town. The Development Corporation and its planning consultants will shortly be arranging discussions with the local authorities concerned. The importance of educational and recreational provision is appreciated.
    Mr. Dance: I thank the hon. Gentleman for that reply, but will he bear in mind that there is a tendency in new towns for there to be a high proportion of young married people which creates a higher proportionate demand for school places than is found in ordinary towns?
    Mr. Howell: That is a consideration which will not be lost upon us.

    Louth
    Sir C. Osborneasked the Secretary of State for Education and Science how soon he expects to make a decision on the Louth plan; and if he will make a statement.
    Mr. Prentice: My right hon. Friend approved the Lincolnshire Lindsey authority's proposals for Louth on 9th November.
    Sir C. Osborne: First, will the right hon. Gentleman accept my thanks for giving a quick decision in this matter and taking away the uncertainty? But is it not rather discourteous to answer a Parliamentary Question like this in a local newspaper 24 hours before it is answered in the House? I learned the answer to this Question from the local newspaper 24 hours ago, and it seems astonishing that an answer should be given in that way 24 hours before the Question is asked in the House.
    Mr. Prentice: The newspaper report to which the hon. Gentleman refers was not an answer to a Parliamentary Question. It reported the fact that the Department had answered the local education authority which, months ago, had asked for a decision. The decision was conveyed to it on 9th November. The education authority had been waiting a very long time. It is surprising that the last Government delayed a reply for so long, and we had an obligation to the authority to let it know as quickly as possible. We had to act with reasonable speed, which we did.
    Sir C. Osborne: Since this was a Question put down for Oral Answer, is it not a gross discourtesy to the House, even with the best interpretation the Minister puts upon it, to have the Answer published 24 hours earlier in a local newspaper?
    Mr. Prentice: The hon. Gentleman is making a fuss about nothing. He will recall that he himself wrote to the previous Minister complaining about the delay and urging that a reply be sent as quickly as possible.
    Mr. Hogg: Does the Minister realise that part of the reason for the delay was precisely that certain questions of principle were involved and it was then thought, rightly, that the Minister who would be responsible in the new Parliament ought to be the one to take the decision?
    Mr. Prentice: Nevertheless, the local education authority has been faced with certain serious problems because of the delay. I take this opportunity to point out that this is a scheme involving progress towards the comprehensive system which seems to have had almost unanimous support in the area, including, I
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    believe, the support of the hon. Member for Louth (Sir C. Osborne), who in this matter is showing a more enlightened attitude than some of his hon. Friends.

    School Buildings, London
    Mr. Liptonasked the Secretary of State for Education and Science how many schools in the London County Council area are housed in buildings more than 80 years old.
    Mr. M. Stewart: I am informed by the L.C.C. that 259 maintained primary and secondary schools or departments in their area are housed in buildings more than 80 years old, but that many of them have been extended or renovated in recent times.
    Mr. Lipton: Is my right hon. Friend aware that far too many children going to some of the schools are being educated in slum conditions? Will he at least give an undertaking not to follow in the footsteps of his unlamented predecessor who savagely cut the L.C.C. schools rebuilding programme?
    Mr. Stewart: I am very well aware of this. This situation is, unfortunately, not confined to London. It will certainly be the hope of the present Government to make better progress with the whole problem.
    Mr. Chataway: When will the right hon. Gentleman be announcing the increased school building programme for 1965–68 to which the Labour Party is committed, particularly by the Minister for Land and Natural Resources at Question Time on 7th May?
    Mr. Stewart: Announcements about this and related matters will be made in due course.

    Science Graduates, Scotland
    Mr. Dempseyasked the Secretary of State for Education and Science what steps he proposes to take to stop the drift of science graduates from Scotland; and if he will make a statement.
    The Joint Under-Secretary of State for Education and Science (Mr. James Boyden): I share my hon. Friend's concern about this matter. Opportunities for employment of science graduates in Scotland are increasing. Scottish universities expect to employ 40 per cent. more

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    in 1965 than in 1962. There are increasing opportunities in Scottish schools and further education centres, for which my right hon. Friend the Secretary of State for Scotland is responsible. There will also be a number of vacancies in the many Government research stations in Scotland.
    Mr. Dempsey: Will my hon. Friend bear in mind that recent reports indicate that two out of every three science graduates are compelled to drift from Scotland in search of employment prospects? Will he do his utmost to expand the opportunity for young graduates to be retained in Scotland for the benefit of the Scottish economy in general?
    Mr. Boyden: The responsibilities of this Department are confined to a very small number of graduates. The main answer to the problem is the economic development of Scotland, which the Government have fully under consideration, and the growth of which they are actively stimulating. I can assure my hon. Friend that we are well aware of the problem and take an interest in it.
    Sir Rolf Dudley Williams: Does not the hon. Gentleman realise that it is not so much the movement of science graduates from Scotland that matters but the flood of graduates who will be moving from this country to the United States if the Concord project is dropped?
    Mr. Boyden: That is another question.

    Teachers, Cornwall
    Mr. Scott-Hopkinsasked the Secretary of State for Education and Science to what level he proposes raising the number of teachers in Cornwall.
    Mr. Prentice: Cornwall, whose staffing standards are already better than the national average, may expect to receive its fair share of the increasing output of teachers from the universities and training colleges.
    Mr. Scott-Hopkins: Will the hon. Gentleman bear in mind that, although the ratios are better than 19 to 1 in secondary schools and 28 to 1 in primary schools, there is an urgent need in country areas to have increased numbers, and surely he will bear in mind what was said in the Gracious Speech and ensure that rural areas get their fair share?
    Mr. Prentice: We have in mind all the things said in the Gracious Speech. The shortage of teachers throughout the country was one of the problems which we inherited from the ex-Government and we are taking steps to deal with it. The fact remains that the problem in Cornwall is a little less severe than in other rural areas.
    Sir E. Boyle: In view of what the hon. Gentleman has just said, is it not correct that the student population in training colleges this autumn is nearly 14,000 above what it was two years ago and that we are nearly 3,000 ahead of the Robbins' target for this year?
    Mr. Prentice: Yes, Sir; there has been some improvement in very recent years, but the overall performance of the last 13 years has not matched up to the need, and the country is still 54,000 teachers short measured against the maximum size of classes laid down in the 1944 Act.

    Educationally Sub-normal Children
    Mr. Scott-Hopkinsasked the Secretary of State for Education and Science whether he will make a statement concerning the development of facilities for the educationally sub-normal, with particular reference to increased facilities in Cornwall.
    Mr. Prentice: In January, 1964, there were 40,600 educationally sub-normal children in special schools in England and Wales, and the number of special school places for these children is increasing at the rate of over 2,000 each year. The Cornwall local education authority has not made any proposal for additional special school provision, but has established 12 special classes in ordinary schools and intends to develop further this type of provision.
    Mr. Scott-Hopkins: Will the hon. Gentleman bear in mind the special need of areas such as Cornwall for increased facilities for backward children, and will he also look into the scale of remuneration of teachers who are specially qualified for this very important work?
    Mr. Prentice: Yes, Sir; we will bear all these problems in mind. I should point out that the Cornwall development plan includes three special schools for children of this kind but the proposals

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    in recent years have not included these for immediate consideration. If the authority puts up a proposal for the 1967–68 building programme, we will give it careful consideration.
    Lord Balniel: Would not the hon. Gentleman agree that the success of the special schools and the junior training schools depends in large measure on the willingness of local authorities to meet the costs of transporting and escorting these mentally handicapped children to the schools, and will he initiate an inquiry to ascertain to what extent local authorities are meeting the costs of transport and escorts?
    Mr. Prentice: There is a later Question on the Order Paper dealing with the whole problem of transport to schools. Certainly in regard to these special types of schools, I would take the view—I am sure that my right hon. Friend would, too—that local education authorities ought to be specially considerate of the needs of children at these schools.

    Fishing Boats, Moray Firth (Timber)
    Mr. Gordon Campbellasked the Secretary of State for Education and Science if the cause of the outbreak of rot in the timber of inshore fishing boats in the Moray Firth has yet been identified; and if he will make a statement.
    Mr. Boyden: Yes. The rot is caused by several fungi, the chief of which is coniophora Cerebella (the cellar fungus), a common cause of decay of timber in boats. It is expected that the problem can be solved by modifications in boat design, and by making use of existing knowledge of wood preservatives and their application.
    Mr. Campbell: Is the hon. Gentleman aware that the matter is one of anxiety for the fishermen concerned, especially because of the heavy cost of repairs, and that the Scottish Inshore Fishermen's Association last week asked whether the Secretary of State would meet a deputation to discuss it?
    Mr. Boyden: Yes, Sir; I am aware of that. This is a matter for my right hon. Friend the Secretary of State for Scotland. The Question relates to the scienti-
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    fic causes of the disease. These are being actively investigated and a solution to the problem is well in sight.

    Children (School Transport)
    Mr. Clive Bossomasked the Secretary of State for Education and Science if he will review the present statutory distance of three miles for transporting children to school with special regard to making the distances more flexible in certain rural areas.
    Mr. Prentice: The present arrangements give local education authorities power to make special provision if they consider that local conditions justify it.
    Mr. Bossom: Will the hon. Gentleman have a county by county survey carried out to see whether the arrangement can be made much more flexible, as was mentioned a minute ago, and could he ascertain whether the distances could be reduced to two miles and one mile? Is he aware that this has the backing of members of both the N.F.U. and the C.L.A., who are most worried about the situation at the moment because of the dangerous state of the roads in rural areas, which have no sidewalks, and also because of the drift of population from the countryside, which is partly due to this problem?
    Mr. Prentice: I will bear in mind the suggestion about a survey, but I am sure the hon. Gentleman will recognise that the growing danger on the roads presents a problem which will not necessarily be solved simply by altering the statutory minimum distance involved. This is surely a matter which local education authorities ought urgently to be considering in relation to each school to ascertain whether danger in its vicinity demands of them any special measures on behalf of the children concerned.
    Mr. Scott-Hopkins: Will the hon. Gentleman bear in mind that in rural areas there are other problems, especially where there is a heavy tourist industry in the summer months, and that there will be a need for the Government to help local education authorities to meet the increased costs involved?
    Mr. Prentice: We will bear that in mind. I would point out that this is another example of the general proposition that I made to the House, that local

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    problems vary so much that the right balance seems to be for a statutory minimum to be laid down with a discretionary power in the hands of each local education authority to go beyond that if local conditions make it necessary.
    Mr. Paget: Will my hon. Friend bear in mind that this is not only a rural problem and that with new estates going up on the borders of some towns the journey to school becomes very dangerous in town areas and that something will have to be done about it?
    Mr. Prentice: I will bear that in mind also, but I would point out that a blanket decision about a statutory minimum covering the whole country will not necessarily solve all the local problems which have to be looked at separately by the local education authorities.

    Grammar Schools
    Mr. Hornbyasked the Secretary of State for Education and Science whether it is his policy to preserve the grammar schools.
    Sir W. Bromley-Davenportasked the Secretary of State for Education and Science what is the policy of Her Majesty's Government towards grammar schools.
    Mr. M. Stewart: It is the Government's policy to reorganise secondary education on comprehensive lines. The method and timing of reorganisation must vary from one area to another. In general, entry to grammar schools will no longer be restricted to certain selected children at the age of 11 plus and the range of studies in these schools will be widened. One aim of this policy is that what we all value in grammar school education shall be preserved for those children who now receive it and made available to more children.
    Mr. Hornby: Is the right hon. Gentleman aware that statements that have been made both by himself and his colleagues and by certain Labour controlled councils have given cause for considerable anxiety amongst many local education authorities? Will he assure these authorities that there will be no wholesale destruction of existing good schools and no undue interference in the indepen-
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    dence of local education authorities who have well conducted the education affairs of their own areas?
    Mr. Stewart: Yes. But what I notice is that, all over the country, local education authorities of many different political complexions are proceeding, or are anxious to proceed, with the reorganisation of secondary education. This creates a situation in which it will become necessary for some general statement of principles to be made, and that I shall hope to make on a later occasion.
    Sir W. Bromley-Davenport: Is the right hon. Gentleman aware that there is the very greatest anxiety through all sections of the community that "hate" legislation will be passed to abolish the grammar schools? Since the Prime Minister has said that grammar schools would only be abolished over his dead body, what happens, in that event, to the one-man band?
    Mr. Stewart: I congratulate the hon. and gallant Gentleman on the care and thought that he has evidently given to his supplementary question. If he will study the terms of my main Answer, he will see that he need have no anxiety about the Prime Minister. With regard to the hon. and gallant Gentleman's reference to widespread anxiety, I think that that anxiety might be lessened if some of the critics of the Government's policy made a more careful study of what the Government's policy is.
    Mr. Hogg: Is the right hon. Gentleman not aware that the disquiet felt by many people at the prospect of the destruction of good existing schools is not altogether allayed by his promise that what is best in existing schools will be sought to be retained? In view of the Prime Minister's statement, to which my hon. and gallant Friend the Member for Knutsford (Sir W. Bromley-Davenport) referred, will the right hon. Gentleman make himself a little plainer in order to avoid an embarrassing choice as to the fate of the Prime Minister?
    Mr. Stewart: The use of the word "destruction" by the right hon. and learned Gentleman does not help the problem. One of the reasons that grammar schools have continued for so long is that they have shown themselves over the centuries to be capable of adaptation and change

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    to meet the new needs of the nation. I think that that process has to continue.
    I do not say that this can be done without anxieties and heart searchings among many people. I was myself a sixth form master in a grammar school and I know well how some people who have served these schools very well indeed must naturally feel. But we must ask them to consider the education needs of the nation as a whole and if we approach them reasonably I think we shall get a reasonable answer.
    Mr. Merlyn Rees: Is my right hon. Friend aware that those of us on this side of the House who attended State grammar schools, who worked in them for many years and who would like our children to go to them, do not accept that the application of the comprehensive principle, in different ways in different parts of the country, will destroy grammar school education but that it will provide it to a larger number of children over a wider ability range, as is already done in the comprehensive public schools?

    Secondary Education (Reorganisation)
    Mr. Hornbyasked the Secretary of State for Education and Science what representations he has received from the National Union of Teachers concerning the reorganisation of secondary education in Bristol and other areas; and whether he will make a statement.
    Mr. M. Stewart: I have received no representations from the National Union of Teachers on secondary reorganisation proposals in Bristol or any other specific areas. I have been sent a copy of a memorandum prepared jointly by the National Union of Teachers and the Joint Four secondary teachers associations on reorganisation of secondary education generally. I have asked my Department to arrange an early discussion of the memorandum with the associations concerned.
    Mr. Hornby: Does not the right hon. Gentleman agree that some of the best teaching in schools all over the country is done in the sixth forms of grammar schools—perhaps one day by himself, in view of his reply to a previous supplementary question? Would it not be
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    damaging to give discouragement, through his policy, to some of those doing this teaching? Will he ensure that their views are given every possible consideration?
    Mr. Stewart: It would be invidious of me to say in what schools or forms the best teaching is given. Excellent teaching is to be found in schools of all kinds. If a genuine effort is made all round to realise the need for secondary reorganisation, we should have no undue anxiety anywhere.
    Mr. Hogg: In view of the anxiety that has been expressed, will the right hon. Gentleman expedite his general statement? Can he indicate when we may expect it?
    Mr. Stewart: I will get on with it as soon as possible. I would rather not state a precise date at this stage.
    Mr. Palmerasked the Secretary of State for Education and Science how many education authorities have either changed or are proposing to change their secondary education system from a substantially tripartite to a substantially comprehensive basis; and whether he will make a list of such authorities available to hon. Members together with relevant particulars.
    Mr. M. Stewart: In January of this year there were 189 comprehensive schools in England and Wales and 39 local education authorities had some secondary school provision of a comprehensive type. A large number of authorities are considering secondary school reorganisation and several are planning to introduce comprehensive schemes in the next two years; but the situation is one of constant development and I cannot say exactly how many plans for comprehensive schools have taken definite shape. It would not therefore be practicable to provide a list of the kind envisaged by the hon. Member.
    Mr. Palmer: Would my right hon. Friend agree that an increasing number of education authorities are moving from the tripartite to the comprehensive system and that they show a great variety of political colour?
    Mr. Stewart: That is certainly so and that is one of the reasons, as my hon.

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    Friend will understand, why it would be difficult to provide the list for which he asks.
    Mr. Robert Cooke: Will the right hon. Gentleman acquaint his hon. Friend with the very special nature of the Bristol problem, as his hon. Friend has a very limited knowledge of the City of Bristol and as many people who have spent a lifetime there and who have represented it for a very long time realise that there is very grave anxiety in the city?
    Mr. Stewart: I do not think that my hon. Friend said anything to suggest that he was not aware of the Bristol problem, but if the hon. Member wishes to tell my hon. Friend something about it, no doubt my hon. Friend, who is always very courteous, would be happy to listen.

    Stirling (University Site)
    Mr. Russell Johnstonasked the Secretary of State for Education and Science whether he will make public the reasons why the University Grants Committee chose Stirling as the site for the sixth Scottish university.
    Mr. M. Stewart: The detailed terms in which the University Grants Committee advises the Government are confidential, but the general factors on which the advice in this case was based are set out in paragraphs 276–287 of its quinquennial report—University Development 1957–1962 (Cmnd. 2267).
    Mr. Johnston: Is not the right hon. Gentleman aware that the decision has caused much anxiety to those of us concerned with regional development, in that all the university centres in Scotland, bar Aberdeen, are now in the central area? Many of us saw the establishment of a university in the Highlands as an invaluable complement to the creation of a Highland development board which would assist in the work of the board.
    Mr. Stewart: I appreciate what the hon. Gentleman has said but, as I think he will know, seven possible sites were considered for the sixth university. The New Universities Sub-Committee of the University Grants Committee visited sites and discussed the matter with local sponsoring bodies, the Scottish Education Department and the Scottish Development
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    Department. I believe that, in the end, the criteria used for making the decision were sound.

    Technological Education, Liverpool
    Mr. Hefferasked the Secretary of State for Education and Science what consideration he has given to the establishment of a second university in the Liverpool area which would be a technological university, following his predecessor's discussions on the subject.
    Mr. M. Stewart: The University Grants Committee and the Advisory Council on Scientific Policy have submitted their advice on the whole question of the development of technological education, and I am giving this urgent consideration.
    Mr. Heffer: When this matter is considered, will my right hon. Friend take into account the fact that Manchester, Glasgow and Birmingham have had the advantage of having colleges of advanced technology while there has not been one on Merseyside?
    Mr. Stewart: Certainly, Sir.
    Sir E. Boyle: How soon does the right hon. Gentleman expect to be able to make a statement, or some announcement, on the whole subject?
    Mr. Stewart: I do not think that I can give an exact date, but I shall try not to delay it more than is unavoidable.

    Teachers
    Mr. Sorensenasked the Secretary of State for Education and Science what further steps are to be taken to ensure a substantial increase in the training of teachers; and what is the estimated shortage of teachers in each type of state school.
    Mr. Prentice: My right hon. Friend is studying both long-term measures to increase the supply of teachers and more immediate ways of improving the staffing of the schools. I understand that the National Advisory Council on the Training and Supply of Teachers hopes to submit a report to him soon. He estimates that 17,000 more teachers would now be needed in the primary schools and 37,000 in the secondary

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    schools in order to bring all classes within the maximum sizes prescribed by his Regulations.
    Mr. Sorensen: Does my hon. Friend appreciate that there are teachers who have temporarily retired from the profession, being mothers, who would be pleased to come back and assist in primary schools if only there were facilities for looking after their children when they were teaching?
    Mr. Prentice: Yes, Sir. In my Answer I said that we were studying both the long-term problem, which is particularly a question of teacher training facilities, and more immediate ways of improving the staffing of the schools, under which heading the point made by my hon. Friend will be considered.

    Comparative Religion
    Mr. Sorensenasked the Secretary of State for Education and Science what steps he proposes to take to encourage pupils in the higher classes and forms in State schools to appreciate the main tenets of all world religions as one means of promoting international respect and understanding; and what reports he has received to indicate how many schools arrange courses in comparative religion.
    Mr. Prentice: The curriculum to be followed in maintained schools is primarily a matter for the schools themselves and for the local education authorities. Many secondary schools, possibly the majority, include some study of comparative religion in their sixth form non-specialist courses, and history, geography, and religious instruction also often include some study of world religions.
    Mr. Sorensen: Would not my hon. Friend agree that it is highly desirable to promote a greater understanding of other religions than those predominant in this country, and that although some secondary schools are doing what is suggested in the Question, many are not? In those circumstances, can he do anything to commend this principle to the schools?
    Mr. Prentice: I am afraid not, because the details of the curriculum of
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    religious instruction are discussed between the local education authorities and the Churches and it would be wrong for my right hon. Friend to give a lead from the national level on matters of that kind.

    Comprehensive School Proposals, Liverpool
    Mr. Tilneyasked the Secretary of State for Education and Science what is the estimated cost of adapting existing buildings to meet the requirements of the Liverpool education authority for comprehensive school education; and how many objections to the local education authority proposals have been received by his department.
    Mr. Stewart: I am informed that the Liverpool local education authority does not expect that the building work immediately required for its proposed scheme of comprehensive secondary education would be very costly. I have to date received about 400 individual letters of objection to the scheme and one from the Liverpool Parents' Protest Committee. The Liverpool authority has today given public notice under Section 13 of the 1944 Education Act, as amended, of the particular parts of the scheme which involve the closure or enlargement of existing schools. These are the proposals which require my approval and to which statutory objection may be made.
    Mr. Tilney: Would the right hon. Gentleman bear in mind the state of many of the primary schools in Liverpool which need a lot of money and consider the priorities between the primary schools and changing the grammar schools?
    Mr. Stewart: Yes, but I do not think that that arises to any great extent because such building in the other field as Liverpool proposes is mostly building which would have been needed in any event. Extra building dependent on Liverpool's reorganisation plan would be only a very small item.
    Mr. Hogg: Before the right hon. Gentleman gives his approval under Section 13, would he give an assurance that we may have a general statement containing his general policy in order that we may view the Liverpool scheme

    1185
    in the light of other schemes and the right hon. Gentleman's general principles?
    Mr. Stewart: I shall certainly hope to do that, but I cannot give the right hon. And learned Gentleman an absolute assurance.

    SELECT COMMITTEE ON ESTIMATES
    Mr. William Hamiltonasked the Prime Minister whether he will take steps with a view to the appointment of an official, equivalent in status to the Comptroller and Auditor General, to serve the Estimates Committee.
    The Prime Minister (Mr. Harold Wilson): I think that such an appointment would be a matter for Parliament rather than for the Government. It is a question which has been considered in the past, and the possibility will no doubt be considered by the Select Committee on Procedure which the Government will be proposing the House should appoint in the near future.
    Mr. Hamilton: Does my right hon. Friend recognise the importance of increasing the power and effectiveness of the control of the Legislature over the Executive? As in recent weeks he has rightly strengthened the power and the effectiveness of the Executive, to the extent that he does not do something similar for the Legislature he is increasing the gulf between the two. Does he regard that as wholly desirable?
    The Prime Minister: As a former Chairman of the Public Accounts Committee, I can say that my hon. Friend is preaching to the converted on this matter. The whole House will be aware of the tremendously increased impact of the Select Committee on Estimates in the last two or three years and of the very valuable work done in that Committee by the appointment of members of the Clerks' staff to work on that Committee. However, this is still an open question and I would have thought that the right place to consider it would be the Select Committee on Procedure.
    Mr. Peyton: Will the Prime Minister look at this again and instead of sitting
    1186
    on the fence come down on one side or the other and lend his support to his hon. Friend's proposal? Does he not realise that it is high time that the balance of power, which has shifted against the House of Commons in favour of the Executive, was redressed? It lies in his hands to help and he is not doing so.
    The Prime Minister: I am not aware of any diminution in the powers of the Legislature, the Public Accounts Committee, or the Estimates Committee. If the hon. Member is saying that the balance of power has shifted because there is a more effective Government, that is for him to say and not me.

    PAYMASTER-GENERAL
    Mr. Kershawasked the Prime Minister what are the responsibilities of the Paymaster-General; and upon what subjects he will answer Questions in the House.
    The Prime Minister: My right hon. Friend the Paymaster-General will carry out the duties which are assigned to him from time to time. It is a long-established practice not to specify these in detail in the ordinary way, but the House will wish to know that my right hon. Friend will answer Questions about the coordination of home information services.
    Mr. Kershaw: Is the right hon. Gentleman aware that, of course, we all wish his right hon. Friend well in his new post, whatever it is, although he is in many ways a very unsatisfactory character himself?
    Mr. Rankin: On a point of order. Is it in order for a challenge of that nature to be launched against any hon. or right hon. Gentleman?
    Mr. Speaker: I do not think that it is a challenge. The nature of the unsatisfactory character alleged is so vague that I am quite unable to rule about it.
    Mr. S. Silverman: Further to that point of order. Is it not within our knowledge that hon. and even right hon. Members opposite are getting more and more into the habit of making personal attacks on people under the disguise of a humbugging sense of humour, and that

    1187
    if this practice is continued it will not be conducive to orderly debates in the House of Commons?
    Lieut.-Colonel Sir W. Bromley-Davenport: Further to that point of order.
    Mr. Speaker: No. I will answer the point of order at once. I am not concerned with anybody's habits one way or the other except that I personally deprecate any such practice in any circumstances, however camouflaged, and I hope that the House will get rid of it.
    Mr. Kershaw: Although the job is rather vague and looks like a job for an old boy friend, will the right hon. Gentleman sit on the Defence Council? Will he in fact have a regulation defence hat, or will it still be just a wig?
    The Prime Minister: Separating the humour, or whatever it was, from the serious part of the supplementary question, and the obiter dictum, which was about worthy of the hon. Gentleman—I will not put it higher or lower than that—the position has always been as it was stated by my noble Friend Lord Attlee in 1948. I quote his words:
    "In the appointment of a Minister either without portfolio or with small Departmental duties it is not the custom to detail, except in certain cases, the particular duties assigned to that Minister."—[OFFICIAL REPORT, 19th July, 1948; Vol. 454, c. 26.]
    I have not known any subsequent Prime Minister to improve on that statement of the position. But I will give the hon. Gentleman this assurance, that my right hon. Friend will not in any way be entrusted, either on a part-time or a full-time basis, with duties of a party character as was the case with the Chancellor of the Duchy of Lancaster in the late Government.
    Mr. Robert Carr: The Prime Minister said that the Paymaster-General would answer Questions about the co-ordination of home information. Will he also answer Questions about the co-ordination of overseas information? If not, who will?
    The Prime Minister: I have been thinking a good deal about this. As the right hon. Gentleman, who answered questions, knows, this is a very complicated point affecting a number of Departments, and it is our intention that the
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    Foreign Office will answer in respect of the overseas information services.
    Mr. Bellenger: The House, I think, recognises the nature of the duties which will be undertaken by my right hon. Friend generally, but, in view of his close connection with security matters, can my right hon. Friend the Prime Minister say whether the Paymaster-General will be specifically undertaking any duties in connection with the Defence Department?
    The Prime Minister: So far as the security services are concerned, the position is exactly as was explained to the House by the Leader of the Opposition in a debate on the Denning Report. There has been no change made in that. I have thought it right to make certain changes within my own office to make quite certain that when there is a problem affecting security I am fully informed about it and will not be in the position of having to come to the House and say that no one told me. So far as defence is concerned, my right hon. Friend will have no responsibility for the Defence Department.
    Mr. Kershaw: On a point of order. In view of the very unsatisfactory nature of the reply, I beg to give notice that I will raise the matter on the Adjournment.

    GEORGE CROSS
    Sir J. Smythasked the Prime Minister if he will grant to the holders of the George Cross the same £100 tax-free annuity, irrespective of need or any other conditions, as was granted to the holders of the Victoria Cross in 1959.
    The Prime Minister: The payment of a monetary reward to members of the Armed Services who receive the Victoria Cross is hallowed by tradition; but I do not think it would be appropriate to extend this practice to awards for acts of gallantry in civilian life.
    Sir J. Smyth: Does the Prime Minister realise that the 128 living holders of the George Cross will be very disappointed with that reply, as will the 237 living holders of the Victoria Cross? When this matter came up on 28th July, 1959, four very prominent members of the Labour

    1189
    Party strongly supported it. They were Mr. Hugh Gaitskell, who was then the Leader of the Opposition, the right hon. Members for Easington (Mr. Shinwell) and Bassetlaw (Mr. Bellenger) and Mr. Aneurin Bevan, who was then Member of Parliament for Ebbw Vale.
    The Prime Minister: The right hon. and gallant Gentleman was courteous enough to write to me about this question and to draw my attention to the problem which some of the holders of the George Cross are facing. If he would be good enough to let me have details of any individual case, I will be very glad to look into hem. If the problem looks at all general, naturally we will be prepared to look at the whole situation again.
    Sir J. Smyth: The Prime Minister says that it would not be appropriate to extend this to civil life, but does he realise that most of these very high awards were given for service during the war? The only difference between the two decorations is this. They are given for equal degrees of gallantry, but one is given for gallantry in battle and the other is given for gallantry not in face of the enemy, as in the resistance movement, prisoner-of-war camps and many other spheres. I think that the Prime Minister is very mistaken in his appreciation of the whole situation.
    The Prime Minister: I think that the point which the right hon. and gallant Gentleman has made is well understood by the House and was in the minds of hon. Members when this matter was last debated on, I think, an Amendment to the Finance Bill which was accepted by the then Chancellor, Mr. Macmillan, in 1956.
    Mr. Shinwell: As this is rather a special case, do I gather from what my right hon. Friend said in reply to the right hon. and gallant Member for Norwood (Sir J. Smyth) that if submissions are made to him about hardship in the lives of any of the holders of the George Cross he will give them his sympathetic consideration?
    The Prime Minister: Yes, Sir.
    Mr. F. M. Bennett: Would the Prime Minister object to my asking him a supplementary question? Although it does not particularly arise from this Question, it concerns a very similar anomaly. There is a very sharp and unfavourable distinction in the financial return to those who won the Military Medal in the First
    1190
    World War and those who won it in the Second World War—
    Mr. Speaker: Order. That is quite a different matter.

    GENERAL ELECTION (TRADE DISPUTES)
    Mr. Channonasked the Prime Minister if he will set up an inquiry into strikes during the election period; and what form the inquiry will take.
    Mr. Crowderasked the Prime Minister what steps he proposes to take to discover the facts concerning certain trade disputes during the General Election alleged to have been motivated for political purposes.
    The Prime Minister: I have nothing yet to add to the Answer which I gave to similar Questions on Tuesday, 10th November.
    Mr. Channon: Would not the right hon. Gentleman agree that that Answer on Tuesday was rather unsatisfactory? As he gave a very definite pledge that he would hold a searching inquiry with full powers to get at the facts, will the right hon. Gentleman at least promise that any report made by the Minister of Labour to him will be published and laid before the House?
    The Prime Minister: I thought that it was a very good Answer which I gave on Tuesday. Obviously the hon. Gentleman did not think it was. At this stage, I have nothing further to add to what I said then.
    Mr. Geoffrey Lloyd: Does the Prime Minister now realise that his political intervention in the Hardy Spicer incident in Birmingham was ill conceived, that it infuriated local trade union leaders and that he was saved only by the equally ill conceived intervention of Mr. Hill?
    The Prime Minister: It is certainly true that my comment on that occasion led to somewhat unexpected and surprising results, one of which was to show, as I suggested on Tuesday, what was the real cause of the difficulties in that factory.
    Lord Balniel: Will not the Prime Minister be a little more forthcoming on this matter because he undertook to hold

    1191
    a searching inquiry with full powers to get at the facts? What is the point of holding an inquiry to get at the facts unless the right hon. Gentleman is prepared to publish them for us to judge what they are?
    The Prime Minister: I will certainly consider the question of what further should be said to the House on this matter, but what I said on the occasion of my statement was that the prime facie evidence on this would be to see whether there was a case for a further inquiry. I said, however, that one of the forms of inquiry which I had in mind was by the Ministry of Labour.

    PRESS AMALGAMATIONS COURT
    Mr. William Hamiltonasked the Prime Minister whether, in view of the anxiety in Scotland and elsewhere concerning the development of monopoly conditions in the Press of this country, he will take steps to set up a Press Amalgamations Court in accordance with the recommendation of the Royal Commission on the Press, Command Paper No. 1811.
    The Prime Minister: A statement about the Government's conclusions on this recommendation will be made as soon as possible.
    Mr. Hamilton: Can my right hon. Friend indicate how long that will be? Is he aware that repeated Answers have been given in the House, certainly not by this Government but by others, which have not met the anxieties felt in Scotland and elsewhere over the development of monopoly conditions in the newspaper industry? Can he, therefore, inject into this problem a sense of urgency, as he is doing in other problems?
    The Prime Minister: The whole House has expressed its anxiety about Press amalgamations over a very long period of years. In fact, it is now over two years since the Commission reported. The previous Government obviously found considerable difficulty—and it is a difficult problem—in reaching a conclusion in two years. I am sure that my hon. Friend will understand, therefore, if we have not been able to
    1192
    reach a conclusion in a matter of 3½ weeks.
    Sir C. Osborne: Whilst investigating this Press monopoly, will the Prime Minister also include an inquiry about why the Daily Mirror gobbled up the old Daily Herald? Surely, it would be better for a free Press if the success of the Sun could be independent of the Mirror Group?
    The Prime Minister: I do not think that the recommendation in the Royal Commission's Report for setting up a Press Amalgamations Court involved retrospective action. The intention was, I think, that it would pronounce on any possible future amalgamation and not that there should be an inquiry such as the hon. Member suggests.

BUSINESS OF THE HOUSE
Sir Alec Douglas-Home: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord President of the Council (Mr. Herbert Bowden): Yes, Sir. The business for next week will be as follows:
MONDAY, 16TH NOVEMBER—Second Reading of the Nuclear Installations (Amendment) Bill, and of the Airports Authority Bill, and Committee stage of the Money Resolutions.
TUESDAY, 17TH NOVEMBER—Report stage of the Budget Resolutions.
Remaining stages of the Expiring Laws Continuance Bill.
WEDNESDAY, 18TH NOVEMBER—Second Reading of the Protection from Eviction Bill, and Committee stage of the Money Resolution.
Second Reading of the Gambia Independence Bill.
THURSDAY, 19TH NOVEMBER—Second Reading of the Machinery of Government Bill, and of the Remuneration of Teachers Bill, and Committee stage of the Money Resolutions.
FRIDAY, 20TH NOVEMBER—Remaining stages of the Travel Concessions Bill, and of the Gambia Independence Bill.
Consideration of the Motions relating to the Legal Aid and Advice Regulations, and the Industrial Organisation and Development Order.
MONDAY, 23RD NOVEMBER—The proposed business will be: Supply [1st Allotted Day]: Motion to move Mr. Speaker out of the Chair when a debate will arise on an Amendment relating to the Nuclear Deterrent, and the discussion of the Nassau Agreement in Washington.
Sir A. Douglas-Home: As to Thursday's business, there is, I think, a good deal of keen and critical interest in the Second Reading of the Machinery of Government Bill. I should like to ask that if it runs for much of the day, as I suspect that it will, we should not take the second item of business—the Remuneration of Teachers Bill—at too late an hour.
My only other point is that we will be asking for a foreign affairs debate sometime between when the Prime Minister returns from Washington and Christmas.
Mr. Bowden: It would not be the intention to start the Remuneration of Teachers Bill if the Machinery of Government Bill runs the whole period.
Mr. Peter Emery: Does the right hon. Gentleman realise that there is considerable concern about the recent developments in travelling facilities from the suburbs and the outskirts of London to the capital city, particularly in relation to the go-slow? Will he take note of this and arrange for a debate in the House on this subject as soon as possible?
Mr. Bowden: I certainly take note of it, but I cannot promise any time in the immediate future.
Sir H. Legge-Bourke: Does the Leader of the House propose as soon as possible to give an opportunity to the House to discuss any reforms that might be required concerning Select Committees? In particular, I should like him to recall that just before the last Parliament ended, the Parliamentary and Scientific Committee, an all-party organisation, submitted a recommendation that we should have a Select Committee dealing with science and technology. It would be helpful if we could have a debate on this matter at an early date.
Mr. Bowden: The Select Committees generally have not yet been set up, but they will be set up within the next few days. I will certainly look at the point regarding the other Select Committee.
Captain Orr: I should like to ask the right hon. Gentleman two questions: first, when we may expect the Second Reading of the Finance Bill; and, secondly, whether he intends to adhere to the practice of his predecessor in allotting one Parliamentary day per Session to discuss the problems of Northern Ireland.
Mr. Bowden: The Second Reading of the Finance Bill will certainly not be next week; I should hope that it would be in the week following.
On the question of Northern Ireland, let us see how we get on a little later in the Session.
Mr. Shepherd: When does the Leader of the House intend to introduce legislation dealing with monopolies, restrictive practices and mergers?
Mr. Bowden: Certainly not next week.
Mr. Robert Cooke: When will the right hon. Gentleman find time to discuss the Motion on the Order Paper criticising the conduct of the Postmaster-General? He will recall that on Tuesday last the Postmaster-General made a long and misleading statement and, by means of a false date, accused his predecessor of concealing the truth. When are we to get at the truth in this matter?
[That this House deplores the statement of the Postmaster-General on Tuesday 10th November on the finances of the postal services in that he misled the House, by suggesting that his predecessor, Right Honourable Reginald Bevins, in view of the imminent General Election, had said "as late at 25th July" that he had no intention of raising postal charges; whereas Mr. Bevins made no such reply in July of this year but made such a statement in reply to a Question from the honourable Member for West Bristol on 25th July 1963, which Question was related only to his present intentions in that year.]
Mr. Bowden: I have seen the Motion on the Order Paper in the name of the hon. Member and others. In the first place, one should take into consideration

1195
what the former Postmaster-General said as recently as 28th July this year:
"I have no plans for increasing postal charges."—[OFFICIAL REPORT. 28th July, 1964; Vol. 699, c. 239.]
In the circumstances, and in view of what the former Postmaster-General said in this morning's issue of The Times, I should have thought—
Mr. Kershaw: On a point of order. What possible connection can this have with the business for next week, Mr. Speaker?
Mr. Speaker: As I understand it, the Leader of the House is advancing reasons—and he had not got quite to his conclusion—presumably for not giving time.
Mr. Bowden: I was doing precisely that and endeavouring to point out that, for those two reasons, I hope that hon. Members opposite will now withdraw the Motion from the Order Paper, when there would be no need to debate it.
Mr. Zilliacus: May I ask whether time can be found for a two-day debate on international affairs before the departure of the Prime Minister, the Foreign Secretary and the Defence Minister and the ensuing N.A.T.O. Council meeting in Paris?
Mr. Bowden: No, Sir. I do not think that there is any possibility of a two-day debate.
Mr. Sandys: Do the Government propose to make an early statement on the situation in regard to Southern Rhodesia?
Mr. Bowden: I should think so, if a development there requires it, but I cannot give a firm undertaking at the moment.
Mr. Geoffrey Lloyd: Will the Leader of the House reconsider his vague and unsatisfactory reference to giving time to discuss the affairs of Northern Ireland? Will he bear in mind that in recent Parliaments it has been the invariable practice to provide either a full day or at least two half days?
Mr. Bowden: As far as my memory serves me, the debate on Northern Ireland has usually taken place late in June or early in July. Let us look at the position when we reach that part of the year.
Mr. S. Silverman: While my right hon. Friend was looking at Private Members' early-day Motions on the Order Paper, was his attention directed to a Motion by some of my right hon. and hon. Friends and myself directed to the conduct of the right hon. Member for Bexley (Mr. Heath) the other night when, in our opinion at least, he made an entirely unjustified and unwarranted attack on distinguished officials who could not answer for themselves? Does my right hon. Friend think it possible to give a little Parliamentary time so that this question can be further explored?
[That this House places on record its great regret that the right hon. Member for Bexley should have abused the privilege of addressing the House from the Opposition Front Bench by making a strong attack on three distinguished officials, well knowing that they could have no opportunity to reply or defend themselves and in flagrant violation of a long and honourable tradition of Parliamentary debate.]
Mr. Bowden: I have seen the Motion, and I have a great deal of sympathy with it, but I can hold out no hope of a debate next week.
Sir H. Butcher: In view of the reply of his right hon. Friend the Prime Minister to me on Tuesday this week, can the Lord President of the Council say whether a statement on the remuneration of Members and Ministers will be made during the coming week?
Mr. Shinwell: Is the hon. Member hard up?
Mr. Bowden: In reply to the hon. Member for Holland with Boston (Sir H. Butcher), I should think that that is a possibility.
Mr. Webster: During the continued absence from the House of any Ministers for Technology, either a Minister or a Parliamentary Secretary, who will answer for this Department in the House at Question Time on Tuesday?
Mr. Bowden: That question was answered by my right hon. Friend the Prime Minister on Tuesday of this week.
Mr. Paget: Is the Budget business on Tuesday formal? In other words, would

1197
the full day be available for the remaining stages of the Expiring Laws Continuance Bill? Or is it debatable?
Mr. Bowden: The Report stage of the Budget Resolutions is formal. These Resolutions are not debatable, but there is an opportunity to divide on them.
Sir C. Osborne: In view of the overriding need for greater exports, will the right hon. Gentleman try to find time to allow the President of the Board of Trade to make a statement on what he has discovered both in Moscow and in Peking which would enable us to increase East-West trade and time to allow us to discuss the matter?
Mr. Bowden: I cannot hold out any immediate hope of that.
Sir Ian Orr-Ewing: May I return to the Question asked by my hon. Friend the Member for Bristol, West (Mr. Robert Cooke)? As reported yesterday in column 839 of Hansard, concerning the reference to Mr. Bevin's speech, the date is given as 25th July. The right hon. Gentleman said 28th July. If the right hon. Gentleman the Postmaster-General has made a mistake, may I remind the Leader of the House that the Prime Minister has always prided himself on getting the exact dates?
When these things happen, and a mistake is made, the House is always very generous, and it will accept the Postmaster-General's apology just as it accepted the slip by the hon. Member for Nottingham, South (Mr. Whitlock). We always accept with great grace. Is it not beholden on the Postmaster-General to make an apology to the House?
Mr. Bowden: I hope that I have not misled the House. In fact, the statement made by my right hon. Friend the Postmaster-General when he spoke of 25th July, 1963, was accurate. The point which I was making was that a similar statement was made on 28th July, 1964.

ORDERS OF THE DAY

  WAYS AND MEANS
  Considered in Committee [Progress, 11th November.]
  [Dr. HORACE KING in the Chair]

  TAX REBATES FOR EXPORTS
  Question again proposed,
  That provision shall be made for authorising the Commissioners of Customs and Excise to make payments out of the sums received by them on account of duties of customs and excise and purchase tax for the purpose of affording relief in respect of duties of customs and excise chargeable on hydrocarbon oils, vehicle excise duty and purchase tax incurred in connection with the production, manufacture or carriage of goods exported from the United Kingdom on or after 26th October 1964, for prescribing the conditions for, and the amounts of, such payments, and for supplementary purposes.

  BUDGET STATEMENT
  3.43 p.m.
  Mr. Reginald Mandling: I hope that the Committee will allow me to start by congratulating the Chancellor of the Exchequer on the manner of his Budget statement yesterday. I know from experience that it is a considerable ordeal to make this particular speech. I should like to say with all sincerity that I thought that the clarity, coherence and lucidity of his statement was quite remarkable. While I cannot go on to add the further traditional words, "I hope to hear him often again in that capacity", nevertheless, as long as he is speaking from that Box as Chancellor of the Exchequer, I am sure that the Committee will receive from him a very clear, lucid and forthright statement of what he intends to do.
  We have it on the authority of the Prime Minister that there were three purposes in this autumn Budget: first, to give effect to the surcharge and export incentives; secondly, to get the economy into shape, as I think he called it; and, thirdly, to pay for the Government's social measures. It is true that the Budget and the Finance Bill will give effect to the surcharge and to the incentive. It is also true, very true, that the Budget will enable the Chancellor to pay

  1199
  for the Government's social measures. But I canont see much in this Budget, or in the Finance Bill which will follow, which will, in the Prime Minister's words, get the economy into shape.
  I can see nothing in the Budget which will increase the efficiency of British industry, which will improve our balance of payments or which will do other than add an additional burden to an economy already heavily loaded. I am convinced that the effect of these measures is bound to be to inflate costs of production throughout the country, to increase the dangers of inflation and thereby to aggravate rather than to improve the economic situation which we face.
  I should like to deal, first, with the surcharge and the export incentives. When the Government decided to take measures to deal directly with the balance of payments they had a choice of possible measures available, of which, obviously, the two main measures were import quotas or the import surcharge which they chose. These were clearly the two main choices if they decided, as they did, to try to impose a check upon imports into this country.
  I should start by saying that, whatever the comparative merits of the surcharge or quotas, I cannot imagine how the surcharge could have been introduced in a more hamfisted manner than it was. The effect has been to introduce a charge which falls heavily and without discrimination on a wide range of imports many of which, frankly, are both essential and irreplaceable. It is bound to put up costs and it is also bound to increase home demand in certain areas of our economy. Possibly most serious of all, it has certainly created a most serious reaction among our friends overseas, and particularly in Europe.
  I think that all hon. Members in the Committee feel that the reaction of E.F.T.A. is very serious. I have a personal interest in this matter, having been concerned very much in the foundation of E.F.T.A., and I think that on both sides of the Committee we feel that it is of great value to this country. We are grieved very much at the reactions which we have seen expressed by our friends in the Scandinavian countries and the other countries of E.F.T.A. at the measures which the Government have taken and,
  1200
  possibly more important, at the way in which those measures were taken. I have no doubt at all that many of the difficulties to which I have referred, and to which I will refer, could have been avoided in practice. I have no doubt about that at all.
  The Government's argument is this: imports had to be reduced because they were too high. According to the letter of international law, the only way to do this is by quotas, but the Government say, "If imports are reduced, it has the same effect on our trading partners whatever method we adopt." They say that Italy and France, for instance, in various ways cut down their imports from other countries, thereby affecting us. They say that in logic the imposition of a tariff surcharge does no more harm to our trading partners than the introduction of quotas, which are permissible under international agreements.
  There is in logic, I accept, something in this argument, but there is also a very large psychological effect which, I think, the Government have totally ignored. It is all very well for them to say that the existing rules of our existing international obligations are wrong and should be changed. But these rules exist. There is no doubt that a quota is permissible, whereas a tariff surcharge is not permissible. If, therefore, the Government decided, as they did, to introduce the illegal method of protection rather than the legal method of protection, I should have thought that the least they could have done was to prepare the way by consultation and by working together with our colleagues and allies, particularly in E.F.T.A.
  I am sure that they made a mistake. I am sure that an immense number of the problems which have arisen and misunderstandings which have descended upon our heads could have been avoided if it had been handled with more common sense, more deliberation and more consideration of the obligations into which this country has entered. Nothing was more inept than to rub salt into the wound by putting in the wholly unnecessary, and I think very foolish, reference to the Concord in the Government's White Paper.
  That can be taken with the reference of the President of the Board of Trade, who, I believe, at one time implied that

  1201
  we could give some special preference to E.F.T.A. He knew perfectly well that this was not possible, and subsequently it had to be denied. Bearing that in mind, and the reference to Concord, I have no doubt at all that the manner in which the surcharge has been imposed has been as damaging, as hamfisted and as inept as could possibly have been foreseen, even from this Government.
  The Government's argument is that this was unavoidable because of the urgency of the situation. This I wholly refuse to accept. I do not believe that it is true at all, and I will explain precisely why. The Government talk about facing a deficit of £800 million. This is the substance of practically every interjection in this Committee's business at present. Let us look at the facts. The £800 million, of course, is the highest possible figure they could choose from a range of figures.
  Secondly, of the figure of £800 million something like a half, I would reckon, is not trade deficit, but either overseas investment in new solid assets for Britain or repayment of existing, outstanding overseas debt, including the North American loan. Those are the first points.
  Thirdly, of course, the Government could only be facing this deficit if they were looking backwards, because when they came into power three-quarters of the year was over, three-quarters of the year when this large deficit had been taken care of—by us. They were facing not 1964, but 1965. They were facing the fag end of 1964, a year of exceptional difficulty, as the Chancellor very frankly admitted yesterday—a year of higher import prices, exceptional capital outflow, stocking up. All these things, mentioned his speech, made 1964 an exceptional year. The Government, when they came into power, were facing the remaining months of 1964, and facing also the prospect of 1965 where, they agree, and the estimates they accept show, the deficit would have been cut without any further action by several hundreds of millions of pounds.
  They were coming into power also at a time when we were moving through the difficult period for the sterling area and moving once again into a period of strength for the sterling area. They were facing, also, a situation where the Finance
  1202
  Ministers of the Commonwealth had agreed only a few weeks before that between 1964 and 1965 the balance of the sterling area as a whole with the rest of the world, which is what determines the level of reserves, would be stable over the year 1964–65. This is what they were facing, not what they talk about.
  Let us look at what happened in 1964. In the first part of 1964 we had, as they say, a deficit on current and capital account of £340 million. Of course, there was a balancing item of £85 million which they ignore, and there was the exceptional Shell/Montecatni deal of £60 million which they also ignore, but the important thing is that such was the confidence in sterling, such was the international confidence in the strength of this country's economy, that we carried the whole of that £340 million deficit in the first half of this year without any loss to the reserves. The reserves, in fact, went up.
  This went on through July and through August. Confidence in sterling remained strong, and sterling remained strong, and until the very last few days of August we made no net drawing from our American facilities and no approach whatsoever to any European bankers under the Basle arrangement. This was the position for two-thirds of the year, which the Government now describe as their problem.
  The situation changed in September. I quite agree that the situation changed with the advent of the election. The situation changed. People overseas had some doubt as to the continuation of existing policies.—[HON. MEMBERS: "Oh."] Oh, yes. There was a very big change between August and September, not accounted for by any experience in the trading position of this country. There was a big change which, I think, must have been partly associated, in the minds of people overseas who did not want to hold quite so much sterling, with the wholly inflationary nature of the policies of the party opposite. The inflationary nature, I may say, of those policies was proved yesterday, by the fact that to meet those policies they need £300 million or £400 million of taxation they never mentioned during the election.
  I have no doubt in my own mind that had the Conservative Party won the election this speculative position would have

  1203
  reversed itself, and we would have seen a flow back of money into London. I say, therefore, that while the party opposite can argue—and one can argue with substance—the need for measures to deal with the balance of payments, there was no case whatsoever for panic measures of the type we have seen; and if there was any element whatsoever of an emergency it was created by the Government themselves.
  I have been dealing with the import surcharge, and the fact that the manner in which the import surcharge was imposed was hasty, and saying that the way in which it was done has done immense damage to our international relations. I want now to say one or two things about the surcharge itself, because I think that the character and the details of it are really hastily devised and ill-thought out so that there is a very high level of surcharge over the whole of the very wide range of goods affected.
  I think that I am right in saying that when the Canadian Government did the same thing they had a level of 15 per cent. for one kind of thing, and other levels of 10 per cent. and 5 per cent. for others. We have manufactures, consumer goods, semi-manufactured goods all affected and all at the same level of surcharge. A bit more thought and a bit more discrimination might have produced far better results.
  Why is the charge cast so wide? It is a little difficult to understand precisely the point of the argument, on which it is based. Is it to hold back imports—a point which has already been referred to—of things which can be made in this country? If that is the reason, why is the charge falling on many things which cannot be made in this country? There is a whole wide range of them, chemicals, raw materials, semi-processed raw materials, where, clearly, the charge is falling upon these imports without any benefit to our balance of payments, for we must have those imports, and the effect of the surcharge is to put up the costs of manufacture in this country and probably export costs as well.
  Finally, why is it being applied to goods which would have come here anyway, goods arriving under irrevocable letters of credit already made and goods already in transit? I have one example, from one
  1204
  of my own constituents, of goods which had already landed in this country and were awaiting Customs clearance. How can it possibly help our balance of payments to apply this charge to goods which would have arrived anyway and for which we have had to pay?
  These, it seems to me, are very practical and very important points, and I hope that the President of the Board of Trade, who, I understand, is to speak immediately after me, will be able to deal with them in his speech, because these are the things which matter, these are the details which are of essential importance if we have to measure what will be the influence upon our economy and our export prospects of the imposition of this surcharge.
  I turn next to the export incentive. This is an idea, of course, which has been around in Whitehall for a long while, the idea of giving an arbitrary rebate to exporters calculated to be roughly the equivalent of the indirect taxation paid in the process of manufacture. It has often been considered, but never in the past accepted, and for good reason, I think. In the first place, it is rather doubtful whether it is valid internationally as a long-term measure. That is illustrated by the way in which it has been complained about by our friends in Sweden. I have already had a telegram from someone who said that his German customer is asking to be paid the equivalent of the rebate.
  I have not much sympathy with the German customer, because I think that it is roughly the equivalent of T.V.A. rebate given in a good many European countries, but it is certainly doubtful whether this particular device is really in accordance with the letter of our international obligations. What is quite clear is that the benefit that will arise from this export incentive is rather small in terms of cash return to the exporter. I agree that it is better to do something for exports than to do nothing, but it is a rather small additional incentive to give.
  On the other side, we must count the cost of this measure, which is very large indeed. I understand from what the Chancellor said yesterday that the cost to the taxpayer of this incentive will be about £75 million. I thought that the Chancellor set his sights rather low when he said that he hoped that the expansion

  1205
  in exports induced by this rebate would eventually be greater than the budgetary cost. I should hope so, too. If one pays £75 million of budgetary money for £76 million of exports, I am not sure that that is a good bargain. We shall watch the development of this measure with interest, but I say to the Committee that it would not be wise to expect any large development of exports to arise from it.
  So much for the measures by which the Government expect and predict they will solve the present balance of payments problem.
  I turn now to the main part of the speech, and I want to emphasise that this is the main part of it, because the main part of the new additional taxation announced yesterday was not concerned with the balance of payments position. It was concerned with the programme of the Socialist Government. The following additional taxation is to be levied: £215 million on the stamp, £93 million on petrel, and £122 million on Income Tax, making a total of £430 million. Of that figure, £280 million will be paid by industry and commerce, a very important point indeed.
  As against this additional taxation of £430 million, no less than £345 million are required to meet additional expenditure arising from the deliberate policy decisions of the present Government. The fundamental point of the present Budget is that the overwhelming preponderance of the additional taxation to be levied is being levied as a result of the policy decisions of the Government, and bear no relation to the balance of payments situation.
  My first comment on this is that there is a contrast between what the Chancellor said yesterday and what he and his colleagues were saying a month ago. They were rather reluctant then to give the cost of their programme. I remember trying to persuade them to be a little less reticent, and more forthcoming, about what their programme would cost the country. I did not have much success. They were not very willing to say how much we would have to pay for their programme. They were not willing to admit—rather the contrary; they were unwilling to admit£that any tax increases were involved in their programme.
  I seem to remember making a statement just before the election, when I
  1206
  estimated that the full cost of their programme over a whole Parliament would be about £900 million a year to the taxpayer. No one denied that estimate. It was a modest one; that is why they did not deny it. I went on to estimate what this would mean in terms of taxation. I did my best to work out a specimen Budget. I mentioned three possibilities: 9d. on Income Tax; 6d. on petrol; and 6s. on the stamp. That was not a bad treble, because it turned out to be 6d. on Income Tax, 6d. on petrol and 5s. 3d. on the stamp.
  What was the reaction of hon. Members opposite to my statement? They said that that was a disgraceful thing to say, that it was nonsense, that they had not the slightest intention of doing that sort of thing, and that it was nursery talk. We said quite clearly at that time that to implement the policy being put forward by the Labour Party would involve vast additional expenditure and much additional taxation. This has been wholly proved to be true, and they have no excuse whatever for saying that they did not know.
  They say they have discovered that the revenue for several years ahead in an expanding economy was laid aside for the programmes of the previous Government. They may just have discovered that, but it was in our White Paper 11 months ago. We said it all the way through. The party opposite knows that that is true. The present Chancellor very honestly said, a few months ago, during the summer, that no responsible party could possibly bid to do more than we were proposing in schools, hospitals, and such things.
  They knew from the published documents on Government expenditure—published in more detail than ever before—that the programmes which we were putting forward would absorb the taxable revenues of the country for several years ahead on a 4 per cent. growth basis. Nevertheless, they committed themselves to vast additional expenditure, and tried to pretend that it would not involve vast additional taxation. This has come home to roost and there will be many other birds to follow it.

  1207
  I am talking about what the Prime Minister said. For example, in a broadcast he was asked about taxation and said:
  "Over the period of a Parliament I believe we can do it certainly without any general increase in taxation …"
  The Prime Minister (Mr. Harold Wilson): Instead of taking a page from the Central Office, why does not the right hon. Gentleman look at the transcript of what I said during the broadcast? Perhaps he will allow me to tell him what I said. I said:
  "Let me say this quite frankly. If it is necessary to increase taxation"—
  this is what I said in reply to Mr. Robin Day—
  "then we shall not hesitate to do it. We shall have to follow a system of priorities—we can't do it all at once, after twelve years, and we are going to be clearly responsible about this question and if we have got to increase taxation we shall say why we must do it, and we shall not shrink from doing it."
  That is from the B.B.C. transcript.
  Mr. Maudling: As it happens, I have the transcript too. The interviewer asked:
  "Alternatively, will your proposals involve increases in taxation?"
  The answer was:
  "No. Over the period of a Parliament I believe we can do it certainly without any general increase in taxation …"
  Does the Prime Minister intend to rescind these tax increases before the next election? If he would like to answer that and undertake not to have an election until these taxes have been reduced, I shall be delighted to give way.
  I turn now to the actual proposals which the Government have made as a means of meeting the additional expenditure which they have decided to incur. The effect of these proposals is bound to be inflationary. It is bound to put up prices. It is bound to damage the economy of this country.
  Let us look, first, at costs. I think that we all agree that nothing is more important than to keep our costs of production as steady and as competitive as possible. This is the theme which runs through speeches from both sides of the Committee, and it is manifestly true. What will the proposals in this Budget do? The petrol tax will cost £93 million, of
  1208
  which at least £50 million will be borne by the trade, by commerce, and by industry. The additional £5 million bounty for exports will be pretty poor compensation for industry, which has to pay an additional £50 million by way of taxation.
  Next, let us consider the insurance stamp. I think that the total to be collected is £215 million, of which £140 million to £150 million will be a direct and unavoidable addition to the costs of production of British industry. All this comes on top of the surcharge which, in many cases, because it has been applied too widely and without adequate discrimination, will add to the costs of production in British industry and make exporting from this country more difficult than it otherwise would have been.
  There is no doubt that the effect of the Budget is to lay an additional direct and unavoidable cost on British industry. If this is the purpose of the party opposite, I think that it has little concept of the real problems of our economy. Secondly, these measures cannot fail to be a discouragement to investment. I am sure that any addition in the level of direct taxation is bound to influence the level of investment, whether by individuals or companies, because the net return on investment will be affected adversely by the increase in direct taxation, and the prospect clearly held out of more taxation to come in the future is bound to be even more damaging than the experience to date. My right hon. Friend the Leader of the Opposition yesterday described the bit of the iceberg that we have seen so far. It is the rest of the iceberg which will affect the intentions of investors in this country in the months and years ahead.
  Then there was the threat of a corporation tax. I read with great care the passage in the right hon. Gentleman's speech about the corporation tax. It is very interesting indeed. But I cannot feel that it can possibly give any encouragement to British industry to invest further. The idea of a separate corporation tax has been examined by many Chancellors and has always been found, in practice, to be unworkable. I think that the main danger, certainly under the new dispensation, is that a specific and separate tax on the profits of companies will be a standing temptation to Chancellors to raid

  1209
  the necessary reserves or profits of companies, because they will not be exposed to the political odium at the same time of putting up the level of taxation on individuals.
  Secondly, I was surprised to see, peeping out of the right hon. Gentleman's speech, this strong addiction to the idea of a differential in taxation as between distributed and undistributed profits. I know that this was in the original doctrine of the Leader of the Opposition, but I thought that the Chief Secretary, in his most illuminating address in the Investors' Chronicle symposium, a few months ago, had completely destroyed this silly idea of a discrimination between distributed and undistributed profits.
  Thirdly, I am sure that the effect of the Budget is bound to be bad for savings. The right hon. Gentleman did not make any reference to savings, apart from a proper and courteous reference to the National Savings movement. He made no reference to the need for more and more savings, but, believe me, if we are to have the level of expenditure envisaged by the Government we shall need more savings than ever before if the level of taxation is to be anything like tolerable. I would have thought that one of the first things which the right hon. Gentleman should do would be to look for more ways of encouraging savings.
  What is the right hon. Gentleman doing about our ideas—about the contractual savings scheme, the new Post Office idea, and the other ideas we left for him? I hope that he will take them over and develop them, because they seem to be very desirable and necessary in the interests of the economy. But the right hon. Gentleman said nothing about savings, apart from a proper reference to the National Savings movement.
  I have little doubt that the reference to a capital gains tax is bound to work adversely against the level of savings. If I understand it correctly, we are to have in the much anticipated Budget of next year—and I cannot complain about the right hon. Gentleman's reference to it, because I anticipated one of mine extensively in the same way—a capital gains tax. We shall certainly await the details of this tax before we judge upon the claims put forward for it, that it advances social equity and justice.
  1210
  On the economics of it, I do not think that anyone this side of Ruritania—or possibly that nearby country that is in favour at the moment—can expect a capital gains tax to contribute towards solving the problems of a heavily burdened economy, because a tax on capital gains will basically come out of savings and not out of current expenditure. The effect of the tax will not be to restrain expenditure; it will be to encourage people—if I may put it in the vernacular—to spend the money before the rats get at it.
  Those are three reasons why this Budget is bound to have an inflationary effect; why it is bound to put up costs and to discourage investment, while doing nothing whatever to encourage savings, and might well do the opposite. Finally, the economic assessment seems to me to show quite clearly that this in an inflationary Budget, that prices will be put up and that the tax yield involved and the reduction of savings involved will mean that the net effect is bound to be substantially inflationary.
  We have the proposals for increased Government expenditure of £345 million, roughly speaking, on the social services, all of which will pass immediately into expenditure and will inflate demand in the economy by 100 per cent. straight away. On the other hand, we have duties, like petrol tax, stamp duty and Income Tax, which will not have the same effect. The petrol tax will be borne largely by industry, the effect of which will be to put up prices, and all the £50 million borne by industry will be offset against tax assessments, and, therefore, half of it, and perhaps more, will come out of the Exchequer anyway.
  The same is true of stamp duty: £140 million or £150 million gross, will fall upon industry, of which probably less than half will be taken out of consumption. As for the increase in Income Tax, there can be no doubt in the mind of any unbiased person that a great part of the payment of Income Tax under the new increased rates, whether on persons or companies, will come not out of current expenditure but out of savings.
  Therefore, when we take into consideration the effect of these three factors there can be no doubt that the

  1211
  amount of direct increase in purchasing power stimulated by the Budget will be very much in excess of the amount withdrawn from purchasing power by the tax increase measure, so that the effect of the Budget will be inflationary. It will increase demand, and I do not see how that can possibly be justified by the speech of the Chancellor of the Exchequer and by the position that he sought to lay before the Committee yesterday. Indeed, the more the party opposite argues that the economic situation is difficult the less it is justified in adding to the difficulties by precisely the sort of Budget it introduced yesterday.
  There is a possibility that the Chancellor believes that this inflationary effect can be justified either by better chances of greater efficiency or better chances of getting an agreed incomes policy. As for greater efficiency, I see nothing in the Budget which is likely to encourage greater efficiency, or productivity, in British Industry. The surcharge, the increase in Income Tax and the other measures will not increase efficiency; they will tend to militate against it.
  I do not believe that the Budget will make any contribution towards an incomes policy. I share with the right hon. Gentleman—as the Committee is well aware—the belief that an incomes policy is perhaps the most important item for this country to face. I do not agree with those cynics who say that an incomes policy is impossible. They may be right—only experience will prove whether they are—but until they are proved right we should try to press ahead and create an incomes policy.
  Time and time again last year I said that the essential condition for the progress of our economy is more exports; that the essential condition for more exports is to keep our costs competitive, and that the essential condition of keeping our costs competitive, above all, is an incomes policy, rational and effective. I tried time and time again, in meetings of the National Economic Development Council, to get agreement on an incomes policy, even an agreement of a temporary character, and it is only right to say—because it is the truth and should be known—that all attempts
  1212
  made by the previous Government in the last year to get agreement on an incomes policy were met with and foundered upon the continued resistance of the trade union movement [HON. MEMBERS: "Oh".] It is true.
  There is plenty of evidence. I know that the trade unions leaders have many difficulties. I accept that. They say, with justice, "It is very difficult for us to put across to the people who follow us a policy which is so different from our traditional outlook." I appreciate their difficulties. But it must be said for the sake of honesty, and for the record, that attempts have been made time and time again to get agreement on an incomes policy, but that our arguments have not been accepted.
  The proposal put forward, which I still believe to be the right one—[HON. MEMBERS: "What was it?"] I will say what it was. It was for a tripartite agreement that the function of management should be to do everything possible to keep prices stable; that the function of labour should be to do everything possible to keep the rate of increase in wages in line with the rate of increase in productivity; and that the function of Government should be twofold: first, to keep the economy expanding and not to use restrictive measures, and, secondly, to undertake, as we did, that if, as a result of restrictions by wage or salary earners, profits received an unfair share of the national cake we would deal with the situation by fiscal measures. The Committee should know this, because it is true and it has been said many times. It is known to N.E.D.C., it is known to the trade unions, and it should be known to the country. This was the proposal by the then Government which was turned down. But it will be necessary in the end—of that I have no doubt. We shall find that this will be the solution.
  Mr. J. J. Mendelson: The right hon. Gentleman the ex-Chancellor would not wish, I am sure, on his first appearance on the Opposition Front Bench, to give a totally false impression of what happened. He said that the trade union movement was responsible for it. Has he forgotten, or does he not wish to tell the Committee, that when a modest proposal was made, and one which had probably been worked

  1213
  out by the Director-General of N.E.D.C., to ask the employers to look at certain proposals for a scheme of price review and certain proposals to make it possible to get a contribution from the employers side, six employers' representatives on the N.E.D.C. said that they were ready to look at it. They took it back to the Federation of British Industries, whereupon it was immediately voted down.
  Mr. Maudling: The fact is that I was there and the hon. Gentleman was not. It is wholly and completely untrue. If the hon. Gentleman looks at The Times of 7th or 9th February—I have not the memory of the right hon. Gentleman the Prime Minister—he will find that what happened was that at a meeting of the N.E.D.C. the employers' representatives themselves put forward a proposal for a price review—put forward very much the same as what the Government are now proposing—and the trade unions turned it down. That is true.
  I will, if he likes, send the hon. Gentleman the lefthand column of The Times to which I refer to prove to him that, precisely as I have said, it was the employers who proposed this and that it was turned down by the trade unions as "a hasty and an ill-advised" action.
  We shall only get an incomes policy in this country if we have a tripartite agreement of this kind and a price review body—I am not quite certain of the details and how they will work out—and, I am quite sure, something like an incomes commission which is designed to ensure that the exception from the general levels in an incomes policy is treated properly and fairly, but remains the exception.
  The other great tragedy of an incomes policy during the last 18 months has been the determination of the party opposite and of its friends to have nothing to do with the National Incomes Commission, which could have done enormous benefit for the exports of the country.
  I sum up what I was saying about the Budget. There are, first, the surcharges and the export incentive. I say that the surcharges could not have been imposed in a more hamfisted, incompetent and inept manner. I say that the increase in taxation arises to an
  1214
  enormous degree from the Government's own deliberate policy and is wholly at variance with all that they said in the election campaign. I say, moreover, that this is an inflationary Budget which will do great damage to our economy.
  4.23 p.m.
  The President of the Board of Trade (Mr. Douglas Jay): I can well understand that the right hon. Member for Barnet (Mr. Maudling), in his apologia today for his past policies, was trying to convince his supporters that he is not really so moderate and reasonable in his comments on this Government's policy as he appeared to be in his first speech only a week ago. But I must say that I doubt whether he succeeded.
  The right hon. Gentleman now tells us that everything was right with our economy until 16th October. He also now tries to argue that the higher tax on petrol, in particular, will have a serious inflationary effect on our economy, but when he himself and other of his colleagues in the previous Government repeatedly raised indirect taxes they all asserted that this was deflationary because it stopped people spending money on other things. That was the famous "Boyle's Law" invented by the right hon. Member for Birmingham, Handsworth (Sir E. Boyle), when he was a Government colleague of the ex-Chancellor.
  The truth is that this change in the petrol tax will have far less effect on prices than the increase in Purchase Tax on necessities imposed by right hon. Gentlemen opposite. The right hon. Member for Barnet not merely differs from the right hon. Member for Handsworth, but also from his right hon. Friend the Member for Bexley (Mr. Heath). The right hon. Member for Barnet, I must say, normally makes such enlightened speeches that one wonders how he came to join the Tory Party at all. The right hon. Member for Bexley is quite different. Now that he is bereft of any official duties he is so bereft of serious argument that he has to sprinkle his speeches with personal abuse. This contrast has been particularly marked during the speeches in the past 10 days.
  The ex-Chancellor told us on 4th November—barely more than a week

  1215
  ago—that he did not seriously quarrel with the present Government's measures to correct the balance of payments. He virtually said that he had prepared them himself. On the other hand, the ex-President of the Board of Trade said last week that they were ruining E.F.T.A., threatening G.A.T.T. and alienating 18 different nations.
  The right hon. Member for Barnet really cannot come along today and say that this was all wrong, because he went out of his way last week virtually to bless the action which the Government had taken. He said on 4th November:
  "I entirely agree with them"—
  the Government—
  "that if they feel now—and this was their judgment and responsibility, which we will not oppose in principle in any way at all—that action should be taken, then they are right to act directly on the balance of payments and not by 'stop-go' or deflation."
  The right hon. Gentleman went even further than this. A little later in his speech he said:
  "… if the total amount of imports has to be cut back, there is something to be said for doing so by the most efficient method rather than by imposing quotas which may be extremely cumbersome to administer and more harmful to trade."—[OFFICIAL REPORT, 4th November, 1964; Vo1. 701, c. 239–40]
  That is to say, the right hon. Gentleman approved the surcharge only a week ago, but the right hon. Member for Bexley says that the surcharge is disruptive and wholly mistaken.
  Mr. Maudling: Anything which the right hon. Gentleman has just read out I agree with, but I still say that nothing could have been done in a more ham-fisted and damaging way.
  Mr. Jay: I leave that part of the argument to the judgment of the Committee.
  I must say that after this sharp clash of opinion between the Leader of the Opposition's two principal economic advisers, I was interested to see whether the Opposition would vote against the surcharge or not. Today, the ex-Chancellor said that they are against it, but yesterday they did not vote against it. The Opposition did decide to vote against the increase in both the petrol duty and the Income Tax, and we have had the ex-Chancellor doing his best this afternoon to justify this peculiar decision.
  1216
  The right hon. Gentleman did not even mention the real issue before the Committee today. That issue is this. Do we, or do we not, think it right to raise the old-age pension substantially, help widows and remove the prescription charges? Those who vote against these rises in tax are voting against the increase in old-age pensions, the help for widows and the removal of the prescription charges. [HON. MEMBERS: "No."] If that is not so, how do hon. Members opposite propose that these benefits should be paid for?
  Mr. Peter Bessell: Are we to understand from what the right hon. Gentleman is saying that the increases in these taxes are to do with old-age pensions and not with the balance of payments?
  Mr. Jay: They are to do with both, if the hon. Gentleman will have the patience to listen to my speech.
  I have absolutely no doubt that the first priority for this Government—having corrected the yawning balance of payments gap bequeathed to us by the cowardice of the party opposite—was to do something immediate and substantial for the old people. During the last election I was invited to two meetings of old-age pensioners and at those meetings it was obvious to me that I was among some of the poorest people in our present society. They unanimously urged on me that the two measures which would bring the greatest relief to them would be a substantial rise in pensions and the abolition of the prescription charges.
  One pensioner who said that he was 75 years old—that was not the highest age of those present—argued his case like this. He said that many of those present at the meeting had started work 60 years ago and had worked for far lower wages and for far longer hours and under far more arduous conditions than almost anyone would stand today. They had helped by such work to build up much of the capital which all of us are enjoying now. He asked me whether I did not think that we who are now earning more and enjoying much higher standards, owed these older people an inescapable obligation. I thought then, and I think now, that that is an unanswerable argument. It is the

  1217
  unanswerable justification for my right hon. Friend's proposals of yesterday for increased rates of taxation.
  If for that reason tax revenue had to be raised somehow, I believe my right hon. Friend was also unquestionably right in selecting two general sources for his new revenue, road traffic, on the one hand, and direct taxation, on the other. If some tax has to be raised, we cannot ignore the fact that road transport and the oil industry today are both, to say the least, exceedingly buoyant and expansive.
  Secondly, whatever one may think of the British system of Income Tax with its many admitted imperfections, which we hope to correct, I believe that it remains the fairest instrument of taxation in the world. It is no doubt true, as I think Edmund Burke once said:
  "To tax and to please, no more than to love and to be wise, is not given to men."
  If this revenue has to be raised, I believe that my right hon. Friend has gone the best and the fairest way about it.
  Do not let us forget—the ex-Chancellor agrees with the facts, anyway—that over half of the revenue to be gained from the rise in the standard rate of tax will come from company profits which have been rising strongly. In itself that will materially improve the chances of achieving a real incomes policy. It would, of course, be very pleasant if, thanks to the expansion of our national product, we could give the assistance needed to the weaker and poorer without higher rates of tax. It is an economic truism to say that had our economy been properly managed over recent years, this would certainly have been possible.
  No doubt the ex-Chancellor has been explaining to the Leader of the Opposition that if our national product had grown during the 13 years of Tory rule by the 4 per cent. by which the ex-Chancellor himself thinks that it ought to be growing, our national income would be about £5,000 million a year higher today than, in fact, it is. But, of course, it did not so grow. The Leader of the Opposition did not seem yesterday to understand—this is the answer to the hon. Member for Bodmin (Mr. Bessell)—that the limitation on imports which we are now compelled to adopt is in itself inflationary and needs a counter-inflationary tax measure.
  1218
  Right hon. Gentlemen opposite first imposed two shattering deflations on the country in 1957 and 1961 which held back our progress to the miserable snail's pace which brought us to where we are now. This was precisely because right hon. Gentlemen opposite restricted imports by deflation and not by the direct limitation which we have adopted and which the ex-Chancellor now, too late, approves. Deflation restricts imports just as drastically as a surcharge. If it did not, it would not work. But it was at the cost of slowing down our whole national income and impoverishing the whole country. Professor Austin Robinson has calculated—I do not think that this is seriously disputed—that the 1957 and 1961 deflations together, in order to cut down imports by £200 million a year, cut down the whole national product by £660 million a year. We do not propose to do that now. We intend to restrict imports temporarily until our balance of payments recovers; and to ensure that our national product goes on rising at the same time.
  After first weakening our economy by those two deflations the previous Government, having then in 1964 swung into the other phase of the electoral cycle, let the economy get completely out of hand. Three weeks ago we found the situation far worse than even the pessimists had expected. The right hon. Gentleman talked about the election. I will tell him this. I ventured, during the election, to guess that the country might face this year a current balance of payments deficit of £300 million and a current and capital deficit of £500 million. Hon. and right hon. Gentlemen opposite, during the election, said that was scare-mongering and spreading panic. Then we found that the deficit was not £500 million, but somewhere between £700 million and £800 million.
  This afternoon the right hon. Gentleman invented a new excuse. He said that part of the deficit was on capital account. He knows as well as I do that whether on current or on capital account it is equally a drain on our foreign exchange reserves. I cannot see how the leaders of the previous Government can escape the charge that either they simply did not know what was going on, or else they misled the electorate. Today, the right hon. Gentleman says that the deficit up until last

  1219
  October had been taken care of; but it had not been paid for. All that had happened was that debts owed by this country to others were mounting up in the sterling balances and the right hon. Gentleman knows perfectly well that those debts would have to be met.
  It was, in fact, obvious as early as January or February of this year—and some of us said so over and over again—that imports were getting out of hand, and that we should face a severe deficit by the autumn. What did the then Government do? The then Prime Minister said that the economic situation had never been better. The then Chancellor first said that one month's figures were misleading; then that the rise in imports was solely in industrial materials; then that an increase in exports would appear very soon; then that it was just a matter of stock building and finally, by mid-summer, that the figures must, somehow, he wrong.
  If I may say so, I am not being wise after the event. During the Budget debate on 16th April of this year I said:
  "I do not believe, therefore, that in the present situation the Government really serve the national interest by complacently looking the other way and pretending the balance of payments situation is much better than it really is ".—[0FFICIAL REPORT, 16th April, 1964; Vol. 693, c. 621.]
  That was what they were doing and that was why we found the situation completely out of hand on 16th October.
  At any rate, hon. Members opposite cannot complain, even if they did not understand the facts themselves, that they were not warned by hon. Members on this side of the House. These warnings were gaily ignored, and so we had, in 1964, a year of rising deficit, rising prices, and stagnant industrial output. The epitaph on the previous Chancellor must be that he gave us inflation without expansion. Finally, the hon. Gentlemen opposite, as yesterday's vote showed—when they did muster up courage to vote—having created this situation by their own inaction, are still running away from the measures which that situation has made inevitable.
  In the past three weeks this Government have certainly made a start, but we will do a great deal more yet. Even the first 100 days are not yet over. In my
  1220
  Department, with its responsibility for trade and industry—with shipping and shipbuilding now added—for industrial efficiency, distribution of industry, and exports, we have a great deal more which we plan to do.
  I believe—and I think that on this I carry the right hon. Gentleman with me—that the expansion of our exports is now the supremely important task facing us, not just for the Board of Trade but for British industry and the nation. If we succeed here we will succeed everywhere. With our balance of payments in hand, growth can go forward; and, with that achieved, we can afford the things we want, both at home and abroad. But if we fail in this we are in danger of failing everywhere, as the present crisis again unhappily proves.
  I do not believe that the export task can possibly be beyond our powers. We are already exporting more than £4,000 million a year and our total exports have been going up by between 4 per cent. and 5 per cent. a year. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite say "Hear, hear". I am pointing out that if we could raise the rate of increase by only a few percentage points we should be within sight of the end of our troubles. And even 5 per cent. is no more than £200 million a year, or materially less than 1 per cent, of our gross national product. That cannot be beyond our resources.
  As is often pointed out, about 200 firms in Britain are doing more than half our export trade at the moment. That means that a large number of firms could do much more. It seems highly probable, therefore, that if these other firms, or most of them, could be mobilised, we should soon be within reach of our target.
  I earnestly hope that every British firm, however big or small, exporting or not, and every other industry or commercial agency concerned, will now realise, if they have not yet realised it, that this will be the real test of our national success or failure in the years ahead. Not merely our standard of living, but our standing in the world, our defences, our aid to poorer countries and our whole future depend on it.
  The first necessity is for all those who are in any way concerned with the export

  1221
  drive to redouble their efforts in every possible way as their contribution to our prime national need. I say this because I have been listening to the advice about exports of a great many industrialists, including particularly Sir William McFadzean and other members of the British National Export Council in the past three weeks.
  I expected, frankly, that they would say that the last thing any businessman wished to hear was more exhortation from Ministers about achieving more exports. In fact, these advisers have told me that, on the contrary, in their view a large number of people in many firms throughout British industry do not even now treat the export effort as of really overriding importance. It is interesting to note that Sir William McFadzean said at the Institute of Transport a week ago:
  "Every company with an export Department, and, therefore, a belief in exports, must make a special effort immediately, perhaps on direct instructions from the Chairman and Board."
  I endorse that comment here today.
  I often hear it said that although our prices may be right, our quality excellent and our design good, where British firms fail compared with their Continental and American rivals is in selling, not only in hard, aggressive salesmanship, but in foreseeing and meeting their customers' requirements and providing the service which they need and expect. I do not think that managements can altogether ignore this criticism, and we in the Board of Trade will see in what ways we may be able to help too.
  Of course, a great deal has already been done and I pay tribute here and now to the successful firms which have tried hard and with highly encouraging results. A great deal has also been achieved by those working in the Government's own export services at home and abroad. I propose now to examine, together with those who are actually experienced in exporting, all possible new lines of action, in a purely practical empirical spirit and to adopt those which offer the best chance of success. It would be wise, in addition to everything that has already been done, for us to try out a number of concrete suggestions which have been made from one quarter or another, in the frank knowledge that some of them may succeed while some may not.
  1222
  Already, we have taken a number of firm decisions. Within our first fortnight the Government have introduced an export rebate scheme. Details of this have been announced, despite the fact that such a scheme was pronounced as being impossible by the party opposite for 13 years. We regard this as one, but only one, valuable contribution to the concerted export plan which we are proposing to launch. Industry has long asked for a scheme of this kind. Now that it has it I hope that it will seize eagerly upon it. Hon. Members opposite have said that such a scheme would be extremely costly to the taxpayer and that it would be negligible from the point of view of the exporter. I do not think that either argument is correct.
  Sir Harmar Nicholls: The right hon. Gentleman says that no thought to export incentives was given by hon. Members on this side of the House. Is it not within his recollection that a number of my hon. Friends and I have in the past put down Amendments to Finance Bills suggesting the introduction of an export incentive, but that on no occasion that I remember did we receive support from hon. Members opposite? Is he aware that every patriotic hon. Member will support him in his scheme and that we all want more exports? Is he also aware that the way the surcharge has been handled may make it more difficult to persuade the G.A.T.T. countries to co-operate with us, in view of the useful incentives which they have announced?
  Mr. Jay: I did not say that no hon. Member on the benches opposite had ever thought about it; just that no action was taken until we came to power.
  We are, secondly, setting up a Commonwealth Export Council—another move which has been deferred for far too long. It is clearly necessary that this shall be closely interlocked with the British National Exports Council, the activities of which span the whole of the world with which we trade. I am glad to say that to ensure this and to bring his great experience of export promotion to bear on the Commonwealth, Sir William McFadzean, Chairman of B.N.E.C., has agreed also to become Chairman of the C.E.C. My Department is now arranging with him how the C.E.C.

  1223
  can best be organised to tackle its important job.
  Next in all the controversy about E.F.T.A. in the past fortnight, many people seem to have neglected the huge growth in trade within E.F.T.A. which has already occurred. Nearly one-sixth of our exports now go to E.F.T.A. markets and this year our imports from E.F.T.A. have increased by 26 per cent.
  The present surcharge, as we have repeatedly said, is strictly temporary and we will do everything possible to strengthen E.F.T.A., both in the Ministerial Council next week and in the future. We are convinced that its continued growth and prosperity are essential to British trade.
  Fourthly, we are launching serious efforts to establish an incomes policy. This, if successful, would, by common consent, enormously enhance our hopes of keeping export costs down. I am astonished at the right hon. Gentleman's discovery that the F.B.I. was in favour of price control all the time. We never heard that before.
  I believe that the measures announced by my right hon. Friend yesterday, both on the side of pensions and of capital gains and direct taxation, will greatly improve the chance of getting agreement on an effective incomes policy. So will the price review body, which we hope to set up, and which will seek to restrain unjustified increases in prices. So, materially also, will the legislation to control rents and stop evictions, which the Government will introduce this Session. Rises in rents have been one of the most potent causes of the rise in living costs, so of export costs, over the past seven years.
  We in the Board of Trade are now reviewing a whole series of detailed suggestions for export promotion. Because I judge it better to discuss these thoroughly with those practically engaged in exporting and not try to impose them on industry, I will not attempt to make further detailed announcements today. I will, however, mention a number of the ideas being examined, with the frank admission that some may turn out to be non-starters.
  First, just because the Export Credits Guarantee Department has been such a
  1224
  brilliantly successful public enterprise up till now, we are reviewing export credits to see whether more business can be won for British industry by further expansion without too much immediate strain on our balance of payments. Of course, we cannot give our exports away, nor can we wait inordinately long for payment, but if—and I have often said this before—particularly in exporting capital goods, we can extend our markets and obtain some down payment at once on reasonable terms our exporters will be better placed to hold or win back business that has tended increasingly to go to those who offer the best credit terms.
  Next, we are exploring methods of mobilising the small firms who, up till now, have simply not had the expertise or "know-how" or resources to achieve the job of exporting. I have recently flown to Peking and back in eight days, and I say with feeling that export work may sometimes be exciting, but it is not always fun. I have found wide support in our industry for the view that some sort of group or co-operative selling might help in some cases in mobilising those firms who are not exporting today.
  Next, I am certain—this will not be a very long catalogue—that we must not neglect the opportunities in the Communist countries, such as they are. I agree with the Leader of the Opposition, in this at least, that well-fed Communists are likely to be more keen on peaceful co-existence than ill-fed ones. Indeed, in a world where Canada sells wheat to China and the United States sells wheat to the Soviet Union it seems plain common sense that we should sell non-strategic goods to both these and other Communist countries.
  That I found to be the near-unanimous and enthusiastic view of the British industrialists attending the industrial exhibition in Peking last week, which was in itself an encouraging sign of co-operation between British industrialists and the Chinese authorities. Our exchanges of trade with the Soviet Union—though they are still unbalanced, as I pointed out very firmly to Soviet Ministers—and I think I would carry the right hon. Gentleman with me on this—are now approaching £100 million a year each way, but those with China stand at barely £20 million a year. The latter is an absurdly low figure between two great nations and though we

  1225
  must not expect any spectacular increase I am sure that a steady growth is possible provided peaceful policies are followed by both sides. I am, therefore, following up the Peking Fair by inviting to this country the Chinese Trade Minister, the head of the China Council for the Promotion of International Trade and heads of Chinese purchasing missions.
  Next, and this is no order of priority, we mean to press on strenuously with the Kennedy Round and the international long-term effort to reduce protective tariffs and restrictions throughout the world. We are tabling our list of exceptions to the proposed Kennedy tariff cuts next week and keeping it to a minimum. We must learn here to distinguish sharply between those short-term emergency measures which any country may have to take temporarily to defend its balance of payments—and many others besides ourselves, including the United States, have done this in recent years—and permanent protective barriers.
  I repeat today, therefore, that the new Government intends to work unremittingly for the success of the Kennedy Round and the policies approved at the U.N.C.T.A.D. conference last summer. We in the Labour Government wholeheartedly supported the initiative at that conference by my predecessor, for in so far as these efforts succeed the opportunities for British exporters will be proportionately wider.
  Mr. Charles Loughlin: Is there an examination going on into the possibility of the creation or expansion of technical and sales staffs attached to our consulates and embassies throughout the world?
  Mr. Jay: Yes. That is one thing that we are examining. We are also reviewing urgently the possibility of market studies organised jointly between Government and industry, of more specialised trade missions, of more publicity for the Government's export services, of more concerted action within our own Government machine and of more trade centres and fairs at home or abroad. But even if all these things were done and these measures pushed forward, the export effort, I believe, will still not decisively succeed unless the efficiency and productivity of the British economy advances much more rapidly than hitherto.
  1226
  I believe that one paramount need is to correct the acute geographical unbalance in the location of employment in this island, which lands us with congestion and labour shortage at one end, and waste and under-employment at the other. This is gross national inefficiency. It means that the growth of the whole national product has to be checked because of over-heating in the South-East and the Midlands while manpower and other resources are being wasted elsewhere. I believe that the most potent single thing we can do to gear up to a 4 per cent. growth rate over the next few years would be to correct that unbalance. That is why I propose, as the Minister responsible for the distribution of industry, to introduce a Bill to control office as well as factory development. This is the first essential step if we are to check extreme congestion in the South-East.
  Secondly, to speed up modernisation and higher productivity in the underemployed areas, we propose to launch a new programme of Government-financed advanced factories in the development districts. This is the quickest way, in addition to many other efforts now in train, to stimulate positive new development, which is what we all want in the least fully employed areas. It fulfils the promise in the White Paper on the Economic Situation, 26th October, that
  "the Government will foster more rapid development in the under-employed areas of the country".
  I shall announce the details of this programme in the near future after consulting the regional officers of my Department and others.
  Thirdly, I told the regional controllers of the Board of Trade yesterday, after a full discussion, that I wished to see a tougher application of the I.D.C.s on factories being built in the really congested areas. These measures are only a start in the campaign to get employment more economically spread out, but I believe that they are the first urgent practical steps necessary to remove the geographical drag on the growth of our national product.
  At the same time, we shall introduce, as soon as we can, major legislation to strengthen the Government's present power to prevent monopoly abuses. Certainly, such abuses exist on many

  1227
  sides of industry and we mean to attack them all along the line. In some respects we shall amend the proposals in the Government's White Paper of last summer. In particular, I think that we need to consider whether powers could be taken to hold up a merger where there is a prima facie case against it and not to let it go through and then unscramble it months or years later.
  I believe that all these measures on the economic and social front, so far taken or to be taken by the Government, stand together. The Government are determined to secure expansion and growth, and if we succeed in the export campaign we shall secure them. We will not get efficiency, however, unless there is a conviction of social justice. And we shall not be able to achieve social justice unless our economy is efficient enough to sustain it.
  We intend to go on as we have begun, pushing forward by whatever is the best practical method on both these fronts, and enlisting the support of industry—public and private, managers and employees alike. That, I believe, is what the country wants to see, what it voted for last month and what, under this Government, it will get.
  5.0 p.m.
  Mr. Peter Bessell: In accordance with tradition, I crave the indulgence of the Committee for a maiden speech, especially as I shall be speaking for my party. I have the honour to represent the Bodmin division of Cornwall, a constituency that has been represented in this House by men of great distinction, not the least being the late Mr. Isaac Foot.
  Mr. Foot rendered great service to the nation—and, indeed, to my party—and, if I may say so without impudence, he has also rendered great service to Her Majesty's Government, in that two of his sons are members of the Government and another son sits for Ebbw Vale. I am happy to report that yet another of the late Mr. Foot's sons continues to render sterling service to my party in the West Country. It is because of the outstanding record of Parliamentary service rendered by former representatives of the Bodmin division that I approach my duties mindful of a great heritage as well as of the
  1228
  needs of my constituents at present and in the future.
  The Bodmin division is an area of high unemployment, and one in which there is serious depopulation. It is an area where there are low wage standards, and where the people do not share the same prosperity enjoyed by others living in the large urban districts. It may, therefore, seem appropriate that I should have chosen to speak in this debate on the supplementary Budget because, whilst the stability and growth of the national economy affect every single person to a greater of lesser degree, areas like Cornwall are infinitely more susceptible in times of financial crisis than, for example, the over-populated, over-employed areas of the South-East.
  We Liberals recognise that Her Majesty's Government are rather in the position of expectant relatives who, arriving for the reading of the will, discover that they have inherited a series of Income Tax demands and a request for payment of the mortgage. We, like the Government, vigorously opposed the policies of the late Government which have resulted in this situation, and I believe that if many of the constructive proposals that I know have emanated from this bench during the last 13 years had been adopted by the late Government, not only could this crisis—if that is the correct term—have been avoided but the Conservative Party might be occupying the Government benches at this time.
  It was, therefore, with some relief that many people were reading in the national Press, about three weeks ago, of the sweeping changes taking place in Whitehall; of civil servants working 80 hours a week to fulfil the demands of the new Ministers. Much of the Gracious Speech appeared to us to be in keeping with the demands of a modern Britain. The climax of this period of high expectations came at 3.30 yesterday afternoon, in this Chamber. We had arrived at the moment of truth; the moment when the Chancellor of the Exchequer would unfold the dynamic economic policies that would galvanise British industry into new life, would encourage our exporters to redouble their efforts, and would provide the incentive to bring together the two sides of industry in a revolutionary spirit of co-operation.

  1229
  It is true to say that every nation judges its Government by that Government's economic policies. I need not remind the Committee that yesterday this Chamber was packed, the atmosphere tense. The —hancellor took his place at the Dispatch Box and we waited—and waited —and waited. When, an hour later, the right hon. Gentleman resumed his seat, we on this bench at least were bewildered to discover that apart from a few long overdue reforms, to which I shall refer in a moment, it was the mixture as before. In fact, it would not be unjust to describe the Chancellor as a sort of semi-detached Tory.
  Where is the dynamic policy of expansion? What promise does the Budget contain of measures which, for example, will bring new opportunities of employment in Cornwall? I readily admit that I have been rather more encouraged by the utterances of the President of the Board of Trade just now, but where are the policies that will raise the standard of living of people who have struggled too long against adversity in the Highlands of Scotland, in Northern Ireland and in parts of rural Wales? Where are the policies that will restore Britain's falling prestige in Europe—or, even more important, in the great family of nations, the British Commonwealth?
  Perhaps nothing illustrates my point better than the imposition of the 15 per cent. import levy. I do not for a moment dispute the gravity of our balance of payments position, but need Her Majesty's Government have acted with what seems to some of us to be indecent haste? A month would have made little difference to the ultimate position, and during that time proper consultations could have taken place between the E.F.T.A. countries and, more important, with the Commonwealth countries. It has been suggested that such discussions might have led to a further drain on our sterling resources, but I reject that argument because it reflects upon the honour and integrity of our friends and allies without justification. If America could be trusted—and she was—why not the British Commonwealth?
  Her Majesty's Government, when in opposition, condemned the late Government during the Common Market negotiations for their failure to consult E.F.T.A. and the Commonwealth—and
  1230
  I believe that that condemnation was justified. This further breach of faith between friends and family can only do further harm to the prestige of our nation. Within days of taking office, the present Government are doing precisely the same thing as the late Government did at the time of the Common Market negotiations.
  While we reluctantly accept that the surcharge may be necessary as a matter of expediency, and acknowledging with relief the Chancellor's statement yesterday, reiterated by the President of the Board of Trade this afternoon, that this measure will only be temporary, there is one other aspect of the matter that is causing concern to many people. It is extremely unfair that the surcharge should have been applied to goods already in the docks and awaiting Customs clearance, and to any goods for which bills of lading had been despatched from foreign countries before the announcement of the surcharge was made. Provided that those bills of lading name British ports of entry, those goods should be exempt. As it is, many small importers—and some larger ones, too—are faced with having to accept deliveries at costs far higher than those on which they budgeted. That will cause real and quite needless hardship. This is a serious matter, and I urgently beg the Government to reconsider the unfortunate plight of these firms and individuals.
  Hon. and right hon. Gentlemen on both sides of the Committee will welcome the pensions proposals—for many of us, they went some way towards redressing the balance yesterday afternoon. We in the Liberal Party still maintain that by introducing a social security tax to replace the present National Health Insurance scheme it would have been possible, without straining the economy, to have provided still higher old-age, Service and widows pensions. Nevertheless, it is a step in the right direction, and we welcome the proposals.
  There are, however, some other matters that concern us and, once again, I trust that the Chancellor will give consideration to our plea. Now that the iniquitous earnings rule is at last to be abolished for widows, why not abolish it also for old-age pensioners, whose need is just as great? Next, will the Chancellor reconsider the position of public service pensioners, many of whose

  1231
  pensions were granted some years ago and who see pensioners who recently came on to the retirement list getting pensions far greater than those which their unfortunate fellows receive? Also, the Chancellor omitted to mention the rate of increase in National Insurance contributions for self-employed persons. I trust that he will bear in mind that any drastic increase would cause real hardship to many people in a small way of business.
  A curious feature of the Budget proposals is the fact that the Chancellor has announced measures which will form part of the annual Budget proposals next April. He has given advance notice of a capital gains tax and a corporation tax which, in principle, we welcome—which will give the tax avoidance experts another field day, or should I say another hundred and fifty field days, in which to devise fresh tricks to ensure that those who do the least work but have the sharpest wits will make the smallest contribution to the National Exchequer while those who toil honestly will continue to foot the lion's share of the bill.
  That is the very opposite of the intentions so forcefully expressed by the right hon. Gentleman yesterday. A capital gains tax is long overdue, but there is a need for other reforms at the same time. For example, a quid pro quo is needed in respect of capital depreciation allowances on new buildings if investment of the right kind is to be maintained and the modernisation of our larger cities is to continue.
  There are two fundamental issues I should like to touch upon. The greatest disappointment of this Budget is the fact that Her Majesty's Government are still apparently wedded to the nineteenth century notion that Britain can continue to support indefinitely the sterling currency of the world under the present system. Even if this is true —and I do not accept that it is—and if we are to be at the mercy of other countries calling upon our slender resources at times when their own balance of payments problems become acute, clearly Her Majesty's Government should initiate talks as a matter of extreme urgency with the countries concerned with a view to finding some sensible method of ensuring that our and
  1232
  their economies are not constantly at risk.
  In the long term we have to overcome the problem of a nation which is living far too close to the bone. Our sterling reserves for the first quarter of 1964 represented 11·1 per cent. of our total export-import bill. In the United States the reserves were approximately 36 per cent. and in Western Germany they were about 25 per cent. The effect of this is that we are desperately vulnerable to changes in world markets. It has been well said that when Wall Street sneezes we catch pneumonia. A drop in our exports, or comparatively small but sudden demands on our resources, appear to cause panic. This will not do and we believe that it is capable of correction.
  We in the Liberal Party supported the Government in the Lobby yesterday on the proposal to increase Income Tax because we recognise that improvements in the social services have to be paid for, but we did this reluctantly. We opposed them on the Resolution to increase the tax on petrol and diesel oil because this will tend to increase the cost of living and because it has long been our policy to seek a reduction in the existing tax which causes very considerable hardship at present.
  How much happier we would have been to have voted with Her Majesty's Government on the kind of dynamic economic policies which for a few fleeting days we hoped and believed might be forthcoming—policies which, as I said at the beginning of my speech, would have given incentives to working people to increase production rapidly and which would have encouraged our export manufacturers to far greater efforts, the very things which are so desperately needed if we are to build up our reserves and to restore and stabilise Britain's economy and above all if we are to earn the respect of the free world.
  I believe that the right hon. Gentleman the Chancellor of the Exchequer was profoundly right when he affirmed yesterday his confidence in the capacity of the British people to face reality, however unpleasant, and to work with honesty and determination in the interests of the nation as a whole. We on this bench wholeheartedly share that view, as will hon. Members on both sides of the Committee. There is, however, one word of

  1233
  caution to be added. No residue of good will is inexhaustible. If new demands are to be made on the peoples of these islands, they are entitled to a clear-cut programme from Her Majesty's Government, a programme of reform that will give them the inspiration they need for the prodigious efforts they will be called upon to make in the years ahead.
  I have crossed Jordan. If I have landed safely on the other side it is only because of the courtesy of hon. and right hon. Members of this Committee. I wish to thank them for their forbearance.
  5.16 p.m.
  Dr. Shirley Summerskill: I thank you, Sir Herbert, for making it possible for me to make my maiden speech to this Committee, and I ask hon. Members to show their customary indulgence on this occasion. I am extremely proud to be the new Member for Halifax. but I am also conscious of the many predecessors I follow in this capacity. The most illustrious of these was John Henry Whiteley, Speaker of this House from 1921 to 1928, born and bred in Halifax. On his retirement, the then Leader of the Opposition, Mr. Ramsay MacDonald, said:
  "You have shown us in a most remarkable way how to be patient and courteous without being lax; how to be strict and severe without being mechanical and formal; … how gentleness can rule and how persuasiveness can subdue."—[OFFICIAL REPORT, 19th June, 1928; Vol. 218, c. 1597.]
  I humbly submit that as a new Member of this House I can do worse than emulate my predecessor. I should like also to pay tribute to my two more immediate predecessors who for many years sat in this House, Dryden Brook, who sat on these benches, and Maurice Macmillan, who sat with hon. Members who are on the benches opposite.
  My constituency of Halifax is probably best known as a textile town. In fact, the town weaves one-seventh of the world's worsted yarn. It has 100 different industries, but it is because I represent the people of Halifax that I am very proud today to speak in support of the Budget's pension proposals. The Budget shows, if nothing else, that this Government believe that people do matter. In spite of a grave economic situation, humane End just measures have been given priority in the first few weeks of this Government.
  1234
  Halifax, along with several other parts of the West Riding of Yorkshire, has an unusually large proportion of retired people. They will welcome the Budget. I urge the Government to make an annual review of the retirement pension. This is imperative, for two reasons. The first reason is that the pension must always be related to the cost of living. Social justice means the relating of income to need. The second reason is that the pension must be linked to national average earnings so that pensioners share in national prosperity.
  I welcome the demise of the 10s. widow, but I would also urge that the Government soon alter the present illogical scheme for widows' pensions so that all widows are treated similarly, because, however they are widowed, the problems and difficulties of widows are the same. It is a fact that women are living longer than men. I will not go into the reasons for that in this Committee, but 60 per cent. of all old people over 65 are women. This is a fact that must be faced. It is quite clear that widows' pensions will form a major part of any social security scheme that the Government introduce in the future.
  May I express, too, the hope that in the spring Budget the same help will be given to single women with dependants? These women are a vast unsung army with no trade union to represent them. Many of them have one parent or two elderly parents to look after, sometimes sick parents, and at the same time they go out and do a full-time job of work. A fallacious argument often put against the case for equal pay is that women have no dependants. These women definitely do. I hope that the Government will not forget them in the spring.
  I ask my right hon. Friends the Chancellors of the Exchequer and the Minister of Health to give urgent consideration to taking the charges off prescriptions as soon as possible. This would be a positive step towards rescuscitating the National Health Service, which has been starved and neglected in the last 13 years. Two shillings for a prescription may seem a mere trifle to many hon. Members, but there are thousands of housewives with families who think not in terms of shillings but in terms of pennies when they go out shopping and budgeting. The chronic sick who may have to pay for six

  1235
  or eight items a week on a prescription are waiting for this measure to be introduced. As a doctor, I frequently write prescriptions of many items for retired people and often they say to me, "Will you not take one of those items off?" Everyone will realise that that is a question to which it is very difficult to respond.
  Yesterday the Leader of the Opposition implied the existence of a relationship between free prescriptions and the issue of Concord. I am at a loss to see this relationship. Aneurin Bevan said that the National Health Service was at the heart of politics. It certainly has nothing whatever to do with the British aircraft industry. It could, however, benefit from a few prestige projects.
  Before the charges are removed, I hope that my right hon. Friend the Chancellor of the Exchequer will consider how the excessive profits which their removal will yield to the 141 private drugs firms which exist because of the increased use of drugs can be directed towards the Treasury. I am aware that my right hon. Friend the Chancellor of the Duchy of Lancaster has been studying this matter in his capacity as Chairman of the Public Accounts Committee. Meanwhile, doctors can play their part by prescribing from the National Formulary, wherever it is possible to do so. Preventive medicine, which we all aim at, means encouraging people to seek medical advice, not only when they are ill, but when they think they are ill. It is for doctors, not a prescription charge, to sort out the malingerers. We cannot afford to put a premium on health as we are doing at the moment.
  I conclude by thanking the Committee for its attention and by hoping that I shall have the opportunity to address it on a future occasion.
  5.26 p.m.
  Mr. Geoffrey Howe: Like the hon. Members for Bodmin (Mr. Bessell) and Halifax (Dr. Summerskill), I crave the indulgence of the Committee as I make my maiden speech. The constituency which I have the honour to represent includes not only the young and very vigorous Borough of Bebington itself, but also that part of the County Borough of Birkenhead which is not already represented in the House of
  1236
  Commons by the hon. Member for Birkenhead (Mr. Dell). I am sure that right hon. and hon. Members on both sides will remember with affection and respect my predecessor as the Member for the division, Lord Oakshott of Bebington, who represented it so faithfully since its creation in 1950. The devoted services which he gave to all sections of the community in Bebington won him equal effection and respect throughout the division. He has been most kind to me as the candidate who sought to succeed him, and I know that it would be the wish of hon. Members on both sides to join me in congratulating him on the honour conferred on him during the Recess and saying how glad we are that he will have the continued opportunity, we hope, of many years of public service in another place.
  There is another feature about my constituency which is, possibly, of a slightly more controversial nature, though I hope not so. In the heart of the division is the Wirral Grammar School. It was at that school that the right hon. Gentleman the Prime Minister spent what must I suppose be described as his formative years. He was apparently an enthusiastic member of the school dramatic society. The school magazine records this verdict on his first performance there 31 years ago:
  "H. Wilson as a middle-aged businessman was convincing and direct. With more vivacity he should do well."
  Possibly more portentous to my hon. Friends would have been the rather more brief verdict on his second performance a year later:
  "H. Wilson was a most villainous villain."
  I know that my constituents would wish me most sincerely on this occasion to congratulate the right hon. Gentleman on his appointment as Prime Minister, a great distinction for an ex-citizen of the Borough of Bebington. I do this most warmly and most sincerely.
  Like the hon. Lady the Member for Halifax, I should like to say a very few words about the category of people identified by the Chancellor yesterday, as the elderly, the sick and the needy. In the Borough of Bebington just over two years ago the borough Old People's Welfare Committee undertook a survey of all the elderly people. The number of old people over the age of 65 of both

  1237
  sexes was ascertained to be just about 5,000. One-fifth of them lived alone. About 300 of them were housebound. Those figures are probably very typical of many other constituencies. It is perhaps one of the more valuable features of the conventional procedure of electioneering through which we have all gone very recently that we are able to meet so many people who we do not normally meet outside their homes and to renew our awareness of the personal and pressing nature of the problems which many of them face.
  The increases proposed by the Chancellor in the retirement pension have been matched by identical increases suggested in the National Assistance provisions. That particular course of action which the Government are proposing interests me in the light of some observations contained in a pamphlet produced by a group of young Fabians only two years ago, entitled "National Assistance: service or charity?" That pamphlet contains this message:
  "… it is safe to assume that a Labour Government"—
  that is talking of what would have happened in 1959—
  "would have raised National Assistance rates, as well as pension rates. However, this would have meant that the numbers on National Assistance would have increased. National Assistance recipients would have admittedly been enjoying a higher standard of living, but the task of reducing National Assistance to a minor role would have been retarded."
  That is not intended as a preface to a controversial observation. The Government have chosen to adopt this method at this time to meet the standard suggested by the hon. Member for Halifax when she said that social justice means the relating of income to need. It is the Government's first method of fulfilling the objective, which, I think, was first referred to by the hon. Member for Jarrow (Mr. Fernyhough) who moved the Address in reply to the Gracious Speech, of the principle: to each according to his needs. I do not presume that this is the Government's last word upon it. We know that a minimum income guarantee is under consideration and may or may not be decided, but it involves recognition of the arguments contained in the pamphlet from which I have quoted that it simply is not prac-
  1238
  tical politics to meet the needs of the existing generation of people in need by flat rate increases at a higher level. Such a course would involve spending about 10 per cent. of the total national income on social security. The same point was covered in the manifesto of the Conservative Party at the last election when we said that help will be concentrated first and foremost on those whose needs are greatest. The point, like so many others, has been put with the greatest clarity by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), whom I am delighted to see in his place, when he said, not many months ago,
  "Benefits for all are the enemy of care for the few."
  That is the principle accepted in fact—let us be frank about this—by both sides of the Committee. Both sides are striving for a method of identifying those citizens of our community most in need and securing for those people a standard of living as high as the community can possibly afford. It is a principle which I suggest is unanswerable, the principle of selectivity.
  How this is to be implemented has involved the suggestion of various mehods. Right hon. and hon. Members opposite are now espousing a suggestion which has been made for some years by hon. Members on this side of the Committee for a scheme which should to some extent be based on the P.A.Y.E. Income Tax code system. The Conservative Party during the last election was to some extent espousing a method of identifying particular groups in the community whose needs were greater than others—more elderly pensioners, more recent widows, and categories of that kind.
  The point that I invite the Committee to accept is one which was most clearly put by the hon. and learned Member who formerly represented Kettering, Mr. Mitchison, when he said
  "In a sense we can say that this is a means test",—
  he was speaking of guaranteed minimum income proposals—
  "just as an Income Tax return is a means test, but it is in a quite different sense from what it has been in the past."
  The plea I make is that when proposals are put forward from either side

  1239
  of the Committee they will not be condemned from the opposite side of the Committee simply because they involve going back to the means test. A test of means is implicit in many social services. It is one which we already freely accept and for which all parties have in the past made legislative provision. A test of means is administered for the supply of school meals and milk free of charge, for the granting of legal aid, and for the home helps service. For all the social services we accept the notion, as the hon. Member for Halifax said, of relating income to means and need. For none of these services has anyone suggested universal free provision, regardless of need and regardless of the means of the recipient. It is only when this principle, generally accepted throughout the Committee, comes to be applied by either party to the central section of social security, to provision for retirement pensioners particularly, that hon. Members on the opposite side of the Committee, whichever that happens to be, are easily tempted to condemn the proposal out of hand as involving a means test.
  My hope is that hon. and right hon. Members on both sides of the Committee will support the Chancellor of the Duchy of Lancaster and my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) when and if either of them bring forward proposals which represent a real step towards the solution of this problem which besets us all. The solution at which we finally arrive must be one of which all in need can take advantage. It must be one that is simple. It must have a real flavour of humanity about its administration, and it must take account of differing needs as well as of differing means. We should all be wary of attaching to it the so-called stigma that has so often been said to have attached to similar proposals put forward from both sides of the Committee in the past.
  We can perhaps agree on this point. The only defect about a means test as a matter of principle, as administered by both parties in the House in the past, has perhaps been that it has been too darned mean, if I may put it in that way. We wish to achieve more generous provision and use the means test in a modern sense to achieve this. The point
  1240
  was best made, again by the former hon. and learned Member for Kettering, in the last Parliament, when he said:
  This is not a matter that we want to debate in terms of slogans, or anything of that kind. We are dealing with old people who have not enough to live on, and we are trying to make their lot more comfortable. Let us for heaven's sake not get this thing cockeyed by putting the wrong label, or the right label in the wrong way, on it. Let us look at the scheme on its merits."—[OFFICIAL REPORT, 10th December, 1963; Vol. 686, c. 244–5.]
  I thank the Committee for the indulgence which it has shown to me on my maiden speech, and I hope, perhaps like the hon. Lady the Member for Halifax, that I may have other opportunities of speaking in the future.
  5.39 p.m.
  Mr. Kenneth Lomas: Like the previous three speakers, I crave the indulgence of the Committee for my maiden speech. It is not my intention to follow the hon. Member for Bebington (Mr. Howe) into the arguments on the justification or not of the means test, because this is supposed to be a non-controversial contribution.
  I cannot claim to bring to the Committee or to the House of Commons any great high academic qualifications. I was one of those who left school at 14½ and had to make my own way in the world. Equally, I cannot claim to have had the experience of working in a scientifically-based industry. For the last nine years, I have been with the National Health Service and for the previous seventeen years with the trade union movement, neither of which can really claim to be scientifically based. But I have the honour and distinction of representing Huddersfield, West, and my pleasure at representing that constituency is shared by my constituents in the fact that it is the birthplace of my right hon. Friend the Prime Minister. The people of Huddersfield are very proud of the fact that on the day that the Prime Minister was elected, Huddersfield, for the first time in its history, had two Labour Members of Parliament. Indeed, between 1945 and 1950 my hon. Friend the Under-Secretary of State for Defence for the Royal Navy served Huddersfield alone, and since 1951 he has made a wonderful contribution on behalf of Huddersfield, East.

  1241
  It is true, however, that during the last 14 years my constituency has been represented by the former Deputy Leader of the Liberal Party, Mr. Donald Wade, and I should like to take this opportunity of asking the House to record in its journals its appreciation of the work that he did in this House and in its various committees during the time that he served here, and to express the thanks of his constituents of Huddersfield, West for the way in which he attended to their problems. I hope that those remarks of mine will not for a moment be construed as an attempt on my part to fly a kite for any kind of Liberal-Labour affiance. I have always believed that the differences as divide the Labour Party from the Conservative Party are the same differences that divide the Labour Party from the Liberal Party. We are fundamentally different. But this in no way prevents the Liberal Party from entering into alliances of its own. During the last 14 years up to 15th October the Conservative Party, by standing down, allowed the former Deputy Leader of the Liberal Party to retain his seat.
  It is unique that no Conservative has had the opportunity of representing Huddersfield, West since 1929. In that year a former Member of this House, a respected temperance Member, Jimmy Hudson, was elected. It was said of Jimmy Hudson that his agent Arthur Gardiner used to say to him at election times, "If you will do the chapels and churches I will do the clubs and pubs," and this arrangement seemed to work very well. It has also been said—and it has certainly been true during the last 40 years—that whenever the Conservatives fight in Huddersfield the Labour Party wins, and it is my earnest hope that the Conservatives will continue to fight in that constituency for the next 40 years.
  The main industries in my constituency are chemicals, engineering and textiles. En particular, engineering and textiles have at one time or another felt the chill winds of economic depression—so much so that in 1931 the firm of John Crowther & Sons, led by Stoner Crowther, introduced a gimmick in the West Riding, when Stoner Crowther accepted a challenge by the last Sir Malcolm Campbell to make a suit in record time. The story is—and it is quite true—that 12 sheep were gathered in the mill yard together with expert Yorkshire Dalesmen. The
  1242
  sheep were sheared, the cloth was woven, dyed and made up into a suit in two hours and nine minutes. That occasion has a connection with this House, because the following day that suit was worn by yet another respected Member, the Right Hon. Jimmy Thomas, as a boost to British Industry.
  Today that firm of John Crowther & Sons is playing a very large part in the export trade of this country and it is turning out goods that are sold in practically every country in the world. It is unfortunate that in order to meet the competition that it faces from Italy and elsewhere, this firm is compelled to import machinery from abroad because it cannot obtain that machinery in Britain. One of these machines is a cloth polishing machine known as the Pol-Rotor machine. It is most unfortunate that it should be necessary for that firm to have to pay the import surcharge on a machine that it would like to obtain in England but which the British machine industry cannot produce. I should like my right hon. Friend to consider whether anything can be done about this.
  I should like briefly to refer to a couple of the other Budget proposals. Certainly pensions had to be increased. As a Socialist, I have always believed that that which was morally right must he politically right, and it was obviously morally right that pensions should be increased. But I implore the Chancellor to find some way of ensuring that pensioners get the increase before Christmas. It must be borne in mind that if the present rate of pension is continued until the end of March 10,000 or 12,000 old-age pensioners will have died before the increase comes through and I, therefore, hope that something can be done to make sure that they get the increase for Christmas.
  Let it not be forgotten that even with this increase they will still not be privileged members of this affluent society. Even £4 a week is not a lot in our present-day society, though I know that it will help many people in Huddersfield. I checked with my local Assistance Board and found that 65 per cent. of all the National Assistance payments made in the Borough of Huddersfield went to old-age pensioners to help them

  1243
  make ends meet. Hon. Members opposite must not resist these proposals or find reasons for delaying them, for they are essential.
  Like my hon. Friend the Member for Halifax (Dr. Summerskill), I welcome the removal of the prescription charges. No one should have to put his hand into his pocket to decide whether he can afford to have medicine. It is right and proper that these charges should go.
  It is unfortunate that the 2s. increase on the National Insurance stamp will be an extra burden on many people who have a take-home pay of less than £10 a week. As a local branch official of the National Union of Public Employees, I know that many people in the Health Service have a very low rate of pay. I wish we could find some way round this, perhaps by extending the capital gains levy and by introducing it at an early date.
  I thank the House for having listened to me. It has always been my policy, as a member of the Labour Party and as a worker for Socialism, to try to ensure that the producers of wealth obtain a fair share of the wealth which they produce. I believe that the only way in which we can ensure this is by having a Labour Government that is dedicated to that end. I have tried not to be controversial, but after 27 years in the trade union and Labour movements I find it very difficult and I hope the House will forgive and understand if I have been controversial.
  5.49 p.m.
  Mr. Nicholas Ridley: It falls to me to congratulate no fewer than four maiden speakers in our debate this afternoon. I have perhaps been singular in that although I have been a Member of this House for five years it has never fallen to my lot before to congratulate a maiden speaker. However, this afternoon there have been four, and I suppose that it is debating justice.
  I should like to pay sincere tributes to the four speakers whom I have heard. The hon. Member for Bodmin (Mr. Bessell), who spoke first, gave us a very clear and expert speech. He covered many aspects of the Liberal Party's policy which perhaps would not have been in a maiden speech if that party had a greater
  1244
  number of representatives in this House, but we can all agree that we look forward to hearing him again expounding his party's views.
  I should also like to congratulate the hon. Lady the Member for Halifax (Dr. Summerskill), who gave us a most impressive and successful maiden speech. I was glad that she paid tribute to my friend Maurice Macmillan who, for a very short time I hope, is not with us on these benches. The whole tone of the hon. Lady's speech, the sentiments and the ideas which she expressed were very much to our liking. We all look forward very much to hearing her on future occasions.
  My hon. Friend the Member for Bebington (Mr. Howe) made another speech which will be remembered by all of us who heard him. Again, he follows a person much missed on these benches, Lord Oakshott. My hon. Friend gave a most interesting account of differences which divide the Committee on the question of how pensions should be handled in future. He covered ground of immense importance and somehow managed in a very clever way to make it noncontroversial. I am sure that we all hope that he will expound these points in future debates.
  Lastly, it is my pleasure to congratulate the hon. Member for Huddersfield, West (Mr. Lomas), who gave us a speech which was well laced with wit and humour. There was very much of what he said which we all found agreeable.
  I should like to take up straight away one point which he made and that was on the question of the imported cotton polishing machine which was put at a disadvantage by the 15 per cent. surcharge. The hon. Member pleaded that the machine should be allowed to be imported free of duty. The argument which the Government put forward is that we should be able to make just such machines here at home and that it is for this reason that they are trying to discourage imports. But as long as these surcharges are temporary there is no encouragement for any British firm to install plants to make similar machines while they feel that the surcharge will last only six months or a year. It is mainly on the surcharge that I want to speak.

  1245
  First, however, I should like to know whether we can be told something more about the balance of payments. We are told that the gap will be £700 million to £800 million by the end of the year. I should like to know what the long-term capital movements have been. We know that there has been an oil deal of £60 million and many other capital transactions. How much of this is E.C.G.D. business? We are spending more and more and exporting more for which we shall not be paid for many years because we lend the money on a long-term basis. The President of the Board of Trade said that he was doing all he could to expand E.C.G.D. but it is bound to be an added strain on our balance of payments if he succeeds.
  Then there is the question of overseas aid. How much of the £700 million to £800 million is accounted for by that aid? It is no use the right hon. Lady the Minister of Overseas Development talking about increasing aid and splashing it around wholesale. It must fit into a purposively planned balance of payments. Hon. and right hon. Members opposite who believe so sincerely in planning should take into account the need for planning the balance of payments. They should think how to fill the gap and cut down on such things as long-term credit and aid if we cannot find any other way of making the payments balance.
  I should like to know what the balancing item will be. In 1960, it was £312 million. If the balancing item this year is as big as that, it will throw all the figures out. What will this item, which deals with errors and omissions, be? I feel that the Government have been less than frank about these figures and about what comprises the £700 million to £800 million. It is difficult for the Committee to make up its mind about the matter without more information.
  It is natural and understandable that the Government should exaggerate the information into a crisis, and I suspect that this is what they have been trying to do. Despite the fact that they urged my right hon. Friend the Member for Barnet (Mr. Maudling) to do more in the spring, I think that they have tried to overplay their hand in this matter. Either there is no crisis and the situation is not as bad as it has been painted,
  1246
  in which case there was no need at all for the surcharge and other measures; or, indeed, there is a serious strain—and I think that there certainly is a strain—in which case I cannot but think that these measures are wrong.
  They run counter to everything in which I believe in politics and economics. There was no consultation either with E.F.T.A., Southern Ireland, the rest of Europe or indeed any other part of the world. I do not put too much on that argument because I never believe that it is a strong argument to say, "Nobody told me about this". But the effect shows how much wiser it would have been to try to get some consultation at least.
  We have broken the rules of G.A.T.T. and of E.F.T.A. and we have exported our troubles to Europe and the rest of the Commonwealth. Indeed the only countries not affected by these measures are probably the Communist countries, which export to us principally raw materials and food. I wonder whether this again is the Hungarian influence being felt in our economic policies.
  I went to Strasbourg last week and I should like to quote words spoken in debate there by a Swede. I think that this will help right hon. Gentlemen opposite to understand, if they do not do so already, why their action has so much upset the whole of E.F.T.A. and the rest of Europe. He said:
  "If any country is to feel free in an emergency to take unilateral action, what does that mean in relation to the reliability of the agreements into which we have entered so far, and into which we might enter in the future? I think it is quite clear that unilateral action of this type, particularly because it is unilateral, will have a negative effect on the GA.T.T. negotiations."
  We have broken our word at a time when the countries of Europe were struggling to abolish restrictions and high tariffs. We have run suddenly counter to all the rules and put the tariff on again. It is this that has surprised these countries so much. What is the point of struggling to cut tariffs down and to get the Common Market to reduce their tariffs, if this is to be nullified by our putting a 15 per cent. surcharge on everything?
  Hon. Members opposite try hard to tell us that this will not affect the Kennedy Round. I hope that it does not,

  1247
  but even if the Kennedy Round succeeds and tariffs are cut down throughout the world, what will stop any country from putting them up again and saying, "We are following the British example in 1964. Why should we not do the same?". Furthermore, we are a big and rich trading nation. If we do this, the temptation to the small and the weak, to those without our resources, becomes very strong.
  Free trade has been denied by the very hon. and right hon. Members who taunted the European Economic Committee with being inward-looking and protectionist. I remember their criticisms during our Common Market debates, saying that what was wrong with the E.E.C. was that it was protectionist and inward-looking. Now we have a Government who, within a fortnight of taking office, do something which is seen throughout Europe as being of the same colour. No longer can we read with any conviction the words in the Gracious Speech:
  "My Government will continue to play a full part in the European organisations of which this country is a member and will seek to promote closer European co-operation."
  What a way to start, and what damage has been done!
  But none of this is so important as whether the measures will work. I do not believe that they will, and not many people in Europe believe that they will. The President of the Board of Trade will confirm that he had a fairly rough passage on his visit to Europe. He came in for fairly stiff questioning and criticism from the G.A.T.T., from the members of the "Paris Club", from the Council of E.F.T.A. and from all those whom he saw. I am sure that the main point of their attack was directed to whether these measures would, in fact, work.
  Of course, imports will decline. They will go down quite startlingly. Importers will be waiting for the surcharges to come off so that they can do their importing then. Everything rests on what is meant by "temporary". Is it six months, a year or two years? How long will it be? I am sure that we shall find it very hard to keep the surcharges in being for more than about six months. Canada did something similar in 1962.
  1248
  She imposed surcharges. Admittedly, they were graduated within a range of from 5 to 15 per cent. on different classes of goods, and there was, at the same time, a devaluation of the Canadian dollar and strong internal measures to put the situation right. But, despite all that, international pressure through the G.A.T.T. and other trade councils succeeded in getting those surcharges removed within six months. I wonder whether this Government will be able to hold them for as long as six months.
  Will their incomes policy have borne fruit in six months? Do they believe that they will succeed in establishing the planned growth of incomes in six months, or even at all? Will they have abolished restrictive practices on both sides of industry by then? Will they do these things in the first 100 days or the first six months? Shall we have had the technological revolution and the modernisation of British industry which we have been promised? Will this be bearing fruit by the time the surcharges have to come off? It is impossible.
  Even giving right hon. Gentlemen the maximum credit, and assuming that they work all their miracles, they will not work them before they have to take the surcharges off. So, when the surcharges come off, we shall be left with demand building up and the economic situation unchanged. If anything, demand will be greater in this country, with all the pent-up imports flooding in. I find it very hard to see what the import surcharges have done other than postpone the problem until such time as the Government are forced to take them off.
  Turning to the Budget, I welcome the rise in pensions, but this rise and the addition to Income Tax which virtually pays for it are not relevant to the situation about which I am speaking because nothing in them bites until the latter part of next year. Neither the increased demand for the pension nor the deflationary effect of the Income Tax changes will effect us for at least six months. We are left only with the petrol tax which can affect demand. The Chancellor admitted that the surcharges would increase home demand, so he had to put the petrol duty up straight away to deal with the increased home demand caused by the surcharges. A very much better way to go about it would have been not to put

  1249
  the surcharges on, or the petrol tax. He has created demand by the surcharges, so he has had to take it off with the petrol tax.
  The right hon. Gentleman said:
  "The effect of the import charge and of the export rebate will be to increase demand on home production."—[OFFICIAL REPORT, 11th November, 1964; Vol. 701, c. 1035]
  I do not know by how much—perhaps, by at least as much as £100 million. The rise in petrol duty will bring in £93 million. The significance of those two figures is such as to make one believe that they were meant very nearly to balance.
  There has been hardly any net change in demand at all. I wonder whether the Government have tackled the situation which causes our uncompetitiveness at all. They have merely scratched at the symptoms without attempting to cure the disease. Their long-term measures, with the best will in the world, cannot work before they have to take the surcharges off. They have done nothing to affect demand in the economy during the next six months here at home, and the problem will pile itself up and become worse.
  It is as though the right hon. Gentleman had been asked to perform an operation for appendicitis on a patient, but he had been given the job on the express pledge that he would not cause any pain. He has, therefore, rejected appendectomy. He is trying every sort of pill and medicine to cure the patient, but he is not prepared to try the one thing which will help. The Prime Minister made "stop-go" so unpopular and made orthodox economics so unpopular that he has been forced to use the weapons least likely to cure the disease. There were references yesterday to my right hon. Friend's maxim—
  Mr. H. Hynd: The hon. Gentleman is describing a very gloomy prospect. Can he suggest what the Chancellor ought to have done?
  Mr. Ridley: I do not believe that it was necessary to put the surcharges on at all. I believe that they were put on to heighten the sense of panic and to try to make the situation appear worse than it is.
  Mr. Jay: Can the right hon. Gentleman tell us what he would have done about the balance of payments situation? What-
  1250
  ever his estimate of it, he cannot argue that it is wholly imaginary.
  Mr. Ridley: I think that he ought not to have put on the surcharges. The increase in the petrol duty would probably have done considerable mopping up of demand, as also would the increases in the contribution for pensions. I only wish that these could have been brought forward earlier so that they would begin to bite sooner.
  Mr. Jay: But if the increase in the petrol duty is the one change which the hon. Gentleman does support, why did he vote against it yesterday?
  Mr. Ridley: For the simple reason that, when coupled with the surcharge, it made absolutely no sense at all, as I explained in my speech, if the right hon. Gentleman had listened.
  I am quite certain that this is not the right way to go about curing our troubles. The Budget is both irrelevant and wrong in its whole conception of trying to cure the disease by removing the symptoms rather than go to root causes, and it is extremely unlikely to work at all.
  6.9 p.m.
  Mr. Henry Solomons: I, too, trust that the Committee will grant me the tolerance which is usual for a Member making his first speech in this Chamber. I was particularly interested in the remark of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), that the Budget is irrelevant. I wondered whether the old people in my constituency of Kingston-upon-Hull. North would say that an increase in their pension was irrelevant. It would be very interesting to get their reactions.
  I, too, was struck by the same point as the President of the Board of Trade, that the right hon. Member for Barnet (Mr. Maudling) failed to mention the pensions increase in his speech. He, too, presumably thought it was irrelevant. The country will be interested to know that when we go to it again in four or five years' time.
  Those of us who have worked among old people, those of us who have been on old people's welfare associations, war pensioners' committees, and so on, know the poverty that still exists. In this debate, when old people and old-age pensions have been mentioned so often, I

  1251
  have been reminded of an incident that happened only a few weeks ago in Hull. I saw a queue outside a church hall waiting for the doors to open for a jumble sale. In the queue there was an old gentleman upon whom I had called a few days earlier. He recognised me and greeted me. I asked him what he hoped to buy at the jumble sale. He replied, "You see my shirt. It is the only one I have. I could do with a new one. I have to wash this one out and hang it up and dry it for the next day". So, in England, in 1964, we have descamisados—"shirtless ones". I for one plead that the Budget proposals shall include some measure of alleviation of the distress of the poverty-stricken in this country.
  The same applies to widows. Any of us who have, like myself, been brought up by a widowed mother know the struggles that widows have to endure and realise that one of the finest pieces of legislation that the Government could bring into operation would be legislation to increase the benefits for widows. It is the same with regard to unemployment benefit and other benefits.
  But there is one point in connection with unemployment benefit that I would draw to the attention of those who would be responsible for reviewing the details of future legislation about it. About 18 months or two years ago I had a long spell of unemployment—brought about, I might mention, by the fact that a Conservative board of directors sacked me because I had been adopted as a Labour candidate. Naturally, I went to the employment exchange and filled out the usual form. At the end of the first week I was paid as a single person. The Chancellor told us that unemployment benefit for married couples would be £6 10s. But the employment exchange does not look upon a married couple automatically as being married.
  As I say, I was paid as a single man. When I remonstrated, I was told that when I filled out the form I said that my wife was doing a part-time job. Of course, my wife was doing a part-time job. One in every three women in industry today is married and doing either full-time or part-time work because of the standard of living, the high cost of rents, and so on. My wife had to go to work so that I should be able to pay the high
  1252
  rent, but because she earned more than £2 a week she was classified as being able to keep herself, and, therefore, I obtained unemployment benefit only as a single person. I hope that that will be looked into. It is not fair to classify as being independent a wife who has to go out to work to eke out what is already a low income when her husband is out of work and is getting an even lower income still.
  I am very glad that the Government have brought in these changes. The old people will be grateful to them, just as they were vocal in their condemnation of the previous Administration, which I have always called the "Bingo Government". Those of us whose local organisations have tried to raise money by running bingo know that when the caller comes to No. 13 he says "Lucky for some". The Bingo Government that we have just got rid of was lucky for some—lucky for the land speculator, the take-over bidder and the tax evader. The present Government will be lucky for some—lucky for the pensioner, the unemployed, the disabled and the chronic sick—and I am sure that our "lucky for some" will be far more appreciated than other people's "lucky for some".
  Perhaps I might just say one word in conclusion. I bear in mind that I have been told to be both brief and noncontroversial. I would remind the Prime Minister that he is in a very difficult position at the moment because not merely has he the Leader of the Opposition, the ex-Prime Minister, watching him very carefully, not merely has he in the country ex-Prime Ministers like Lord Attlee, Lord Avon, Mr. Macmillan and Sir Winston Churchill, but behind him on these benches he has another ex-Prime Minister in the person of the hon. Member for Kingston upon Hull, North, who was the Prime Minister in the famous Cairo Forces Parliament during the war and will be keeping an eye on him, too.
  6.16 p.m.
  Mr. A. E. Cooper: All I can say about that is that I hope I am in the House when the hon. Member for Kingston upon Hull, North (Mr. Solomons) makes a contrversial speech. In the last few days we have heard some magnificent maiden speeches, and it has

  1253
  been a great pity that we have not been able to reply to them in a way which they really justify. I should like to complement the hon. Gentleman on the presentation of his speech, and we shall look forward to hearing him on more controversial occasions. We know at least one thing, that we have an optimist in the House. Any hon. Member opposite who thinks that the Labour Party will form the Government of this country for four or five years must be "stone bonkers".
  I suppose that the Budget can be called a goulash, and a not very tasty one at that. The first duty of any Government is to ensure that conditions exist for industry to prosper, for a prosperous industry is the seed corn of our country. The Government measures must be judged against that background. We have heard a good deal about the. I believe, imaginary figure of £700 million to £800 million deficit. I thought that the first half of the speech of the President of the Board of Trade was rather fifth-form stuff, and that he could really do better than that. The second part of his speech was most constructive, and I am sure that he will get full support from those of us on this side of the House who have experience in industry for any measures which he proposes which will be for the benefit of British industry.
  But the right hon. Gentleman has been less than frank with the House. We do not expect the Prime Minister to be frank with the House, but we do expect the President of the Board of Trade to be so. What the right hon. Gentleman should do is to set out in a White Paper just how the £700 million or £800 million is broken down. An hon. Friend of mine a little earlier spoke about the balancing item, which could be anything from £200 million to £400 million—we do not know. It could be the smaller figure. We have no idea yet what has been the total sum on capital account of the big Shell chemical project and other items of that kind. We do not know precisely how much repayment of overseas debt is accounted for. Speaking from memory, I believe that it amounts to about £90 million a year on the North American debt alone.
  We must also take into consideration the very important point relating to the Export Credits Guarantee Department.
  1254
  This aspect has not been raised sufficiently in the Committee; at least, it has not been sufficiently appreciated by many people. The facts are quite simple. We pay for our imports largely by cash out of the current year's earnings. Any goods that we buy now are paid for and come into this year's accounts. But a proportion of the goods which we export—and exports this year are running at an annual rate of £4,000 million—are covered by the E.C.G.D. and manufacturers are paid for these goods out of Government funds from the revenue of the country. The Government itself does not receive payment from the overseas buyers for some years afterwards—perhaps, three, four or five years and up to seven or eight.
  We do not know what is the extent of that, but let us assume that 20 per cent. of our trade is done on E.C.G.D. terms, which amounts, roughly, to £1,000 million a year. Our export trade builds up year by year. Although it increases slowly, it is, nevertheless, increasing. This must mean that in the current financial year we are drawing payment for goods sold as far back, perhaps, as seven or eight years, which must obviously be very much lower than the total value of the sales entered this year—as much as £100 million to £150 million. I am not being controversial, because this is a very important point which perhaps is not widely appreciated. It would be a good thing—perhaps not during these proceedings, but later, when we discuss the Board of Trade—if this aspect could be illuminated and Parliament told how far back we are drawing money and what it really means.
  Mr. Jay: I am sure the hon. Gentleman realises that, in the normal E.C.G.D. transactions, there is an immediate down payment, usually a good deal less than 50 per cent. of the total value of the export. In other words, some payment is secured in the year of export.
  Mr. Cooper: But it is a very small item, sometimes the payment being as low as 15 per cent. I am aware of many transactions where that has been the case.
  Mr. Edward du Cann: E.C.G.D. cover is available in respect of about 25 per cent. of the total volume

  1255
  of British business. The figure, therefore, is slightly larger than my hon. Friend the Member for Ilford, South (Mr. Cooper) has suggested, which reinforces his point. The forms of credit are suppliers' credit and the financial guarantees introduced by my right hon. Friend the Member for Barnet (Mr. Maudling), when he was President of the Board of Trade. The normal form is, in the first case, to allow five years' credit and, in the latter case, credit up to 15 years, with a down payment of about 20 per cent. Some of these transactions are very large.
  Mr. Cooper: I thank my hon. Friend the Member for Taunton (Mr. du Cann). My point is that these transactions make a very considerable contribution to the balance of payments problem, which will continue to right itself as years go by but, paradoxically, will get worse as our exports build up—the more so if the E.C.G.D system is extended as suggested by the President of the Board of Trade. The gap will tend to grow larger all the time. We must not lose sight of this in future consideration.
  Taking these capital items into consideration, with the E.C.G.D. idea, I am forced to the conclusion, reluctantly, that this crisis exists largely in the minds of the Government and has been created from a deliberate political motive in order to raise additional taxation to pay for social service benefits which they had not the guts to talk about during the election campaign. We tried for the three weeks of that campaign to force every member of the present Government to cost their programme, to tell the country honestly what it meant in terms of extra taxation. Not once did we ever get a reply.
  Mr. Sydney Silverman rose—
  Mr. Cooper: Just a moment. The hon. Gentleman gets up so often that perhaps he will allow me to finish what I am saying.
  My right hon. Friend the Member for Barnet (Mr. Maudling) costed this programme for the Labour Party and the country. He was told that he was indulging in schoolboy economics. But when they come into power the very thing that he said they would do is done and
  1256
  it costs exactly what he said it would cost.
  We are not complaining about the increases in pensions. They were right and justified and everyone applauds. We complain that the Government during the campaign made no mention of the cost of this part of their programme to the electors. It is for that that they stand indicted by this party and the nation.
  Mr. S. Silverman: The hon. Gentleman has just said that the party opposite is in favour of raising old-age pensions. He has said that his party made that perfectly plain—as, indeed, it did—during the course of the election campaign. Can he tell me whether his right hon. Friends themselves assessed what the cost of this would be, whether they told the country during the campaign, and whether they said how the money would be raised?
  Mr. Cooper: We set it out quite clearly. We said that it could be done on the basis of a continual 4 per cent. growth.
  Mr. Silverman: This is still not quite clear. Of course, it could be done out of a 4 per cent. growth in the economy. We all said that. But we cannot do it out of a 4 per cent. growth until we have such a growth. Does this mean that the party opposite would have done nothing until it got a 4 per cent. growth.
  Mr. Cooper: It will be found that in the last 12 months growth has been substantially better. We were within measurable distance of getting 4 per cent. growth under the Conservatives. [HON. MEMBERS: "Oh."] The party opposite is supposed to be the dynamic party, elected on the policy of making the country move forward. As I walk about the country I do not see a glow of expectation on the faces of the people. I see them going about their work in the ordinary way and looking rather unhappy this morning at the extra tax bill. They will soon find out what is the real cost of Socialism.
  One of the items which has caused the balance of payments difficulty has unquestionably been stockpiling in a big way. The President of the Board of Trade will find in his Department all the evidence he needs that a great deal of deliberate stockpiling by industry as an

  1257
  insurance against the type of thing that the Government have introduced was done this year. This will obviously rectify itself as the weeks and months go by. So, again, I am quite sure that it was quite unnecessary, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said, to put the surcharges on.
  If we wanted any further evidence to support what I say, the level of industrial activity has not got to a state of being overheated and would certainly not justify the volume of imports coming in now. It must, therefore, be obvious to anyone with the meanest intelligence that stockpiling was going on. Nevertheless, this is taken as one more excuse by the Government for panic measures. Investment in industry must continually increase and the source of this investment must he from limited places—for example, the percentage of profits ploughed back into business and further money coming in from private investors.
  This latter money is available to industry only if savings are high. In the last financial year, savings reached a figure of £2,000 million compared with £100 million when we came to power in 1951. A high level of savings is vital to the country's whole economic structure and we have to consider whether the measures which the Government have now introduced will assist savings or cause them to dry up, thereby denying industry its very life blood.
  Industrial profits are not high in the strict sense of the term and, in any event, the State benefits if profits are high. The right hon. Gentleman knows this, for at one time he was Financial Secretary to the Treasury. On average, about 50 per cent. of all company profits go direct to the State, while about 25 per cent. are paid out in dividends, all taxed at the standard rate and in many cases at the Surtax rate, and about 25 per cent. go back into industry.
  It must be obvious to anybody that if profits are forced down by some means, the amount which the Exchequer gets from industry and the other recipients of profits will fall. It is this volume of money which now largely finances the Welfare State and which would have to be met by higher personal taxation. The right hon. Gentleman must decide what he wants to do. Does he want industry
  1258
  to play a great part in all this, or to depress it so much that he has to force more and more taxation on to the private individual?
  If dividends are restricted, savings will decline and that will have serious effects on industry generally and on our general economic structure. We must get out of our heads the idea that dividends are the perquisite of a few. There are nearly 14 million people in this country who are, directly or indirectly, the beneficiaries of company dividends.
  Mr. Jay indicated dissent.
  Mr. Cooper: I wish that the right hon. Gentleman would not indicate that that is not true. I will explain how true it is. The trade unions, for example, have very large investments in British industry and get a substantial part of their incomes from those investments. The Labour Party has much of its funds invested in British industry—capitalist industry, for it does not invest in nationalised industry.
  Mr. Robert Maxwell: The Labour Party does not have any investment in industry. Some trade unions have investments in industry through the trade union unit trust, but the Labour Party invests its funds only in Government securities.
  Mr. Cooper: The fact remains that it invests its money and, therefore, has a beneficial interest in dividends. That is the point and it is very important.
  Mr. S. Silverman indicated dissent.
  Mr. Cooper: I wish that the hon. Member for Nelson and Colne (Mr. S. Silverman) would apply his considerable intelligence to these matters. This is very important. Savings result from a surplus of earnings over expenditure. I cannot put it more simply than that. Dividends are part of the income of a person or organisation. If there is a sufficient balance, the balance is savings which go back to be reinvested in productive industry. If dividends are cut back in some way so that savings are restricted, the lifeblood of industry is dried up. That is the simple ABC of economics. If the right hon. Gentleman does not believe me, I suggest that he has a word with the two professors who will put him right about this matter.
  Mr. S. Silverman: I promise not to interrupt again. Everybody realises that dividends are not illegitimate and that a great many people have them who are not rich people, but if we want to get an equitable incomes policy, if we expect people to restrain increases in wages, which are just as legitimate as dividends and probably a little more, is it not necessary, reasonable and effective also to restrain rents, dividends and interest? Otherwise, we will not get an equitable incomes policy which everybody agrees to be necessary.
  Mr. Cooper: We do not want to go into the whole subject of how an incomes policy is made up, but there are very few cases—of course there will be some—of excessive dividends, for companies generally do not indulge in an excessive give-away of their capital. They are much more interested in ploughing money back into their businesses so that they can be rebuilt.
  Unfortunately, the Labour Party itself has created the atmosphere of hostility towards capitalist industry. There is no getting away from the fact that over the years the Labour Party has criticised dividends as immoral, saying that they were paid to people who sat back on their backsides and got money which they had not earned. They forgot that the money was risked when it was invested in industry. Let us forget this "holier-than-thou" attitude towards dividends and recognise that they are vital to the whole economic life of the country.
  I now come to some of the Government's measures. The 15 per cent. Impost on imports is reprehensible and illegal. There is no question but that we have broken our international agreements. In the eyes of foreign countries, we have destroyed the industrial reputation of this country which took many years to build up and which will now take us many years to restore.
  There is no doubt that costs will go up permanently. This is not a matter of costs going up and being brought down again very quickly, for their will obviously be an effect upon wages, and once wages go up, they do not come down again, even if prices come down. In industry we shall be saddled with a permanent increase in the labour costs of nearly all the goods we manufacture.
  1260
  The cost of living will be increased. This, too, will make for demands for higher wages and again industry will suffer. Yet right hon. Gentlemen opposite are supposed to be a Government trying to encourage exports, to keep our costs in line and to get them down. Every action they have taken will positively put up the cost of production and worsen our competitive position. There is no gainsaying that.
  There is also the effect of the increase in the cost of petrol. What genius told the Chancellor of the Exchequer that the effect would be only one-fifth of a point? This is too absurd. The effects are cumulative over a very wide range. They are not easy to calculate, but I am certain that they will be far greater than the small amount which the right hon. Gentleman suggested yesterday.
  I now raise a subject of very great importance to the chemical industry, and in this connection I declare an interest. Practically all chemicals are affected. The memorandum from which I am about to quote has already been submitted to the President of the Board of Trade in part or in total. A great many of the chemicals which are affected cannot be made in this country, or are basic natural products from other countries. For the purpose of what I am now saying I am not for the moment arguing the case for or against the general proposition of a 15 per cent. surcharge. All that I am saying is that where it can be shown conclusively that basic raw materials are not available in this country—the machine to which reference has been made is a case in point—they should be exempt.
  Many of these chemicals are essential to the Health Service, and the surcharge will be an increased cost to it. Other materials are used in great quantities for our export markets. It is no use the Government saying that it is possible to get rebates on these things. The Civil Service is in such utter confusion that one cannot get replies from it on any subject. At one time we used to be able to get an "off-the-cuff" answer to questions on the telephone. Now we are told, "Will you please put it in writing?" I am still waiting for replies.
  I apologise to the Committee for mentioning these products, but I must get them on record. They are bromine;

  1261
  iodine; selenium; silicon; mercury; arsenic trioxide; calcium carbide; hydrocarbons. Next comes a most curious one which sticks out like a sore thumb and about which the Government mist do something, methane. We have been spending a great deal of money in North Africa to bring it here in order to produce gas for our industry. We bring over our first shipment, draw up technical plans to get it in production, and what happens—bang, 15 per cent. straight away. This is absurd.
  The list continues with calcium tartrate; dicyandiamide; calcium pantothenate; potash; gambier; quercitron bark extract; essential oils; turpentine; rosin and resin acids; and copolymers of acrylonitrile, used by the great firm of Chemstrand, which gives enormous employment to people in Northern Ireland. This firm now faces a 15 per cent. impost and will have to sell its products in the rest of the world in competition with countries which do not have such a surcharge imposed on them.
  What do the Government want? Do they want money? Do they want exports? If they want exports, what do they propose to do to encourage them? Will they take off these ridiculous imposts on basic raw materials in industry, or are we to believe that they do not care a hang about the export trade? We shall put down Amendments on behalf of the chemical industry during the passage of the Finance Bill, and I hope that the Government will give very serious attention to the points which I have made, which affect not only the chemical industry, but other industries of equal importance. The criterion must be, "Will our industry be helped by this? Are we to encourage industry to bring these materials in and to make goods for export from them, or are we to have to fight with one arm tied behind our backs?"
  The new Income Tax changes undoubtedly will have a very serious effect on the very people we are anxious to help. A salary of £2,000 a year, either for an individual or for a husband and wife combined, is not out of this world. I know a large number of teachers, for example, whose combined salaries are between £2,500 and £3,000. In this salary bracket are young thrusting scientists who have just got their first foot on the ladder. We want to encourage them. We do not
  1262
  want them to go to America or anywhere else. These are the sort of people we want in this country. We want to encourage young executives, who are the future lifeblood of industry. Is what the Government propose the way to do this—to take about £100 a year out of their pockets in extra income Tax? Most of the rise which teachers are to get in April next year will be gone before they get it as a result of the new income Tax proposals.
  Hon. Members opposite always seem to think solely in terms of people with £5,000 or £10,000 a year, but it is the people in the middle income bracket who are most seriously affected by these pro posals than anybody else. They are the people who are penalised.
  Hon. Members may say, "You have made many criticisms. Is it not time you said something constructive?" That is not an unfair question. I have always argued with the right hon. Member for Battersea, North (Mr. Jay) about the right way to impose taxation. Should one impose it on earnings or on spendings? I have always believed that a greater degree of taxation should be levied on spending. In other words, I should have preferred to see increases in taxation on spirits, beer and tobacco. That would have been a far better way of dealing with the matter than by putting an extra tax on petrol and increasing Income Tax. This would have been much fairer and would not have been open to anything like the criticism to which it is open.
  I am sure that the Opposition will support all propostals which can be shown by the Government to be of benefit to the nation. But this Budget is highly inflationary and, I am sure, will endanger the whole prosperity of our nation.
  6.46 p.m.
  Mr. Paul B. Rose: As the youngest Member on this side of the Committee, I think that it is particularly appropriate that I should address myself to the subject of pensions. I am profoundly convinced that the unfair treatment of pensioners before 15th October was uppermost in the minds of many young people when they cast their vote on that day. I believe that this is a tribute to the idealism of so many young people who are too often denigrated by their elders.

  1263
  During the past week hon. Members on both sides have expressed their strong opposition to restrictive practices. I am told that there are two restrictive practices which obtain in this Chamber. One requires me to be non-controversial, and the other requires hon. Members to listen to me with a tolerance and courtesy to which I am not accustomed. While I find the latter restrictive practice most commendable, I am not so sure about the first, because it is very difficult to be restrained and non-controversial in the face of the complacency which has previously been shown concerning the problem of old-age pensioners.
  There has been far too much complacency on this subject over the years. There can be no room for complacency now, because the Chancellor of the Exchequer's proposal will do more in one fell swoop than all the sanctimonious protestations in the years prior to 15th October. If there is any criticism which may be made, it can only be about the sources from which we draw the revenue to pay the pensions. Perhaps we may pay more attention to the question of spending on defence and our overseas commitments in that respect.
  Before dealing more thoroughly with the question of pensions, I should like to take the opportunity to observe a custom of the Committee and to refer to the former Member for Blackley, Mr. Eric Johnson. Despite our political differences, I would be the first to say that he cared a great deal for the old people in the division, and, within the limits in which he was allowed to work, did as much as he could for them. He was generally liked and popular among people of all political persuasions. His parting shot to me after the election result was declared was that, because he was 67, he would hold me to our promises on old-age pensions. I am glad to say that he will be a beneficiary of my right hon. Friend's proposals. I am as delighted to support an increase in his pension as I was to assist in his retirement.
  It is an essential prerequisite to an equitable society that strong Government action should be taken to protect those least able to protect themselves—the elderly, the sick, the handicapped, the widows, and the infirm. There can be
  1264
  no substitute by means of private charity. This is the job of the Government and this is the job that is being done. It is this social aspect of budgetary policy rather than any narrow technical consideration that concerns me and, I believe, concerns ultimately the people of this country.
  A Budget does not merely balance the nation's books. It does not merely dictate economic priorities and the direction of economic growth. It also can be used to regulate social priorities. It is as much a reflection of our moral concern for our fellow men and women as it is an exercise in accounting. I believe that the Budget this time has been used in this way as an instrument of social justice. The Chancellor of the Exchequer has used the weapon in a way which demonstrates certain attitudes to the way in which people acquire their wealth, attitudes which, in my submission, are the bedrock of the philosophy of hon. Members on this side of the Committee.
  When we talk about a tax on capital gains, this is not merely another method of obtaining more finance for pensions. It is recognition of the fact that there are some people who earn their money in an unproductive way and that they have to give up some of this money to the community which has helped to create that wealth. Today, the teacher, the public servant or the ordinary employee of a company has a right to kick when he sees the evasion and avoidance of tax that goes on in a variety of ways, particularly among people who are fortunate enough to have their own business or who can invest on the Stock Exchange. In this atmosphere of the devil take the hindmost, the hindmost has been the man or woman living on a fixed income, particularly the retirement pensioner.
  It is not possible to assess the extent or the intensity of human misery which has been caused primarily by the sheer financial inadequacy of the retirement pension. The Salford Report talks of old people who have to go to bed at six o'clock in the evening because they cannot afford the coal with which to keep themselves warm. Any general practitioner can tell of cases of malnutrition among old-age pensioners who cannot afford to buy food and to whom our elementary needs are an unascertainable

  1265
  luxury. There is also the wounded pride of those to whom National Assistance, whatever its intention, is seen as the twentieth century equivalent of the old poor law. Very often, they would rather starve than have recourse to it. Rightly or wrongly, this is often the attitude.
  In addition to 1¼ million old-age pensioners who are forced to seek National Assistance, there are also an estimated ¾ million who do not seek National Assistance because they either do not know of their entitlement or are too proud to take it. Remember that this was the generation which was forced to march to London for bread. Talk of donations hardly helps to alter these attitudes.
  The way in which the present system affects old people can probably be best assessed and most graphically illustrated by specific references. Only two or three months ago, I called on an old lady in my constituency of Blackley and she told me that the 4s. National Assistance allowance which was given for coal had been withdrawn. The reason was that it was simmer—summer in Manchester, on a night when my fingers were freezing to my canvassing card and the sky was that shade of grey which only a Mancunian can know and still love.
  That old lady was denied the 4s. which she needed for coal. I took up the matter with the National Assistance Board, who replied that it was summer and that she was not entitled to the money but agreed to look into the matter. The Board sent an investigator, who decided on a compromise. He felt that as the lady was nearly 80, she needed assistance in window cleaning. She was given an additional 1s. 6d. a week, and this at a time when we were told that the economy had seldom been stronger. I therefore hope that as the increase in pensions is to be postponed for four months, immediate action and attention will be given to assist pensioners over these coming months during the winter.
  We now have a Government who are acting in a rather remarkable and unique way. They are actually doing what they promised to do. This seems to be the point which is causing so much difficulty to hon. Members opposite. But the whole questions of public service pensions, the need for an annual review and a comprehensive super-
  1266
  annuation system need to be tackled at the earliest opportunity. While I am delighted at the increase to 30s for the 10s. widow, there remain many curious anomalies in the system with regard to widows' pensions, not least the arbitrary 50-year age barrier.
  I would add a word not so much on the financial aspects of the problem, but on the human side. In my constituency there are many families who are separated through municipal housing. Their children grow up, they go to live on overspill estates and they, in turn, have children. Their problem there is one of loneliness. It is compounded by the problem of distance and the expense of travel. To my mind, it is an act of sheer humanity to allow these people the privilege of cheaper fares to facilitate their much diminished mobility and the possibility of going to see their children and their grandchildren. Just as man cannot live by bread alone, so the problem of old people cannot be resolved purely by Budgets alone.
  It is in that context that I hope we will hear later of more money being allocated, not so much in pensions but in assisting the care of the elderly. We have to end, for example, the near-Dickensian horror of old people who have lived a lifetime together being separated in old people's homes, such married couples being allowed the privilege of walking together once a week. I should like to see a modification of the earnings rule to assist those who can still do a useful service to the community. More important is the fact that work at 65 should no longer be a matter of economic necessity, but should become a matter of choice.
  The Budget displays a new attitude to the widow, the elderly and the sick. It is a recognition of society's obligation, and to the extent that this has happened it is a breath of fresh air. If it fails to tap some of the sources of wasteful expenditure which I mentioned earlier, I hope that this will be only in the short term. Every fairminded and humane person will welcome the. Budget. I welcome it, not only on my own behalf but on behalf of the people of Blackley. I thank hon. Members, on both sides, for the tolerance and indulgence they have extended to me and which, I am sure, after this occasion, will not be extended again.
  6.58 p.m.
  Sir Alexander Spearman: I am glad that it has fallen to my lot to congratulate the youngest hon. Member on the benches opposite on his excellent maiden speech. It was both vigorous and interesting and clearly on a subject near to his heart. The hon. Member for Manchester, Blackley (Mr. Rose) showed a happy combination of confidence and modesty and knowledge of his subject, qualities that particularly appeal to the House of Commons. It does not, perhaps, happen very often, but I am sure that on this occasion I speak for everyone here where I say that we look forward to hearing the hon. Gentleman again.
  I am sorry that the Government have imposed the import surcharge, and particularly that they have done it in a way that seems to me to have been both hasty and ill-considered. When Governments make what are thought to be serious mistakes, tears on the side of the Opposition tend to be of rather a crocodile nature, for obvious reasons. But, on this occasion, I believe that the damage done is far greater than party advantage.
  I had hoped that, whatever party was in office, this country would set an example in freeing and expanding world trade, because I believe that that is the greatest contribution which we as a country can make to a safer as well as a richer world. It must be a sad day for the progressively-minded members—and I freely admit that there are many on the benches opposite—who have always disliked being on the defensive and supporting out-of-date protectionist policies and who have wanted, on the contrary, to be on the attack in adapting policies to changing conditions.
  The right hon. Gentleman the Minister of Aviation, who in any other surroundings I would call my right hon. Friend, is very preoccupied today with his own problems, but he must be very unhappy at the antagonism which this country has created for itself in Western Europe. If our goods are competitive abroad, or, as has happened before, if the Government took action to ensure that they would be competitive and to convince foreigners that they would be competitive, then there would be no difficulty in borrowing abroad enough to see us over a difficult situation. When the economy is excep-
  1268
  tionally buoyant, of course stock-building is exceptionally severe.
  But if our goods are not competitive, then this surcharge will be of no avail. It is attacking the symptoms and not the disease itself. It will put up costs because of the effect it will have on the imports of plant and partly manufactured goods. It will possibly cause retaliation, and it certainly is causing ill-will, which must affect our exports. It tends to protect the high-cost inefficient producer—and British industry today urgently needs not less but more competition.
  Mr. Maxwell: Would it make any difference to the hon. Member if I told him that the Managing Director of the International Monetary Fund, Mr. Schweitzer, from which institution this country has applied for a loan of 1,000 million dollars, stated on his authority that the steps taken by the Government were both right and urgently necessary and, furthermore, that there was no alternative to the 15 per cent. surcharge? Regardless of what hon. Members opposite say, no country has taken steps against our exports, because they believe that the steps taken by the Government were right and necessary and will be only temporary.
  Sir A. Spearman: That is not my opinion. Furthermore, it will cause inflation. May I quote what was said by a former Chancellor of the Exchequer in the House:
  "… we must strengthen still further, and without delay, our budgetary defences against inflation. This need arises from the decisions which His Majesty's Government have taken … to increase exports and reduce imports, in order to narrow, as swiftly as we can, the very wide and dangerous gap in our overseas balance of payments … The effect of these decisions must be, if taken alone and unsupported by other measures, to increase the inflationary pressure by reducing the supply of goods available in the home market without, at the same time. reducing the total of purchasing power. To help to counteract this is the purpose of the proposals which I am making today."—[OFFICIAL REPORT. 12th November, 1947: Vol. 444, c. 391.]
  He later said that he proposed to increase the rates of Purhcase Tax as follows:—
  "the 16⅔ per cent. rate will be increased to 33⅓ per cent.; the 33⅓ per cent. rate to 50 per cent.; and the 100 per cent. rate to 125 per cent.—[OFFICIAL REPORT. 12th November, 1947; Vol. 444, c. 403.]

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  That was in contrast to the present Chancellor of the Exchequer who, though he said very much the same thing, has cut back spending only by putting a tax on petrol which he estimates will bring in the current financial year £32 million.
  The President of the Board of Trade gave me the impression today, not for the first time, that he thought that if only we could export more or import less our troubles would be solved. Of course, all hon. Members agree about the extreme urgency of increasing our exports, but it is quite impracticable to increase exports or to reduce imports unless at the same time we produce more or spend less. That would only create inflation.
  Obviously the ideal remedy is to produce more, and I have no doubt that we can produce more if and when we can get more enterprise and fewer restrictive practices in industry. That will take time, and with the present shortage of skilled workers there is no possibility of a materially quick increase in output. We must therefore fall back temporarily on the much less desirable alternative of spending less. Lord Amory—and I think that hon. Members who know him will agree that it is not his way to exaggerate—said last week that the Government's programmes contained the seed of inflation in the immediately foreseeable future. Had he spoken after the Budget speech he would have had no cause to change his mind in that view.
  I do not know whether, now that they are in office, all hon. Members opposite think as one man or whether, as was the case when they were in Opposition, they are still a coalition of incompatibles. But, on this matter, it seems that every one of them is agreed that there shall be no more stop and go. Perhaps they feel fortified by the very superficial leading articles in The Times, the Sunday Times and other newspapers on this subject. If they and the papers only mean by this that the Government must provide themselves with better statistics to foresee more accurately changes in demand and better instruments for controlling that demand, then of course I agree that this is an improvement which we should all like to see. But it is very difficult, and I am not entirely sure that the new recruits from Central Europe will find a solution.
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  But if they mean by this that the brakes are never to be applied, then I say that they are talking nonsense—and dangerous nonsense. The only way it is safe to drive a car without brakes is to drive it very slowly. We had this prewar when there was huge unemployment. Then there was no need for brakes. But we all agree that we shall not go back to that again. All experience shows that whenever our spare industrial capacity—and by that I do not mean only the plant but the plant and the skilled workers available for it—falls below the danger level, round about 5 per cent., we inevitably run into balance of payments difficulties. We found that in 1951, 1955 and 1960–61. If home demand is so great that every manufacturer can sell everything he produces at home, clearly conditions are not competitive. When conditions are not competitive managements do not exert themselves. After all, we must take men as they are and not as we would like them to be, and, human nature being what it is, managements do not exert themselves in the same way to keep their costs down and their efficiency up. Moreover, and this is not so often said, they tend to choose the wrong sort of investment. They tend to choose to invest in the sort of plant that will give them the maximum production per unit of capital, whereas what they ought to be doing, and what many do when competition is more keen, is to choose investment that will give the maximum production per unit of labour.
  There is sometimes said to be a conflict between growth and stability because growth means more inflation and inflation means higher prices. I believe that that is an absolute myth. I believe that in inflationary conditions we only get "bubble" growth. I would like to read one sentence from a publication which I strongly commend to hon. Members, "Policy for Incomes?" by Professor Paish and Mr. Hennessy—Hobart Paper 29. I may divert here just to say that we hear quite rightly a great deal about social justice but nothing is so cruelly unjust as inflation, hitting just those who can least afford to bear it. Professor Paish says
  "Inflation is not only grossly unjust in its effects but also leads to the inefficient use of resources and to the survival of inefficient managements, and thus in the long run tends to slow down growth."

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  I am quite convinced that any Government aiming at near-full employment and growth and stability have all the time to be prepared to use both the accelerator and the brake alternately. After all, if one is driving a car very fast one has to use the brake. The earlier you put it on the less shock to the passengers, and the later you put it on the greater the shock. In the inter-war years we had vast unemployment because there was a glut of goods people had not the money to buy. That will not happen now because we know—both sides of the Committee will agree on this—how to create demand when the economy is under-stretched. What we do not know so well is how to cut demand back smoothly when the economy is over-stretched.
  I think my right hon. Friend the Member for Barnet (Mr. Maudling) deserves great credit for being the first Chancellor to put the brakes on before we began dropping below the danger point of surplus capacity. He had the courage—it was not an easy thing to do in election year—to impose unpopular taxes. It may be that he expanded too much in 1963 and cut back too little in 1964. Some of us said that in our speeches in the Budget debate at the time. But right hon. Gentlemen opposite cannot attack him on that score. In 1963, the present Chancellor of the Exchequer, the present President of the Board of Trade, and the present Minister of Aviation all condemned his Budget as too timid and too cautious. In 1964 the President of the Board of Trade condemned his Budget for cutting back spending. I will not give the actual quotations because I have given them in the House before, but I have them by me if anyone wants them.
  I am convinced that if the brakes are not put on now they will have to be put on later, and the longer the delay the more drastic the measures will have to be. Dr. Dalton chastised consumers with whips. I am afraid it will fall to the present Chancellor—and he will not like it because he is a kindly man and a very old friend of mine—to chastise the with scorpions. Perhaps on the harsh and difficult days that lie ahead for him he will draw some comfort from the prophecy made on Tuesday by the Chancellor the Duchy of Lancaster, when he said:
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  "The Christian spirit must and will live, even in adversity."—[OFFICIAL REPORT, 10th November; Vol. 701, c. 875.]
  7.16 p.m.
  Mr. Adam Hunter: I am pleased to have this opportunity to address the Committee for the first time, and I crave hon. Members indulgence. I am doubly pleased, when I consider how many new Members are still waiting to make their maiden speeches. I represent Dunfermline Burghs, in which constituency is situated the City and Royal Burgh of Dunfermline. There we have the ancient abbey which is a great part of Scottish history. The abbey is not a standing monument to the past, but a living organism and it plays a very great part in the current and religious life of the community even today.
  There are, of course, three other small burghs in the constituency. Two of them, Lochgelly and Cowdenbeath, are at present facing economic and social difficulties due to the decline of the coal mining industry on which the area has been solely dependent for quite a number of generations.
  As Member for Dunfermline Burghs I follow Dr. Alan Thompson; and before Dr. Thompson, Mr. James Clunie; and before Mr. Clunie, Mr. William Watson, whom I am quite sure many Members still in the House remember with great respect. These three hon. Gentlemen made a great contribution to the business of this House and served their constituency well. I am sure that all members of the Committee will wish Dr. Alan Thompson every success in resuming what I feel sure must be a brilliant academic career.
  Looking back on the record of my immediate precedessor's maiden speech I find that he made it from the Liberal benches, a mistake for which he profusely apologised. I could not possibly have made this same mistake, for I have seen, since I came to this House, that the Liberals are still on the other side of the House and that Dr. Thompson's colleagues and many new ones, including myself, are firmly—despite the small majority—established on the Government side.

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  I should also inform the House that I was until a few weeks ago a miner working in the bowels of the earth, an occupation I have followed for just over 40 years. To be suddenly transported from a working environment of that nature to the most important institution in the land, with its long history and tradition, was certainly, to put it mildly, a most interesting and exciting prospect. An hon. Member is advised to make a maiden speech non-controversial. On the other hand, he is informed that maiden speeches are allowed to proceed without interruption. The latter could be interpreted as some sort of licence, but, if so, it is not my intention to abuse it. To be non-controversial in a Budget debate seems virtually impossible, so if I transgress traditional procedures a little I plead to be excused.
  The Budget proposals have my support. A supplementary Budget was necessary. By taking early action in an effort to begin an attack on the adverse balance of payments situation, the Government have again shown their determination to get Britain on its feet again. Everyone knows that desperate situations need desperate remedies, and it is unfortunate that some people have to suffer in consequence of the measures taken this time.
  I particularly welcome the proposed increases in National Insurance and associated benefits, particularly the increase in the amount for old-age pensioners. I have had close and practical experience of old people, and I know their difficulties in maintaining decent and civilised standards. This prompts me to say that the Government are doing no more than they said they would during the recent election campaign: that immediate attention would be paid to this outstanding social problem.
  Tax increases are often a cause of resentment, but it seems to me that those who are now asked to pay more are more able to pay the increase. Due to closure of pits, my constituency is now a low-wage area, but I am sure that those of my constituents who suffer from this mild taxation increase will accept it readily, in the knowledge that it is inevitable and that the burden is placed on those who can the better afford it. A big majority of taxpayers will not be affected by this new taxation, and that is how it should be.
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  While I noted with some regret that there was no mention in the Gracious Speech of a national fuel policy, I am heartened to find that the increase in oil duty will not adversely affect the operations of the coal mining industry. Any budgetary measures that promise for the future some hope that the Government of the day will formulate some regional planning are acceptable to me. The lack of alternative employment to offset the rapid decline in the coal mining industry in certain parts of my constituency constitutes a major social problem.
  That problem can only be solved by the introduction of new and modern industry which will replace the old and dying industry and thus bring the constituency back to its former position of being considered a high wage area. As it is, too many of the working population there are earning too little; many of them are working in Her Majesty's dockyards, in local authority public services, and the like, which do not pay high wages.
  I thank the Committee very much for the attention that it has given to me.
  7.35 p.m.
  Mr. Charles Doughty: It is a very great pleasure and an honour for me, as a Member representing a constituency in the south of England, to welcome to this House a Member from Scotland, and to congratulate him on his first speech in the Chamber.
  This speech of the hon. Member for Dunfermline Burghs (Mr. Adam Hunter) was clear; at times I thought he was approaching the controversial, but he was able to skirt round that in the way to which we are accustomed in this House. I congratulate the hon. Member on what he said, and on the interest he aroused in all of us in describing conditions in his constituency. We look forward to hearing him in the future.
  In considering the Budget Statement, we all want to bear in mind the avowed policies and purpose expressed by the Chancellor himself yesterday. He said that it must contribute to a healthy foreign balance, stable prices, full employment, social justice for the needy, fair play for all taxpayers, and sound planning of public expenditure. A little later he said that it would make possible

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  the achievement of an income and prices policy.
  While I wish him well in all those policies, I very much fear that after this Budget not one of them can be realised, because this inflationary Budget will lead to the exactly contrary state of affairs. The Budget, for reasons I shall give later, is inflationary the whole way through. All hon. Members will wish the right hon. Gentleman well, particularly when he said that it is part of his policy to pursue an incomes policy. Whatever has been done or said yesterday, or at any other time, I am sure that the Chancellor, or any other Chancellor, will come up against human nature.
  I am sure that whoever he went to to suggest the details for an incomes policy, he will have got the same answer, human nature being what it is, "We entirely agree with what you say. We think that your policy is for the good of the country, but it cannot be applied to our trade or occupation—apply it to the others." And, of course, a variety of reasons could be put forward to support that particular person's argument. And as the present policy will undoubtedly lead to an inflationary increase in prices, the Chancellor will also be met with the answer, "Look at what you have done to put up our prices, our costs and our charges. How can we, at the moment, discuss such a policy when we do not know what the future can possibly bring?"
  I am glad that the Opposition decided yesterday not to vote against the 15 per cent. surcharge, but that does not mean that I am 100 per cent. in favour of that surcharge. I am not in favour of it, because it is a breach of agreements—there is no question about that. Whether the present Government like them or dislike them, we were forbidden by those agreements from imposing surcharges. It may well be that hon. Members opposite can say that the surcharge is better than quotas, but if we break agreements we cannot expect people to trust us in the future.
  That is exactly what the Government have done. They have not only broken agreements, but have done so in a most ham-handed way. They have done it without any consultation. If there had been consultation, it may be that our
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  trading partners, if I may call them that, would have agreed, perhaps reluctantly, to this surcharge being put on as a temporary measure, but to do so without any form of discussion, or even giving any information to our trading partners beforehand, was to make bad worse.
  It was done in a ham-handed way from another point of view, because I am informed that those who have the job of imposing the duty at ports of entry have not the faintest idea of what the regulations mean—whether the surcharge is to be imposed ad valorem or on quantity. As a result, there will certainly be for many days a great holdup in Customs sheds while that is being sorted out.
  Another matter has been overlooked. Our export trade does not depend only on prices and quality, although those are among the most important matters that have to be decided.
  It also depends upon good will. It also depends upon our word being trusted and our relations being friendly. It will be a very long time before the good will which has been destroyed among our foreign customers by this action will be restored, a very long time indeed. It was done at a time when E.F.T.A. was doing very well and some countries in the Common Market appeared to be having difficulties. E.F.T.A. received a shaking from which I hope it will recover, but it is in a very bad way.
  The tax on petrol is not only put on petrol used for pleasure or for holidays, but on petrol used throughout industry. Everything that is not carried by rail is carried by some vehicle which burns either petrol or diesel oil. If we increase the cost of that necessary raw material we must put up costs right through industry. That will be an inevitable and obvious result from what was done yesterday.
  In the thirteen years of Conservative Government Income Tax was brought down from 9s. 6d. to 7s. 9d. Even so, hon. Members of this party were always saying that the tax was too high. We know that it was too high, but we could not bring it down below 7s. 9d. Now, for the first time for many years, it has increased to this extent. Who will suffer from this? I do not mince words.

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  This is a big attack on the skilled worker, on the white-collared worker, on the executive and on the professional man or woman. In the years since the war his condition has increased very much, but it has not increased so much as that of the manual worker. I have been pleased to see the condition in wages of the manual worker increase so much, but for people of the class I have described the increase has not been quite to the same extent.
  Many of them are having considerable difficulties. They have mortgage interest to pay on their houses, children to educate and a car to run for business or pleasure or both, and many other costs and charges of that kind. In most cases they are not left with very much to spare. They are the people who will get no benefit, but who will suffer most from the imposition of the taxes put on yesterday and from the increase in the cost of living which undoubtedly will rapidly follow from what has been done and is threatened to be done. They have been completely abandoned by the Government of the day.
  I hope that they will now realise fully that they cannot look to the Liberal Party for any support. The Liberal Party voted against the Government on Monday and with the Government on Tuesday. They voted against them yesterday at 4.37 p.m. and voted with them at 4.51 p.m.
  Mr. J. Grimond: I am interested in the account given by the hon. and learned Member of our voting, but does he approve of the increase in old-age pensions? If so, how does he presume they are to be paid for?
  Mr. Doughty: I have not yet reached that part of my speech—
  Mr. Grimond: The hon. and learned Member will do so?
  Mr. Doughty: I shall certainly do so.
  This matter is referred to in an article in The Times today. A kind of atmosphere has been endeavoured to be created that the Government have increased old-age pensions which were not increased before. I am not going back over long periods of history but when we just lost the election a few weeks ago old-age pensions had been increased—I am talking about purchasing power—to a
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  far greater value than they were in 1951. I hope that people realise that.
  The criticism I have to offer about the increase in old-age pensions announced yesterday is that it is entirely nondiscriminatory. That is what The Times said in its second leading article today:
  "It is questionable whether, given that the Government's policy allocates greater sums to insurance benefits and bearing in mind the amount of parliamentary time needed to authorize the changes, the proposals make either the best use of the money or the time."
  The best use of the money was what we suggested that we would make. We would give it where it is most wanted, to the older pensioners. We should not spread the butter so thinly that everyone gets it quite regardless of whether all need it or not.
  Mr. Eric S. Heffer: Would the hon. and learned Member tell us whether it is more difficult for an old-age pensioner of 75 to live than one of 65? Does he have to pay more for food and other commodities?
  Mr. Doughty: That is not the point. The old-age pensioner is far less likely to be earning any useful sum at 75 than at 65. If proof of that were needed, one has only to look around this Committee. Money would be much better spent where it is really wanted.
  That is where the party opposite has gone quite wrong. It has taken the money largely from those who, in many cases, can ill afford it—there is no argument about that—and given it in some cases, not by any means all—to those who do not require it so much.
  Yesterday's Budget Statement had a peculiarity in that the Chancellor announced what would happen in April. Generally—I make no criticism of this—if one puts a Question to the Chancellor before April he says, "I cannot anticipate my Budget Statement". That cannot apply now. There is a curious thing about which I should like some information. In the Budget speech yesterday there was no suggestion about reducing the level of Surtax. This seems clear if my reading and my knowledge of English is correct. The Budget Resolutions say:
  "in the case of an individual whose total income exceeds £2,000, at such higher rates in respect of the excess as Parliament may hereafter determine."

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  That seems a clear indication that next April the Surtax level will be brought down to £2,000 thereby increasing possibly largely—the amounts are not disclosed—the taxation which those who earn those sums, and, believe me, they are not riches, will have to pay, making their condition harder at that time. We decreased the Surtax rate thereby helping the executive man, the scientist and, in many cases, school teachers.
  For other items of taxation we shall have to wait and see the details. I shall certainly not anticipate company taxation, but those who talked about people making large speculative capital gains are, to put it mildly, not accurate. An hon. Member has spoken about people who spend their time only in investing on the Stock Exchange. As it is at present, the law sees to it that in buying and selling one may do not many deals before one is liable to heavy taxation. This is a question of administration. What the effect of an excessive tax of the suggested nature will be in slowing down all forms of business, all forms of capital investment and all forms of capital borrowing we do not know.
  Who will put money into some speculative concerns—honestly run—when he feels that if it goes wrong he will lose his money? He thinks, "If this wins and the value of the shares is increased, the Chancellor of the Exchequer gets it". Companies with a somewhat speculative business or a risk business, will find it very difficult to obtain capital. I hope that the Chancellor, before he comes down to the details of the capital gains tax, will think carefully of what the results will be. I do not think that he will get much money out of it. I think that it will be extremely difficult to administer and that it will be a great brake upon industries.
  I am sorry if I repeat myself to the Committee, but I repeat myself because I feel very strongly for those who will suffer most from the Budget and the additional taxation and the threats of what is to come in April. They are the white-collared worker, the skilled worker, the executive, the professional man, the man with family responsibilities and a not very large income but many liabilities who is already feeling that things are difficult for him. These people will feel
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  that things are a great deal worse. They will feel that things are a great deal worse because of the activities of the Chancellor of the Exchequer as he expressed it yesterday and as he threatens for the future.
  7.41 p.m.
  Mr. Alfred Morris: I think that it was Aristotle who held it to be the essence of probability that some improbable things will happen. He might perhaps have said something also on the need for legislative assemblies to show restraint and indulgence towards maiden speakers.
  His remark about the essence of probability was certainly true of the election from which I have emerged as the first Labour Member for the Wythenshawe constituency of my native Manchester. In addition to a superb fellowship of natural supporters, I had the help of some extremely improbable visiting speakers. The Committee might think it churlish, even ungenerous, were I not to acknowledge the efforts of these improbable visiting speakers on my behalf.
  First, I must acknowledge the support which accrued to me from the efforts of the then Prime Minister, the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home). He spent half an hour or so making his speech in Wythenshawe, and there were some who thought that he might be encouraged to stay a little longer. It was even argued, perhaps a little scurrilously, that he had spent upwards of an hour in other marginal seats and that he was selling us a little short.
  But we had the advantage of a two-hour visit from the then Leader of the House, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), and I am most deeply grateful for his splendid contribution to my success. Unfortunately, we did not have the services of the Secretary of State for Education and Science, the right hon. and learned Member for St. Marylebone (Mr. Hogg), but we were touched by the quiet, persuasive work he was doing on our behalf in well-reported speeches made elsewhere in the country. Again, it would be uncharitable not to mention the generous support we received from the right hon. and learned Gentleman's calm, reasonable and mature appeals to the

  1281
  electorate. In my view, he is the sort of speaker who not only encourages people to vote Labour. He seems to have the further knack of making them life-long Socialists at the same time.
  One of the more endearing remarks made in Wythenshawe by the right hon. Member for Kinross and West Perthshire was that its people lived in surroundings very much like those of his home place. Hon. Members who know Manchester will readily appreciate the discernment of this remark and how very much I owe to the right hon. Gentleman's efforts on my behalf. Wythenshawe is a place most of whose people earn their living as industrial workers or as employees of national and local public services. They are a very lively, warmhearted, sociable, hardworking and intensely practical community of people. I am deeply proud to be their representative, as I know that my unfortunate predecessor was proud to have been their representative, in what is still the most illustrious of legislative assemblies.
  One of the Wythenshawe community's main concerns is to see that our industry and our economy are energised, modernised and radically expanded. They know that economic expansion requires an incomes policy which is, and is seen to be, both fair and socially just. They will have been heartened that my right hon. Friend the Chancellor of the Exchequer has shown the courage and the will to tackle the grave economic problems with which he was faced on assuming office. They will be indebted to him, also, for the feeling of social justice which informed the speech with which he opened this debate.
  In particular, they will rejoice at the improved benefits envisaged for elderly people, widows and war pensioners. In the months ahead, they will be looking to the Treasury Bench for stern proposals to deal with the scandal of land profiteering and the effects of high interest rates on the standard of living of owner-occupiers and council-house tenants alike. They will want to see some early initiatives towards disarmament and a reduction in arms expenditure. They will also want to see drastic action to curb the exploitation of consumers and some improvement in the housing prospects of the many young people for whom matrimony is followed by years of living with "in-laws".
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  Most of the people of my constituency know that in the Britain of past years the highest rewards have not gone to those who have worked the hardest or whose work has been of most value to the community. Those on fixed incomes have barely kept pace with an ever-increasing cost of living. Many have fallen utterly behind, including so many super-annuitants of the public service. They have been expected to tolerate the intolerable. Such features of the policy pursued in recent years are the central cause of our failure to achieve the twin objectives of economic expansion and a socially fair incomes policy.
  Governments are not entitled to hope for a dynamic economy unless they have shown that they can be trusted to share the rewards of economic growth equitably. As one who has for some years held a position of responsibility in the public service, I trust that in their talks on incomes policy with representatives of industry my right hon. Friends will take into account not only the views of what one may call the federal leaders of industry, but also those of the more direct practitioners, trade union officers and managements alike, who do the day-to-day work of salary and wage negotiation. In my view, they could tell us far more about the causes, if not the effects, of what has come to be called the "wage drift" than could more senior people on both sides of industry.
  Secondly, I should like it to be emphasised that when employers decline to bargain adequately with trade union officers but agree to negotiate only when, and sometimes after, they are faced with strong industrial action, they are actively discrediting the trade union movement and will be exposed as disruptive elements in our industrial life.
  Thirdly, I hope that we shall have an incomes policy which attempts to cure the disease of overtime. By this I mean that I should like us to create an industrial society in which it will no longer be necessary to work long hours of overtime to earn a living wage. Work-people in my constituency are today as apprehensive of losing their overtime as they used to be, or their fathers used to be, of losing their jobs.
  He was an acute observer of our industrial life who remarked that overtime is no longer the jam: it has become

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  the bread of life for millions of working people in Britain today. And an industrial society based on overtime becomes a tired, ineffective and, if I may say so, an ugly and demoralised society. I should like to think that hon. Members on both sides of the Committee will give a lead to our fellows in industry by showing that they can conduct the business of the House of Commons efficiently and well without the incidence of unnecessarily long hours of overtime. I look forward to a happy coincidence of precept and practice in our approach to this subject.
  Finally, one of my main impressions of the House so far was when, on the election of Mr. Speaker, it was said that what unites the House is the love which all right hon. and hon. Members have for it as an institution. Perhaps I may be permitted to say, as a new Member, that I bring with me an enduring respect for a House of Commons which has been an instrument of revolutionary social change and which has provided the means for such change to be carried through peacefully. As a life-long democratic Socialist and co-operator, I feel that we are honoured to be here at a time when I believe that we shall see this House acting according to its finest traditions.
  7.52 p.m.
  Mr. Stanley R. McMaster: First, I should like to congratulate the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) on his interesting and non-controversial speech. I look forward to hearing many more speeches from him, and, perhaps, a controversial one.
  I should like to deal generally with the state of the economy as I see it. Our economy has been dogged ever since the war with the difficulties of balancing exports and imports. I feel that we have become very much too preoccupied with the phrase "stop-go" and that it is because of this that we are landed in the difficulties which the Budget reflects.
  It is a fact that as a trading nation this country must export sufficient to provide, first, the raw materials which are essential for our exports, and, secondly, the food which is essential to sustain our population. It is also true that we are living
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  in an intensely competitive world. We face fierce competition, not only from Europe and countries including old enemies, like Germany, but also from Eastern countries which have progressed very rapidly since the war. It is against this background that I should like to examine briefly the measures which have been introduced by the new Chancellor of the Exchequer.
  I listened with great interest today and yesterday to speeches from the Government Front Bench and noted particularly that none of the Front Bench speakers scorned the use of the regulator. In fact, the Chancellor said that he would not be afraid to use the regulator. I feel myself that it is a shame that he has not considered this point first and placed it in front of the measures which he has announced for dealing with the present imbalance.
  I feel that the surcharge which has been introduced is only buying time. It does not meet the problem which has been raised. In fact, so far from curing the country's difficulties and ills, it will, if it is extended too long, act in the opposite direction, because whenever 15 per cent. surcharge is placed on imports the countries from which we import are bound to take retaliatory action. Some of them have already announced that they intend to do so and individual manufacturers who previously bought some of their commodities or raw materials from this country have announced that they will not do so any longer. In this way, the 15 per cent. surcharge defeats its own ends. Also, it may mask the true difficulties which face this country.
  If imports and exports are in a state of imbalance, I would suggest to the Committee that the correct thing for us as a trading nation is not to attempt to cut down our imports, but to step up our exports. The only way in which we can do so is by making our exports more competitive. What does this 15 per cent. surcharge and the other measures announced yesterday do? Does the increased tax on fuel oil and on petrol help to make this country more competitive? I think that the answer is obvious. They are bound to add to the cost of production and make us less competitive.
  So far as the surcharge is concerned, now that our industry is no longer facing

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  keen direct competition from foreign industry but is hiding behind a 15 per cent. tariff barrier, will it become more competitive? I suggest to the Committee it will be anything but; it will become less competitive. When industrialists are met with stern wage demands, vigorously fought for by the trade unions, will they not be tempted now to say, "We have 15 per cent. in our favour. We can give them a little more rather than face the prospect of a strike". It is this attitude which makes this country much less competitive, and prevents us, rather than helps us, from meeting the fundamental imbalance which has arisen over the past 12 months.
  It has been frequently asked during the debate what measures hon. Members on this side of the Committee would suggest to meet the problem. First, I should like to suggest that instead of increasing the petrol tax we might have considered increasing the Purchase Tax on luxuries. Our shops now are very full of luxury goods. I accept the case that pensioners needed a rise, but that, of course, is a totally different matter from the necessity of meeting and balancing our foreign trade. I suggest that instead of raising the tax on fuel oil, which adds to the cost of production, Purchase Tax should be raised on some luxury commodities—cameras, perfume, spirits and perhaps tobacco. Commodities of this nature are much less fundamental than fuel and petrol.
  The measures which have been announced by the Chancellor are irrelevant to the needs of the country. The Resolutions which the Opposition voted against will not help us to cure our ills; instead, they tend to be inflationary. This point has been very well developed in speeches from the Front Bench on this side of the Committee and by other of my hon. Friends. I would suggest that the Chancellor will find, before this Parliament is very much older, that he is forced to use the regulator. What will happen then to all the attacks of the Labour Party during the election on the questin or "stop-go"?
  We find that we are continually on a knife-edge. With rising wage demands, our exports tend to be priced out of world markets, and unless we clamp down on home demand and make our industries more competitive this problem will recur.
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  It is no use applying a surcharge of 15 per cent. and then perhaps increasing it to 30 per cent., only to have to increase it again. This, in a way, is a form of devaluation—true, a temporary devaluation, but that is, in effect, what it amounts to. This does not help the country. In fact, if this surcharge is not removed quickly we shall find that the retaliatory measures which are taken against us by other countries will be so severe that we shall lose export markets, and any benefit that we get from reduced imports will he quickly cancelled out and, indeed, more than cancelled out.
  As for the Chancellor's suggestion that the tax changes will be disinflationary, I feel that he should know that these tax changes are much too slow-acting to take the pressure out of the economy. The best and quickest way of removing pressure from the economy by tax changes is by immediate increases in Purchase Tax. This acts rapidly. The increase in the standard rate of Income Tax will not help to meet the immediate problems of this country—problems which we face as a result of our £700 million or £800 million deficit on world trade.
  I should like to mention briefly the effect of these measures in areas of high unemployment. As hon. Members know, I represent one of the Ulster constituencies and I am particularly apprehensive about the effects of these measures on areas such as Northern Ireland. Such proposals will only make it more difficult for us to meet our problem of unemployment. One of the reasons for the persistently high unemployment in Northern Ireland, as in Scotland and the North-East, is transport costs, and the increased taxes, particularly on fuel, are bound to aggravate the problem.
  Further, the disincentive effect of a high standard rate of tax is bound to be bad for that part of the economy which is suffering from under-employment. While this continues, there is no incentive to manufacturers to expand or increase their rate of production or, indeed, to be venturesome at all. Unless we can encourage that element which my hon. Friend the Member for Ilford, South (Mr. Cooper) mentioned, unless we can encourage those persons on whose ingenuity, brains and initiative this country depends, by giving them a greater return for their efforts, they will pull in their horns. The

  1287
  economy will cease to expand and the great expansion forecast by the party opposite will be completely frustrated.
  It is very much in the interests of Northern Ireland that British industry should expand rapidly, but I am afraid that the measures which have been introduced by the Chancellor all act in the opposite direction. The country will very soon find out their results.
  Mr. Arthur Lewis: Accepting every word that the hon. Member has just said, and particularly that part of his utterances which we know to be true, namely, the high degree of unemployment in Northern Ireland, which, incidentally, has existed for many years, may I ask whether he can say what the Government should do which the previous Government never did to bring full employment to Northern Ireland? I have been in the House for the last 13 years and I have heard the hon. Member complain bitterly—and rightly so—on many occasions about the high rate of unemployment in Northern Ireland, but the previous Government never did anything about it.
  Mr. McMaster: I am glad to answer that interruption. While I sat on the Government side, members of the Socialist Party frequently supported these ideas, which I put forward at that time, and I am very glad to say that the Conservative Government on many occasions adopted measures which were directly designed through the tax system to assist Ireland.
  In the last Budget, as the hon. Member may recall, we gave free depreciation to areas of high unemployment. This has considerably helped the Northern Ireland Government, and as a result our level of unemployment is now between 1 per cent. and 2 per cent. lower than it was a few years ago. The level has been steadily falling. After all that has been said by the Socialists, I would have expected the present Chancellor to have introduced some such measures.
  The hon. Gentleman asked me what I would suggest. I would suggest measures such as the Conservative Government proposed, such as relieving Northern Ireland from the payroll tax, providing free depreciation and other similar
  1288
  measures, using the tax system, not only to encourage exports but to help areas of high unemployment. The Chancellor could have given special rebates to areas of high unemployment. It is no use the hon. Gentleman shaking his head; these are proposals which he was advocating a few months ago.
  Mr. Maxwell: The previous Government had 13 years in which to do all this. The present Government have been in power for only 23 days. Would not the hon. Gentleman agree to wait and give the Chancellor of the Exchequer a chance to make such proposals in his April Budget?
  Mr. McMaster: Considering that the party opposite made this the main plank in its election platform, I would have expected it to adopt such proposals during the first 100 days.
  In view of what I have said about the dangerous effects of the Chancellor's proposals, and the fact that there is no special relief for areas of high unemployment, I have not got much confidence in anything which is likely to be introduced by the Government in the future. All that I expect to see is a spiral of inflation, which will make things particularly difficult for areas such as that which I represent. I think particularly of the shipbuilding industry in Belfast. How will steel nationalisation and a high fuel tax assist shipbuilding? How will they help us to compete against the German and the Japanese shipyards? I suggest that these measures will have the opposite effect.
  Already, my hon. Friend the Member for Ilford, South has mentioned the synthetic fabric industry. Besides the firm that he mentioned, we have Courtaulds, Chemstrand and Dupont. They all depend on cheap fuel and electricity. The raising of the fuel tax is bound to make conditions for them more difficult. The other day I was speaking to the director of one of these companies, and he said that it was cheaper for a firm whose head office is in the United States to set up a factory in Holland rather than in Northern Ireland, because it could get its electricity cheaper in Holland to enable it to manufacture synthetic fabrics, 50 per cent. of which, incidentally, is exported. That would not help Ireland. These measures will make it

  1289
  much more difficult for us to continue the high level of exports which this country needs.
  Mr. Arthur Lewis: What the hon. Gentleman does not seem to understand is this. Accepting every word that he has said, is it not a fact that after 13 years of Tory rule—accepting all that the Tory Government did and all that they did not do—Northern Ireland still has the highest level of unemployment of any part of the United Kingdom and has had that for some years? Why has that state of affairs been allowed to continue? Why did not the previous Government put it right?
  Mr. McMaster: I do not want to continue these exchanges because I know that other hon. Members want to speak, but I should like to answer that point briefly.
  The numbers of gainfully employed in Northern Ireland have been rising rapidly. Our established industries, including shipbuilding, linen and agriculture, have all suffered from a run down in employment, owing to modernisation and changes in trend. In five years, more than 10,000 workers were laid off in Harland and Wolff, that is, 50 per cent. of the work force, but these have all been absorbed in industry in Northern Ireland. Unemployment has dropped, though not as quickly as one would like, but considering the rise in population and the run-down in industry we have made considerable progress during the last 10 years or so.
  Our productivity in Northern Ireland is much higher than in the rest of the United Kingdom. We have been increasing productivity at a rate of 4 per cent., 5 per cent. and even more each annum, which sets a fine example to the rest of the country. This, again, has been supported by the action taken by the previous Government to help us. If the present Government can do anything like this they can be proud of themselves.
  Mr. Arthur Lewis: What is the present unemployment figure?
  Mr. McMaster: Unemployment is at 7½ per cent. This is a substantial improvement over the figures a year ago, and particularly two years ago, when it went as high as 11 per cent.
  Mr. Arthur Lewis: This is the point which the hon. Member does not seem to accept. I agree that 7½ per cent. is better than 10 per cent. or 11 per cent. unemployment, but all these figures are due to the action or inaction of the Government supported by the hon. Member.
  Mr. McMaster: Perhaps I should not be tempted to go any further into this. I have attempted to explain to the Committee that other reasons and factors are operating in Northern Ireland which have prevented our reducing unemployment to the national average, but I feel that the measures announced by the Chancellor of the Exchequer and promised in the Queen's Speech show nothing to give any hope to people in Northern Ireland.
  On the contrary, because they tend to increase our costs of production they will prevent us from continuing the expansion which has been going on and from attracting new industries. Over the last 13 years, or so, 170 industries have been attracted to Northern Ireland in a way which has made hon. Members representing constituencies in Scotland and other parts of the United Kingdom quite envious. I look forward to the day when a Conservative Government can take effective steps to meet the problems of areas such as Northern Ireland and get the United Kingdom's exports back into balance.
  8.14 p.m.
  Mr. Arnold Gregory: I am very sensitive of the great personal occasion of addressing the Committee for the first time and pray the indulgence of hon. Members for any crimes which I may commit in procedure or any boredom which I may inflict upon them.
  As my hon. Friend the Member for Bolton, East (Mr. Robert Howarth) said the other day in his maiden speech, like him, I share in the representation of a town and I also have strong links with the cotton industry. Furthermore, I have a direct link with the industry in that for the past 20 years I have earned my living in it. It is a very happy experience to represent in the House of Commons a cotton town which has long boasted the quality of its cotton products, spun and woven, which have meant so much to the economy of the country.

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  The constituency has returned to Parliament many distinguished people, including "men of cotton" who have distinguished themselves in the Manchester district as champions of free trade and sponsors of reform both economic and political, in what was known in the area as the Manchester Movement.
  The only monument in Stockport is to one of these men of radical spirit, Richard Cobden. As times change and the town changes it appears that we are likely to lose this one and only monument in the course of town-centre redevelopment. As he is the only principal Liberal representative we now have in Stockport, we shall care for him and put him safely in another place so that people may see him as a monument of past political activity in the borough.
  In a recent election campaign article, The Guardian said that the cotton industry in Stockport had declined. It bracketed my party and my candidature with that decline in a way that was somewhat dispiriting. But whilst cotton in Stockport has declined, the Labour Party in its influence and standing increases daily and it has added to its political representation in the House of Commons for the first time for nearly 35 years.
  In the 20 years that I have spent in the cotton industry, incidentally not in Stockport, decline has been the order of the day. During that time we have seen a considerable reduction in the labour force. We now have only 25 per cent. of the labour force in the town compared with that of 20 years ago. Furthermore, only three spinning mills are running in the town. The rest are closed, either running to ruin or converted to light industry, such as mail order business and light assembly work. We do not complain, in that this ensures a good supply of alternative means of employment in the borough.
  At a time when there is a demand in the national economy for an increase in exports, for modernisation, and the use of modern technology, the cotton industry can contribute, but in spite of £30 million having been invested in the industry we have not had modernisation followed by greater production. The industry has weakened, and unfortunately control of imported goods has not followed through
  1292
  and we have not had Government policy to support what had been done in modernisation and rationalisation.
  A speech by my right hon. Friend the Minister for Economic Affairs, which he made in Manchester 18 months ago, on the part which the cotton industry could play in a national economy was well received by both sides of industry and was most encouraging. I recently had a discussion with the chairman of a large cotton group, and he assured me that, from his point of view, the 15 per cent. temporary import surcharge would give great encouragement to the cotton industry because it would give an essential measure of protection. Indeed, where there had been thoughts of shut-down before, the surcharge is regarded as a most encouraging piece of legislation which the industry hopes will stay for quite some time.
  In Lancashire, we find that, instead of money pouring into the industry to make it expand, mills are closing. Although there are full order books, there is a shortage of labour. We are extremely short of the kind of workers who can find a decent basis for employment in the industry as such, and, instead of staying in cotton, a good many of them seek employment elsewhere.
  In Stockport, tremendous concern is being expressed also about a newer industry with a high degree of modern technology. Last week, I met a group of representatives of men and management from a factory which not long ago employed 15,000 people in aircraft production. This labour force is now reduced to 2,000, and the workpeople are very worried about the distribution of nuclear contracts to the Midlands and the south of England, since the very existence of this factory with its 2,000 employees is now seriously challenged. There have been several closures in the Stockport area, and it is a matter of fair play, at least, that something should be done about the distribution of such orders, particularly when it is known that still more work is going to areas where orders are plentiful and full employment prevails.
  It was most encouraging to have the Government's assurance that there would be early measures to introduce effective policies which would sweep away slums and ancient overcrowded schools. The

  1293
  obvious matter of overstrained and inadequate hospital services was strongly emphasised by my hon. Friend the Member for Stockport, South (Mr. Orbach) the other day, and I firmly endorse what he said.
  I am much obliged for the opportunity given me to address the Committee. It has given me the chance to deal with the problems and virtues of a town with which I have had the closest political connection for four years and of an in-industry in which I have earned my living for 20 years. I am happy to think that this occasion has opened for me a medium through which, I trust, I shall be able to contribute in a small way in the future.
  8.22 p.m.
  Mr. Patrick Wolrige-Gordon: I very warmly congratulate the hon. Member for Stockport, North (Mr. Gregory) on his maiden speech, It was a most interesting address, obviously well informed about the situation in his constituency and, particularly, in the cotton industry. I hope that he enjoyed making it as much as we enjoyed listening to it, and I know that we all greatly look forward to hearing from him again.
  Ever since the recent election campaign began, we have heard a great deal about a balance of payments crisis. This, of course, is nothing new. Obviously, my memory cannot go back as far as that of some right hon. and hon. Members on both sides of the Committee, but to anyone who studies economics it early becomes plain that our country, with its responsibilities for sterling, with its proud position in the world to maintain, and with its inevitable difficulties over raw materials, will always have a difficult balance to achieve in the matter of exports and imports.
  My complaint about the Budget is that it contains next to nothing to do with this problem. We have the surcharge, which had been already announced, and we have the export incentive proposals, but otherwise this very real problem, the significance of which I feel keenly, has been used as an excuse to raise general taxation in order to find money for social benefits. I regard this as absolutely deplorable, first, because the present Government promised that it
  1294
  was exactly what they would not do when they were bidding for people's votes. They said that their increased social expenditure would be financed out of the growing expansion of British industry. [HON. MEMBERS: "Hear, hear."] Hon. Members may cheer, but it has not happened. The finance has come out of a rise in the general level of taxation.
  Secondly, the doctrine that this is the necessary groundwork for an incomes policy seems misleading and dangerous. If the only means by which one can achieve an incomes policy is by raising the level of benefits for those worse off before one starts, it seems to me very likely that many other sections of our national life will try to get in on the act.
  Thirdly, the inflationary effect of what we heard yesterday will be out of all proportion to the value of the benefits conferred. Indeed, it seems likely that there will be such a progression upwards of taxes first, then wages, and then costs, that very soon further increases will be required. I wonder whether the present Government will find it so easy to obtain the money then as they seem to think it is today in a country grown prosperous under a Conservative Government.
  I go back to the measures to deal with the balance of payments problem. It seems odd to me that, after all the talk, what we get to deal with our balance of payments problem is good old-fashioned protection. There has been much talk of the measures as blunt instruments bluntly produced. I agree with that. I know of firms with a very fine export record which are keen to increase it and to invest to this purpose but on whom the surcharges act in exactly the wrong way, making it difficult, not easier, for them to export because they have to rely on imported materials which are simply not available in this country. I hope the Chancellor will take urgent steps to disentangle exactly where the increased burden that he has laid on our export trade by this measure is to be found and take steps to remove its weight, particularly from our heavy construction and mining industry, as quickly as possible.
  I would mention also the export incentives scheme. The Chancellor of the

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  Exchequer talked about various ways in which the export rebates would help exporters. Then he uttered what I felt to be a very interesting sentence, stating:
  "The intention will be defeated if firms merely pocket their rebates and make no effort to expand their sales abroad."—[OFFICIAL REPORT, 11th November, 1964 Vol. 701, c. 1029.]
  I wonder that any Chancellor has to say anything like that. Is there no way of ensuring that if these firms do not use the rebate for increasing their export trade they shall not get it? It seems a complete waste of money if they do not do so.
  What other plans have the Government to deal with the crisis and remedy it? I find it hard to believe, after all the build-up, all the scolding, all the jargon about silence, and so on, that the Government are simply going to meet the problem with increased and temporary protection. Presumably we shall have to work harder to sell more abroad than we did. Is protection an incentive to harder work? I do not think so. I should have thought that absolutely the opposite was necessary. After what we have seen so far, I confess to having little confidence that the Labour Government have any fundamentally new ideas about how to get the country going.
  Mr. Cyril Bence: Is the hon. Gentleman suggesting that in order to encourage the efficiency of the fishing industry Government protection should be removed from it?
  Mr. Wolrige-Gordon: What I am saying is—and I want to make this absolutely clear—that the simple fact is that if we want to increase the efficiency of British industry and the competitiveness of British industry the last thing we want to do is to increase its protection.
  Mr. Bence: The fishing industry as well?
  8.30 p.m.
  Mr. J. J. Mendelson: The hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) has been raked by a mild form of crossfire from his Scottish colleagues. I do not think that he received as much artillery fire as he may receive—indeed, will receive—on future occasions, because my colleagues did not want to interrupt the general debate too
  1296
  much. It is my intention to leave him to his fate and to my Scottish colleagues for future occasions. I say this particularly because I have other fish to fry.
  My first reference concerns the major decisions on pensions. In many ways this is an occasion when hon. Members on this side of the Committee who have worked for years to bring about some of these improvements must begin by congratulating the Government on having brought in these measures at such an early date. Quite obviously, the decision to bring in these measures of social reform a few weeks after taking office involved not only keeping an important pledge to the old-age pensioners, the disabled and the widows, but also is an indication of the kind of change in our approach to policy in general that will take place under the new Government.
  It was interesting to see among the many comments quoted today in the national Press a report by a reputable political correspondent of a newspaper firmly in support of the Opposition at all times. He quoted a very senior member of the House on the Conservative benches as saying:
  "What I cannot see for the life of me is why our lot did not bring in these measures for social reform nine months ago."
  The correspondent did not identify the hon. Member, and I fully accept that, since it is not the custom of Lobby correspondents to mention names on such occasions. But I would dearly love to know the identity of that senior hon. Member if only to ask him why, if he was so much in favour of these measures, he did not, when we were fighting for them, give comfort and support to us. After all, as a senior member of the Conservative Party in this House, he would have had immediate access not only to the hon. Member for Taunton (Mr. du Cann)—and I do not underestimate his importance in these matter—but to the right hon. Member for Barnet (Mr. Maudling) himself and to the then Minister of Pensions and National Insurance. He could have used his influence then; but obviously he did not. It has taken a change of Government to introduce some of these humanitarian reforms. This explains the gloomy faces on the Opposition benches yesterday afternoon when my right hon. Friend the Chancellor of the Exchequer was

  1297
  announcing the improvements for our old people, the war injured and those injured in industry.
  When they go home to their constituencies this weekend and try to refresh themselves with the opinions of the people at home, hon. Members opposite will find that many of the speeches which we have heard today, including that of the hon. Member for Aberdeenshire, East will not sound as acceptable as they did to themselves. The hon. Member used a very dubious phrase, which he never qualified or clarified, when he said that the money from the new taxation was to be used to improve pension payments and that it was all very deplorable. We must ask him whether it is deplorable that pensions should have been increased. Is it deplorable that public money is being used to pay for these increases? What is deplorable?
  Mr. Wolrige-Gordon: I will tell the hon. Gentleman exactly what is deplorable. It is fighting an election campaign telling the people that one will not raise taxation in order to pay for social benefits and two weeks later doing exactly that.
  Mr. Mendelson: I do not know whether the hon. Gentleman was here earlier when my right hon. Friend nailed that allegation for all time. If he goes back to the many occasions on television and elsewhere and rereads the speeches of my right hon. Friend the Prime Minister and a speech which has not yet been mentioned, that of my right hon. Friend the Member for Coventry, East (Mr. Crossman), now the Minister of Housing and Local Government, but who had a great deal to do with the working out of the pensions policy of the Labour Party in recent years, he will find that my right hon. Friends made it deliberately clear, as was reported on television, that what we were asking our people to do was for those at work to accept their responsibilities for those who had done the work before and who had worked up the machinery of our industries but who were now in retirement and needing our help.
  Mr. Wolrige-Gordon rose—
  Mr. Mendelson: I have dealt with the hon. Gentleman. Once is enough.
  I move from that to the equally important consideration before us in the
  1298
  Budget statement. It concerns the policy adopted by the Government in dealing with imports. It is of singular importance that every Member of the House of Commons, Government and Opposition Members alike, should be conscious of the fact that all we say in the debate will be listened to with great interest by our E.F.T.A. and other trading partners in Europe and elsewhere. I remember sitting for years on the other side of the Committee and having to suffer allegations from Her Majesty's Ministers that whenever we criticised some of the policies then being pursued we were being unpatriotic, piling it on, turning every subject and argument into weakening the position of this country in relation to our trading partners abroad. In and out of season, this accusation was made.
  Like the right hon. Member for Barnet and other hon. Members opposite, I and many colleagues on this side of the Committee have recently had conversations with representatives of the E.F.T.A. nations. A number of things must he discussed between us concerning the policies we wish to pursue, but I put it on the record that in all these private conversations I have found much more understanding on the part of our E.F.T.A. partners about what the Government are trying to do; I have found that they understand that it is in the long-term interests of all the members of these organisations that Britain should put her balance of payments in order.
  As hon. Members opposite will know, the alternative facing the Government was not making these decisions to put on a 15 per cent. tariff and continuing unhappily as before. However much the right hon. Member for Barnet may now try to make it appear that a crisis was not developing, the alternatives facing the Government were to take these measures or to allow things to go on as they were and at the end of the year and early next year, before there was time for any normal recovery, to have to come down much more heavily with much more serious potential cuts in our imports. I am not teaching the hon. Member for Taunton anything in saying that. He was a Treasury Minister and he knows that that was the real choice facing the late Government and, equally, the present one. In face of that, to

  1299
  make mere debating points and to ignore the seriousness of the problem is to act with a degree of irresponsibility which we never accepted when we were in opposition.
  I had an exchange this afternoon—it is within the recollection of the Committee—with the right hon. Member for Barnet. I have sent him an urgent note giving him notice that I would raise the matter again. However, it may not have reached him and that may be why he is not present.
  Mr. Edward du Cann: Perhaps the hon. Gentleman will allow me to explain to him and the Committee that my right hon. Friend the Member for Barnet (Mr. Maudling) has had to be elsewhere during the most of the afternoon. I imagine that the hon. Gentleman did not know that.
  Mr. Mendelson: I accept that explanation immediately as long as it is clear that notice has been given and that for an unavoidable reason the right hon. Gentleman is not in his place.
  This is a matter of great importance, and that is why I have secured photostat copies of the relevant documents. I should like to refer to these documents. The right hon. Member for Barnet, who was Chancellor of the Exchequer only a few weeks ago, with all his knowledge of the work of the N.E.D.C., when talking at the Dispatch Box about the discussions on an incomes policy in the N.E.D.C., said that during those discussions it was the trade unions which were responsible for holding up progress and that the trade unions were not prepared to agree to any of the suggestions which had been made.
  I intervened and said that the right hon. Gentleman was putting a misleading record before the House and that on a very important occasion the officers of the N.E.D.C. had produced proposals which were designed as a basis of discussion in advance of reaching agreement on an incomes policy and that those proposals included a suggestion for a price review body of a certain kind. I further stated that the six representatives of the employers' organisations on the N.E.D.C. were prepared to look at these proposals and regarded them not too unfavourably when they were
  1300
  put to them. But, alas, they found that their opinions had been completely unrepresentative of the opinions of the people whom they purported to represent on the N.E.D.C., because within a short time a committee of the Federation of British Industries issued a report which was endorsed and accepted by acclamation at a large meeting of the Council of the F.B.I. attended by 180 members which completely rejected the proposals which had been accepted as a potential basis for discussion by their six representatives on the N.E.D.C.
  The right hon. Member for Barnet then repudiated what I had said. After saying that in particular he had attended the meeting and I had not—those were his Words—he stated that, far from this being the case, the true position was that the employers had put forward a suggestion for a price review body and that the trade union representatives had turned it down. I have stated almost verbatim what the former Chancellor of the Exchequer said in rejecting my factual account of what had happened.
  This is what we find when we turn to the facts. As this is the first occasion on which we have had an intervention from the former Chancellor of the Exchequer about the importance of this body and a future incomes policy, I should like to quote, first, from the official statement issued by the Federation of British Industries in March this year. In introducing and examining the report of the sub-committee set up by the F.B.I., this is what was said:
  "Price supervision and variable profits tax. Report of an F.B.I. Working Party on which the A.B.C.C., B.E.C. and N.A.B.M. were represented.
  1. We have examined certain proposals for discipline over profits or prices on the basis that if they were practicable and were put into effect, they would be matched by restraint in seeking wage increases on the part of trade unions. These proposals may be called:

  (i) The Variable Profits Tax Scheme.

  (ii) The Prices Registration Scheme.

  (iii) The Prices Complaints Scheme."

  Those were the proposals which I quoted this afternoon. I did not give these names because I did not want to take too much of the time of the Committee during the speech of the right hon. Gentleman.
  I turn to the front page of this official statement by the Federation of British

  1301
  Industries and I quote its first paragraph:
  "We have given detailed and objective consideration to certain proposals in the field of prices and profits in the hope that they might contribute to the search for an incomes policy. We publish today a summary of the arguments which have driven us to the conclusion that the schemes so far examined would not serve the desired purpose or the national interest."
  This committee's report was endorsed unanimously, as the right hon. Gentleman well knows, by a meeting attended by 180 representatives of the council of the F.B.I. four days later.
  Mr. du Cann: I remember well the exchanges which took place earlier this afternoon to which the hon. Member has referred. My recollection is, however, that the former Chancellor of the Exchequer, my right hon. Friend the Member for Barnet (Mr. Maudling), quoted in particular a newspaper account of an N.E.D.C. meeting of 8th or 9th February. He was uncertain of the date. It occurs to me that possibly my right hon. Friend and the hon. Member are talking about two entirely different matters, because there appears to be a discrepancy in the dates of the incident to which he is referring and the meeting of the N.E.D.C. to which my right hon. Friend referred. Does not the hon. Member think that this might be the case and the explanation?
  Mr. Mendelson: For the former Chancellor to stand at that Box and say with superiority, "The hon. Member was not at the meeting but I was", without making certain what he was talking about, is an act of irresponsibility on the part of a former senior Member of the Cabinet. What he says about the attitude of the trade unions, although he is now in opposition, is still of considerable importance, because he was chairman of the committee at the time the discussions took place.
  If further evidence were needed, there is a report, which I shall not quote, from the Economist of 14th March, this year, in which the same point was made in considerable detail and was commented upon. It is important that the record should be clarified before this debate ends and that it should be clearly established that in his statement the right hon. Gentleman was giving a misleading impression of the negotiations which had taken place. These were proposals for
  1302
  price control and price review and restraint on profits which had come from the N.E.D.C. and were turned down by the council and the committee of the Federation of British Industries.
  I now turn to another matter which concerns the proposals of the Government for the implementation of the policies which they have put before us. Having given this warm welcome to the measures of social improvement which the Government have produced so quickly, I am deeply critical of the decision by the Government that the various pension improvements should not come into effect before the end of March next year. I say this all the more definitely and clearly because I was a member of the pensions group of the Parliamentary Labour Party when we sat on the other side of the Committee and time and again with my colleagues I complained against the long delay in introducing the improvements which were sometimes achieved after a long battle in years gone by. It is not sufficient for my right hon. Friend the Chancellor to explain that there are these serious administrative difficulties, which are entirely responsible for the long delay. I am sure that this is so, but there are a number of questions which the Government spokesman must answer when he replies to the debate this evening. I will formulate them as precisely as I can.
  Given the existing administrative machinery which, according to the Chancellor's statement—which I accept—has made it so difficult to bring these pensions improvements into effect before the end of next March, what precise proposals did my right hon. Friend the Chancellor make to the Minister of Pensions in requesting a speeding up of this machinery? Secondly, precisely what reply did he receive, and, thirdly, what advice did my right hon. Friend the Minister of Pensions receive as to why it is impossible to devise a scheme which would allow these improvements to be brought into effect before the end of next March?
  There is a great deal of disturbance in the minds of many old-age pensioners and other pensioners all over the country who will profit from these improvements. There is a doubt in the minds of some of my constituents, and no doubt the constituents of some of my hon. Friends, and those of us who support

  1303
  the Government in their general policy, and this Budget in particular, have the task of putting searching questions on this issue and demanding answers.
  For example, a proposal is being discussed among old-age pensioners whereby it might be possible to introduce a temporary pensions payment book or temporary payments slip in order that these payments could be made earlier while the machinery of changing the books, drawing the old ones in and sending new ones out, is being completed. Did my right hon. Friend the Chancellor suggest this to my right hon. Friend the Minister of Pensions? Did my right hon. Friend the Minister of Pensions make such proposals to the administrators involved? Precisely what was the reply which she received when she made such a proposal?
  Already there have been a number of meetings of old-age pensioners. These are points which have been discussed by them and which will be discussed by many more of them over the weekend when we visit our constituents to refresh ourselves with the views of the people we represent. It is of the greatest importance that the Government should provide precise replies as to why, after all the experience we have had of delay in the past, and after this long delay and this long-overdue reform, once again it should be 20 weeks before anybody can profit from them.
  Yesterday afternoon the Leader of the Opposition gave a qualified welcome to those parts of the Chancellor's announcement which did not imply action next week but implied action after next April. He seems to be not unhappy at the fact that the precise details of the capital gains policy have not been announced and that, according to my right hon. Friend, some of them remain to be worked out. The Leader of the Opposition thought that this was a time when he could still advise my right hon. Friend to go slow on these measures. We have also seen a certain recovery on the Stock Exchange, probably inspired by the same motives as those which motivated the Leader of the Opposition yesterday afternoon.
  I want to draw the Government's attention to an important fact. We have decided to increase the contributions for
  1304
  all those employed by 2s. a week. This will be a very considerable additional payment which people will have to make. I fully support this decision. It is in line with our general policy that those who are at work accept their responsibility for those who arc retired or who have suffered from injury either in war or in industry.
  I would draw the attention of the Government to the fact that the actual increase in contributions from the employers' side will be far more diffused and will not have the severe impact that it will have upon people who will have to pay their increased contributions week by week. For instance, according to a calculation made this morning in the Financial Times, the big corporation of Associated Electrical Industries will have to pay a yearly additional sum of £.850,000; though, as the Financial Times hastens to point out, this is very little compared to the profits for this year of £9,600,000. Also it is very important to remember that this is a tax which hits equally every income group and, therefore, those people who are on rather lower wages than some of the others will have to bear more of a burden because of the additional 2s. a week than will some others.
  In this situation, I accept that it is a necessary imposition and a policy that we can support both because of its moral purpose and also because it is an operation which makes sense, namely, that if we want an increase in social benefits we have to pay for them. At the same time I think it is essential for the Government to make it clear that, when we proceed from the present measures to their implementation which will start now or next year, we must be equally assured, particularly in the circles of wage-earners who are very much concerned with the long-term policy of the Government, that when the capital gains tax comes to be worked out, and when the policies affecting the distribution of income come to be worked out, when the approach is made to an overall incomes policy, which we hope will be successful, that we can make it quite clear to all the people who are interested in this in the country, in the workshops and industry in general, that there will be no holding back, that there will be no acceptance of the hopes of the right hon. Gentleman the Leader of the Opposition that the capital gains

  1305
  tax will not have any teeth in it, that it will be made quite clear that we mean business and that we shall have a capital gains tax which will bite.
  I have dealt in some detail with these points and with questions directed to Her Majesty's Government and have spent as much time as I have in criticising the attitude adopted by the right hon. Gentleman the Member for Barnet and other speakers from the other side because I believe we on these benches have a very important function in this matter. It is our duty to make quite certain that at all times the views of those whom we represent are brought to the notice very early on of the members of Her Majesty's Government, our colleagues for many years, so that they are given the earliest opportunity to give precise answers to these important questions.
  8.59 p.m.
  Mr. Edward du Cann: I have been asked by my right hon. Friend the Member for Barnet (Mr. Maudling) to make an apology for his inability to be here for a few minutes. My impression of the matter raised perfectly fairly by the hon. Gentleman the Member for Penistone (Mr. Mendelson) is that the unions said that the proposals put forward in N.E.D.C. were rash and impossible. The matter was nonetheless pursued by the F.B.I. Whatever the outcome was, that is my impression, but, as he knows, have been sitting in the Chamber the whole of the afternoon and I have not had the opportunity of checking the matter closely. But I am sure that he and other members of this Committee will certainly acquit my right hon. Friend of any intention deliberately to mislead the Committee. There will doubtless be an opportunity to deal with the matter further, if need be, and it can be cleared up then.
  During the nine years I have been a Member of the House I have never followed a maiden speaker. I do not know why it is, but I share the experience of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). But today we have had eleven maiden speeches. The hon. Member for Heywood and Royton (Mr. J. Barnett) spoke yesterday from his own experience and, in the words of my hon. Friend for Walsall, South (Sir H. d'AvigdorGoldsmid), made a very attractive speech.
  1306
  I agree very much with that description. The hon. Gentleman for King's Lynn (Mr. Derek Page) spoke in very glowing terms of his own constituency and its problems, and the hon. Member for Bodmin (Mr. Bessell), who is not here at the moment, impressed all who heard him, though his speech was somewhat controversial, as one might expect from the West Country.
  We also heard the hon. Lady the Member for Halifax (Dr. Summerskill). I cannot pay her any higher compliment than to say that some of those who heard her had memories brought back for them. There was my hon. Friend the Member for Bebington (Mr. Howe), who spoke with a splendidly light touch and had some interesting remarks to make about a certain old pupil of a school in his constituency, and also made some serious points in an excellent speech. The maiden speech of the hon. Member for Huddersfield, West (Mr. Lomas) was particularly well spiked with humour and again had underlying points of importance.
  The hon. Member for Kingston upon Hull, North (Mr. Solomons) was, perhaps, the most controversial of a very controversial bunch of maiden speakers, but spoke with great effect from his experience. The hon. Member for Manchester, Blackley (Mr. Rose), whom we welcome particularly as the youngest member on the Government side, had some pertinent points to make. I am sorry that when I left the Chamber to get a bite of food I missed the speech of the hon. Member for Dunfermline Burghs (Mr. Adam Hunter), but my right hon. Friend tells me that it was an excellent speech. The hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) gave us his views of the future and made social points, and the hon. Member for Stockport, North (Mr. Gregory) spoke from his local knowledge, and spoke very interestingly about cotton, in particular.
  Apart from the controversial nature of some of the speeches—which was really rather refreshing in a way—one factor was that, without exception, they paid the most pleasant tributes to their predecessors, and the fact that their speeches were sincere, constructive and modest will, I am sure, have endeared them to the House from the very beginning.
  I should like to say to the hon. Member for Heywood and Royton, who replaces

  1307
  a very old friend of mine, Mr. Leavey, who was very much respected on both sides of the Chamber, that Mr. Leavey and I were often mistaken for one another. The only time I have ever seen my own name on the enunciator was when Mr. Leavey was speaking. The hon. Gentleman will forgive me if I say that I look forward to doing that again after the next election.
  There was a twelfth speech. I join with my right hon. Friend the Member for Barnet in paying a tribute to the right hon. Gentleman the new Chancellor for the manner and humour of his speech, although I cannot pay so warm a tribute, obviously, to the contents of that speech. I was amused by what he said about his naval experiences, for which many of us give him great credit. I would only say that many of us would have said that any vessel over 80 tons was a dirty great battleship. As a man, we certainly wish him well. He has always been a most engaging opponent, and we shall, of course, always be ready to respond to any measures he may introduce to defend sterling and, more on the positive side, to improve its world role as one of the main trading currencies, with increased benefit to the United Kingdom.
  My hon. Friend the Member for Nottingham, South (Mr. William Clark), in an able speech, made a point about international liquidity which was invaluable. I hope that the new Chancellor will follow the initiative that my right hon. Friend the Member for Barnet originally, in circumstances of some difficulty, took in this field with some success, for which he has not yet had the credit. I believe that this will be a subject of increasing importance, and I do not doubt that the right hon. Gentleman will remember this.
  The solution of the balance of payments problem depends on two things; an accurate diagnosis of the problem and the taking of effective countermeasures, which is really what the debate is about. The solution will not be assisted in any way by an exaggeration of the problem, and I think that we are entitled to ask the Government what the true position is. I should like, in particular, to quote from paragraph 4 of the White Paper, which states:
  1308
  "It is expected that, when the accounts for 1964 as a whole are available, they will show a deficit on the balance of payments, taking current and long-term capital account together, which is most unlikely to be below £700 million and may well reach £800 million."
  Two points emerge from that. First, the figure of £800 million is apparently the maximum. Secondly, current and capital account, in the words of the White Paper, are being taken together. The balance of payments White Paper published in respect of the first half of 1964 showed that we had a capital deficit of £216 million and a current deficit of £125 million. Therefore, two-thirds of the deficit was on capital account and due to the sort of special factors of Shell and Montecatini, to which the Chancellor referred. These are non-recurring items. I suggest for the consideration of the Committee and in the context of what has been said by the Government that they are not so much a sign of weakness but rather of an accretion of strength.
  It is worth remarking, in parenthesis, that so far as we know—the Chancellor has not told us yet—he proposes no measures to contain further capital expenditure in future, which makes one assume that he shares that view. There are other special factors. Part of the estimated deficit on capital account is represented by the demand of interest and capital on the American and Canadian loans for the year, which amounts to £67 million and is perfectly easily deferable. Much of the current deficit is due to our massive overseas aid, which hon. Members on both sides of the Committee of course wish to see continued. How much falls on current account I do not know, but it possibly amounts to something of the order of £100 million per annum.
  Judged on the trade figures for the first nine months of this year, the current account deficit looks like being not £800 million, not £700 million, but nearer £350 million, and that is the figure to which we should be addressing ourselves at pre. sent. The year 1964, as my right hon. Friend the Member for Barnet rightly pointed out, is nearly over. It is quite remarkable that the White Paper says very little about 1965. It quotes no figure. It is reticent. The Chancellor in his speech yesterday was entirely silent on this subject. However, we have some evidence, and we can all make our estimates. The best estimate it is possible

  1309
  for me to make at the moment£and I believe this is the kind of figure given to O.E.C.D. by British officials last Friday—is that the deficit for next year on capital and current account together will be of the order of £300 million or £400 million.
  In other words, the economic situation will be distinctly better. I quite appreciate that the Chancellor may not wish to refer to specific figures. I understand that, but it is fair that I should make the point that in our judgment the situation next year will be distinctly rosier. [Interruption.] We had already published figures. Some hon. Members below the Gangway opposite do not seem to have got the point, but the situation would have been distinctly rosier whether there were this Government in office or not. The rise in imports is mitigating in spite of the stocking factors to which the Chancellor referred. We all know that the prospects for exports at the end of this year and the beginning of next year are better.
  In considering the strength of the British economy, we must have a look at the capital side in particular. Prospects for the sterling area are good for 1965. Our capital assets are now £12,800 million, a growth of £1,500 million during our Conservative stewardship. We have extra preserves beyond the gold and convertible currency holdings in the dollar portfolio. We have the substantial borrowing facilities of the I.M.F., the Anglo-American swap arrangement and the arrangement with the Central European banks.
  Whatever may be said irresponsibly by some people—I exempt hon. Members in this Committee—the capital position of the country is strong. I do not deny that there is a problem on current account and that we want to increase our share of world trade, but we should not confuse capital and current account. I believe that the figures which have been given to the public, with all respect to the right hon. Gentleman, in the White Paper are exaggerated and incomplete. It is right for me to make that point.
  It is certainly arguable that the 15 per cent. surcharge on imports will affect the level of them further. I say "further" advisedly, because it is feasible to hold the view that imports
  1310
  at present are at a peak. Whether it was right to introduce it is a matter of judgment. I say plainly to the right hon. Gentleman that our view is that the action taken was precipitate, as my hon. Friend the Member for Scarborough and Whitby (Sir A. Spearman) said, and that its effect, particularly upon our European friends, was probably not fully considered.
  We all sympathise with the new Administration coming in, but I must make these criticisms. However good the Government may honourably believe their reasons to be, the breaking of any international agreement by Britain is a most serious matter and is in any circumstances to be regretted. [Interruption.] I say "any breaking of any agreement". The fact that the rules of G.A.T.T., for example, may require revision does not excuse a breach of those rules.
  Certain speakers during the course of the debate have made the point that hurt cannot be avoided if exports from our friends into the United Kingdom are limited. Of course this is true, but I do not accept what that very able new Minister, the Economic Secretary, said in the House of Commons a few nights ago on the Gracious Speech, namely, that consultation was impossible. I do not accept this. I do not believe it. My right hon. Friend the Member for Bexley (Mr. Heath), in a speech the other evening, went through the matter in some detail. Even if full consultation was not possible, some information should certainly have been given to out friends, as the hon. Member for Bodmin and my hon. Friend the Member for Cirencester and Tewkesbury both said. The Daily Mail puts it rather well in its leading article today:
  "Britain is not, was not, teetering on the edge of ruin. She had time to consult her friends, to do the right thing."
  The Times puts it rather more modestly, but the point is valid. My hon. Friends the Members for Twickenham (Mr. Gresham Cooke) and Cirencester and Tewkesbury spoke of their experience at the Council of Europe. It was I suppose, only natural that the President of the Board of Trade should carefully skate over his own experiences at the E.F.T.A. Consultative Committee.
  It is thoroughly unfortunate that we have broken the rules of G.A.T.T. It

  1311
  is thoroughly unfortunate that we have broken the rules of E.F.T.A. I do not wish to exacerbate an already difficult situation, but some of the things said by our friends in E.F.T.A. have been deeply concerning. As to the position of Austria and Denmark, I can only say that I wish the right hon. Gentleman, when he goes tothe E.F.T.A. meeting at the end of the week, as I think it is, all success in healing wounds which should never have been opened.
  We have broken the rules of the European Coal and Steel Community. We have broken trade treaty after trade treaty. Last but by no means least, we have upset many of our friends in the Commonwealth whose chief desire it is rightly at this moment to sell us their exports of manufactured goods. If we in Britain have a duty to the underdeveloped nations, the developing countries of the Commonwealth, it is to provide access for their manufactured goods in future. I speak not in detail of the humiliations we are enduring where our affairs are being examined by committee after committee.
  Mr. Maxwell rose—
  Mr. du Cann: With great respect to the hon. Gentleman, I would be very happy to give way to him but for one fact. I have never heard anybody make so many speeches as he has in the last two days. I would happily, however, give way to him on another occasion, and I shall look forward to that.
  I certainly accept what the Chancellor has said about his long-term objective of wanting freer trade in the world as a whole. Of course. That was our objective, and that is what we worked towards, and worked towards with some success. We shall support him in all he does to realise that situation in future.
  I wish to remind the Chancellor of a matter which I believe he should never forget. All the nations of the world, whether they are behind the Iron Curtain, whether they are members of trading blocs, whether they are independent nations, are interdependent in matters of trade. I seriously think that the danger of reprisals, etc., which arises from these measures will set back the progress that he wishes to make, that we wish him to make, and that the whole Committee
  1312
  wishes should be made in the national interest.
  As to the Kennedy Round, of which the right hon. Gentleman the President of the Board of Trade spoke, the importance of this, in spite of all the very grievous difficulties—they are very real—cannot be over-estimated. It is the only bridge between the rival trading blocs in the world at this time. We must do our utmost to ensure that it succeeds. I hope that it will not be long before the right hon. Gentleman when he negotiates for Britain in the Kennedy Round can live down the blunder of this surcharge.
  I will make one further point on this matter. The Committee understands very well that the whole political and economic situation in Europe is now again apparently in the melting pot. What the future may hold none of us can tell, but it is plain that sooner or later—and I am not speaking about entering the Common Market—Ya new initiative will have to be taken and possibly by this country. Europe looks to us for a lead. I hope with all my heart that nothing that has been done so far by the present Government will prevent us from being successful in that respect in the future.
  Now for some detailed points about the surcharge. We have seen the list of products which are exempted from it. The right hon. Gentleman is right to exempt ships, aircraft and, above all, books, and thereby to save us breaking one more agreement with U.N.E.S.C.O. The hon. Member for King's Lynn, my hon. Friend the Member for Ilford, South (Mr. Cooper) and others have rightly drawn attention to this list and have suggested that it should be brought more up to date. There are some important raw materials which cannot be made in this country and which have not been excluded, for example, in the fields of man-made fibres and glass. Each of us in our constituency post bags and in other ways has a long list of grumbles to put forward, and I hope that when the Committee stage comes, the right hon. Gentleman will look seriously at the constructive suggestions put forward in this Committee and by the House as a whole, if he does not accept evidence which is put front of him in the meantime.

  1313
  The hon. Member for Huddersfield, West raised the point of orders in train. I beg the Chancellor to realise that this causes very real difficulties for some firms, particularly where payment has already been made. The hon. Member for West Ham, North (Mr. Arthur Lewis), in his typically ebullient speech which we all enjoyed yesterday, rightly made the point about new inventions and how important they are. Again in the context of modernisation I hope the Chancellor will look again at items falling in that category. The list of exemptions is not in the state that it should be, and I hope that the Chancellor will consider reforming it.
  As to pensions increases, we naturally welcome these in general. We ourselves were pledged to increase pensions in due course in continuation of our good record and of our policy which has been to ensure that pensioners should continue to share in the national prosperity; 1961, 1963, 1965—it is a good progression.
  However, certain questions must be asked. The first is this—which the hon. Members for West Ham, North, for Huddersfield, West and for Penistone asked the Chancellor during the debate—why the delay? It would have been possible to introduce some of these measures earlier. When we were the Government we introduced them earlier. Why the delay? The person who should answer the question is the Chancellor. I think the country had the impression that it would be one of the first aims of the Labour Party, if they became the Government, to reform the pensions arrangements much more substantially.
  We were told by the Chancellor that his right hon. Friend the Minister of Pensions and National Insurance had been working very hard. Those of us who know her and like her, as we all do, do not doubt that for a moment but, as my hon. Friend the Member for Bebington said, this is an interim measure, and it is very important to see the new reforms got right, and I hope these arrangements will not make any more difficulties in carrying out the structural reforms that we all want to see.
  The third point concerning the pensions increases is this. There are many quotations on the record. I exempt the right hon. Gentleman who is now the Minister of Housing and Local Government from
  1314
  saying clearly that there would be no increases in taxation. Whatever the Prime Minister may have said today, he is on record as having said exactly that. I think that the immediate change in policy is very damaging for the Prime Minister's reputation and for others who made statements of that sort in the election.
  I remind the Chancellor of something which he said in the House of Commons on 20th July, 1964:
  "We should be aiming in the latter part of the 1960s for a 5 per cent. and then a 6 per cent. growth rate. Only then shall we attain the programme of social expenditure that is both necessary and desirable. I want to make it clear that on this side of the House we recognise that our programmes cannot be achieved until we are maintaining a growth rate of 5 per cent. or 6 per cent."—[OFFICIAL REPORT, 20th July, 1964; Vol. 699, c. 75.]
  That was a wise thing to say and an objective we can all understand and sympathise with.
  To come back to the White Paper, we see in paragraph 9 that in truth—a point not yet made in the debates that we have had—the White Paper, in fact, and the Government now are accepting not a 5 per cent. or 6 per cent. growth rate hut a 4 per cent. growth rate, and yet during the whole of the election we were constantly attacked for not doing more. In other words, the policy has changed. The electorate were told one thing; another thing is now being put into effect. It is well that this should be clearly understood.
  I turn to some of the Measures in this Budget. First, the increase in Income Tax. As the Chancellor rightly said, this is going to hit very hard. It will hit seven million people very hard indeed. As my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) said, it will hit the young managers, the young technicians, the young scientists—surely exactly the sort of people whom we should he encouraging at this time.
  "Encourage enterprise", the Chancellor said. Quite right. That is the thing to aim for; that is the thing to do. That is what we need in the context of economic advance—to encourage enterprise. They talk about it and do something different in practice. It is a sorry matter. I regret particularly the effect this must inevitably have, as my right hon. Friend the former Chancellor

  1315
  pointed out today, on the volume of savings coming forward in the future.
  Inside one month up go taxes. The hon. Member for Penistone, in his speech a moment or two ago, urged his right hon. Friend the Chancellor to do more. And there is the threat of more to come—very much more.
  Mr. Mendelson: Hear, hear.
  Mr. du Cann: "Hear, hear", the hon. Gentleman says. Note it in the country. The Chancellor is a worthy disciple of the late Mr. Gaitskell. I remember very well his Budget of 1951. Income Tax going up. [Interruption.] We have not had an Income Tax rise for 14 years. That Budget led to two things in 1951. It led to the resignation of the right hon. Gentleman who is now Prime Minister and to the Labour Party being defeated at the subsequent election.
  I contrast our own record: Income Tax down from 9s. 6d. to 7s. 9d. In the 1953 Budget—3½ million people taken out of tax altogether. Abolition of the Entertainments Duty, reduction of the Purchase Tax top rate from 100 per cent. to 25 per cent. As my hon. Friend the Member for Ilford, South pointed out. we were able to increase pensions and put up the total volume of social expenditure and at the same time, over the years, reduce the rate of taxation, not just occasionally but consistently.
  There are many criteria by which one can judge the Budget. My hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) asked whether it would assist exports. We have the rebate. That will help, but how much? That, as my right hon. Friend the Member for Barnet said today, is a matter for conjecture. Some hon. Members may think that there are other methods of helping exports which would not be so spectacular, like tourism mentioned by the hon. Member for Dewsbury (Mr. Ginsburg), clearing the docks, and matters of that sort, but which would be more effective. All right, the rebate will help; but the whole of the Budget seems designed precisely to add to industrial costs, and it cannot assist our competitiveness in any way. I go as far as to say that, overall, the Budget must make it more difficult to sell abroad.
  The speech of the President of the Board of Trade interested me very much.
  1316
  [An HON. MEMBER: "A good speech."] Yes, it was a good speech, but if right hon. Gentlemen would be good enough to refer to a debate in the House of Commons on 17th April, when my then hon. Friend the Member for Meriden who is not now with us, raised the subject of exports, the right hon. Gentleman will find that virtually every so-called new measure which he put forward in his speech as being new policy was mentioned by me in that debate as being the policy of the Conservative Administration. During his speech the right hon. Gentleman made the admission, quite rightly, that exports during our tutelage were running at a record level.
  We were interested in particular points which the right hon. Gentleman put forward, and I should like to put two of these to him. First, in his review of E.C.G.D. matters, I hope that he will change his views as they seemed to me before he joined the Government and that we shall export to people who will pay us and not to those who are not prepared to pay. Do not let us have dogma standing in the way of that. [HON. MEMBERS: "Hear, hear."] All right, let us see a bit of activity in Spain, for example. When the right hon. Gentleman mobilises the activities of small firms, will he look at the activities of the International Gifts Fair which have been good and will be valuable in the future?
  As for the Budget and the question whether it will contain inflation, it is without doubt an inflationary Budget. We have seen today that road haulage costs are to go up by 2½ per cent. Taxi fares—and we may well ask what is coming next. What about the discussions on public transport? We have no indication when they will be completed or what the Chancellor is aiming at. Those who represent rural constituencies in particular bitterly resent this new impost on transport.
  Will the Budget assist in the preparation of an incomes policy? The Chancellor's other measures may have an effect, but I would quote the words of Mr. Frank Cousins at the T.U.C. Congress in 1963:
  "We will not have wage restraint whoever brings it in and wraps it up for us."
  I do not know how the right hon. Gentleman will deal with that. Certainly it is true that an increase in the cost

  1317
  of living must lead immediately to demands for wage increases. We wish the right hon. Gentleman success with a wages policy, but we believe that he has created new difficulties for himself.
  As for the question of assistance to modernisation, I spent this morning writing out a list of the ways in which the Budget would assist immediately. I show the Committee the piece of paper—it is completely blank. [Laughter.] In no way is the Budget the answer to that problem. On all these counts, on costs, on competitiveness, on exports, on modernisation this Budget fails.
  I also have had the pleasure this morning of rereading the preface to "The New Britain", which says:
  "The world wants it and would welcome it. The British people want it and deserve it and urgently need it."
  Very well, who on reading these words could possibly have dreamt what was coming to them in thirty days in new taxes? Did any member of the Government, did the right hon. Gentleman, or any of his Liberal friends, say that they would be voting in favour of an additional petrol tax and increased Income Tax within thirty days of Parliament meeting? No, they did not.
  Mr. Eric Lubbock rose—
  The Chairman: If the hon. Gentleman does not give way, the hon. Member for Orpington must resume his seat.
  Mr. Lubbock: The hon. Gentleman has said that the Liberals voted in favour of the increase in the petrol tax.
  Mr. du Cann: I do not think that I said that, but if I did I withdraw. If I said it, I apologise to the whole of the Liberal Party and to the hon. Member for Orpington in particular.
  One final sentence. I am sorry not to have got it out half a minute earlier. The Labour Party came to office, we believe, on a false prospectus, and it is seeking to remain in office by misrepresenting the national situation today.
  9.30 p.m.
  The Chief Secretary to the Treasury (Mr. John Diamond): Having regard to the way in which the General Election was conducted and the lack of information available on which to vote, I should have thought that it lay least in the
  1318
  mouth of the hon. Member for Taunton (Mr. du Cann) to say what he did in his closing remarks about a lack of information from this side. But we do not want at this stage to engage in yet a further pre-election debate.
  I thought that it might be useful to the Committee if I were to reply, first, to the debate, including the speech of the hon. Member for Taunton and that of his right hon. Friend the Member for Barnet (Mr. Maudling), and then, if there is time left, we can descend to some of the pleasantries across the Floor which, apparently, the hon. Gentleman enjoys so much. However, so far as I and my right hon. and hon. Friends are concerned, we are here to get on with the job.
  Before I go further, it is my very pleasant task to congratulate all the maiden speakers who contributed so well and so pleasantly to our debates. The hon. Member for Taunton has referred to them individually, so I should be detaining the Committee if I were to go over that process again in detail, but I wish to refer to just two maiden speakers for the reasons which I shall explain and with, I hope, the indulgence of the Committee in so doing.
  First, I mention the maiden speech of the youngest hon. Member on our side, my hon. Friend the Member for Manchester, Blackley (Mr. Rose), a constituency which I had the proud privilege to represent from 1945 to 1951. It gives me very great pleasure to congratulate my hon. Friend not only having made an excellent maiden speech, but on being able to do what I failed to do in 1951.
  Next, all right hon. and hon. Members will, I am sure, wish me to pay special attention to the maiden speech of my hon. Friend the Member for Halifax (Dr. Summerskill), the only lady maiden speaker today. She spoke with great charm and freshness, and, on behalf of all male Members of the Committee, I must say that there is something especially attractive about a maiden speech when it comes from a maiden.
  Before I plunge into the essence of the Budget, I wish to reciprocate the courtesies which the right hon. Member for Barnet and the hon. Member for Taunton paid to my right hon. Friend the Chancellor. He has asked me, on his behalf, to reciprocate and to express the

  1319
  hope that both hon. Gentlemen will enjoy a very long and successful career in their "shadow" positions. I hope that the right hon. Member for Barnet will understand that I am referring not to his physical stature, but to his fiscal stature, when I say that I hope that his shadow will never grow less.
  It will, perhaps, be of assistance to the Committee if I deal with the replies to the debate in the course of a speech which attempts to relate the detail to the major principle. In so doing, I shall, so far as I can, give all the information which hon. and right hon. Members have asked for, and, in particular, give the figures which, I think, will be helpful to the right hon. Member for Barnet.
  The deficit, as we know—it has been referred to so many times—on current and capital account in our balance of payments was estimated to be between £700 million and £800 million. There is no reason for anybody on either side of the Committee to attempt to dress up those figures. They do not need any dressing up on our side. They speak for themselves. They do not need any dressing up, or worse than that, from right hon. and hon. Gentlemen opposite.
  The hon. Member for Taunton attempted to say that because an element in these figures was capital, therefore one did not have to pay for it—that if it was capital, somehow or other it provided itself. So far as the balance of payments is concerned, our difficulties arise whether these are capital payments or current payments. If they are capital payments, the money has to be found to make the investment. If they are capital payments, one runs up debts just as much as though they are current payments. The hon. Gentleman can test this for himself immediately. It does not matter in what form the money comes in, whether it is borrowed for current purposes or capital purposes, it has to be borrowed, and once we borrow money we have to repay it. The situation is simply that we had this difficulty.
  Nor does it help the Committee for the hon. Gentleman to take the first half year when there was a disproportionate amount of capital payments, to subtract the capital payments and then to double the rest and say that that is, in effect, the current figure. It is quite wrong,
  1320
  and it is far better for the Committee to face up to the real facts.
  The facts as we know them, and as right hon. Gentlemen opposite in the last Administration know them, are that the best estimate we could have was the expectation, when we came in, that there would be a deficit on capital and current account—nobody wants to gloss over any part of it—of £700 million to £800 million. That is a situation which requires immediate action. It requires immediate action by a Government who want to put the economy in order. It may be that a sluggish Administration which is 13 years tired may not feel it necessary to take any steps and may prefer to let the position go from bad to worse, especially as polling day is advancing. That may be the case. So far as we are concerned, it was a situation which had to be dealt with immediately.
  Let me put it in its context. This figure compares reasonably with a deficit of £446 million for 1960. It is nearly double that figure. [Interruption.] On the one hand, it was £446 million, and on the other it is £700 million to £800 million. There is no need to make the comparison. It was that figure in 1960 which led the previous Government to take all the steps which we familiarly described as a stop in the stop/go process. That led to the disastrous delaying of the economy. It was that which led to the unemployment. It is that figure, £466 million, which one should compare with a figure of between £700 million and £800 million. I hope I have put the matter in perspective and that we need not go over these figures time and time again.
  Mr. Ridley: After all that, will the hon. Gentleman give us the split-up for which we have been asking and tell us what the balancing item will be and give us all the other figures for which he has been asked?
  Mr. Diamond: I am sorry that the hon. Gentleman should have asked me for that, because it shows that everything I have been saying hitherto has gone right over his head, or that he prefers not to listen to it. The figures for the first half year have been published. I have not got them with me, but they were quoted by the hon. Gentleman's hon. Friend only five minutes ago, and he might have listened to his hon. Friend. The simple point is that, whether one spends capital

  1321
  or current money, it is money and it has to be found.
  One suggestion that has been made is "Yes, admittedly, the situation had to be dealt with, but one might have dealt with it by borrowing." I want to say, with the reserve which is implicit in my function—and which the hon. Member for Taunton fully understands—that that course was not open to Her Majesty's Government because of the expected deficit for the following year. As my right hon. Friend has said, the estimated deficit for the following year was likely to be such a figure as to be wholly unacceptable. [HON. MEMBERS: "How much?"] Only someone with no sense of responsibility for this country in relation to other countries would ask me to disclose that.
  Mr. William Clark rose—
  Mr. Diamond: I repeat that we could not deal with this problem by borrowing because we would have to borrow a further substantial sum in the following year—and whether people are prepared to lend one more money if one is overspending at a spend-thrift rate is another question.
  We had to take action and that action has been described. I shall not go over it again. I want to deal with the main criticism from the benches opposite that the action we took was inflationary, as I understood the hon. Member for Taunton to say. I apologise for troubling the Committee with figures, but it is helpful to have them. [Interruption.]
  The Chairman: Order. I do not think that Parliament is helped if hon. Members, from a sitting position, hurl remarks across the Floor.
  Mr. Diamond: I am grateful, Dr. King, to my hon. Friends for their support, but I hope that it will not be quite as vociferous as it has been from time to time. Can therefore, with apologies for burdening the Committee with some figures, try to explain this in the way in which the hon. Gentleman attempted to address himself to the subject?
  First, let us deal with the effect of what we have been doing for the current year. I am giving the figures at the annual rate. I do not think that they differ from the figures he gave, but as
  1322
  neither of us can see HANSARD just yet I am not precisely aware of them.
  As far as revenue is concerned, there is the import surcharge running at £200 million and the additional tax on petrol at £93 million. The export rebate, on the other hand, is £75 million, leaving a difference of approximately £220 million. Thus, the effect of our actions immediately is, at the annual rate, £220 million net coming in.
  There will be a certain amount of destocking. No one can put a precise figure on that. We estimate that the £220 million plus the destocking are just about right to cover the import saving. This import saving is the action we were compelled to take in order to deal with the situation I have described.
  Given that one inherits that situation, given that one must do something about it, and given that one must save approximately £300 million in imports, and that one saves it, one must take countervailing action to deal with what otherwise would be resulting inflation. We have dealt with that partly by £220 million in the revenue items and we estimate destocking to cover the balance.
  Sir Douglas Glover rose—
  Mr. Diamond: With all deference to the hon. Gentleman, I think that this argument is best deployed fully. Then I can answer questions.
  The action we are taking arises directly out of the position we inherited—out of the deficit on our capital and current account. That action is being taken merely to correct what would otherwise have been the inflationary effects of the savings on imports. That is the first stage in the argument.
  We now come to the further things we have done. They have resulted in approximately £350 million at an annual rate of expenditure. I imagine that it would be reasonable to add to that savings offsets. We will put it the other way round. Against this £350 million there is an income coming in of approximately £400 million. It is necessary to provide more income than expenditure because it is to be expected that if taxation and contributions are raised, up to a point there is some reduction in saving. Therefore, if account is taken of that

  1323
  reduction in saving, it will be found that these two sides balance again. The two sides balance with the additional expenditure which we are incurring and the additional income which we are raising to meet that expenditure.
  I want to repeat this very shortly. To meet the current account deficit, the balance of payments deficit, we have had to take certain action, as we have done, and we have countered the possible inflationary effect in the way I have described, that is, import surcharge, petrol and the export rebate set against it.
  Then—and there is no need to try to baulk this or run away from it—we have done two things, the first directly attributable to our heritage and the second not. The second thing we did was to raise Income Tax and contributions in order to pay pensions. Let us have it quite clearly that that is what we did and we did it deliberately and to have effect from the start of the following year.
  That is what the taxation is about, taxation to which right hon. and hon. Gentlemen opposite object. It was to pay for the pensions which right hon. and hon. Gentlemen want. They want the pensions, but they do not want the tax. I ask the hon. Member for Taunton if, as he and his right hon. Friend the Member for Barnet say, it is right to pay these pension increases as from the beginning of the next financial year, where does he intend to get the revenue?
  Mr. du Cann: I will certainly answer that. The fact is that we were able five times to increase pensions, we were able to increase National Assistance rates eight times and we were able to mitigate the earnings rule five times, without any general increase in taxation.
  Mr. Diamond: The hon. Gentleman has referred to the past. It is not a very straightforward answer to my question. I am prepared to give way to the hon. Gentleman again if his right hon. Friend the Member for Bexley (Mr. Heath) will permit him to rise to his feet, which I gather he will not. The question is: what is to be done in this situation?
  Mr. du Cann: I will only say, because we want to hear the hon. Gentleman tell us more, that I have always regarded the past as a very good precedent for the future.
  Mr. Diamond: We cannot waste the time of the Committee too much, because I want to reply to detailed questions.
  We are left with this situation obsolutely lucidly clear in the minds of all hon. Members: we did certain things to cope with our heritage, which is one aspect, and we did other things to provide for pensions, which is another aspect. We raised taxation to provide for pensions now because we thought that pension increases now were due and overdue. Right hon. Gentlemen opposite agree with the pensions and then vote against the taxation.
  Mr. R. J. Maxwell-Hyslop rose—
  The Chairman: The hon. Member for Tiverton (Mr. Maxwell-Hyslop) knows that if the hon. Gentleman the Chief Secretary does not give way, the hon. Gentleman must resume his seat.
  Mr. Diamond: I hope that the Committee will agree that I have given way more than is normal. I have many questions to answer in the time available, and I hope that I will be allowed to do so straight away.
  The right hon. Member for Barnet asked me whether this rate of 15 per cent. was high. The answer is, "Yes, very high, but it had to be very high to deal with a very difficult problem."
  The hon. Members for Manchester, Withington (Sir R. Cary) and King's Lynn (Mr. Derek Page) asked about the question of coverage, which is important. I hope that I will be excused for reading out a precise answer. I am referring to the coverage of the imports charge. The phrase "basic raw materials" in the White Paper of 26th October was intended in a generally descriptive sense. All would agree that terms such as "basic" and "raw ", "essential" and "inessential" are incapable of precise definition.
  There will be many opinions on the stage of processing at which a material ceases to be raw and what is essential.

  1325
  The broad basis which we have adopted as a guide is that raw materials which have undergone only elementary processing should be exempted. Even this is difficult to apply in a wholly consistent way over the many and varied materials and we are conscious that the list we have prepared may well contain anomalies. When we review the list we shall try to remove any anomalies which may be causing serious hardship, bearing in mind, of course, that the scheme as a whole is a temporary one.
  On the other hand, we have not attempted to select materials or manufactures for exemption on any basis of availability or non-availability in the United Kingdom. Apart from the fact that it would be impracticable to apply the criteria of availability, to attempt to do so would introduce a deliberately protective character which is alien to the purpose of the charge and which we believe would make it wholly unacceptable to other countries.
  Mr. Edward Heath: I am grateful to the hon. Gentleman for giving way and for the explanation which he has just made. Could he help us by giving an assurance that when the list of exemptions is embodied in the Finance Bill it will be in such a form that the House can amend it if it so decides?
  Mr. Diamond: It is not for me to attempt to anticipate what Amendments the Chair will or will not select. Subject to that, there is no desire to prevent Amendments from being moved which will have the effect which I think the right hon. Gentleman has in mind.
  I have been asked by the hon. Members for Chippenham (Mr. Awdry) and Bodmin (Mr. Bessell) a difficult question about goods in transit. The answer to it is that we cannot see our way to granting alleviation of any kind. First, this is the normal and almost universal practice for dealing with the situation. Secondly, it is admitted that as a result of dealing with it in this way the import charges have immediate effect, but it was the policy of Her Majesty's Government that they should have immediate effect. Thirdly, there is such a variation in the times of transit and different methods of transportation that it would be impossible to define any satisfactory method other than the time of arrival.
  1326
  Finally—[Interruption.] I hope that the hon. Member for Ormskirk (Sir D. Glover) will contain himself and allow me to answer the question. I can understand how unhappy he is sitting on those benches. He can take it from me, from experience, that one gets used to it. May I say to the hon. Gentleman, without wishing to be personal, that it is the same with marriage: the first six years are the worst.
  I am sorry that I cannot answer all the questions, but I will do the best I can. I have been asked about the effect of the petrol and oil duty on the cost of living and whether steps are being taken to deal with the problem of fares, a point to which the hon. Member for Withington referred. The immediate increase in the cost of living is one-fifth of a point. The final increase in the cost of living resulting from this duty, when it goes right the way througfh the economy to its final stages, is estimated to be, all told, well below half a point. [HON. MEMBERS: "Oh."] On the related point, may I say that representatives of the bus operators have been invited to a meeting with my right hon. Friend the Minister of Transport tomorrow. I hope that this indicates the speed with which we try to deal with these problems.
  I have been asked about the likely effect of a capital gains tax, to which my right hon. Friend referred in his Budget speech, with regard to a house in which a taxpayer may be living. I should like to say rather carefully that it is not possible to enter into details of the tax at this stage, but that one thing which can be made clear is that the Government do not propose to bring into charge a house which the taxpayer owns and in which he lives as his only or main place of residence.
  My hon. Friend the Member for Penistone (Mr. Mendelson) has raised a question which I am glad he asked, because it is in all our minds: whether we could possibly bring forward the date of payment of the increased pensions. I assure my hon. Friend that if it were possible it would have been done. There is nothing that has stopped us doing it except the sheer administrative impossibility of doing it earlier.
  Dame Irene Ward: The party opposite would not take that explanation from us.
  Mr. Diamond: The difficulty is that the machine is such as it is, and we inherited that machine from the party opposite.
  Mr. Heath: We inherited it, too.
  Mr. Diamond: The right hon. Gentleman says that his party inherited it. What did they do about it in 13 years?
  Mr. Heath: We improved it.
  Mr. Diamond: We have gone into this fully and thoroughly. With the best of good will in the world, I cannot hold out any hope of bringing forward the date of payment. I assure my hon. Friend—because we are all interested in the same point—that had it been possible to do it, we would have done it by now. We do not need to be reminded about it.
  Mr. Arthur Lewis rose—
  Mr. Diamond: I apologise to my hon. Friend for not giving way, but there are difficulties and the time is not all that great.
  I have also been asked, in relation to bringing forward the date of pensions, whether it is possible to do something in its place. The answer is that we are doing what we can via the National Assistance Board to help pensioners during this winter. I cannot say precisely the amount or form that this will take, but we are doing the best we possibly can.
  I hope that the Committee will accept that I have done the best I can in the time available to answer the many questions. I have tried to put the debate in its proper framework and to give right hon. and hon. Members opposite all the figures so that they could make their own judgment. I could have wished that, during the election, right hon. Members opposite had given us all the figures so that we could have made our judgment. I hope that my right hon. Friend's Budget will be accepted.
  Question put and agreed to.
  Resolution to be reported.
  Report to be received Tomorrow; Committee to sit again Tomorrow.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Proceedings on the Motion relating to Finance Bill (Procedure) may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Short.]
  Mr. George Lawson: I beg to move, That this House do now adjourn.
  Mr. Deputy-Speaker (Dr. Horace King): Finance Bill (Procedure).
  Mr. Heath: On a point of order, Mr. Deputy-Speaker. Did you not clearly hear the Adjournment moved by the Government Whip? Ought not that Question to be proposed and the normal Adjournment procedure to be followed?
  Mr. Deputy-Speaker: I did not call upon the hon. Member for Motherwell (Mr. Lawson) to move the Adjournment.
  Mr. Heath: Further to that point of order. Surely it is not customary for Mr. Speaker or Mr. Deputy-Speaker to call anyone to move the Adjournment. It is the custom for the Government Whip to rise to move the Adjournment, whereupon the Motion is accepted by the Chair. In this case he was clearly heard to move it. He rose and moved the Adjournment.
  Mr. Deputy-Speaker: The House has passed the Business of the House Motion to enable it to proceed to the second Motion on Finance Bill (Procedure). I was about to call the Chancellor of the Exchequer, and was in the process of doing so, when I was interrupted. I must rule that we must get on with the business.
  Mr. Heath: With great respect, Mr. Deputy-Speaker, before you started to read the Motion to which you have just referred, the Adjournment was moved by the Government Whip. I am certain that if confirmation were wanted by the House he would confirm that he rose and moved the Adjournment. In that case, ought you not either to accept it or to ask the hon. Member to withdraw his Motion?
  Mr. Diamond: Further to that point of order. Perhaps I may offer an explanation which the right hon. Gentleman will find acceptable. It is my responsibility to deal with the Motion

  1329
  which is about to come before the House and I asked my hon. Friend the Government Whip at which stage this would occur. He whispered certain words to me which indicated when this Motion would be put, and I imagine that the right hon. Gentleman overheard words which were merely the usual Front Bench exchanges.
  Mr. Heath: Further to that point of order. I assure the Chief Secretary that I overheard nothing which he may have said to his hon. Friend. What I clearly heard was the Government Whip move the Adjournment.
  Mr. Deputy-Speaker: I hope that the House will he reasonable and will let us proceed with the business which is on the Order Paper.
  Sir D. Glover: Further to that point or order. It was in the hearing of the House, of dozens of hon. Members, that the Government Whip moved the Adjournment—although he may regret that he did so. Surely it is the procedure of the House that, the Adjournment having been moved, we cannot go back on previous business. I am sure that if the Government Whip is allowed to come to the Box he will admit that he moved the Adjournment of the House.
  Mr. Deputy-Speaker: I hope that we can proceed with the business of the House.

  FINANCE BILL (PROCEDURE)
  Ordered,
  That, notwithstanding anything in the practice of the House to the contrary, provision may be made in any Finance Bill introduced in the current year with respect to the income tax chargeable for a subsequent financial year.—[Mr. Diamond.]

  SECURITY
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lawson.]
  10.6 p.m.
  Dame Irene Ward: I am very glad to have this opportunity on the Adjournment to discuss the very important matter of security. I very much regret that I was originally informed that a Treasury Minister would answer the debate. I presume that this
  1330
  is so though I have not been told if it is to be the Paymaster-General, though, of course, he may be also a Treasury Minister. So far as I am concerned, I should be glad to have an answer to the questions I propose to raise.
  I am asking for an assurance tonight in the matter of security. It is, of course, the responsibility of the Prime Minister and the Home Office and it is on this that I want an assurance so that it can be recorded in the Official Report of the House. I want an assurance that there will be no diminution in the security regulations which cover the security of this country, without Parliament being informed.
  Mr. Deputy-Speaker: Order. I apologise to the hon. Lady for interrupting her, but I am calling the right hon. Gentleman on the Front Bench to order.
  Dame Irene Ward: That is very kind of you, Mr. Deputy-Speaker. I am delighted.
  I am asking for this assurance as there has been so much difficulty and controversy since the new Government took office that I think it right that we should have an assurance on the records of the House. I am asking that there shall be no diminution or alteration in the security regulations without Parliament being informed. Implicit in this is, of course, that there shall be no directive to—and no interference—with the security committee of the Civil Service Commissioners in relation to their responsibilities to deal with anyone who has had any contact with Communist or other organisations which are antagonistic to this country.
  It is difficult in Parliamentary life always to keep track of what happens and I think it most important that we should have assurances on this point—that there shall he no whittling down of the responsibility of those who are responsible for our security services without Parliament being informed. That is one assurance which covers two points I am asking about.
  I do not want to make a controversial speech—this is a most important matter, which should be treated most seriously—but the country was very disturbed when it was announced that the Prime Minister, in regard to personal appointments, one to himself and one to the

  1331
  Chancellor of the Exchequer, had decided to waive the regulation that no one of foreign birth should be appointed to any of the Departments dealing with various aspects of the Services and covered by the security regulations.
  I am not arguing—I could not do so, in any case—that the Prime Minister has not the right to do this under the present regulations. Of course he has. If I assess the position correctly—and it is difficult for anyone like myself, who is an outsider, to be able to interpret the regulations accurately—the regulation was embodied by the Civil Service Commissioners in 1956, after the unfortunate episode of Dr. Fuchs, since when no foreign-born national, however reliable, has been appointed to any Department covered by the regulations.
  That the Prime Minister should rush into taking this responsibility on his shoulders immediately after his appointment caused great anxiety to very many people in this country. I must move very carefully here, but I must say that, this having happened in such a very short time, I do not believe that either the Prime Minister or the Chancellor of the Exchequer has had sufficient experience in security matters to rush into creating a new situation like that. I very much regret it.
  I have been following as closely as I can one or two of the new arrangements that have already been made, but until I asked a Question in the House it was very difficult to find out that this arrangement was to take effect on 1st January, 1965. It seems to me that for the Secretary of State for Foreign Affairs or the Secretary of State for Commonwealth Relations to be able to put aside deliberately laid down regulations about foreign-born nationals, and to say whether those people are to be employed in the Foreign Service or the Commonwealth Office, is putting a great responsibility on them. We seem to be almost back to the situation when, by the personal intervention of a Minister—in all good faith—Guy Burgess was established in the Foreign Service.
  The Prime Minister's answer about his position has been rather lightly referred to—and I do not like the type of language used in connection with these important matters—by some of the spokesmen sup-
  1332
  porting the right hon. Gentleman saying that the "security chaps" would take care of the security position of the people who have been appointed. That may well be, but that is why I am asking for this further assurance that there has been, and will be, no alteration in the responsibility of those who administer the regulations under the Civil Service Commissioners security committee without Parliament being informed.
  My hon. and gallant Friend the Member for Harrow, East (Commander Courtney), who knows much more about these things than I do, is to follow me, but I take a great interest in these matters, and in view of the hurry in which the Prime Minister has abandoned established practice I felt it absolutely essential to have it made quite clear that if there were to be any alterations of any kind that diminished our security they should not be promulgated without reference to this House, where they can be discussed in detail.
  10.15 p.m.
  Commander Anthony Courtney: I wish to support my hon. Friend the Member for Tynemouth (Dame Irene Ward) and to say how grateful I am to her, as I think the House and the country should be, for raising the question of security on the Adjournment Motion. We discuss these matters far too little in this House.
  We should realise what a grave effect there might be on the future of our country if our security arrangements are not perfect, as they should be. In the short time available, I wish to draw attention to one anomaly in comparatively recent regulations which I believe seriously handicaps members of our security services in the performance of their duty, and which deserves the attention not only of the House but of the country.
  It is known generally, from a number of disturbing security cases over the past few years, that the operations of certain foreign embassies in London include espionage activities carried out under the cloak of the diplomatic immunity and privilege accorded by international convention. I am sure that the hon. and learned Gentleman the Financial Secretary to the Treasury will agree with me in that flat statement of fact.

  1333
  The privileges and immunities granted to foreign embassies are governed throughout the world by a Convention arrived at three or four years ago to which we and the vast majority of civilised nations subscribe. It lays down certain immunities and privileges. I draw attention to a particular point I have in mind. On 2nd October in the London Gazette there were published the identities of four countries with whom Her Majesty's Government have special bilateral arrangements for the granting of special immunities and privileges to certain personnel of their embassies in this country.
  I make a statement here, which I believe to be true, that certain of those embassies—I shall not specify how many or which—come into the category of those which have been operating under the cloak of these immunities to the detriment of the security of this country over many years in the past. I think it anomalous in the extreme that our security services should be handicapped by the fact that these special bilateral immunities and privileges accorded to the members of the missions of these particular four nations in London include practically every single member of the embassy staff. They are well outside and above those privileges which are granted internationally by usage and under the terms of the Vienna Convention, so much so that in these particular embassies in London individual domestic servants, chauffeurs, cooks and bottle-washers have equivalent diplomatic privilege and immunity with their ambassadors.
  While that situation exists it surely represents an intolerable strain on our security services. I ask the hon. and learned Gentleman to refer this point, now it has appeared in the London Gazette, to his right hon. Friend so that something can be done about it.
  10.19 p.m.
  The Financial Secretary to the Treasury (Mr. Niall MacDermot): I think that the whole House knows, as I certainly do, the great concern and interest which the hon. and gallant Member for Harrow, East (Commander Courtney) has in matters concerning security. I have not had notice of the point that he raised in the short speech he made and it was not very easy to follow the precise details from the careful remarks he made.
  1334
  I cannot, therefore answer them, but, if he will be good enough to write to me, giving me any further particulars he wishes to give, I shall let him have such information as I can, although he will understand if I cannot give very much.
  The hon. Lady the Member for Tyne-mouth (Dame Irene Ward) is also known to the House to have had a long interest in matters affecting security. It is an interest which I personally can share with her, because I spent six and a half years of the war in security, or, as it became later known, counter-intelligence. I think that it is a matter for regret that the hon. Lady has allowed her interest in these matters to be diverted into what I regard as a particularly un-English activity, and that is to take part in a mounting attack from the benches opposite on two gentlemen who are not in a position to hit back.
  The hon. Lady has not referred at all by name to the two appointments to which she was alluding. They are, of course, the appointments of Dr. Balogh and Mr. Kaldor as advisers to the Government. Their names have been published in the Press and have been referred to by some hon. Members already in our debates.
  Dame Irene Ward: Surely the hon. and learned Gentleman would agree that, if the Prime Minister takes unprecedented action, it would be very odd if one did not mention the case in Parliament. That is the Prime Minister's responsibilty, not mine.
  Mr. MacDermot: Perhaps the hon. Lady would wait and allow me to reply to her remarks so that she can see whether it is unprecedented. The hon. Lady appears to think that these appointments represent some change of policy, or the breaking of the normal rules governing the access of foreign persons to secret information or to appointments in the Civil Service. In fact, that is not so at all. The Nationality Rules for appointments to the public service are set out in Regulations by the Civil Service Commissioners in the Civil Service Order in Council 1956, with the approval of the Treasury and the Secretary of State for Foreign Affairs. The relevant Regulations were published in HANSARD the other day in answer to a Written Question by the hon. Lady.

  1335
  The application of those Regulations to both Dr. Balogh and Mr. Kaldor is as follows. They are both British subjects, both having been naturalised before the war. They would, in fact, both have been eligible for appointment under these rules for the established staff of the Civil Service, since they are British subjects with residence in this country for at least five out of the last eight years. In the case of Dr. Balogh, as he is appointed to the Cabinet Office, he would come within the provisions of a special regulation to which I will refer in a moment.
  They are, in fact, not established civil servants. They are both temporary civil servants. The same requirements on nationality normally apply to temporary appointments, but Departments have discretion in the public interest to employ any person in a temporary capacity. Even an alien can be employed though an alien can be employed only if the responsible Minister, with the consent of the Treasury, issues a certificate under the Aliens Employment Act, 1955. It follows, therefore, that in the case of temporary staff the nationality rules are not exclusive, but serve to remind Departments that aliens should be employed only where there is either some special requirement for their service or suitable British staff are not available.
  With regard to the question of access to secret papers, this is quite distinct from the nationality rules, because the principle is that no one, whatever his origin, is allowed access to classified information, unless the head of his Department is satisfied that he can be trusted and he is subject to the necessary security inquiries. A special consideration arises in the case of persons of alien origin in case they may be liable to pressure, for example, through having relatives behind the Iron Curtain. Such persons are not given access to classified information, unless the benefit to the country outweighs any security risk. There is a great variation in the degree of risk involved, and it would be wrong to apply too rigid a rule. Each case is considered on its merits and Departments are given discretion to allow cases where the risk is likely to be small.
  No change has taken place in the application of these principles by the present
  1336
  Government, nor have they made any alteration to the security rules since they took office. The position personally of Dr. Balogh and Mr. Kaldor, I would remind the House, is that they have both rendered distinguished service to the country of their adoption. Dr. Balogh, as is well known, is a Fellow of Balliol College, Oxford, and has been since 1945. He has acted as chairman of the Minerals Committee of the Ministry of Fuel and Power besides being an author of many well know works. Mr. Kaldor, apart from advising a number of British overseas territories on economic questions, is a Fellow of King's College, Cambridge, and was a member of the Royal Commission on the Taxation of Profits and Income in 1951–55. He also contributed to Beveridge's "Full Employment in a Free Society."
  The regulations have been set out fully in HANSARD and hon. Members will be able to refer to them in detail for themselves. The special provision to which I have referred, which comes under paragraph 2 of Regulation 12, is that in certain offices, which include the Cabinet Office, the requirement that a person shall have been a British subject by birth can be waived by the special permission of the Minister responsible for the Department. There is nothing new in this provision. It is something which was laid down and was applied by the previous Government.
  Commander Courtney: Could the hon. and learned Gentleman clear up one point? I think this shows the confusion which I and some of my hon. Friends are in. The hon. and learned Gentleman, I am sure perfectly correctly, says that arrangements for the handling of security have not been altered during the time of this Government. I should like to ask this question. It was understood, I think on both sides of the House in the last Parliament, that questions affecting security should normally be dealt with by the Home Secretary unless they were broad questions of policy in which case they would be handled by the Prime Minister personally. May I ask the hon. and learned Gentleman why, then, these questions are being answered by a Treasury Minister?
  Mr. MacDermot: The question might have been asked a little earlier. The reason is that I am the Treasury Minister

  1337
  responsible for pay and establishment questions in the Treasury covering the whole Civil Service. The question that has been raised is on security conditions on the employment of persons in the Civil Service. It is that which I am answering. We were given notice by the hon. Lady the Member for Tynemouth of the questions that she would raise and I have been seeking to answer them. I would then refer briefly to—
  Dame Irene Ward: May I—
  Mr. MacDermot: No, I cannot give way again.
  Hon. Members: Order.
  Dame Irene Ward: I can stand if I want to. May I have an assurance—
  Mr. Deputy-Speaker: Order.
  Mr. MacDermot: I am not prepared to give way any further. I have already given way a good deal.
  I want to answer some of the allegations which have been made in this House about Dr. Kaldor in the last few days. At Question Time on 10th November the hon. Member for Surbiton (Mr. Fisher) asked me a question in these terms:
  "In view of the fact that the economic advice hitherto tendered by, for instance, Dr. Kaldor to overseas Governments has usually resulted in a situation of near riots and almost of revolution—I am thinking particularly of British Guiana—is it wise in these circumstances to pay outside economists of foreign extraction to create chaos in Britain?"—[OFFICIAL REPORT, 10th November, 1964; Vol. 701, c. 812.]
  The assertion in that question is wholly untrue.
  On the same evening the right hon. Member for Bexley (Mr. Heath), in his winding-up speech, thought fit to gain a laugh from the House at the expense of a civil servant who was not in a position to reply, in these terms:
  "He has a remarkable reputation of advice to Governments. He has been official adviser to six countries. The net result has been: in two, bitter opposition, in one, the Minister resigned, in one, there was a general strike, in one, the Government fell, and in the last there was a revolution."—[OFFICIAL, REPORT, 10th November, 1964; Vol. 701, c. 953.]
  None of those statements is true. I am sure that the right hon. Gentleman extracted them from the front page of
  1338
  the Daily Telegraph. The Daily Telegraph was very careful in mentioning the fact that Dr. Kaldor had tendered advice to certain Governments, not to allege what the right hon. Gentleman alleged, that certain events that occurred afterwards were the result of that advice. He chose to do it. I invite him to repeat that allegation outside the House and to face the consequences of doing so.
  Mr. Edward Heath rose—
  Mr. MacDermot: Only a little time remains at my disposal—
  Mr. Heath rose—
  Mr. MacDermot: —and I will not give way.
  Mr. Heath rose—
  Hon. Members: Outside the House.
  Mr. Heath: On a point of order. Is is not customary in the House when a Minister answering an Adjournment debate has given one notice that he is going to attack one that, having made his attack, he should at least give way and give one an opportunity to comment on it?
  Mr. Deputy-Speaker: That is not a point of order.
  Mr. MacDermot: I did not give the right hon. Gentleman the Member for Bexley (Mr. Heath) notice that I would attack him merely notice that I would reply to the attacks which he made upon a distinguished civil servant who is not in a position to defend himself—quite a different matter. It is obvious that the right hon. Gentleman is aware that only three minutes remain for me to reply to the debate. I propose to get on with my reply. [Interruption.] Hon. Members opposite are interrupting and I can assure them that this is certainly to do with security.
  Let us consider the right hon. Gentleman's allegations. First, he referred to "bitter opposition". That presumably referred to the references in the Daily Telegraph to Dr. Kaldor's advice to the Ceylon Government and the Mexico Government. The Ceylon Government adopted his proposals and they were put into legislation. In Mexico, the proposals were never even published because they were not followed. They were

  1339
  rejected by the Government there. Thus there was no question of bitter opposition arising.
  His next allegation was that in one country a Minister had resigned. That, he alleged, was the result of the proposals. It presumably referred, again, to what appeared in the Daily Telegraph about Dr. Kaldor's recommendations to the Government of India.
  Sir Douglas Glover rose—
  Mr. MacDermot: I must get on.
  Sir D. Glover: On a point of order. Would you give us some guidance, Mr. Deputy-Speaker? What have these economic considerations of Mexico and Ceylon got to do with an Adjournment debate raised by my hon. Friend about security?
  Mr. Deputy-Speaker: The Minister has not said a word which has yet been out of order.
  Mr. MacDermot: It is obvious that the hon. Gentleman, by raising spurious points of order, is trying to prevent me from replying to the debate.
  Dame Irene Ward: Answer me.
  Mr. MacDermot: I have answered the hon. Lady.
  The position in India was that after Dr. Kaldor had made his proposals, which had been adopted by the Finance Minister, there were mounting attacks made on that Minister. He resigned, the reason being due to insurance corporation scandals being revealed involving officials in his Ministry. Apparently in India there is still a custom, which under the last Government we saw fall into desuetude, that Ministers accept responsibility for the acts of people in their Departments.
  The next allegation was that in one country there had been a general strike. That, presumably, referred to Ghana where, following the publication of the tax proposals recommended by Dr. Kaldor, there was indeed widespread
  1340
  opposition from the vested interests who would have suffered from those tax proposals. There was not a widespread general strike but a railway strike. It was a peculiar feature of the settlement of that strike that the strikers required and made as one of their demands the removal of taxes on foreign companies, which would not have affected the strikers in any way. That might give some indication of the source and instigation of that strike.
  The final allegation was on the same subject as that of the hon. Member for Surbiton (Mr. Fisher); namely, British Guiana. Following the publication of the proposals for the Budget, which were based on the advice tendered by Dr. Kaldor, there were, it is true, riots. The Commonwealth Secretary in the last Government appointed three judges to hold a commission of inquiry to investigate the causes of those riots. Their conclusions were published in a document published by the Colonial Office and obtainable from the Stationery Office. If any hon. Member wishes to receive a copy of the document, I will be glad to supply one with the relevant passages marked.
  They set out all the Budget measures in full and also set out the fact, and commented on this in their report, that
  "It will be seen that there was nothing deeply vicious or destructive of economic security in the Budget. It had been drawn up on the advice of an experienced economist, who could not be said to have any Communist prepossessions. The Budget won immediate approval from many persons."
  They proceeded to quote favourable comments on it from the London Times and the New York Times. They set out the strong attacks made on the proposals in the Budget by—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-four minutes to Eleven o'clock.

EDUCATION AND SCIENCE
  Teacher Training (Married Women)
  Teacher Training (Married Women)
  Parent-Teacher Associations
  Parent-Teacher Associations
  University College, Bangor (Students)
  University College, Bangor (Students)
  Comprehensive Education, Liverpool
  Comprehensive Education, Liverpool
  Grammar School Places, Bournemouth
  Grammar School Places, Bournemouth
  Comprehensive Schools (Staff)
  Comprehensive Schools (Staff)
  Education Staff College
  Education Staff College
  Part-time Teachers (Superannuation)
  Part-time Teachers (Superannuation)
  New University, Inverness
  New University, Inverness
  Oxford and Cambridge Universities (Rates)
  Oxford and Cambridge Universities (Rates)
  Parliamentary Questions (Business Management)
  Parliamentary Questions (Business Management)
  School Building (West Ham)
  School Building (West Ham)
HOME DEPARTMENT
  Sir Roger Casement
  Sir Roger Casement
  Wakefield Prison
  Wakefield Prison
  Commonwealth Immigrants
  Commonwealth Immigrants
  Electoral Reform
  Electoral Reform
  Crimes of Violence
  Crimes of Violence
  Toys (Safety Standards)
  Toys (Safety Standards)
  Fingerprints (Identification)
  Fingerprints (Identification)
  Lorry Parking (Residential Roads)
  Lorry Parking (Residential Roads)
BRITISH GUIANA
  Dr. Jagan (Discussions)
  Dr. Jagan (Discussions)
FIJI ISLANDS
  Economic Development
  Economic Development
ADEN AND SOUTH ARABIA
  Constitution
  Constitution
DEPENDENT TERRITORIES
  Grants in Aid (Administration)
  Grants in Aid (Administration)
BOARD OF TRADE
  Spain
  Spain
  Tourist Industry (Hotels)
  Tourist Industry (Hotels)
  Shipbuilding Orders
  Shipbuilding Orders
  Travel Agents
  Travel Agents
  Leipzig Fair
  Leipzig Fair
  China (Minister's Visit)
  China (Minister's Visit)
  Bellshill Industrial Estate
  Bellshill Industrial Estate
  Companies (Political Contributions)
  Companies (Political Contributions)
NATIONAL FINANCE
  Fish Boxes (Surcharge)
  Fish Boxes (Surcharge)
  Man-made Fibre Imports (Surcharge)
  Man-made Fibre Imports (Surcharge)
  Duty-free Books
  Duty-free Books
PUBLIC BUILDING AND WORKS
  New Department (Accommodation)
  New Department (Accommodation)
COMMONWEALTH RELATIONS
  Commonwealth Secretariat
  Commonwealth Secretariat
TRANSPORT
  Free Transport Facilities (Private Bus Services)
  Free Transport Facilities (Private Bus Services)
RAILWAYS
  Frizinghall and Manningham Stations
  Frizinghall and Manningham Stations
  Stanley to Kinnaber Junction (Passenger Services)
  Stanley to Kinnaber Junction (Passenger Services)
HOUSING
  Protection from Eviction Bill
  Protection from Eviction Bill
  Milner Holland Committee (Report)
  Milner Holland Committee (Report)
  General Grant Orders
  General Grant Orders
LOCAL GOVERNMENT
  Rating Hardship
  Rating Hardship
  Grant-aided Services
  Grant-aided Services
  FOREIGN SECRETARY AND MINISTER OF TECHNOLOGY
  FOREIGN SECRETARY AND MINISTER OF TECHNOLOGY
  MINISTERIAL BROADCASTS
  MINISTERIAL BROADCASTS
  SCOTTISH ORAL QUESTIONS
  SCOTTISH ORAL QUESTIONS
  NEW MINISTRIES AND ADVISORY POSTS (COST)
  NEW MINISTRIES AND ADVISORY POSTS (COST)
  COLONIAL AND COMMON- WEALTH RELATIONS OFFICES
  COLONIAL AND COMMON- WEALTH RELATIONS OFFICES
  NASSAU AGREEMENT
  NASSAU AGREEMENT
  MEMBERS (VOTING)
  MEMBERS (VOTING)
  MINISTER WITHOUT PORTFOLIO
  MINISTER WITHOUT PORTFOLIO
HOSPITALS
  Stoke Mandeville (Invalid Tricycles)
  Stoke Mandeville (Invalid Tricycles)
SCOTLAND
  School Building (Western Isles)
  School Building (Western Isles)
  Fishery Protection (Western Isles)
  Fishery Protection (Western Isles)

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

LORD CHALFONT
The Right Honourable Arthur Gwynne Jones, O.B E., M.C. (commonly called Alun Gwynne Jones), having been created Baron Chalfont, of Llantarnam in the County of Monmouth, for life—Was (in the usual manner) introduced.
Several Lords—Took the Oath.

EGG MARKETING BOARD AND "PIRATE" RADIO ADVERTISING
3.18 p.m.
LORD AIREDALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether reports are true that the Egg Marketing Board are contributing to the revenue from advertising of pirate radio stations operating in breach of international agreements; and, if so, whether they propose to take any action.]
LORD HOBSON: My Lords, I am informed that the Egg Marketing Board has entered into a contract for advertisements to be broadcast by one or more of the unauthorised broadcasting stations which are at present operating off our shores. The Government strongly deprecate this action, and in response to their representations the Board hat; agreed not to renew the contract without prior discussion with my right honourable friend the Minister of Agriculture, Fisheries and Food.
LORD AIREDALE: My Lords, I am very much obliged to the noble Lord, particularly as I think this is his first appearance at the Government Dispatch Box. Is it not rather a pity that the four members of the Egg Marketing Board appointed by the Minister of Agriculture
422
were not able to prevail upon their colleagues to prevent this from happening in the first place?
LORD HOBSON: That may well be so.
EARL FERRERS: My Lords, can the noble Lord state whether Her Majesty's Government have told the Egg Marketing Board that they are not allowed so to advertise, or whether they have merely suggested that they should not?
LORD HOBSON: My Lords, we have told them that their present action incurs our displeasure.
LORD WAKEFIELD OF KENDAL: My Lords, can the Minister say whether the Government are proposing to take any action to stop these radio stations from operating?
LORD HOBSON: My Lords, that is another question and the noble Lord might care to put it down.
EARL FERRERS: My Lords, can the noble Lord tell me whether it is not strange for the Government to interfere with the advertising policies of an independent marketing board?
LORD HOBSON: Not when these stations are operating without a Postmaster General's licence and are taking advantage of operating in international waters pending international agreement.
EARL FERRERS: Is not the right answer, then, to suspend the broadcasting stations, as opposed to interfering with the advertising rights of the marketing board?
LORD HOBSON: That, indeed, is another question.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, should not the advertising of a marketing board, which has great privileges under the Statutes of this Parliament, be very carefully examined as its conduct goes on? They have been very good up till now, but I hope they will not be allowed to go too far.
LORD HOBSON: I am sure the criticisms of the noble Earl will be borne in mind.
LORD AIREDALE: My Lords, in view of the question asked by the noble Earl.

423
Lord Ferrers, might I ask this? Did not the Postmaster General, in a Written Answer in another place the day before yesterday, express his intention to get rid of these "pirate" radio stations by legislation?
LORD HOBSON: This is really another question. The matter is of course being actively considered.

MINISTERS AND CROWN PRIVILEGE
3.22 p.m.
LORD DILHORNE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether any new directives have been issued with regard to the claiming of Crown Privilege by Ministers.]
THE LORD CHANCELLOR (LORD GARDINER): My Lords, in future a Minister will not claim privilege for any document on security grounds except after consultation with the Prime Minister. The question of Crown privilege in general will he examined by the Law Reform Committee as part of its inquiry into the law of evidence, and I am asking the Committee to give priority to this part of its inquiry.

THE YEMEN
3.23 p.m.
LORD CARRINGTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper,
[The Question was as follows:
To ask Her Majesty's Government whether they have any statement to make about recent events in the Yemen.]
LORD SHEPHERD: My Lords, I would apologise to the noble Lord the Leader of the Opposition that my noble friend Lord Walston is unavoidably absent from his place and is therefore unable to answer his Question.
The noble Lord the Leader of the Opposition and the House will have seen the recent announcement of a ceasefire in the Yemen, and that a meeting of the Yemeni leaders is to be convened
424
on November 23 in order to reconcile differences and discuss the formation of a new Government. Her Majesty's Government welcome the end of the fighting, and hope that these developments may lead to a permanent and peaceful settlement.
LORD CARRINGTON: My Lords. I am grateful to the noble Lord. I wonder if he could tell me whether in point of fact the cease-fire is being observed, and also whether the subversion across the border from the Yemen into the South Arabian Federation has stopped. Would he also agree that, for the stability of the area and for the stability of the South Arabian Federation, an essential part of the agreement should be the withdrawal of the 40.000 Egyptian troops which are in the Yemen?
LORD SHEPHERD: My Lords, I am not in a position to state whether full fighting has ceased in the Yemen, but we believe that it has been considerably reduced. In fact, so far as I know, in the last 24 hours there have been no further incidents. With regard to the withdrawal of the United Arab Republic forces in the Yemen, we have so far seen no statement to this effect, but I would suggest to the noble Lord and the House that perhaps we might wait until the outcome of the conference and see whether a withdrawal takes place.
LORD CARRINGTON: My Lords, I do not want to press the noble Lord, but that does not quite answer what I asked. What I said was that I hoped the Government agreed that, for the stability of the area, it was essential that the Egyptian troops should withdraw.
LORD SHEPHERD: My Lords, I would not dispute that, but we must, think, wait. I hope the noble Lord will not press Her Majesty's Government on this, but obviously the withdrawal of these forces would be helpful to the situation in that particular area.
THE EARL OF DUNDEE: Meanwhile, my Lords, can we take it that Her Majesty's Government will not decide the question of recognition until after this conference has taken place?
LORD SHEPHERD: My Lords, surely the question of recognition depends upon the usual criteria—criteria which

425
have been recognised by previous Governments—for giving recognition to any new régime.
THE EARL OF DUNDEE: One of which criteria would be that the authority of the Government should not depend on the bombs and bayonets of 40,000 foreign troops.

NEW TOWNS BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to new towns and to matters connected therewith, being (except in the case of section 1(1) of the New Towns Act, 1964) those enactments in their application to England and Wales; with corrections and improvements made under the Consolidation of Enactments (Procedure) Act, 1949.I beg leave to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

MUSEUM OF LONDON BILL [H.L.]
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): My Lords, I beg leave to introduce a Bill to establish a Board of Governors of the Museum of London; to transfer to them the collections of the London Museum and of the Guildhall Museum and the benefit of certain funds; to define the functions of that Board, and to provide for purposes connected with the matters aforesaid. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Champion.)
On Question, Bill read 1a, to be printed, and referred to the Examiners.

DOGS BILL [H.L.]
LORD DOUGLAS OF BARLOCH: My Lords, I beg leave to introduce a Bill to control nuisance by dogs. I beg to move that this Bill be read a first time.
Moved, That the Bill be now read 1a.—(Lord Douglas of Barloch.)
On Question, Bill read 1a, and to be printed.

SPECIAL ORDERS COMMITTEE
THE CHAIRMAN OF COMMITTEES (LORD MERTHYR): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That a Committee be appointed to consider all Special Orders in the present Session; and that the Lords following, with the Chairman of Committees, be named of the Committee:

D. Atholl.

M. Willingdon.

E. Munster.

V. Soulbury.

L. Airedale.

L. Archibald.

L. Cawley.

L. Coutanche.

L. Crawshaw.

L. Faringdon.

L. Goddard.

L. Jessel.

L. MacAndrew.

L. Meston.

L. Morton of Henryton.

L. Peddie.

L. Royle.

L. Strang.

L. Terrington.

—(Lord Merthyr.)
On Question, Motion agreed to.

THE CONSUMER COUNCIL
3.27 p.m.
BARONESS ELLIOT OF HARWOOD BARONESS ELLIOT OF HARWOOD rose to call attention to the Report of the Consumer Council; and to move for Papers. The noble Baroness said: My Lords, I rise to move the Motion standing in my name on the Order Paper. The first Report of the Consumer Council appeared towards the end of July, and there was at that time no moment for a debate in your Lordships' House. Today is, therefore, the first opportunity we have had to discuss consumer affairs. In the meantime, of course, we have had a General Election: a general post has taken place, and I now find myself sitting on a different side of the House from that on which I should have been had the debate taken place in July. Nevertheless, I do not intend to make a different speech. I propose to make the same speech as I should have made had I been on the other side of the House, because consumer protection is not a

427
Party political subject: it is a subject which applies to all consumers, to whatever Party they may belong.
This is a very big subject, my Lords. There is much to say, and I do not want to weary your Lordships with too long a speech. I am, in fact, fortunate in having in your Lordships' House another member of the Consumer Council, the noble Lord, Lord Peddie, to whom I am very much indebted for a considerable amount of assistance on the Council. This afternoon we have arranged to divide between us the many subjects which we are hoping to discuss with you, so that neither of us will, I hope, speak for too long. I am also asked by the noble Baroness, Lady Burton of Coventry, to say that she is extremely sorry that to-day was an impossible day for her to take part in the debate. She is one of the experts on this subject, and I, too, am very sorry she cannot be with us to-day.
As this is the first time that this subject has been discussed, and as I am often asked, "What is the Consumer Council?", "What are you doing?"—and there then generally follows the query, "I suppose you are part of Which?"—I hope that your Lordships will not mind if I make a brief allusion to the origins of the Council and to our terms of reference. We were set up by the President of the Board of Trade as a result of the recommendations in the Molony Report on Consumer Protection, and our terms of reference are set out in this Annual Report which we are discussing. The functions of the Council are

"(a)to inform itself about the consumer's problems, and about matters affecting his interests;

(b) to consider, after consultation where necessary with other affected interests, the action to be taken to deal with such problems;

"(c) to provide advice and guidance for the consumer, in particular through the Citizens' Advice Bureaux and other appropriate organisations and …

"(d) to publish an annual report."

We have expressly excluded from our terms of reference the following: preparation or publication of comparative test reports, the taking-up of complaints on behalf of individual consumers, and law enforcement action. Within our terms of reference we have been getting under way and starting our work and,
428
in the first instance, as we cannot deal with individual complaints we have passed these on to the Citizens' Advice Bureaux. These bureaux have a grant from the Board of Trade to enlarge their activities, to bring their services into new localities and to increase the number of bureaux throughout the country. It has inevitably been rather a slow process since they have had to train workers, to get premises and to get the support of local authorities, and it has not gone quite as fast as they or we would have wished. Nevertheless, it is progressing and I hope that in another twelve months we shall see a big increase in the number of citizens' advice bureaux.
We work closely with the Consumer Association, the groups which form a Federation of Consumers and it is here that the magazine Which?, the magazine of the Consumer Association, comes in. Other sources from which we get information are the Press, the correspondence columns of the Press, letters from Members of Parliament, letters from teachers and from women's organisations, from social workers and, of course, from the general public as shoppers and consumers. We must spread our net as wide as possible in order that we shall be able to serve the community as best we can.
My Lords, looking back on the first twelve months I think we have been able to take decisive action in one or two things: the Hire-Purchase Bill, which we debated in your Lordships' House (and with your Lordships' help we managed to get approval for one or two important Amendments to the Bill) subjects in the field of textiles: the danger to children from wearing flammable nightdresses, which have now been banned by regulation under the Consumer Protection Act, 1961, and the quality of school uniforms, especially blazer clothing. Here we had many complaints, which have now been met, and the Council have been able to promote discussions between all the interested parties, the textile manufacturers, the makers-up, the retailers, the teachers and the parents. We hope shortly that these results will be effective and that the number of satisfied parents will be considerable.
In setting standards and defining quality we have the help of the British

429
Standards Institution and the Retail Trading Standards Association. Both of these organisations have helped us in many matters, and we are extremely grateful. In our Annual Report your Lordships will find many subjects on which we have given our views and taken action, not excluding the Bill to end resale price maintenance, and we shall continue to take a useful part in any legislation which makes things easier for the consumer. But to-day, with your Lordships' permission, I shall try to draw your attention to the programme we have mapped out for ourselves in the future. We have a new Parliament and we want to have new proposals.
First, I should like to take a look at a very old service which, with a very large increase in advertising, is assuming a very new look—I refer to the travel business. One of the admirable by-products of the higher standard of living to-day is the way people spend their holidays. Whereas in the past hardly anybody could afford holidays abroad, to-day the ordinary person takes very nearly for granted the annual event, when he may, if he wishes, take his holiday abroad. The increase in holidays abroad is phenomenal. Last year nearly 5 million people went abroad for their holidays, over 2 million on inclusive tours, and the travel business now accounts for a trade worth nearly £225 million annually. The rapid growth of the travel business has drawn into it large numbers of small operators of doubtful quality, and the competition in the industry requires large advertising outlays which the travel agent is frequently obliged to meet either by a bank overdraft or by the use of clients' deposits long before the actual provision of the transport or accommodation. The absence of adequate training facilities for the staff and the way many operators insist on conditions which restrict their liability create further hazards for the holiday-maker.
The Council's concern has been justified in the case of Fiesta Tours and the Sigma Travel Service, both of which your Lordships will remember went into liquidation during the past year. The saying "It is better to travel hopefully than to arrive" has for many tourists rather a sinister and uncomfortable meaning. The creation by the Asso-
430
ciation of British Travel Agents of a fund of £35,000 to compensate where consumers are let down by the failure of agents gives confirmation to the Council's concern.
In the light of recent events my Council are convinced that the industry cannot be properly controlled unless those undertaking responsibility for the organisation of other people's holidays are obliged by registration to comply with conditions which will ensure the reliability of their arrangements. These, we think, should include the possession of adequate operating capital; the provision of some kind of insurance or deposit to cover liabilities to clients for obligations which may arise through the breakdown of arrangements; the employment of staff trained to a level established by some kind of course or examination; adherence to a code of conduct similar to that of the Association of British Travel Agents; and the acceptance of liability for the sub-contractors who provide facilities. I mean by that that there should be proper hotels, up to the standards advertised, or, if a villa is at the end of the journey, that it should be built and equipped and not be in process of construction. Some or most of the conditions we suggest are already met by the well-known travel agents; but if anyone can start a travel agency with no capital or safeguards for the client there is something wrong and it should be put right. We hope that the Board of Trade will take steps in this matter before another holiday season starts.
My Lords, I now pass to another subject, that of deaf aids. The Council has been discussing with the Ministry of Health the provision of deaf aids under the National Health Service and the number of firms that manufacture and sell the aids outside that Service. One in every ten people has a significant hearing defect and it has been estimated that 1½ million people could be helped by hearing aids. Between 1958 and 1962, 229,000 Medresco hearing aids, the only ones that the National Health Service provide, were supplied through the Service. In 1963 nearly 50,000 new National Health Service aids were supplied; but anyone who wants a choice of hearing aids has to go outside the National Health scheme. Judging from

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the number of firms promoting commercial hearing aids, there is a large and expanding market for privately promoted aids. We know that a number of deaf people are sensitive about their hearing defects and are particularly vulnerable to the claims and pressures of salesmanship. The commercial aids that they are sold may not give the relief to their personal hearing problem that they have been led to expect.
The Council urge that no hearing aid should be sold unless the deaf person has had his deafness medically examined and that people who fit commerical hearing aids should be qualified in the same way as those who operate under the National Health Service. Manufacturers and sellers of commercial hearing aids should be registered to ensure the fulfilment of these conditions. We also feel there should be a lighter, less bulky alternative to the Medresco hearing aid made available under the National Health Service.
My Lords, another subject is that of safety—particularly safety in the home. We have given support to the banning of flammable clothing for material for nightdresses and also fully approve the regulations governing oil heaters, both of which were effected under the Consumer Protection Act, 1961. Under earlier legislation, the Heating Appliances (Fireguards) Act, 1952, an Order was made requiring guards on electric fires. In more than ten years, therefore, there have been three sets of regulations governing safety in the home. But we think that this is not sufficient, because fatal domestic accidents amounted to 9,000 in 1963, which is considerably more than the 7,000 fatal road accidents during the same year.
Now that the Home Office have power to make regulations under the 1961 Act, the Council regret that so little use has been made of it, and we have a number of suggestions to make about further directions in which urgent action is required. First of all, if I may, I would mention electrical appliances. The British Electrical Approvals Board run a safety test scheme, and this is very successful, but there are still a large number of electrical appliances being sold, many of them imported from abroad, which have not passed the standards of the Board's tests. We should like to see that stopped.
There are also the dangers that come from certain types of children's toys—
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sharp metal points or edges, breakable plastic which breaks thinly enough to provide a cutting edge. There are many ways in which children can be injured by toys. There is also the paint which is used on them. If the paint contains a lot of lead and the child sucks it the result can be serious. A recent issue of Which? highlighted many of these things. I think that some action should be taken to prevent these accidents through toys. Another thing about which the British Standards Institution and the Council are concerned is the kind of baby carry-cot which stands on a little stand; many of them are used in homes and, if not properly and solidly made, they can easily collapse, causing the child to have a serious accident.
In addition to the banning of flammable materials for children's clothes, we should like to see manufacturers discouraged—indeed, perhaps prevented—from putting nursery designs on this kind of material to encourage people to buy it and make it up in their own homes. We wish to see all material of this kind clearly marked as being dangerous for making up into nightdresses. We should like the regulations to be stiffened considerably. In another direction, we should like to see local authorities including among the many regulations they have on housing standards, a provision for fixing points for fireguards on open fireplaces in new houses. This should not be difficult to do. It is one of the things which could be easily added to the list and it would add considerably to safety in the home. Then, moving away from the home to the motor car, we wish to see safety belts in new cars made compulsory under the Road Traffic Regulations.
I realise that the more we put on to local authorities—as your Lordships know, I am a member of a local authority—the more we are going to impose difficulties on officials and the more difficult it is going to become for them to carry out their new responsibilities. For instance, the weights and measures service is most important, but it is understaffed and in many places underpaid. There are various other important services which are now devolving on local authorities and for which the personnel is not there to carry them out. I think that we have to face up to this and see the recruitment of both men and women

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(I believe that in the weights and measures service there are no women—I cannot think why, because they could easily be employed in that service), so treated as to be able to carry out these responsibilities. If we do not do this, all this legislation will simply remain on paper
Most housewives spend a certain amount of time in shops. The question of shopping is a controversial subject and one which we have discussed in your Lordships' House before at considerable length. I realise that the Council's views may clash with the interests of some of the retail establishments and the banks. Nevertheless, we have our views and I am going to state them. We realise that the standard number of hours and the five-day week must be adhered to, but when we think of the 24¼ million people who are gainfully employed for at least five days a week we realise that they must shop on Saturdays or late on weekdays. The Council think that the interests of the consumers are of great importance in this very difficult problem. They think that the, Shops Act should be revised to enable shopkeepers who wish to do so—because this is a voluntary suggestion—to open for six days in the week. The decision in the case of individual shops should be left to the discretion of the proprietor in accordance with his ability to secure part-time staff and reliable alternative supervision to fulfil his wants.
So far as the banks are concerned, they have much larger staffs and by organising a rota system it should be possible to allow for normal working hours and yet have the banks open on Saturday morning. This is more important than ever, I think, as many businesses pay their employees by cheque and the cheques are often cashed on Saturday morning. I know that they are open now on Saturday morning, but there has been talk about Saturday closing.
Another subject which deeply concerns us, and which also has its controversial side, is the question of advertising. The Council have been giving careful consideration to the question of misleading advertisements. In the course of a very small survey which we did—I stress that it was very small—of a number of newspapers, both provincial and national, we found l20 examples of advertisements which seemed to us to
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contravene the Advertising Association's code of advertising practice and we have sent details of this survey to the Advertising Standards Authority. The trouble is not so much the wording of the code as inadequate supervision, both by the editorial staffs and by the various advertising organisations.
Taking a look across the Atlantic, where advertising is a gigantic industry, I see another scheme which is worth considering, although it might not be appropriate for ourselves. The Federal Trade Commission has a staff employed to supervise printed and television advertising relating to goods in inter-State trade. This Commission can compel the immediate withdrawal of undesirable advertisements. The Commission makes its own judgment on whether advertisements transgress the very general lines laid down by the law for their control. Whether this could be done in this country I do not know, but it might be possible to give some statutory force to the voluntary codes which are at present in existence. I believe that more effective machinery than we have now is needed, and we on the Council shall continue to think about it.
There is another field where the problem of giving more information to the consumer ought to be considered. This is the labelling of consumer goods in the shops in such a way as to enable intending buyers to make an accurate assessment of the potential performance of the articles they are buying. At present there are great discrepancies between labels on different goods and few of them contain enough information to guide the customer to a wise choice. The Consumer Council plan to introduce a national informative labelling scheme, based on a label of standard design. The contents of the label will vary according to the goods concerned and must be worked out with those industries which are prepared to co-operate in the scheme. Such information as the durability of carpets, the boiling time of kettles or the shrink resistance of cloth can be shown by a comparative scale which will enable the buyer to relate performance to price and to his precise needs. It is not intended that the Council's labels should guarantee any specific level of quality, apart from safety. It will be strictly limited to giving information.
The Council have already obtained the co-operation of the British Electrical and Allied Manufacturers' Association for this scheme, and also that of the British Standards Institution, who will collaborate with each industry in evolving the tests by which the performance of the goods will be measured. The different levels of performance, the tests and methods of measurement, will be evolved by the industries in consultation with consumers, but the actual items which will be carried on each label will be decided on a consensus of consumer opinion. This scheme will depend on the voluntary co-operation of manufacturers who will use our labels in accordance with the formula laid down by their particular industry. The Council realise that the consultation with different industries will take time, but we are confident that the labels when defined and in use will help the shopping public, and that they will give support to this scheme. This will have a cumulative effect on manufacturers' attitude to the scheme.
I realise that this scheme will not meet with the wholehearted support of all manufacturers. I was recently in Bradford, addressing the woollen and worsted trades, and they were critical and suggested that already there were too many labels dangling about. But many of these labels are not easy for the ordinary shopper to understand, and they do not always give the information which he or she wants. We hope that when our labelling scheme gets going some of the existing labels (with the exception of brand names) will be superseded by the informative label we describe.
All this, I realise, requires a lot of preparation and thought, and we are deeply concerned to make practical suggestions which can he translated into action. But there is one subject, and quite a big subject, which is a long-term one and in which I am particularly interested, and that concerns education of the consumer, at, I may say, all ages. There is a Scottish saying that runs:
"Cheat me once, shame on you,
Cheat me twice, shame on me".
We have not approached our task, by any means, from the point of view that the consumer is always right. Even when right, circumstances often indicate that if a complainer had been more know-
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ledgeable and better advised, disappointment with the goods or services acquired might have been avoided. In the contemporary climate of an ever-widening choice of goods of ever-increasing complexity, sold by highly skilled marketing techniques in new market places, the Consumer Council believe that individual members of the public badly need a good grounding in shopping techniques and in their legal rights.
With this in view, we have set in train a comprehensive programme for enlightening and educating the consumer. On the one hand, the Council's publications will increasingly provide advice and factual information about goods and services and the way they should he used. This will help to put the public in the position of making their selection of goods in a considered and informed way, so that they can assess the promise of performance against their own needs and wants. The project for a national informative labelling scheme, which has already been mentioned, will also help consumers to choose goods on the basis of factual information. The Council are also, as I previously mentioned, pursuing the subject of misleading advertising, so that the information in advertisements about goods and the performance which can be expected from them is accurate and does not give a false impression.
In a sense, this programme of enlightenment is a first-aid measure designed to stop the gaps in people's information and knowledge. But the Council would like to go further. We want to introduce into subjects taught in schools, technical colleges and institutes of adult education what we call a consumer emphasis. This does not mean that we want to make a case for a new subject in the already overcrowded curriculum. But much of current educational thought is on our side when it embraces the concept that school subjects can include an approach that relates to practical realities of day-to-day living with the subject that is being taught. We think that this consumer emphasis can be a valuable educational tool that will help to a better understanding and appreciation of subjects—. English for example. The language that is used in advertisements, the descriptions that manufacturers devise for their products, the way in which information is

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presented on packages, all provide practical examples of an everyday use of English where the meaning of words is often blurred. Children can relate the claims on a package to the performance they have themselves seen. In arithmetic a consumer emphasis is implicit in exercises involving everyday problems, such as interest on hire purchase or credit trading, and on calculating costs of different quantities of everyday goods.
In commerce, the importance of personal budgeting and national budgeting, the different ways of buying, the different organisations that help to educate and protect the consumer, the meaning of credit and its place in modern society, can be considered side by side with the commercial, the selling aspect. Domestic science is a subject which can be seen to have a relevance to adult life, and, here again, there is a place to study the different methods of shopping and credit facilities, the use of different services, the methods of salesmanship used to promote products, the laws about labelling of foods and the agencies and legislation that exist to protect consumers in their home and family situation. Such examples are not valuable merely for the information they contain, but because they can help pupils to think out a situation in an inquiring way. Other subjects where this consumer emphasis is receiving attention from teachers include art and design, applied science, social studies and applied economics.
We are glad to say that we have the support of the Department of Education and Science in working for this consumer emphasis to be included in appropriate subjects. We have, in our contacts with teachers and lecturers, local education authorities and educational organisations, been encouraged by their response to this emphasis. This response comes from all levels of education in all parts of the United Kingdom, and we are busy preparing material for teachers to use. I went to Manchester and Birmingham earlier this year and I saw for myself extremely brilliant classes in which this type of emphasis was already being used in schools and adult colleges.
I have asked the noble Lord, Lord Peddle, to tell your Lordships our views on the revision of the Merchandise
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Marks Acts and the Sale of Goods Act, on the problems of doorstep salesmen and on the need for examination of standard printed contracts and guarantees. I think between us we shall have covered most of the ground up to date. I could have mentioned a lot of other things, such as drug labelling and house buying, furniture buying, children's shoes and so on, but I have already spoken for too long.
Our job is not a static one; it alters as circumstances change. It is no exaggeration to say that there has been a revolution in sales techniques—new methods of shopping, new materials and new manufactured goods—and this revolution is still going on. It is happening abroad in European countries; it is happening in the American Continent; it is no doubt beginning in Africa and wherever trade and marketing are developing. We are engaged in a new personal service and one which through-out society is an essential service and so can never remain static.
There is a difference in appearance between the picturesque blue-turbanned Nigerian ladies who sell goods at the weekly market in an African village and the girls in neat overalls and the spotless conditions of, say, Lord Sainsbury's stores or the Marks and Spencer establishments. But the principle of manufacturer, salesman and purchaser and their relations is the same all the world over. But in the more highly developed countries, particularly in the Western world, the individual consumer has to stand up to a different kind of service and salesmanship, and often one cannot blame him or her for being somewhat overwhelmed by it. It is in the light of these new conditions that our Council have to do their job.
I do not believe that we need necessarily clash with the manufacturers or with the retailers. Consumers want to buy and manufacturers want to sell. These are the simple facts. It must, I think, be to the interests of the manufacturer or the retailer that the consumer should be an informed and discriminating shopper; the two interests meet at the point of sale. The more customers are satisfied, the more they will buy or, in the case of services, the more will they use the service of the agency concerned. In our modern society the organisation of men and women into associations with

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common interests is the accepted principle. But a representative voice for consumers as such is a new venture. We have embarked on an uncharted sea in a ship in which our Council might be termed a mixed-manned force. If we can steer it into channels useful to the consumer, I shall be well pleased. I beg to move for Papers.
4.2 p.m.
LORD HOBSON: My Lords, on rising to address your Lordships' House for the first time from the Government Benches, the trepidation I feel is only slightly less than when I made my maiden speech some nine months ago from the Opposition side of your Lordships' House. I must say that I do not feel quite as nervous to-day because of the friendship and understanding which I have received from Members on both sides of your Lordships' House, and I greatly appreciate it. The humorous animadversions of the noble Lord, Lord Mancroft, on my duties as a Lord in Waiting were typical of those who, I think, love our Parliamentary institutions. Nevertheless, in all seriousness I appreciate the import of his words, and particularly in the context in which they were made.
To-day we have had an explanation of the work of the Consumer Council from the noble Baroness, Lady Elliot of Harwood. I think it was a fine and comprehensive explanation of the work that had been accomplished, and an outline of a future programme. At the outset, speaking on behalf of Her Majesty's Government, I can tell the noble Lady that it is the intention of my noble friend Lord Rhodes to answer so far as possible all the points that she has raised. She will appreciate that there was quite a long list. Nevertheless, certainly in the field of wool textiles I know, coming from the same county, that Lord Rhodes will be exceedingly well informed, not only from theoretical briefs, but from a profound practical knowledge. As for myself, of course I am going to take that lesson, too. I have considerable experience in the electrical industry. The noble Lady raised the question of the safety of electrical appliances, and for a few minutes I shall deal with that problem.
As your Lordships are aware, when the present Administration was in Opposition, we took the line that the Consumer
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Council set up in 1963, should be given a fair run. That was our view. It is our view to-day, and we see no reason at all why we should not continue to give it support and as a Government we shall do so. Of course, we attach great importance to the complete independence of the Consumer Council from Her Majesty's Government. That not only helps the Consumer Council, but it probably helps Her Majesty's Government, too. As the recommendations come forward and are made by the Consumer Council, the noble Baroness can rest assured that they will receive prompt consideration, and even on very difficult questions which are often raised, the question of manufacture, and international agreements sometimes, they will endeavour to arrive at a decision within a reasonable time.
The Council's first year was certainly a very busy one indeed. I have a list of the subjects on which they passed an opinion and, indeed, in some cases, acted. Certainly so far as school uniforms are concerned—and I do not want to transgress on to the field of my noble friend Lord Rhodes—flammable nightdresses, and on one or two other questions, action has already been taken. I personally fully agree with the Molony Committee that any conclusions which the Council publish should reflect a balanced judgment on the problem under discussion, taking fully into account the production, commercial and practical difficulties. This sets the Council a very high standard. If they live up to it, their remarks will carry greater weight with the Government and the community as a whole.
The Council themselves seem to recognise that they have to walk the tightrope between the pitfalls, on the one hand, of dissipating their resources and, on the other, of disappointing their public on particular issues. I myself am a great believer in patience in this field. There is, after all, no consumer crisis at this or at any particular time which we have to put right quickly. But I would agree that a series of small but, nevertheless, important reforms might benefit the consumer, and are for this reason to be aimed at. Neither the Government nor I think that the community as a whole expect the Council to be able to do everything at once. It is a matter of deciding priorities.

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If I may express a personal opinion, having studied the contents of this Report I feel that the Council have exercised their discretion exceedingly well in that regard. I do not intend to say too much about individual subjects covered by the Council's Report, or on their programme as published last month. I have no doubt that a number of your Lordships will wish to do this in the course of the debate and, as I have said, the points that will be raised in the debate it will be the duty and. indeed, the pleasure of my noble friend to answer.
Perhaps I might reflect here a little as to why more measures to protect the consumer are needed now than, say, before the war. One thing of which I am sure is that it is not because manufacturers and traders are any less honest nowadays than they used to be. It seems to me that it is rather because the things they sell are so much more complicated, and are offered in such wide variety as sometimes to bewilder and confuse the purchaser. We have so many domestic electrical appliances to help us in our homes. We may all be able to learn to work them, but we know very little about their construction, and we need informed help in choosing the right one for our own purpose. So far as the home industry is concerned—and it is just as well to pat Britain on the back occasionally—I think that our manufacturers have done a jolly fine job. I am quite aware of the difficulties about imported electrical appliances. and I am glad to see that, because of the competitiveness of British industry, these are not of necessity increasing. But, of course, there are real problems. It is not so long ago that it was possible to purchase an electric fire that did not have a guard. To-day it must have one.
There is also the question of the wiring of electrical apparatus. All British electrical apparatus to-day, certainly fires and refrigerators, is what we term three-core, negative, positive and neutral. But very often, because of the difference in size of plugs in houses, a plug is not fitted. The result is that very often an amateur electrician endeavours to couple them up, and if he couples the earth with the positive he gets into real trouble; which is the
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cause of accidents. I do not want to be too technical on this matter, but we in Britain have given an international lead as far as standardisation of colouring of red, black and green for positive, negative and neutral, are concerned, and it will be our earnest endeavour to get our views accepted internationally. In the same way, in the field of electrical toys, model railways and things of that sort, and the question of the low-voltage transformer, we are doing all that we can to get standardisation. As far as at least 70 per cent. of the British toy manufacturers are concerned the standards are certainly at a very high level indeed.
Another point which is often over-looked—and I cannot stress this too forcibly to your Lordships' House—is the question of the wiring of property. Many old properties have been rewired for electricity, and people think they can put any amount of apparatus on the wiring, with the result that serious accidents occur. Nevertheless, here I think a word of praise is due to the Electricity Boards who now, when a house changes hands, inspect the wiring, as a result of which many serious accidents are avoided.
My Lords, I come back to the Report. The scope for confusion in a choice of apparatus is very wide indeed, which also means that the scope for deception by the few unscrupulous traders is also wide. It is information and education which will, I am sure, in the long run prove one of the most important contributions which the Council can make to help the shopper to shop wisely. I was therefore very glad to read that the Council regard informing and educating the consumer as one of their primary functions, and that they have formulated a policy and started a programme of consumer education, of which the noble Lady gave us some indication during her speech.
It is particularly important in any education to "catch them young", and this, I see, the Council intend to do. Now that people tend to marry earlier, they cannot learn too soon how best to set up home. Often they have not time to pick this up and learn wise shopping piecemeal by trial and error. Of course, the Council are doing other things, too, but their educational programme will, I think, bring much wider benefit and exercise a greater influence on the whole

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community than can any consumer protection legislation, which is, after all, generally designed to outlaw bad trading practices which, as I have just said, are mercifully not widespread. My Lords, the consumer must be protected; but he must be protected, not against the manufacturer and seller, but against abuses by the manufacturer and seller. It must be one of the important functions of Government that the consumer is provided with ready and relatively simple remedies against such abuses. But it will be for the consumer himself to avail himself of these remedies, and here again education is important.
I should now like to say a little about the other organisation which is receiving Government money for consumer protection work and which is closely associated with the Consumer Council, the National Citizens' Advice Bureaux Committee. The aim is that this organisation should provide a country-wide service of information and advice for the individual consumer, and I am glad to see that the number of bureaux has increased in the last two years, though there are, no doubt, still some areas without one. The Citizens' Advice Bureaux have just celebrated their Silver Jubilee and are, as we hope the Consumer Council will be soon, a well-recognised national institution. They are completely impartial and they can help both the consumer and traders. Working as they do at local level, their services are readily at hand and they can help to sort out a lot of individual problems locally. They can also act as the eyes and ears of the Consumer Council, and bring to their attention problems which are becoming widespread.
It is obviously very important that there should be good and close working relations between the two bodies. The Consumer Council needs the intelligence work of the Citizens' Advice Bureaux, who, in their turn, need guidance from the Council on both general and particular matters. On page 7 of their Annual Report, the Consumer Council list a number of bodies who are also working for the consumer and with whom they are in close touch. Perhaps I might say a little about one of these, the British Standards Institution. They are a very old institution. They were founded in
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1901 and, of course, those of us who have had the happy and useful experience of working in the engineering industry know the tremendous service that they have rendered throughout the years not only to Britain but to the world by their standardisation of specifications. That they, too, are now interested in standardising what are called, to use common jargon, which I do not like, "consumer durables" is, I think, a welcome step and one that should be encouraged, because the reputation of the British Standards Institution is first class internationally.
With the formation of the Consumer Council, the Institution disbanded their own Consumer Advisory Council, but their Women's Advisory Committee remains in being and continues to do much useful work. The Consumer Council will, I understand, be looking to the British Standards Institution for technical help in their efforts to introduce a voluntary labelling scheme, and as the Council say in their Report, there is a joint working party of the two bodies to keep the consumer standards under review. All this is, I am sure, important. I do not want to take up more of your Lordships' time. I am absolutely convinced that, as in the past, we shall have an interesting and illuminating debate. And let me say again that I am grateful to the noble Lady for introducing this Motion.
4.17 p.m.
LORD PEDDIE: My Lords, I welcome this opportunity of joining with the noble Baroness, Lady Elliot of Harwood, in drawing attention to the Report of the Consumer Council. I think the Report itself shows a range of activity far beyond anything envisaged by the most optimistic supporters of the Consumer Council. I must say that I myself, in the early days when invited to serve upon the Council, had some reservations and some misgivings. I felt, and indeed indicated my impression to the Minister, that there was some little doubt as to the capacity of the Council to achieve a great deal within their limited income. I have found subsequently that in spite of the restrictions that were imposed upon them they have done a job that most certainly justified the decision to establish the Consumer Council. I think a great deal of the credit is due to the noble Lady who serves as

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Chairman and to the Director of the Council, Miss Ackroyd. Both these ladies have undoubtedly fired the Council with their enthusiasm and shown tenacity of purpose that has reflected itself in the achievements of the Council over the past year.
I would also pay this tribute, as one who serves on the Council. It has been really remarkable to see how a group of people who have been drawn together in the staff at very short notice and in so rapid a space of time have welded themselves into a team that is undoubtedly inspired by a sense of social purpose. I think the Report itself indicates that the greatest single achievement of the Council over the short period of its existence has been to high-light the vast range of consumer problems still to be tackled.
To-day, as my noble friend has indicated, consumers are more vocal, but it would be wrong to believe that it is only in recent years that the consumer has found any defenders. Indeed, I find pride in the fact, due, to my own personal association with the co-operative movement, that Molony himself pointed out that the need for consumers to organise themselves was first expressed in the genesis of the co-operative movement. There is no doubt that the growth of voluntary associations over the past years has given an indication of the increasing awareness of the consumer. That is important. The theory was once held—it is probably still held by some—that competition and free choice in themselves are adequate safeguards for the consumer. I think that theory is exploded to-day, because competition tends to disappear, and free choice is all too often an illusion. You can have the same products in twenty different packs, and the housewife would be under the impression she is having a free choice.
New conditions have emerged over the past years which have entirely transformed the consumer field—new conditions which have been expressed in the greater varity and complexity of goods to which my noble friend, Lord Hobson, made reference: synthetic fibres, drugs, electrical appliances and so on. Those conditions make it utterly impossible for the consumer to form an accurate assessment of the value and worth of those products. We have, in addition, the powerful force
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of advertising, which is indeed an effective persuasive element. I say nothing to condemn advertising; it serves an exceedingly useful function in modern business. Nevertheless it provides an instrument which can, on occasion, distort the true assessment of a particular product by an individual consumer, Another factor, too, which I think is important and which undoubtedly justifies the activities of the Consumer Council is that under modern conditions, increasingly so, even the integrity of the trader and the manufacturer is not in itself a complete safeguard for the consumer. In commerce as in currency, a Gresham's Law can operate and the bad can drive out the good. All too often one finds that if a bad trader is allowed to flourish the good traders, the good manufacturers, are reluctantly forced to degrade their standards, because of the existence and tolerance of the bad trader. Therefore, there is an undoubted necessity for legislation to enforce minimum standards and also encourage consumers themselves to be more discriminating.
That is why I believe that the item mentioned on page 8 of the Report, dealing with direct approach, is of considerable importance. Here is indicated a particular work of the Council which I believe has considerable possibilities. Effective contacts have been established with organisations in commerce and in industry to improve standards. Moreover, the Council has worked closely, and will continue to work closely, with consumer organisations, consultative bodies of nationalised industries, and the Council of Industrial Design. In addition, it will have, and has had, regard to the views of suppliers and manufacturers. For example, it has contact with the British Electrical and Allied Manufacturers on the subject of labelling, and the National Dairy Council on matters relating to homogenised milk. In addition, the Council itself has welcomed the opportunity of membership of such bodies as the House-builders' Registration Council, because in the field of house building and house construction there is undoubtedly a tremendous need for the protection of the consumer. When we think of consumers we have to think not merely of the person who is buying a pack of butter over the counter but also of those persons who are buying houses, because in that

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particular field there is unquestionably a great necessity for close examination of consumer rights.
But I would emphasise—and I think this is tremendously important—that it is a mistake to assume that there are two permanently opposed groups constantly and inevitably at each other's throats, one the traders and manufacturers and the other the consumers. The majority of traders and manufacturers in this country seek to maintain good standards, if not from a sense of public duty then from enlightened self-interest, because enlightened self-interest will undoubtedly justify the maintenance of good standards. But there are organisations and individuals who deliberately—and emphasise "deliberately"—exploit the consumers' inadequate knowledge. Therefore it becomes the responsibility of the State, through its legislation, and of bodies like the Consumer Council operating under the blessing of the State, and in addition of voluntary organisations, to correct the balance and give that very necessary protection.
We are entering into an era of law reform and I am sure the noble and learned Lord who sits on the Woolsack will himself be the spearhead of those changes that I hope are in prospect. There are signs of a concerted effort to bring the law into tune with modern conditions, and the Council itself hopes to benefit from this proposed forward movement by gaining favoured conditions or better conditions in the consumer field. I might draw attention to one or two aspects of Acts of Parliament that relate to consumer conditions where the Consumer Council feels there is an urgent necessity for some change or improvement.
The Sale of Goods Act is a very important Act and one which unquestionably is to-day the keystone of consumer protection. Nevertheless, we should like to see a new Sale of Goods Act which would govern and protect the needs of both consumer and retailer in modern marketing conditions. We believe that such an Act must recognise that there is an unequal bargaining position which lies at the heart of most consumer contracts to-day. The present Act of 1893 was based on the mercantile conditions of the last century, not the conditions of to-day. It
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has been a worthwhile Act, there is no doubt, but it does not meet modern conditions. We believe that in many respects there should be change. For instance, the whole basis of that Act creates a picture of the buyer and the seller meeting as plain citizens endeavouring to strike a mutual face-to-face bargain as they would in the old market place. But to-day that picture is ridiculously unreal. The market place has gone and the supermarket has taken its place, and the seller, however enlightened he may be, has become an anonymous powerful giant—not the individual trader in the market place but a great giant possessed of tremendous power and completely anonymous. Those are the conditions under which the modern consumer has to operate.
We believe that where the consumer has no real room to negotiate, the Act must prevent sellers from avoiding their obligations by way of exemption clauses. A common incident of this is in many printed guarantees when the consumer buys goods. The new Act, we hope, would give the consumer a practical means of getting his money back where the seller's promises are not fulfilled. Reform is needed, perhaps beyond the confines of the Sale of Goods Act, to qualify the very one-sided nature of many standard contracts now in use in the insurance and public utility fields. Contracts for the supply of electricity, telephones and travel bookings are all examples. Many private builders' contracts also fall into the class which, in my opinion, deserves to be scrutinised.
The whole basis of the contention I am trying to make is that many of the so-called guarantees to which I have referred allow the manufacturer to be the judge in his own cause, and often seek to avoid his liability for defects and dangers to users inherent in his products. The Council would urge that measures be taken to remedy the situation where the present Act fails to fulfil its original purpose because of the changed conditions in which it has to operate.
The second Act which I think is of tremendous importance is the Merchandise Marks Act. The Council have been asked to make comments on the Board of Trade proposals for the revision of these Acts, which certainly fall short in a number of ways of what is required

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in the way of effective statutory protection of consumers. I believe that the Board of Trade have not entirely welcomed all the suggestions that have been made by the Council. I should be glad if my noble friend, when replying, would give some indication of the attitude of the Government towards some of the recommendations that have been made by the Consumer Council.
One of the main recommendations of the Council has been that a broad definition of trade descriptions should be included to cover cases where vague claims are made in imprecise terms. The Council believe that the falsity of such claims should be judged by their cumulative effect on the buyer—whether this is achieved by fact, implication or omission. For example, there are many medical preparations which rely on the implication that the vitamins or hormones included in the product will bring certain benefits. Whilst in some cases there may be just a grain of truth in this, the much wider implications which the makers have successfully put across are often quite unfounded. Your Lordships have seen the advertisements of a powder which is offered for sale and which contains "20 per cent more". But more than what? Nobody knows. But it is expressed in such a way as to bamboozle the poor unfortunate buyer.
I am sure that noble Lords in this House are not likely to fall for the blandishments of such advertisements. For example, there may be an advertisement merely making a plain honest statement that a particular soap is good for washing the skin. That can be sold at a normal price. But sometimes the impression is created that the user will be given beauty, and the purchaser is asked to pay ten times the price for the same product. It may have a different smell, but the poor consumer suffers. I know that this does not apply to anybody in your Lordships' House, but there are people who honestly believe that the type of scap which they use is capable of making them beautiful.
The Council also take the view that the Acts should cover services well as goods, and that oral misdescriptions should be made an offence. Finally, a revision of the Acts should make them generally acceptable to advertising which at present escapes through the legal diffi-
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culty of relating a particular advertisement to a particular sale. For example, in order to prosecute a false claim made in a television advertisement, it would be necessary for the buyer, at the time of buying the goods in the shop, to refer to the precise advertisement shown on the screen. Naturally, it is seldom, if ever, possible to establish this link.
Lastly, as an indication of the sort of things which I think this Government should tackle at an early date, I would make reference to a subject that I have referred to previously—namely the problem of the doorstep salesmen. I shall not say a lot about this problem, but noble Lords may have noticed that a national newspaper recently carried an article on this subject. I am informed that this same newspaper, in the subsequent week, received 4,000 complaints from their readers indicating criticism of the activities of these doorstep salesmen. Many of them are reputable traders doing an honest job of work, but there are many who are not so honest. We believe that the law relating to hawkers and pedlars seems to be inapplicable in modern conditions. Licensing may help to offer some measure of the control needed, but there are awkward problems attached to it, such as the circumstances in which a licence can be cancelled, and so on. But I hope that my noble friend will in his reply give some indication as to whether or not the Government are giving some attention to this exceptionally difficult and thorny problem.
I would say that this Report of the Consumer Council marks a tremendous step forward over the whole field of consumer protection. State intervention to protect consumers and restrain the dishonest trader is quite old—it has been in existence for a long time; but in modern times there has been a certain reluctance on the part of the State to adjust the protection to meet modern conditions. I hope that there will be a change in that attitude. I am sure that there is a change in the attitude so far as manufacturers are concerned.
Noble Lords may remember that only a matter of six or seven years ago a statement was made by a director of one of the largest international food concerns, if not the lamest, in the world. He asked: why do we have a lot of unprofessional

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busybodies trying to protect the shopper, who is quite able to look after herself? Three years after he made that statement, that same firm had to withdraw a complete brand of margarine on the Dutch market because there were 70,000 cases of suspected poisoning. Yet, as I say, three years previously the director had said that the shopper was quite able to look after herself. Those 70,000 cases indicated that the shopper needs something more than his own ability to protect himself in these circumstances.
Over the years some, at any rate, in this House have played a great part in this field. I am sorry that my noble friend Lord Alexander of Hillsborough is not here. I should like to pay tribute to all that he has done in this respect. As far back as 1925, forty years ago, he came along with a Consumers Bill. It was rejected, but that did not diminish his continued efforts in the cause of the consumer. My Lords, I have great pleasure, and indeed pride, in joining with the noble Baroness in drawing attention to the work of the Consumer Council, often under extremely difficult conditions; but it is work that will undoubtedly give increasing protection for the consumer.
4.37 p.m.
THE LORD BISHOP OF SOUTHWARK: My Lords, I regard it as a privilege to be associated in this debate with the noble Baroness. If large numbers of the population are producers, all of us are consumers: we cannot escape from that. Even I as a Bishop am driven to recognise the strength of the consumer interest of the man in the pew. For all that, consumer organisations and the protection of consumer interests have never kept pace in this country with the growth of large-scale industry, and the creation of the Consumer Council by the President of the Board of Trade last year, following the recommendation of the Molony Committee in 1962, marked an important step forward in a field which has been far too long neglected.
We live in a complex and highly technical society in which the rights and needs of the individual can, and may be, overlooked and overshadowed by expediency and the necessity to organise for large numbers. The Council seek to protect and educate the individual
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against those who would exploit him, and, indeed, in many cases, to protect him against himself. In this respect the Council are serving a useful purpose as a watchdog.
In its short life, under the chairmanship of the noble Lady, the Council have done work of outstanding importance. Their attempts, for example, to call the attention of the industry concerned to the consequences of the continued sale to the public of flammable children's nightdresses merit the highest praise. That it finally became necessary for the Home Secretary to issue regulations under the Consumer Protection Act. 1961, showed that where profits are concerned suasion does not always work, and points the moral that it will be necessary from time to time for legislation to be promoted to protect the consuming public.
All the recommendations of this Council merit the most serious consideration. Such subjects as those to which the noble Lady refers—for example, the compulsory registration of travel agents; revision of the Sale of Goods Act, 1873, to prevent suppliers from contracting out of their liabilities to the customer; the revision of the present Merchandise Marks Acts to cover services as well as goods—while not in themselves constituting major social reforms, would form a useful addition to the social legislation upon which the general wellbeing of this country depends. Her Majesty's Government are already committed to a heavy programme of legislation. Here are matters largely non-controversial which could usefully be added to the programme so soon as opportunity presents itself.
I was particularly impressed by the measures advocated in the Council's Report on hire-purchase. From personal experience when I was a parish priest in a large industrial city, one of the most heart-breaking problems I had to face, over and above the tensions and depressions of industrial life, was the hidden problems of hire-purchase payments—namely, the hardship and suffering caused to those who had been encouraged, sometimes through their own stupidity, sometimes through the pressure of slick salesmen, to enter

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into, often unwisely, hire-purchase agreements.
Until now the Council have proceeded on the good British democratic principle of gentle persuasion. One wonders, however, whether the time has not come to give the Council just a little more "teeth", at the same time not interfering with the right to trade freely, which is a valued part of our heritage. I have in mind the following example. In the electrical appliances trade there is nothing to stop a salesman of a particular heating product, after receiving instruction in the art and wiles of salesmanship, from setting himself up as a heating specialist". He may put a plaque to this effect outside his door, or use the title on his letter-paper. In fact, he is nothing of the kind, his sole object being to sell his particular product. But the unsuspecting housewife is duly impressed. The British Standards Institution are trying to persuade the public not to buy goods of this kind unless the Institution "kite" of approval is attached. But this, as I am sure the noble Lady will tell us, is uphill work. In fact, the housewife has redress, but does not know it, in the form of by-laws lodged with the local council, against false representation and can take the matter through the courts.
At the moment the Council work through the Citizens' Advice Bureaux, but, in spite of what my noble friend says, I wonder if it is altogether sufficiently widespread and adequate for present-day needs. It occurs to me that were the Council to persuade local authorities to open a consumers' protection department, set against the framework of existing bylaws and therefore requiring no further legislation, strength would be added to their work. The housewife's reply to the visiting salesmen, "I will ask the Council", might have the desired effect.
My Lords, it is not my intention to-day to consume more of your Lordships' time. I simply wish to add my voice to those who have expressed their appreciation of the remarks of the noble Lady, and to ask for your approbation of the important work in which her Council are engaged. It is an approbation which could be properly expressed in the support of such legislation as the noble Lady's Council recommend.
4.45 p.m.
BARONESS GAITSKELL: My Lords, I hope that my noble friends Lord Hobson and Lord Peddie, whose speeches I so enjoyed, will forgive me if I do not go all the way with them in the rosy picture which they have painted of the set-up of the activities of the Consumer Council. I enjoyed what they had to say, but it is more with the future of the Council that I am particularly concerned.
First, I should like to congratulate the noble Baroness, Lady Elliot of Harwood, on the attractive layout of her first Annual Report of the Consumer Council, and on the way in which she herself has presented it. It was much more comprehensive than the Report itself and it taught me quite a bit. The Report has a beguiling cover; it is short; it is clear and it is well written—a model of what such a document should be.
Because of its conciseness and clarity the Report is also more revealing. It sets out plainly what the Conservative Government claim to achieve through the Council, and any criticisms I may make spring from that claim. For if the Consumer Council was just another addition to consumer protection organisations, one could welcome it on that score and accept it at its face value. It is because the Council's terms of reference closely follow the recommendations of the Final Report of the Molony Committee on Consumer Protection which proposed—and I quote from the document,
"that a powerful and national body should be set up to promote the interests of consumers",
that I venture to suggest that "a powerful and national body" cannot be launched with a grant from the Board of Trade in the first year of £60,000. The Government, I feel, could not have been serious. I know that this sum has now been stepped up to £125,000 for the year 1964–65. Perhaps this was with the wry knowledge that an incoming Government takes on the liabilities of an outgoing one.
It is when we come to examine the terms of reference of the Consumer Council that we are assailed by doubts and reservations. The fact that in the first year there seems to have been a duplication of ideas from other bodies with consumer interests is due to what is left out of the terms of reference. The

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Council Report states that their activities are supplemented by the use of public media. I feel that they just trail behind when dealing with consumer interests and grievances, giving them a blessing here and a cheer there. The fact that the Council's terms of reference preclude it from comparative testing and from taking up individual complaints also preclude it from the consumer pressure group that such an organisation should aim to be. It is another case where a limited idea of objectives and too little money inevitably lead to small dividends.
The Board of Trade appointed ten members, all distinguished in their own field; but they represent themselves as consumers: they do not represent their organisations. This is one weakness. The Council is lucky in its Chairman, the noble Baroness, who is engaged in many other activities. In the freezing weather of last spring, I had the pleasure of attending an Anglo-German conference which she conducted with enormous skill and charm. Lady Elliot of Harwood is endowed with a powerful voice whose volume owes nothing to any loudspeaker. I was discussing this conference with one of our leading journalists, telling him about the highlights of the conference, when I just added that, with such a magnificent voice, Lady Elliot of Harwood should be the C.I.G.S. His comment, quick as lightning, was, "Isn't she?" But as Chairman of the Consumer Council she has a very mixed "General Staff", and practically no professional troops.
With all respect to the Citizens' Advice Bureaux—and they are very worthy bodies—I do not think one could call them professional consumer researchers; nor has Lady Elliot of Harwood any ammunition in the terms of reference. Also, my Lords, because the members of the Council sit as consumers and do not represent the interests of any organisation, a supplier and a manufacturer have been included. I have nothing against these two distinguished individuals, but I can easily understand that their interests might clash with their duty. They may be as jealous of consumer rights as anybody, but I am not aware that there are manufacturers on the T.U.C., nor are there any trade unionists on the F.B.I.
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It may be an old cliché, but you cannot sit on both sides of the table. Selling to consumers is not the same as protecting them.
The main function of the Council is to provide advice and guidance for the consumer, and this information is to be collected by the Citizens' Advice Bureaux. Though these have a core of paid workers, most of the work is voluntary. Since the war they have dwindled in numbers—there are now, I believe, only about 400 of them. Up till now they were concerned with welfare problems passed on by doctors and social workers. They have no money for publicity, and I doubt whether they are equipped to deal with consumer complaints. It is left to this amateur nework, worthy though it is, to collect and provide the information for the Consumer Council. I do not think that they can turn the Consumer Council into what I think it should be—a great defence organisation, a pressure group for consumers.
My Lords, looking through the first year's achievements of the Council, I feel that its work has been of a far too general nature. Examples such as the squashing of the campaign to sell homogenised milk because it is cheaper to produce, looking into the pitfalls of hire-purchase, the dangers of flammable nightwear, giving a blessing to the abolition of resale price maintenance, sitting on the fence on stamp trading—all these matters have been given wide publicity in Parliament, in the Press and through broadcasting. The case against flammable nightwear could not have been made out with greater knowledge and cogency than by my noble friend Lady Burton of Coventry in this House on February 10. Dishonest travel agents were given a jolly good "pasting," but, obviously, the newspapers were far more effective on this score.
Perhaps the most practical measures undertaken by the Council were on school uniforms. This down-to-earth concern of parents and teachers is, I think, a much more appropriate problem for the Council to take up. All the interested organisations were brought together into consultation, and quality and price came under review. It was decided that complaints and comments should be dealt with at local level, by the local parents' and teachers' association. I think that

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this was a very important decision, and should be a pointer to the way in which all the future activities of the Consumer Council should emerge.
So I come to the paragraph in the Report headed, "Direct Approach". It is very frank, and I quote again from it:
"The Council's effectiveness on behalf of consumers depends largely on its ability to get manufacturers, advertisers, retailers, or Government Departments to take action along the lines which it suggests"
This is, indeed, a very tall order, and the delivery date seems to me a long way off. I think that in the first year, if the Council had, perhaps, set its sights a little lower, a little closer to the ground, and started on the labelling scheme which it put forward on October 1 of this year, two weeks before the Election, it would have been far more effective. But even on this it is far too cautious. The Council says that the scheme will rest on the voluntary co-operation of suppliers and can advance only very slowly. But surely what the Swedes can do, we can do as well. This would be of immense benefit to consumers.
So I think that the Council, despite its admirable Chairman, is not equipped to act as the Government's advisory council on consumer affair;; nor for the rather vaguely defined educational rôle, though I must say, having heard the noble Lady, that I feel more encouraged about this particular rôle. Also, it cannot do comparative testing which is done well by the Consumers' Association, of which I am an honorary vice-president, though I speak to-day entirely as a consumer.
The other day I bought a small bottle of pills. The price had gone up from 3s. to 3s. 6d., but, to add insult to injury, the small and convenient container had been scrapped and n clumsy little package substituted, with each pill hermetically sealed in plastic paper. I can only think that this was the idea of a man using these for outer space. I am sure that many of your Lordships have had experience of wrestling with one of those beastly plastic wrappings which are unnecessary, expensive for all I know, and calculated only to raise one's blood pressure. This is a small matter, but consumer complaints are often small and easy to remedy. Many consumers feel as I do when these days I go shopping, watching the rising tide of increasing prices, when sometimes—and I emphasise
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"sometimes"—I feel a minnow in a shark infested sea.
To sum up, my Lords, I would say that the functions of the Consumer Council are at present too imprecise. Complaints can be properly handled only at local level. It is for local authorities to form consumer groups, with representatives on the Consumer Council, so that the Consumer Council can be a sort of central clearing house for complaints, a central organisation for information. The great thing is for these local bodies to have a representative on the Consumer Council itself. So far, as I have said, the Council, with its able Chairman, has been given responsibility but without power. We can all clamour for lower prices, better quality, safer products, greater choice. It does not need a Consumer Council to formulate these ideals. I hope that the Chairman will get together with the new Minister, and that this Government will help, both economically and in other ways. I hope they will give the Council more money and more powers, so that it is transformed from an organisation which until now has been simply a facade, into a building in which something concrete can be achieved.
5.0 p.m.
LORD REA: My Lords, I had not intended to address your Lordships, but in view of what has been said this afternoon I should rather like to follow the noble Baroness opposite to explain that I do not really join with her in her faint damns of praise of the Consumer Council; and, if I may, to congratulate the noble Baroness, Lady Elliot of Harwood, on the very fine work that obviously has been done by this Council under her leadership. I am not going to detain your Lordships more than one minute, but there were two quite small points which I noticed in the speech of the noble Baroness, Lady Gaitskell, on which I should like to comment, in no political or Party way at all, of course, but merely as a personal opinion.
The noble Baroness mentioned safety belts in motor cars, and I think expressed the opinion that these should be made compulsory. My Lords, I am not sure I would go so far as that. I do not think that compulsion in such matters is a desirable thing. Indeed, there are circumstances where, in this particular matter, it might not be a good thing. I

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mention this because I heard the other day—I cannot vouch for the truth of this story—about a man in his small car who was going through one of the under-the-Thames tunnels which has a number of curves in it and where, at each curve, there is a notice warning drivers of large vehicles to give way to drivers of smaller vehicles because there is not room for both of them to negotiate the turn. On coming to a turn after he had passed the depth of the tunnel and was starting the upgrade, he heard a great noise and saw an enormous vehicle bearing down on him, obviously out of control, scraping along the side, with flames and sparks coming up as the driver was trying to stop himself by rubbing along the wall. The driver of the car pulled in as hard as he could to the left, saw that nothing could be done and so shifted quickly across to the passenger seat. My Lords, if he had had a safety belt on he would have been killed, because the whole of the off-side of his car was ripped off. That is not a thing which will often happen, but it shows that there is not an overwhelming case always for safety belts.
The other point which I should like to mention, and which is a very important one to me, is the matter of the Shops Act. I do not know how many of your Lordships present this evening will remember an occasion when that Bill was before your Lordships' House and when I stood, like Casabianca, trying to get extended hours allowed, but was absolutely mowed down by both the Conservative Party and the Labour Party, in a total minority of one. The arguments put up were not clear to me, but it seemed obvious that it was the interest of big business—the big business of the big shops on the Conservative side, and, with great respect to the noble Lord, Lord Peddie, the big business of the "Co-op" on the other. They put up every argument to stop this extension of shop hours at nights and week-ends, basing their argument on a point which I could not get them to see did not arise—that is, that it would be or might be a hardship to the shop assistants; that we could not work them like animals. My Lords, the very first consideration of a matter of this sort, of course, is that the shop assistants should be totally safe-
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guarded. They should not work more than proper hours or late hours, or be compelled to work them.
However, I shall not pursue the matter because the noble Baroness has made it clear, and the printed Report also makes it very clear, that there is a great demand for longer hours and Saturday hours so long as they are properly controlled—and that, if I may say so, should also apply to banks. Your Lordships must, I am sure, have had the same experience as myself in a city, town or village, of finding three or four banks close together with hardly a customer in them on a Saturday morning, with the unfortunate bank clerks doing practically nothing. I should have thought it was not beyond the bounds of possibility that the big banks, and even some of the smaller banks, might come to some sort of co-operative arrangement whereby, on a Saturday morning, Martins took over Barclays, Lloyds took over the District, and they took turns and worked it out in a sensible way.
5.4 p.m.
LORD DRUMALBYN: My Lords, we have had a most interesting debate, and I should like to start off by congratulating the noble Lord, Lord Hobson, on a splendid performance, if I may say so, at the Box, on his first appearance there. I thought he had all the virtues of a speaker at the Box: he was brief, he was clear and he was courteous. I should like to congratulate him very warmly on behalf of the whole House, on his performance.
There has been a remarkable unanimity in the course of the debate except for one speaker, the noble Baroness, Lady Gaitskell, who I see is now leaving her place, and, if I may, I shall he making some reference to what she said in the course of my remarks. One thing I should like to say straight away is that the noble Lady is certainly no minnow, and I am quite certain that she can look after herself very well in the shops. But that is not so with everybody, and that is one of the reasons why we had the Consumer Council appointed. Although this debate certainly affects us all as consumers, as the right reverend Prelate has said, I myself have a particular personal interest in this subject, because I had two years as Parliamentary Secretary at the Board of Trade. For almost the whole of those two years the Molony Committee

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was deliberating, and throughout that time we were "waiting for Molony". However, towards the end of my period of office there the Report came out, and very little time was lost in appointing a chairman to the Consumer Council and in taking the steps necessary to get it set up.
Now I think that this Report is an example of public relations at their best. It is exceptionally well presented and printed; it is clear and it is succinct; it states its terms of reference and it shows how the Council is carrying them out. It has a final section on "looking ahead", and it has an excellent foreword by the noble Baroness herself, the chairman. Of course, the only snag is that it costs two shillings, but that, no doubt, cannot be helped. I hope the noble Baroness has got a very wide distribution of this Report, because I am sure this is one of the ways in which the activities of the Consumer Council can become widely known. Certainly I am sure it will have gone to all the Citizens' Advice Bureaux throughout the country and to those other bodies with which she co-operates. Certainly our congratulations are due to the chairman and members of the Council, and not least to its very able director, who I think is also a member of the Council, and to her staff. The noble Lord, Lord Peddie, said that the Report showed activity far beyond the range that its most optimistic supporters expected. My Lords, not those who knew my noble friend Lady Elliot of Harwood and Miss Ackroyd.
My Lords, since the time it was created by the Government the Council has shown that it was quite independent of it, and the noble Lord, Lord Hobson, attached great importance to this. I certainly agree. I hope it will continue to be, although perhaps I might be allowed to say that, having so fully established its independent position, it can perhaps afford to consult with the Government from time to time before expressing an opinion to see if the Government have information which might be helpful to it in arriving at its conclusions. I hope it does so already freely, but, in any case, I hope that it will do so in the future. I can understand why, perhaps, it did not do so in the early stages.
My Lords, the Molony Report envisaged that the Council should become the "authoritative and considered voice
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of the consumer" (which perhaps goes rather further than being just a watchdog, although the watchdog rôle is certainly important). But it felt that the Council could not achieve that status by mere appointment, and that—and I quote
"respect for the Council's views must be earned, not conferred".
Now I refer particularly to the Molony Report because I think that the noble Baroness, Lady Gaitskell, is perhaps not fully aware that the terms of reference were based almost identically on the recommendations in the Molony Report, even to the extent, I think I am right in saying (the noble Lord will correct me if I am wrong), that the amount of grant that they are receiving in this year is the amount of grant that was recommended by the Report. I see that the recommendation in paragraph 884 says:
"Our estimate of the cost of staff, premises and other overheads leads to the conclusion that by the end of the first two years of its existence the Council would require an annual grant of £125,000".
I understand that, because it was able to get into its stride so quickly, it received that grant before the end of the first two years of its existence. I am sure that has been helpful to everyone. The Report laid great stress on these major rôles: to inform themselves and to inform others; to collect information about consumer problems and to consider what, if any, action was required and to promote that action; and to stimulate and co-ordinate the efforts of others—that is, in research, for example, and in other directions—and, in particular, to promote and co-ordinate efforts to guide the consumer in the business of sound buying. That seems to me to be a conception on the part of the Molony Committee quite at variance with the conception of the noble Baroness, Lady Gaitskell.
The Council says that it is criticised for spreading its net so wide. I notice that the noble Baroness, Lady Elliot of Harwood, in her admirable speech, said that the Council has spread its net wide; and I believe it is right to do so. I believe that it is bound to consider any substantial matter affecting the consumer. It may be that there is some danger in trying to do too much itself instead of co-ordinating the work of others; but, however that may be, it seems to me that the Council has made an excellent start

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in the work of co-ordination and stimulation.
As it says in its Report, its work is a co-operative endeavour. For example, it services a Joint Council on Consumer Complaints; it works with the British Standards Institution and other bodies such as the Retail Standards Association and the National Council for Quality and Reliability and Standards affecting the Consumer. It has formed some close links with the Citizens' Advice Bureaux which provide the indispensable link with the consumers in all parts of the country. This also is in accordance with the recommendations of the Molony Committee and it is through the Citizens' Advice Bureaux that the Council passes advice to consumers on their problems, and the Citizens' Advice Bureaux could be described, perhaps in this respect, as the eyes and ears of the Council.
I was glad to hear the noble Lord, Lord Hobson, say that the Government's objective is to obtain a nationwide coverage of Citizens' Advice Bureaux. If I may, I should like to ask the noble Lord who is going to wind up to give us a little more information on this; I should like to know what actual progress has been made and what difficulties are being encountered. The Molony Report referred to the difficulties of financing because a certain amount of expenditure by the local authorities would be required to get these Citizens' Advice Bureaux started and to keep them going where they do not already exist. It would be interesting to know the scope of the finance that is required and whether the Government contemplate any further steps in this matter. I understand that a grant of something like £27,000 was given to the Citizens' Advice Bureaux last year through the Council of Social Service, and we should like to know whether, in the light of experience, this grant has proved adequate; and, if not, what further steps are required.
The Council has many other sources of information: the local consumer groups, the Consumers' Association, and the Press. It is debarred from taking up complaints on behalf of consumers, although it services a Joint Committee on Consumer Complaints. It can thus
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be well informed on what is going wrong and causing trouble. I am glad to see that the Council is steadily establishing good relations, not only with the bodies concerned with consumer protection but also with producing, distributing, testing and advertising interests and, indeed, with the Press.
Among its activities is one which I think likely to be fruitful in the long run, and of growing importance, and I was glad that the noble Baroness, Lady Elliot of Harwood, referred to this. That is its efforts to interest and inform teachers so that they in turn can educate the young in the elements of good shopping. In my view, to educate the young to be quality-conscious and to be discriminating buyers should help them not only in their shopping but in their education, because it relates to everyday experience what they are learning in arithmetic and the other subjects to which the noble Lady referred. And it should help the economy as a whole, for it should tend to raise the quality of British products, because more discriminating buying will mean that manufacturers will have to provide better quality products. In this, the Council has a close ally in the Council of Industrial Design with which it seems to be working very well.
One curiosity is that we have set up a Consumer Council without having defined what we mean by "a consumer". Perhaps that does not matter very much; for ordinary purposes we know what a consumer is; we all are consumers. But it seems to matter when we come to legislate for the protection of the consumer or, at any rate, so apparently the Molony Committee thought. The Committee emphasise the need to produce a definition which will distinguish consumer trade from commercial business and it suggested a definition. I am sure the noble Lord has already found that this is a particularly difficult problem, and I wonder whether he is briefed to say anything about it tonight.
The Committee stated the objective of protection of consumers as purchasers in terms which went rather wider than the consumer: "that persons shall not induce sales or attempt to do so, whether deliberately or not, by making false or misleading statements of a

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factual character". To achieve that objective the Committee made many suggestions for legislation; and the noble Lord, Lord Peddie, dealt with some of these. I was surprised at his prefacing his remarks by saying that we are entering into an era of law reform. It is difficult to remember a time when we have not been in an era of law reform. But even in the consumer field we have had such notable Acts in the last decade or so as the Food and Drugs Act, and the Weights and Measures Act. Perhaps it is not right to mention the Hire-Purchase Act in quite the same breath as those monumental Acts, but it shows that progress has been made as also with the Consumer Protection Act, a Private Member's Bill which was fully supported by the Government.
The noble Lord said that these recommendations are non-controversial. I am not sure of that, but in any case they are very highly technical and I will not blame the noble Lord if he is unable to give answers to these points tonight. But I think the main interest will concentrate on the prohibition of contracting out of the standard conditions and warranties in civil law; that is, the conditions as regards merchantable quality, fitness for purpose arid correspondence with description. Secondly, one recommendation was that all forms of advertisement should be made subject to the Merchandise Marks law in so far as the application of a trade description to the goods advertised is concerned. I was interested to hear from the noble Lady that she has been contemplating the possibility of making the code of advertising practice statutory in some way or another. Just as (I think it was the noble Lord, Lord Peddie, who said it) the Consumer Council should be given a run, as I am sure it should, so I feel the Advertising Standards Authority also should be given a run. I see that the Consumer Council has been co-operating with the Advertising Standards Authority. I hope that this co-operation has been useful and fruitful; and that it will become more and more so.
Thirdly, there was a recommendation about legislation on seals of approval. The recommendation was that the seal of approval should be used only if registered as a certified trade mark and if
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goods had been tested independently. And, fourthly, it was recommended that the Board of Trade should be empowered to make regulations in regard to particular goods, forbidding retailers to trade in them unless information in writing is given, by label attached to the goods or otherwise, as to, for example, the size, the care required in their use and their composition.
The Report says that the Consumer Council has been preparing a statement of its views. I did not gather whether that statement had yet been forwarded to the Board of Trade, but no doubt the noble Lord will be able to tell us. I would not press the noble Lord too far on this point, but we should like to know what are the prospects of early legislation. We know that these are early days for him yet, but, as he is aware, we were hopeful that it would have been possible to bring in legislation this year, had we been on his side of the House, and we still hope that the Government will be able to do so.
I am glad that the Consumer Council is giving informative labelling intensive study, with a view to a national labelling scheme. That is something which I am sure deserves support from all of us. Here again, if the objective cannot be achieved by voluntary means, then the regulation-making powers, to which the Molony Committee referred, will no doubt have to be considered. The noble Lady mentioned a host of other activities—travel agents, shop hours, advertising, safety standards and labelling—and the successes in the matter of blazers: that is, school uniforms, and children's nightdresses, both of which might be described as "blazers".
I should like to make a comment on travel agents. For my own part, I am inclined to feel that we have to distinguish fairly sharply between travel agents, in the proper sense of the word agents, and tour operators. Again, I do not know whether the noble Lord has had time to study this matter, but we are entering into the period of Private Members' Bills and I should be surprised if there were not a Private Member's Bill on this subject this year, so that I think that the noble Lord will have to reach some conclusions pretty soon about what the Government's attitude is going to be.

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No system of standards is worth very much, I think the noble Lord will agree, without some quality control, and possibly adequate testing. Many manufacturers have their own quality controls. Others find it convenient to have quality control done outside. It might well be thought a good thing to have some form of certificate or badge showing that goods are subject to quality control. Like so many other things in this sphere, such devices are best worked out by, or on behalf of, the industries themselves. I am a firm believer in self-control as being the best form of control, but that does not mean that the advice and help of the Consumer Council or the British Standards Institution should not be sought and welcomed.
Representatives of the Consumer Council already sit on many bodies. I do not know how far their staff can be stretched, but I am sure it is a good thing that a representative of the Consumer Council should sit on these industrial bodies so as to be able to represent to the manufacturers themselves, at the point of decision-making, the consumer's point of view.
There are obvious pitfalls in the way of any organisation such as the Consumer Council. As I said, I do not think that one of the pitfalls is spreading the net too widely, because I feel that by its nature the Council has to deal with consumer matters of substantial importance as they come along, and has to be vigilant for new ways of deceiving and prompt to expose them.
It is important that the Council does not comment before consideration, that it should not go off "at half-cock", and I am sure that it does not allow itself to be beguiled or teased by the Press into committing itself too quickly. If its voice is to be really authoritative, as I am sure it should be, it must speak only after careful consideration. Of course, it will make mistakes—all organisations do. But it needs all the time to be persuasive and persistent with Government organisations, with manufacturers and distributors, and with all other organisations in the consumer field. It has, I think, to be pro-consumer rather than anti-anything else. I think it was the noble Baroness who said that there is no clash of interests, and I am sure that this is true.
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My Lords, I believe that the Consumer Council has made an admirable start in obtaining the confidence and trust of the organisations with which it has to deal, and I hope that the noble Lord who is to reply will be able to continue the support for the Consumer Council which I like to feel that we in the previous Government gave. Of course, no Government can ever be expected always to agree with the Consumer Council; nor should the Consumer Council expect it.
5.27 p.m.
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES): My Lords, I think that it has been a fascinating debate and we are indebted to the noble Lady for giving us the opportunity to discuss this subject. I find my own transition from making, I hope, stuff of quality to talking about it agreeable, too. One of my earliest recollections is of shimmering summer evenings, with my father talking over the garden fence to his neighbour who worked with him in the mill. It was always about how they could improve the quality of the cloth they worked on. Those were the days when articles had to last, when clothing was handed down, as it was in my family, from elder son to younger and when housewives worked miracles with the sewing machine. The reputation for good stuff which was made then still persists. I remember that two years ago, when I talked to the Anglo-Japanese Club in Osaka, I had quite a thrill, when the Japanese elite of the Zaibatsu came up to me, rubbing their lapels and saying, "This is from Yorkshire, too".
In those days, housewives had fewer fabrics to choose from—wool, cotton and silk. When I first set up my own business, after coming out of hospital in 1921, I remember going to see an old manufacturer, who was bewailing the situation. "Look at this", he said, I am full up to the top with stock I can't sell." Being a young man and enthusiastic, I asked, "What is it?" "Come in here", he said, "and look at all this red flannel. They do not want it now, but the women will come back to it again." Well, they never did. They went on to other things. Now we have nylon, rayon, Orlon, Terylene and a whole host of acryllic and other synthetics, which are being added to every day

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Again, in those days, there was very little pre-packaging of goods, except perhaps on retailers' premises, and very little mail order or hire-purchase business. The increase of these things has been phenomenal. Everything that will pre-pack is pre-packed; hire-purchase business goes up and up; mail order business houses boom; self-service stores and supermarkets are opening up everywhere. Now many housewives go out to work and many of them have plenty of money coming in. They are bombarded with exhortations on television and in the Press to discard and buy. I believe the Americans have a term for it, planned obsolescence. But there are also an enormous number of people in this country who are still very much on the border line and whose incomes are not enough to allow them to discard and buy again: young working families; families with a large number of children; families who still have difficulty in making ends meet. But it is not just for them that the noble Lady has been working; it is for everybody.
We all want a fair deal in this. Your Lordships will be aware that when we were in Opposition we were enthusiastic about consumer protection. We still are enthusiastic, and the advantage now is that we shall be able to do something positive about it. We attach great importance to the independence of this Council from the Government and to its right to be outspoken.
I do not want to cover the ground again, but mention has been made of the manufacturer and the seller. We are not against the manufacturer and the seller, but we are against abuses by them. It must be one of the important functions of Government that the consumer is provided with ready and relatively simple remedies against such abuses. But—and this is where education comes in—it will be for the consumer to avail himself of these remedies.
Some noble Lores mentioned the question of Citizens' Advice Bureaux. I should like to see the Citizens' Advice Bureaux grow faster than they are doing. Those of us who were Members of Parliament for many years and were in close touch with our constituents appreciate acutely the need for liaison between the people who can inform and the people who can receive. Numerous cases came to me on all kinds
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of problems, which are covered in this very admirable Report; every month somebody came. In answer to the noble Lord, Lord Drumalbyn, I should like to see, instead of the 429 already in existence and the some 40 more in the process of formation, a working up towards the number of the urban districts there are throughout the country. I would support the right reverend Prelate's reference to the form of Citizens' Advice Bureaux which can be undertaken by councils and local authorities in the setting up of, not exactly a department, but perhaps an extension of the weights and measures authority. I would draw your Lordships' attention to the town of Sheffield where exactly this has been done. I think it is a good development, and I am perfectly certain that my honourable friend the Minister of State at the Board of Trade, who is responsible for this, representing as he does one of the Sheffield Divisions, will be glad to know that I have mentioned it today.
I want to say a word or two now about the Council's terms of reference. I think the terms of reference were right. I believe that the inclusion of the individual approach to the Consumer Council would have been absolutely hopeless if it had been allowed. I feel that the Molony Committee were correct in saying that they should be aloof from it.
I believe it was mentioned by my noble friend Lady Gaitskell that the finance was not enough. What I would say to her is this. The Council has been going for only twelve months. It was envisaged that by the end of the year £125,000 might be required. I think it is indicative of the speed it has been going at that already £125,000 is required, and is being provided. I think that as the work proceeds and its value is more and more recognised ways and means (as is usual) will be found for finance to keep up with the work in hand.
Another point is the Merchandise Marks Act, referred to by my noble friend Lord Peddie. The Molony Committee on Consumer Protection made certain very far-reaching proposals in relation to merchandise marks law. The Board of Trade are at present in consultation with industry and other interested bodies on proposals to give effect to these recommendations. We hope it will be

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soon. The Consumer Council are among those who have been consulted, and I am glad to say that they seem to be broadly in agreement with the proposals prepared by officials. I should not, of course, wish to prejudice the Government's position in relation to legislative proposals which we shall in due course be putting before your Lordships, but I think I can safely say that at present it seems unlikely that we shall be departing very far from the recommendations of the Molony Committee. Nor can I say when we shall be able to introduce this legislation, except that it will be as soon as Parliamentary time permits.
Now a word on the labelling scheme, which has been mentioned by many noble Lords. We at the Board of Trade have been interested to see the proposal by the Consumer Council to introduce a national voluntary labelling scheme. We are following these developments very closely and we understand the difficulties. We understand, too, that it cannot just be done in five minutes. We believe that the powers should be used sparingly, and that only where it was not possible for labelling to be achieved by voluntary means should we bring in compulsion. That is what we believe. So far as the labelling of drugs is concerned, I understand that the Consumer Council is among the bodies which are being consulted by the Ministry of Health in the context of a review of medicines legislation.
The noble Lord, Lord Peddie, mentioned guarantees and contracting out. I think this could best be dealt with in the context of an amendment of the Sale of Goods Act, as recommended by the Molony Committee. That Committee, however, recommended that amendment of merchandise marks legislation should precede amendment of sale of goods law, and we are following that recommendation. We shall be discussing with industrial and other interests the Molony Committee's proposal to prohibit, through amendment of the Sale of Goods Act, contracting out of civil liabilities by the means of guarantees.
Now a word on doorstep salesmen. A few months ago a lady came to see me saying she had bought a sewing machine. She had seen an advertise-
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ment for a cheap sewing machine. A man came, but he had not come about the cheap sewing machine at all. He had come to sell her a new one. By Jove!, he did. She managed to sign on the dotted line for an electric sewing machine which would have kept a whole school going. The husband came home at night, and very cross he was. He came to see me. We are aware of this difficulty, and we are aware of the benefit of the ability to think it over. We want plenty of publicity about this. We want plenty of publicity in the Press so that the public can be put on its guard against it—against the kind of tactics these people use, and the rackets that are going on. We ask everybody to publicise it when they see an abuse.
Now with regard to travel agents. Some time ago some constituents of mine who had paid their money for their holidays were standing on the kerb at St. Pancras Station, waiting for a mini-bus to take them to the Lakes in Italy. A young man came along and said that the mini-bus had not come back from France yet, so they had to go to Victoria. So after a lot of messing about they got the tickets and away they went across the water. After going round the back streets of Calais, they eventually found a mini-bus with a student asleep on the back seat. They had great difficulty in waking him up, because he had made the journey from the Channel ports to Como and back again, to arrive on time, as he hoped, for these people. They set off. As they went along they found that no accommodation had been booked for them. So one of my constituents, who spoke good French, acted as the courier, and eventually got them in at various places. But unfortunately this mini-bus was in such a mess that it broke down going over the Alps. It is bad enough for anybody to go over the Alps and break down, but for twelve passengers in a mini-bus, with the confusion and the worry behind them of having to find their own way across France, it was worse. Is it not about time that this question was looked into, and something done about it? The Consumer Council have done a useful service by calling attention to abuses.
Of course, there are always pros and cons about these things. There are substantial arguments for and against the

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regulation of this trade. On the one hand, all of us would wish holidaymakers to be able to look forward with confidence to enjoying the holidays that they have booked and paid for, and—like any other responsible traders—the responsible firms in the travel trade set store by maintaining the trade's reputation. On the other hand, it would be too much to hope that any practicable system of control, leaving room for legitimate competition and for enterprising new entrants to the trade, could always identify unstable firms so that those firms, and only those firms, were excluded. What we are doing at the moment is this. We are studying the problems. That is not just an idle statement—I mean it. The President is studying this mater, and he will take careful note of the views expressed in the Council's Report and during this debate. The Government will announce their conclusions as soon as possible. I understand that to-day there is a Question down by the honourable Member for Montgomery.
Now a word on school uniforms. The British Standards Institution told us that standards have been prepared and are likely to be published soon for a whole range of blazer cloths in a basic quality; and that the work has started on standards for gaberdines, and a code of practice for making up blazers and raincoats. We hope that manufacturers will adopt the British Standards in manufacturing cloth for this purpose, and that school authorities will, where appropriate, order by reference to these standards. I can appreciate the noble Lady's difficulties when she remained at a Conference, where we were together at any rate for the first evening, because the wool trade is rather reluctant to commit itself to agreements of this type—on labelling, on qualities and se on. But I can assure noble Lords that progress is being made, and without any doubt whatever those parents who have apprehension about the replacement of blazers for those rough lads who rub out their elbows so quickly, and mothers who are faced with another bill, are going to have some good news in the not very distant future.
With regard to flammable clothing, who has not had his heart torn with the sad stories that we have seen, and still see, every year? It is fantastic that in this day and age there should be so
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many fatalities in the home caused by the flammability of fabrics. My right honourable and learned friend is considering the possibility of extending the scope of the present regulations to other types of garments and, perhaps, materials sold by the yard. I understand the noble Lady's anxiety about this matter. The cloth which is printed in designs which are very appealing to the children should, in my opinion, be brought in, too, because, otherwise, how can one discriminate? There is nothing to prevent anyone from going into a shop, buying a length of cloth and making it up. The danger is there just the same. Even warning labelling, as suggested by the Consumer Council, will be of little value in the absence of adequate supplies of flame-resistant garments. However, regulations are not the only answer. They undoubtedly help to encourage public safety consciousness, but care in the use of heating appliances and guards on open fires remain of the greatest importance. I will not pursue this subject because my noble friend Lord Hobson dealt fully with it when he spoke earlier on.
However, I should like to have a word on toys. Regulations are being prepared to implement the Molony Committee recommendations to ban celluloid toys and to impose safety standards for electrically-operated toys. Their preparation has been delayed by the complexity of the British Standard for transformers for use with toys and its variations from the international standard.
My noble friend has answered one or two of the other points, and I am sorry if I have not been able to reply to the multitude of questions; it is not the case that we are not interested but simply that there is no time. But because it is a thing near my heart and I should like to mention it for my own satisfaction, and because it is on page two of that little report that the Consumer Council issues every month—this particular one is dated October 29—I should like to finish on the subject of house buying.
My Lords, there is nothing which hits harder at a person or persons than when they have bought a house which is not right, when there is something dreadfully wrong with it in the way of construction. I had in my old constituency 178 aggrieved purchasers of houses who entered into purchase of their houses in good faith.

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They were ordinary working folks who saved up for the biggest purchase they had made in their lives and were likely to make. The houses were all right, but because of the use of poor quality filling which had been dug from the pits in the locality, full of sulphide which swells when it is exposed to damp, the walls of their sitting rooms bulged. What redress did they obtain? What redress is there when the builder goes bankrupt? What can you do? What happens to the old lady who has made her plans on her pension so that she can just paddle through, yet is then faced with a bill for £450?—as they all were. Surely these are things that need the conscience of the country to make us act quickly now; and I am perfectly certain that if we are patient in these early months of the formation of the Consumer Council and if we persist and proceed on the very admirable lines which have been laid out for us we shall make great progress in the coming years.
5.56 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I should like to thank very much all those noble Lords and the noble Baroness, Lady Gaitskell, for their very kind reception of our first Annual Report and of the speech which I made outlining our plans for the future. I am very much encouraged. I said at the outset of my speech that this was not a Party political issue of any kind, and I think all that has been said to-day bears that out. I was delighted to hear from the noble Lord, Lord Rhodes, just now that he was very keen about the independence of the Council. I know that the noble Lord, Lord Drumalbyn, was also very keen about its independence, so I can assure them both that the Council is likely to remain quite independent. We are also not going to be deterred in the views which we may take up on behalf of consumers as to whether or not they fit in with the views of all interests concerned. It is impossible to please everybody. We are there to speak for the consumer and we will do so with both courage and conviction.
I should for one moment like to answer one or two of the points which were made, but first I should like to join with the noble Lord, Lord Peddie, in the very admirable remarks he made about
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our staff at the Consumer Council. I am glad he did so, because I felt that it was not perhaps my province to do so in the first instance. But I should like to agree with him that we are most fortunate in the Director and the staff which she has got together and which is most admirable.
I should like to assure the noble Baroness, Lady Gaitskell, that so far we have had no difficulties arising from the mixture of the Council. In fact as the noble Lord, Lord Peddie, will bear me out, the mixture has been on occasions very helpful. There have been no difficulties about whether people's interests were or were not involved. We have a body of people who regard problems as they come to us as problems of the consumer, and not as problems in which they themselves have any personal interest. This is very valuable and important. I was very glad to have the support of the right reverend Prelate, the Lord Bishop of Southwark, and to hear that he feels strongly about protection of the consumer, and I was pleased to hear also the remarks he made about hire purchase. I think the Act which has been passed is going to help a great deal in the problems which arise in those ways.
I should like to say, in answer to the noble Lord, Lord Rea, that I am glad he supports us in connection with the Shops Act and extended hours. I stress again the fact that this should be entirely a decision of the shopkeeper himself, and I hope this may happen in the course of the next year. I realise, of course, that there are two points of view about the question of safety belts. You cannot be right all the time. But I think, on balance, we feel that the evidence is in favour of safety belts rather than that they should be simply optional. Of course, we all of us know of cases where safety belts might have been dangerous. I also know of cases where safety belts have saved people's lives.
I should like to assure the noble Lord, Lord Drumalbyn, that we intend to have consultations with the Government in the same way as we had consultations with himself when he was in the Government, and we are sure—in fact we have been given an assurance—that we shall be consulted by the present Government, as we were by the past Government, on

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points on which they want our views. I would thank him and other noble Lords for the remarks they made about the make-up of our Annual Report. I take no credit; it was due to the staff. But I think it is a very good document, nicely produced. It is not expensive in my opinion; it is jolly good value for two shillings. We have distributed some 3,500 copies and all the time it is being asked for by various people. I was glad to hear the noble Baroness, Lady Gaitskell, say she feels we should not be stinted of money. I am pleased to say that the budget we put forward this year was accepted by the previous Government. I dc not expect it will be repudiated by the present Government. Therefore, for the time being we have the money we asked for.
I should like to deal with one or two points that the noble Lord, Lord Rhodes, mentioned. I am glad he feels strongly about travel agents. I am sure something ought to be done about this, and fairly quickly. His account of the doorstep salesman is only one of many we have heard from all over the country. I am gild he picked up the point about increasing the range of legislation dealing with flammable materials and the question of the safety of toys, and I ant also delighted that he is himself personally interested in this question of house buying procedures, the contract and so on, to do with house buying. It is a matter we want to pursue.
On the question of the Citizens' Advice Bureaux, I hope that they will be able—in fact, f think they will be able—to expand more rapidly. We are at the moment making an inquiry, through one of our staff who is going round the country, to find out how effective the C.A.B. service, the Consumer Group service and the various local authority services are, and we are going to consider all that in the future. There is one point I should like to make—and I speak now as a local authority person, because I have been twenty years on a local authority. Any organisation that is in the local
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authority, whether it deals with weights and measures or the adulteration of milk, anything, in fact, run by a local authority, whether county council or town council, has always a sort of imprimatur of an official body. It is difficult for the ordinary citizen to take a small complaint to the local authority, because he always, rightly or wrongly, has a feeling that the local authority is "they" and it is "we", and "they are not with us".
I know that happens and I am inclined to think—although I do not want to be committed on this at once—that it would be better to keep a service such as the C.A.B. or our Consumer Groups or anything that the Consumer Council wants to set up as not inside the local authority. They could well be backed by the local authority, but I do not think they should be inside the local authority, for the reason that the ordinary little citizen, the ordinary man or woman in the street who has some small complaint, would not feel nearly so inclined to go to a big office in the local authority building as to talk to some friendly person in a rather smaller set-up in a voluntary organisation. I realise there are two sides to this question, but I think, on balance, I would rather let the consumer feel we were on his side of the fence rather than on the side of the local authority, with all the law that it has to administer.
I am indeed grateful to noble Lords for allowing me to answer and also for listening so kindly to what I am afraid was a tremendously long speech, but it was my one opportunity to get on the record what our plans are and what we want to do. I am most grateful for the help of noble Lords. I think they have been too kind; they have indeed praised us beyond our merits. We are determined to do our best in this field. We shall always be glad to have any comments and criticisms, and we hope that as time goes on we may become more and more useful. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

CLEANING OF LONDON'S PUBLIC BUILDINGS
6.5 p.m.
LORD AMULREE LORD AMULREE rose to ask Her Majesty's Government whether they will consider undertaking the cleaning of those public buildings in London for which they are responsible, and encouraging other authorities to follow their example. The noble Lord said: My Lords, many of your Lordships who have recently visited Paris must have been surprised and delighted to see the effect of the cleaning that has taken place in that city, the very extensive scheme of cleaning public buildings. The city has become far more light, far more cheerful, and a much gayer place altogether; and one can now see those buildings as they were intended to be seen by the architects and builders who first constructed them. The object of the Question I have put down is to inquire whether we cannot do more of the same thing in this country.
I am bound to say the Ministry of Works have done a certain amount. They have cleaned, among other buildings, the Banqueting House in Whitehall, one of the gateways of the Tower of London and probably quite a number of other buildings, though I do not want to make a catalogue of them now. It seems to me that some private firms have cleaned Bridgewater House and, I think, the one next door to it, Spencer House, and certainly the effect of that is most spectacular. If you walk in the Park one fine Sunday morning and look at the scene of Bridgewater House you will realise the enormous change. The same thing has happened with some of the buildings made of brick. I think that the police station at the top of Charing Cross Road was cleaned two or three years ago, and again the effect is quite startling; and there are many more examples. I would add, in parenthesis, that I am not referring in the Question to painted buildings but merely to brick and stone buildings.
One rather curious thing, which seemed to me surprising, was that although a great deal of money was spent on the conversion of the Treasury and No. 10 Downing Street, and there was a scaffolding all around the building for a long time, no attempt was made to clean it at the same time. I am informed—I do
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not know whether it is right or wrong—that it would have cost about another £2,000, once the scaffolding was there. The balustrade at the bottom was damaged in the war and it is entirely new, and some pinnacles at the top damaged in the war are entirely new. The rest of the building, which is a remarkably fine building, has not been cleaned and looks dark and dreary. Think what the effect would be, if we could have the Treasury Building, the Scottish Office, Horse Guards and the Admiralty all cleaned at the same time. The view, looking up across Trafalgar Square to the National Gallery at the top, would make a sight well worth seeing, and would, I think, draw more visitors to London than come at the present time.
I realise that it would be an expensive thing for the Government to undertake this work at the present time, when one wants to cut down on public expenditure, and I feel that my Question has not come at a very propitious time. But I think it is something which could be borne in mind. What the Government could do would be to encourage local authorities to clean buildings in their care and possibly some prosperous bodies, such as the members of the Bar, or the Law in general, to get the Law Courts cleaned. They are not inspiring buildings, I know, but they would look far better if they were not covered with dirt. One is told of the large amounts of money that counsel make with their cases; so I am sure there is plenty of money there. That is something the Government can do. Then there is the Civic Trust, which has taken a certain interest in cleaning buildings in the provinces. That would be prepared to offer good advice on what could be done.
One has seen other examples to which I have not referred. There is the front of the great Cathedral of St. Paul. That has emerged in a most astounding way from being cleaned. In fact, someone told me—whether rightly or wrongly I do not know—that some of the stone turned out to be marble. This was not known until it came to be cleaned. That was a fairly expensive job. The Lord Mayor's Fund was I think for £150,000, and the area of the building is 140,000 square feet. I am told that to clean

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Portland stone, which is what most of these buildings consist of, costs about 12s. 6d. per square foot, which corresponds roughly with the figure required for cleaning the buildings in Paris, where the cost is about 20s. per square metre. So there is not a great deal of difference between the two countries in the processes involved. The processes involved in cleaning are really the same—that is to say, water is squirted under considerable pressure, upon buildings.
I am told—and perhaps the noble Lord can answer me on this point—that one difficulty about the washing of buildings in London is that there are certain bylaws or regulations, call them what you like, which make it difficult, if not impossible, when the water main is on the pavement, for people to do that work except during week-ends and at night. That makes matters extremely expensive. The objection to doing this work in the day time does not appear to be a valid reason, because if one goes round buildings where building work is being undertaken now you can find water being pumped away in the street during the complete 24 hours, and nobody worries. If there is some reason why this washing cannot be done during the day, some restriction because the water may drop on the pavement, I am wondering whether that state of affair; could not possibly be changed and some modification made.
One of the sad things I saw in one of the cheaper papers was that somebody said that the Whitehall Banqueting House now looked like a lump of cheese. I am quite sure that that is not the attitude of mind of people in the military world in regard to these things. Therefore I wish to put my Question to the noble Lord as to whether more of this work cannot be undertaken at the present time.
6.14 p.m.
LORD TEYNHAM: My Lords, I feel that I must support the noble Lord, Lord Amulree, on this matter. But before I do so, I must declare an interest and say that I am a director of a cleaning company. Her Majesty's Government have maintained that they are anxious to modernise Britain. May I suggest that they now encourage the use of modern methods in the cleaning of public buildings, not only outside but inside? Over the last few years cleaning methods have improved enormously. It is now
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possible to clean carpets in public buildings really well without taking them up at all. With these modern methods you get a first-class finish.
The method of cleaning buildings outside has progressed enormously in the last few years. I am sure that many of us have seen the result at St. Paul's, which is now, I think, excellent. Why not Westminster Abbey, and a host of other public buildings, many of which look in the last stages of decay but could quite easily be renovated and made to look nice? The noble Lord, Lord Amulree, mentioned the cost as being 12s. 6d. per square foot, and suggested that is similar to the cost of cleaning a square metre, 30s. I rather feel that he has his figures somewhat mixed. But the Government have said that they are going to modernise Britain. Why not have a brighter and cleaner Britain? I hope that Her Majesty's Government will be able to look at this matter a little more closely.
6.16 p.m.
LORD STRABOLGT: My Lords, I should like to support what the noble Lord, Lord Amulree, and the noble Lord, Lord Teynham, have said about the cleaning of buildings. I am inclined to think on occasions that we are apt to overclean our paintings in the national collections and to neglect our buildings.
This seems a little unfortunate, because if you clean a painting or overclean it the damage is irreparable, while of course a building is much tougher.
The noble Lord, Lord Amulree, rightly pointed out the wonderful things that have been done in Paris. I fully agree with him. I found it a revelation to drive up the Avenue de I'Opéra and see the Opera House in all its glory, with its copper roof gleaming green in the sun. With due respect to the present Administration, I wish that we had someone like M. André Malraux with us in this country, not only to clean buildings and brighten up the city, but also for preserving buildings which are not always of tremendous interest but do mirror a particular period. I agree also about the Law Courts, though I must beg to differ with the noble Lord, Lord Amulree, in one respect: I think the Law Courts comprise a very fine building. But whether one thinks that or not, it is a most important building, and its present

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state, does not, it seems to me, do justice to the site or to the important proceedings which go on inside.
There is also the question of statues, which I feel should come under the category of buildings. I think that one or two of those could do with a clean-up and some brightening. There is poor old Rima, the Epstein memorial in Hyde Park. This is a matter which I know the noble Lord, Lord Amulree, has raised before in this House. I can remember when this memorial to Hudson was first created by this distinguished sculptor and erected there. It was tarred and feathered almost every month, such was public opinion. It is completely neglected by the Ministry of Works. The pond is silted up, and the plaque, when I last saw it, only recently, was dirty. Therefore I hope that the noble Lord, Lord Mitchison, will be able to tell us what is intended to be done with regard to statues as well as with buildings.
The Clean Air Act which was recently passed, and which is being extended to the various areas of Central London, has had the wonderful effect that one can see, on a sunny day, a blue sky, but it has also shown us the defects in the buildings when they are neglected. It is more than ever necessary, now that the air is becoming purer, that we should be able to see the beauties of our city. One hopes that the Government will give this matter their urgent attention.
6.19 p.m.
LORD HAWKE: My Lords, I, too, have an interest to declare, in a rival firm to that of my noble friend Lord Teynham. I am going to speak for only a moment. If the Government are considering a wider extension of this cleaning, the matter of timing is extremely important. The interior and exterior cleaners tend to be the same men, and, naturally, to work outside in the winter is not at all a pleasant task. The contractor is frequently stopped by bad weather, and so on, and therefore it is bad business for the Government to do their outside cleaning in the winter. They should do their inside cleaning in the winter and their outside cleaning in the summer. It takes a considerable time to finalise these contracts, because it is not nearly such an easy business as it sounds.
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Great experts on the quality of stone have to be called in to decide what is the right sort of cleaning to adopt. Considerable consultation has to go on between the Ministry of Works and the contractors before the specification for the contract can be drawn up at all. Therefore, now is the time to start thinking about next summer's contracts. It is vain to think that one can start on outside buildings now.
6.22 p.m.
LORD CARRINGTON: My Lords, I want to say just one word in supporting the noble Lord, Lord Amulree. I am not the director of any stone-cleaning company, but I was for thirteen years a "director" of a "company" which worked in the buildings to which we are referring. And I suppose the noble Lord opposite will tell us that we ought to have done more about it than we did. I agree with everything noble Lords have said. Nobody who has been to Paris lately can fail to have been struck by the transformation in that beautiful city in the last few years.
It probably was not worth while doing anything in London in the old days, for it was a very filthy city and tons of soot and dirt came down every 24 hours on our buildings. Even to-day it is fairly dirty, as anybody knows who has left a car out for 24 hours. But there was an excuse in the old days, and the idea that London is a filthy city in a perpetually swirling, yellow fog is to be found still in many places abroad. I do not think there is nearly so much excuse for it now as there used to be in the old days. I do not see why we should go oil seeing these dirty, soot-stained buildings when we now have smoke-free zones and everything is much cleaner. We were given a good lead this year by what the outgoing Lord Mayor of London did for St. Paul's in the Fund which he set up for its cleaning. We have seen what has been done in the Banqueting Hall, as noble Lords have said. I am sure we should do more. We were talking earlier on this afternoon about holidays and tourists. I think we should do well, if we want to attract people to this country, to see that London is a sprightly painted and, above all, clean city.
There are many places we could start with. We could start with Somerset House: we could do the Horse Guards.

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We could finish what Lord Amulree described, Kent's old Treasury building, which at the moment has a rather deplorable piebald look. We could do the Royal Naval College at Greenwich, probably the finest set of buildings of its type to be found in this country. There are all these places which could be dealt with. Perhaps we might one day be able to look upon Nelson on his column as he really is supposed to be, and not have to pay for eight months in the year for the floodlighting of what looks like a small black chimney-sweep on a burnt-out rocket.
Who knows, some of the less distinguished buildings might appear a little less ordinary, and perhaps less repulsive, than they sometimes look now. Might it not lighten the heart of the traveller down King Charles II Street, which flows like the River Styx in the dark underworld between the old India Office and what are laughably called the new Public Offices, if they were given a good scrub? Of course, there are more important things, aid I appreciate that fact, as does the noble Lord, Lord Amulree. But I hope that we shall not concentrate only on essentials and neglect the arts and amenities. I think we should he surprised if we tried to clean these buildings. We should be surprised at the difference it could make to London, to those who visit it, and perhaps, above all, to those who live in it.
6.25 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF LAND AND NATURAL RESOURCES (LORD MITCHISON): My Lords, I am sure I speak for the whole House in thanking the noble Lord, Lord Amulree, and the other noble Lords who have spoken on a matter which, after all, comes home to all of us. We live here in London. We have spoken principally about London, although, in fact, this is a question which affects a good many other large cities, too. I remember being told when I was very young that "Cleanliness is next to Godliness", and I also remember hearing a Yorkshire proverb, in a rather opposite sense, "Where there's muck there's brass". I think, in a way, both those things are very relevant to what we have to say to-day.
There are really two schools of thought about the slate in which public
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buildings should be left, apart from any difficulties in doing the job. There are some people, the "Cleanliness-next-to-Godliness" school, who would like them absolutely clean, and there are others who find a certain attraction in what I have heard described as the patina of old buildings. There is just the same point about pictures, and my noble friend Lord Strabolgi mentioned it in connection with their cleaning, too. One cannot quite meet everybody's views about this: but there is, of course, a problem. It is not so easy as one thinks to get these buildings right. Some of them—for instance, the Horse Guards, which Lord Amulree specifically mentioned, as did another noble Lord—have been tried.
There was a Question in this House in 1952, by the noble Lord, Lord Rennell, mentioning a number of buildings which he thought ought to be cleaned. The Horse Guards was one. The Ministry of Works had a try at the Horse Guards, and Lord Rennell was invited to have a look at the result. He did so, and agreed then that it was really hopeless. I know that there have been improvements since that time, but, in fact, the principal method in London still appears to be washing or using steam on the buildings. That is because most of the buildings concerned in this Question are of Portland stone, and one can deal with Portland stone in that way.
The French buildings are of a rather different stone. It is a very attractive stone when it is fully cleaned, and it is easier to clean than the stone out of which most of the London public buildings are built. Then there remains Bath stone which is easy to clean and does not patch—I will refer to that in a moment—but it presents a rather disappointing appearance when it has dried. It looks "flat"—or that is what the architects think about it, and I daresay that some of your Lordships would, too.
I do not want to trouble your Lordships at this hour with a list of the buildings which have been attempted. Some have been completely successful. There are such cases, and perhaps the most obvious one is Buckingham Palace, which has been done, bit by bit, over a number of years. That has been a complete success. That was a "new"

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building, and these are by far the easiest to deal with. It is the picturesque and older buildings that present the difficulty. The usual difficulty is what I referred to just now as the "patchy" result. One does the cleaning, and then the building develops patches and looks worse than it was before.
My Lords, I do not want to be too discouraging about this. It is, of course, the case that the Ministry of Works go on, year after year, cleaning the public buildings for which they are responsible. I cannot think that Lord Nelson would have welcomed a description of himself as "a public building, for which the Government were responsible", and therefore I am going to leave out statues. Moreover, I do not know anything about them.
But surely the real remedy in this matter, and the long-term remedy to get the city looking more or less uniform in this respect, and to get something which will last, is to avoid depositing the dirt, instead of cleaning it away after it has been deposited. Clean air legislation, and its proper carrying-out and enforcement, are in the long run far more useful, though of course—I do not want to disturb the noble Lord, Lord Amulree—I would not for a moment say that you have not got to do something about what is there. But it is the case that clean air legislation is, really, the more important side of the matter, as I see it.
My Lords, I repeat that it is getting late and I do not want to keep your Lordships, but I feel that I am a bit of a poacher turned gamekeeper. That always happens when there is a new Government. I am sure I am not the only person in this place who has been, for a very large part of his time indeed, asking the Government of the day to spend money on something or other, and at the end of it all it is a question of how you weigh up these things. But I must remind noble Lords that, coming in as a Government, we have found a state of affairs which from a financial point of view is pretty critical. I do not want to rub it in at this stage and during this debate, but if your Lordships will think for a minute of what was said in another place the other day, you will remember the amount
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of money which we are in process of borrowing, in order to pay back foreign countries or foreign bankers who are lending to us. You will remember, too, the prospective Budget deficit and the need, which I think both Governments have felt, one after the other, for a really critical review of Government expenditure. So this is not quite the moment to spend too much on anything, if I may put it that way.
When it comes to a choice of priorities, I can see a case for saying (I put it no higher than that) that the needs of the poorest people in this country, who are provided for in the statement made the other day—the pensioners, the widows, the people who have to find houses in London at the moment, and the others who, in one way or another, have difficulty or misfortune consequent, perhaps, on the complications of our society—must quite definitely come first. This kind of operation, necessary though it is, must be treated, comparatively speaking, as a sideline. We must not allow ourselves to beautify the city at the expense of the inhabitants. I think, if I may be allowed to use a quotation, that it was Thucydides who said, that it was
"the men, not the walls, that make the city."
If we have to look after one and not the other, then, surely, it is the men and women who live in it who have the first claim on any available resources.
I hope I have not been contentious on what is a non-contentious subject. It is perhaps extraordinarily difficult to get out of one's bad habits in that respect. But I agree with what has been said about the need for cleaning. I can assure the noble Lord, Lord Amulree, that it is going on steadily all the time. I have a list of buildings here which have been cleaned year after year. I can say that we must look at the matter against the background, as it were, both of our present financial situation and of other calls—more urgent calls, I think—on our necessarily limited resources.
Having said all that, I trust that those who feel strongly about some particular piece of cleaning (and the noble Lord, Lord Amulree, mentioned one) will let my right honourable friend the Minister of Works—or, if they like to use me as a postbox, myself—know what

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it is, and I will tell him. Perhaps I ought not to say that I have already had one public building for which the Government are responsible called to my attention to-day, and I propose to ask the Minister of Works whether this is not a proper case. This is clearly an instance of "No names, no pack-drill." But I hope that the matter will be ventilated by those who feel that a particular case needs attention.
LORD SOMERS: My Lords, before the noble Lord sits down, I should like to ask a question, purely out of ignorance. Is it possible, provided the stone is hard enough, to do anything by abrasive methods with a rotary electric scraper or anything, like that?
LORD MITCHISON: Yes, my Lords, I understand that it is. I am sorry that I did not go into that matter, but it was a question of time. That method is used for sandstone, as I understand it, and peppering grit on to the buildings has been tried. That did not work very well, but the cleaners are hopeful now about some experiments with soft grit that are going on. It is a concept which I find a little hard, but apparently there is something called soft grit, and there are also various chemical methods. It is not only in this country that these methods are being tried out, but in other countries too. But no startling breakthrough has yet appeared, as I understand it, and we still remove the dirt in the old-fashioned way in which we remove it from ourselves—by washing.
LORD STRABOLGI: My Lords, before the noble Lord sits down may I ask him one question? Bearing in mind the financial considerations to which he drew your Lordships' attention, would he not consider that from a financial point of view it is very important that the cleaning of buildings should be borne in mind? I say that, because their cleanliness would help to attract tourists and visitors to this country as part of the invisible exports, which it is very essential that we should increase by every means we can. It is really part of that.
LORD MITCHISON: My Lords, of course that falls to be considered. I do not have any information—I doubt if anybody has—on what degree of dirt deters the tourists from going to a place. I think it was in Dublin that they were always rather proud of being rather dirty, and thought it attracted tourists. But I do not wish to offend anyone who has opposite views. I would merely say that, clearly, there is an advantage in having clean buildings, or, if you support the other school, reasonably clean buildings; but it is a subject which is, after all, a comparatively minor item of expenditure. One must attend to such matters case by case, as time goes on, and welcome the assistance of those who have noticed a particularly bad example and want something done about it.
House adjourned at twenty-three minutes before seven o'clock.