Sitting of 13 April 1965

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  SAINT MARK, CAMBERWELL BILL
  Read the Third time and passed.
BIRMINGHAM CORPORATION BILL

  CITY OF LONDON (VARIOUS POWERS) BILL
  ROCHESTER BRIDGE BILL
  UNIVERSITY OF LEEDS BILL
  As amended, considered; to be read the Third time.

  PORT OF LONDON BILL [Lords]
  Read a Second time and committed.
  MANCHESTER CORPORATION BILL (By Order)
  Second Reading deferred till Thursday 29th April at Seven o'clock.
ORAL ANSWERS TO QUESTIONS
  OVERSEAS DEVELOPMENT

    India (Agriculture)
    Mr. Shepherdasked the Minister of Overseas Development whether she discussed the question of further help in the agricultural field when she visited India recently; and what action will follow such discussions.
    The Minister of Overseas Development (Mrs. Barbara Castle): Yes, Sir, I discussed in some detail with the Indian authorities the ways in which our technical assistance and capital aid might be most usefully employed to help in the development of Indian agriculture. I was told of the plans being made by the Indian Government to increase agricul-
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    tural production and explained that we were anxious to integrate our own forward planning of assistance to fit in with their plans. We are now following up these discussions so as to lead to agreement on specific assistance projects.
    Mr. Shepherd: When discussing these matters overseas, will the right hon. Lady bear in mind that the form of aid which we want to be given to these people is aid which will enable them to help themselves more, since the time may well come when we shall not be able to afford the amount of money which we are now giving to overseas aid?
    Mrs. Castle: Yes, Sir. That is the purpose of all our aid.
    Mr. Peter Mills: Will the right hon. Lady bear in mind the important work which various missionary societies are doing in this respect, particularly their agricultural work, and can she say whether there is any co-operation between her Ministry and these missionary societies?
    Mrs. Castle: The aid which we give is on a Government-to-Government basis and we therefore merely meet requests put to us by the Indian Government. The responsibility for integrating all the work in the aid programme at the receiving end is with the Indian Government.

    Aid (Balance of Payments Situation)
    Mr. Stratton Millsasked the Minister of Overseas Development if she will make a statement of the net effect of Government aid on the balance of payments situation; and what studies she has instituted as to which forms of aid are least onerous in this respect.
    Mrs. Castle: I am urgently studying this question with the Department of Economic Affairs, the Treasury, the Board of Trade and other interested Departments. The investigation is not yet complete but it is clear that the net effects are different for different forms of aid.
    Mr. Stratton Mills: Can the right hon. Lady give us any idea when this review will reach finality? Secondly, is she aware of the dismay caused in the developing countries by the Chancellor's restrictions, for balance of payments reasons, on private investment? May

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    we have an assurance that the same balance of payments reasons will not be extended to cut down Government aid to developing nations?
    Mrs. Castle: We are pressing ahead with the review as quickly as possible and in any case I hope to be able to report to the House, in the White Paper which I shall introduce before the Summer Recess. The answer to the last question is that we certainly have no intention of cutting aid.
    Mr. Sandys: Against the background of the Budget and the balance of payments problems, will the Minister bear in mind that commercial investment is often as valuable as, and sometimes more valuable than, direct Government aid?
    Mrs. Castle: I am certainly aware of the râle which commercial investment plays in development, but, obviously, in considering all these forms of development we have to have regard to our own balance of payments problem.
    Sir C. Mott-Radclyffe: Is the right hon. Lady aware that in his Budget statement the Chancellor of the Exchequer stated very clearly that those who invested money overseas would have to assess more accurately in future the advantage which they would get from overseas investment as compared with the advantage which they would get from investment at home? Is this guidance to be applied only to private or company investment, or is it to be applied also to the Government and, if so, at what stage?
    Mrs. Castle: The criterion for assessing Government aid is its effectiveness in achieving the ends which we are seeking, namely, the development of the countries concerned to the utmost extent which our resources will allow.

    India and Pakistan (Aid Programmes)
    Mr. Stratton Millsasked the Minister of Overseas Development following her recent visit to India and Pakistan, what proposals she has regarding the British aid programme to these countries.
    Mrs. Castle: During my visit to India I discussed with the Planning Commission and with Ministers the integration of the future planning of our technical and capital assistance with the Indian
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    Government's own forward planning so as to ensure the most effective British contribution to India's development needs. These discussions will be of great value when we consider specific future requirements with the Indian authorities.
    As regards Pakistan, I would refer the hon. Member to the reply I gave to my hon. Friend the Member for Willesden, West (Mr. Pavitt) on 23rd February.
    Mr. Stratton Mills: Is it not time that the Minister began making up her mind as a result of her visit to India and Pakistan about exactly what she proposes to do? Is she aware that our capital assistance to Pakistan, for example, is £8½ million per annum, while our technical assistance is only £½ million? What are the criteria for this difference? Would she also make clear whether she is considering any change in the distribution between the two forms of assistance?
    Mrs. Castle: I would first correct the hon. Gentleman. Our technical assistance to India is currently running at over £¾ million. Action has already been taken, particularly in the technical assistance field, to meet the specific requirements which the Indian Government expressed to me during my visit. With regard to capital aid, our pledge for 1965–66 will be made at a meeting of the Aid India consortium later this month.
    Mr. Sydney Silverman: Can my right hon. Friend say what proposals she has in mind to ensure that Belfast, North makes an adequate contribution to these proposals?
    Mr. Speaker: We must regularise even Northern Ireland, in the circumstances, to bring it within the reply.
    Mr. R. Carr: Is the right hon. Lady aware that India and Pakistan are two of the countries in which aid by private investment will be most severely hit by the recent proposals of the Chancellor of the Exchequer? What will she do about this?
    Mrs. Castle: There is a later Question on private investment.

    Kenya (Farms)
    Mr. Wallasked the Minister of Overseas Development what proposals she has for continued financial support

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    for resettlement schemes on small European mixed farms in Kenya.
    Mrs. Castle: I would refer the hon. Member to my reply of 30th March to which I have nothing to add at present.
    Mr. Wall: I thank the right hon. Lady for her reply last week. May I ask her to bear in mind the special claim of the agricultural settlement trust farmers, for whom I believe all Governments have a special moral responsibility, particularly in view of the fact that it seems likely that trust lands may be excluded from any future resettlement scheme?
    Mrs. Castle: I will bear that in mind when I have the report in front of me.
    Mr. Sandys: Does the right hon. Lady realise the great importance of making a firm statement as soon as possible to remove the tremendous uncertainty and anxiety which exists among British farmers in Kenya?
    Mrs. Castle: I appreciate that. As I said in my reply of 6th April, the Mission's full report is not likely to be ready until June. There is a mass of detailed material which it is essential it should have time to assimilate and evaluate. However, it hopes to let me have an interim report by the end of April or May.
    Mr. Sandys: Does that mean that the Minister hopes to be able to act on the interim report, or shall we have to wait until July or August until any policy decision is taken?
    Mrs. Castle: I should like to wait to see the interim report, but clearly once I have a report, whether it be an interim report or the final report, I shall have to enter into discussions with the Kenya Government on the basis of the report.
    Mr. Sandys: The interim report?
    Mrs. Castle: As I say, I have no idea what the scope of the interim report will be. But I do not think that I can hold out any hope to the House that I shall be able to announce specific action until later in the year.
    Mr. Wallasked the Minister of Overseas Development how much financial help has been given to assist compassionate cases in Kenya for the six months prior to October, 1964, and the
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    six months after, respectively; how many cases remain to be dealt with; and what assistance she proposes to make available.
    Mrs. Castle: A sum of £661,000 was provided to the Kenya Government in March, 1964, for the purchase of farms belonging to compassionate cases in the period from July, 1963, to June, 1964. As I informed the hon. Gentleman on 27th November, 1964, we have agreed to provide additional funds and the British High Commission in Nairobi is currently studying each individual case on its merits, and has already sent me progress reports in some detail. I am not yet able to say how many further cases will qualify for assistance and what sum will be involved, but the question is being pursued as a matter of urgency.
    Mr. Wall: Is the Minister aware that the last Government gave over £1 million for these purposes? How much does the right hon. Lady expect to be able to make available? Will she appreciate that these people are ageing, that they include a number of war-wounded and that they have no hope of selling their farms unless the British Government are able to provide financial help?
    Mrs. Castle: I am aware of the difficulties of these cases, but, as I said at the time, we are prepared to make an appropriate sum available. Clearly, its size must depend upon the examination of individual applications by our authorities.

    Food Surpluses
    Mr. Peter Walkerasked the Minister of Overseas Development what plans Her Majesty's Government propose to present to the United Nations aimed at channelling food surpluses to the deficit areas of the world.
    The Parliamentary Secretary to the Ministry of Overseas Development (Mr. A. E. Oram): I have nothing to add at present to the reply my right hon. Friend gave to the hon. Member for Derbyshire, West (Mr. Crawley) on 15th December last.
    Mr. Walker: Is the hon. Gentleman aware that the first Secretary of State said before the election that the Labour

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    Party would make a large number of specific proposals to the United Nations immediately it came to power? Can he give us any idea what the specific proposals are?
    Mr. Oram: We propose to await the outcome of the meeting of the Inter-Governmental Committee, which is being held in Rome at the moment. I think that it would be better for the hon. Gentleman to await the results of that examination.

    Voluntary Service Overseas
    Mr. Hamlingasked the Minister of Overseas Development what steps are being taken by her Department to publicise voluntary service overseas amongst young people at universities and colleges of further education.
    Mr. Oram: A pictorial booklet for circulation in industry and among educational bodies will be ready for distribution in May. A film about volunteers is in an advanced stage of production and should be ready for loan by September.
    The Committee on Overseas Service—the Lockwood Committee—of which we are members and to the expenses of which we subscribe, has produced brochures which have been distributed to university appointments boards, colleges of advanced technology, technical colleges, student organisations, and agricultural colleges.
    Sir Knox Cunningham: Would the hon. Gentleman think of extending this publicity for the voluntary youth organisations?
    Mr. Oram: We are anxious to spread this publicity in as wide a fashion as possible. I will certainly take the hon. and learned Gentleman's suggestion into account.
    Mr. James Johnson: Is my hon. Friend aware that there is a potential field—quite a large field, in my opinion—of young teachers who wish to make exchange visits with their opposite numbers overseas, perhaps in Africa, which would be an excellent thing? Can my hon. Friend tell us what help he is prepared to give in this respect?
    Mr. Oram: I think that my hon. Friend will realise that a large number of the volunteers who go overseas are already
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    engaged in teaching. We welcome this. Any additional help which we can get will also be welcome.
    Mr. R. Carr: Can the hon. Gentleman say what progress is being made with the plans which were set afoot about a year ago for the production of a film on young volunteers to be shown commercially and also for use by British information services overseas?
    Mr. Oram: I am not sure whether the film which the right hon. Gentleman has in mind is the same——
    Mr. Carr indicated dissent.
    Mr. Oram: Apparently it is not. Perhaps the right hon. Gentleman would give me notice of that question.
    Mr. Longbottomasked the Minister of Overseas Development how many industrial apprentices are included in the volunteers currently serving overseas; and how many she anticipates will be included in the 1,600 volunteers who are expected to be serving overseas in the year beginning September, 1965.
    Mr. Oram: Forty-three at present. I hope 75 this autumn.
    Mr. Longbottom: I hope that the hon. Member is not satisfied with this number. I hope that he will have talks with his hon. Friend the Parliamentary Secretary to the Ministry of Labour to see if it can be increased.
    Mr. Oram: I can assure the hon. Member that I am not satisfied. I am most anxious that this side of the recruitment of volunteers should be considerably enhanced. In the discussions over the weekend that I referred to in reply to an earlier Question I emphasised the importance of this field of recruitment.
    Mr. Hamling: Is my hon. Friend aware that those who have taught in technical colleges were certainly unaware of this service until last October?

    Teachers of English
    Mr. Francis Noel-Bakerasked the Minister of Overseas Development what additional steps she is taking to increase the number of teachers of English working overseas, and to train such teachers in the use of the most modern techniques, including machines, for language teaching.
    Mr. Oram: Under the Aid for Commonwealth English Scheme 30 experts in the teaching of English will be in post by this autumn. A further number will then be starting training so as to increase the total to 60 by 1970. They are trained in the use of the most modern techniques. The cost of these arrangements is met from my Ministry's vote but the experts are on the staff of the British Council.
    Mr. Noel-Baker: Excellent though these arrangements are, would my hon. Friend agree that 60 teachers by 1970 is a drop in the ocean compared with the tremendous demand all over the world to learn English? Will he look as a matter of urgency at ways of increasing enormously the effort being put into English teaching all over the world?
    Mr. Oram: I share my hon. Friend's concern in this matter. I should not like him to think that the 30 and 60 people to whom I have referred are the only teachers available for teaching English. These are the experts, the specialists. But there are many others who are occupied in teaching English.
    Mr. Sandys: Is the hon. Gentleman aware that as more and more people learn English all over the world, fewer and fewer of them can understand each other? Would he put more emphasis on the teaching of correct pronunciation and less on the teaching of Shakespeare and Chaucer?

    India (English Language Instruction)
    Mr. Jacksonasked the Minister of Overseas Development what plans she has for further assistance to the Government of India in the field of English language instruction; and to what extent these have been affected by the recent linguistic disturbances in India.
    Mr. Goodhartasked the Minister of Overseas Development whether she will give additional assistance to the programme of instruction in English language teaching for India.
    Mr. Oram: Assistance to the Government of India is given in this field, as in others, at the request of the Indian Government. Through the British Council we are successfully meeting the substan-
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    tial requests which have been made for our help.
    Mr. Jackson: Will my hon. Friend bear in mind in his discussions with the Indian Ministry of Education concerning the supply of English teachers to India that there is greater need in the smaller universities away from the big centres than in universities like Delhi, which already have a good standard of knowledge of English?
    Mr. Oram: I thank my hon. Friend for calling attention to that point, which I regard as important.
    Mr. Goodhart: Does the Parliamentary Secretary recognise that even if the number of trained linguistic teachers in India is doubled within the next few years, there will still be less than one for every 15 million of the population and that the best chance of maintaining English is to bring television into use as quickly as possible?
    Mr. Oram: We recognise, of course, that this is a drop in a vast ocean. There is a later Question on the Order Paper concerning the support that we are giving for television for teaching overseas. I think that, in a small part at least, the point that the hon. Member has in mind will be met.
    Mr. R. Carr: The later Question refers to what we are doing through an organisation in this country. Can the Minister say whether we are ready to give the Indian Government any help in establishing their own television services, which might help in this direction?
    Mr. Oram: The Centre for Television, to which we are making a grant, is in touch with overseas Governments. Certainly, its services are available to the Indian Government and other overseas Governments.

    International Voluntary Service and U.N. Association International Service
    Mr. Freesonasked the Minister of Overseas Development whether she will take steps to provide Government encouragement and financial help for the International Voluntary Service and the United Nations Association International Service.
    Mr. Oram: Both these bodies are associated with the graduate volunteer scheme and Her Majesty's Government contribute 75 per cent. of the British costs of the volunteers they send overseas.
    Mr. Freeson: The graduate volunteer scheme is limited in scope when related to the kind of activities which these organisations undertake. Is my hon. Friend aware that these two bodies undertake the sending overseas of many more people than graduates, as well as the reception of people in this country from overseas? Will the Minister consider consulting these two bodies, which are in serious financial need, and encourage the expansion of their work internationally overseas and at home?
    Mr. Oram: We are constantly in touch with these and other organisations engaged in sending volunteers overseas. We are fully aware, as my hon. Friend has pointed out, that their valuable work extends beyond the recruitment of graduates. At the moment, however, we have no plans for extending the scheme of Government support beyond the recruitment of graduates.

    Southern Rhodesia (Students)
    Mr. Jacksonasked the Minister of Overseas Development if she will consider seeking to promote a university and college scholarship programme for Southern Rhodesian students throughout the Commonwealth, in order to help the African populace towards the experience necessary to take over the government of the country.
    Mr. Oram: Facilities already exist in such schemes as the Commonwealth Scholarship and Fellowship Plan which, as its name implies, provides scholarships at Commonwealth universities for Commonwealth students. Training opportunities in this country are also available under British Technical Assistance. Rhodesians also have their own university college in Salisbury to which Her Majesty's Government have given, and are pledged to give, very generous support.
    Mr. Jackson: In thanking my hon. Friend for his reply, may I ask him to bear in mind that there are many hon.
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    Members, on both sides of the House, who are not prepared to see the young people of Southern Rhodesia kept back and retarded in their knowledge and education? Does not my hon. Friend consider this to be a subject which might be raised at the Commonwealth Prime Ministers' Conference for an accelerated education programme?
    Mr. Oram: It is not for me to say what the agenda of the Prime Ministers' Conference should be, but I certainly share my hon. Friend's concern that all possibilities of educational advance should be extended to Rhodesia.
    Mr. Wall: Does the Minister agree that in Rhodesia there are more Africans at school as a percentage of the population than in any other independent State in Africa?

    Overseas Service (Pensions)
    Mr. Ridleyasked the Minister of Overseas Development if she will introduce legislation to amend the Pensions (Increase) Act, 1962, to provide that a pension supplement is payable to a former officer of Her Majesty's Overseas Service, who was born, or was resident at the time of his joining the Service, in an overseas territory, but ceases to be so resident upon his retirement.
    Mr. Oram: No, Sir.
    Mr. Ridley: I know that the Parliamentary Secretary has considered this matter carefully, but is he aware of any other legislation in which entitlement to a pension increase depends upon the accident of where one is born or where one happened to be at the time of entering the service? Will the hon. Gentleman give an assurance that in considering any future Pensions (increase) Bill, he will try to overcome the difficulty involved in this case, because there is clearly an injustice in the legislation?
    Mr. Oram: I have been in correspondence with the hon. Member and I know of the case that he has in mind. The Act which increases the pensions draws a distinction, however, between overseas and local officers, and the case that the hon. Member has in mind is distinctly one of a local officer. I see no prospect that we can answer the hon.

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    Member's case that the legislation should be amended.
    Dame Irene Ward: Does the Minister's reply mean that no Acts will be altered by Her Majesty's Government? In view of all the pledges which they have given all round the place that they will deal with a good many people so much more generously than did the Tory Government, does the Minister intend to alter no Act, however wide the gap may be?
    Mr. Speaker: The Minister could not do it arising out of the Answer, which was confined to a particular point.
    Dame Irene Ward: On a point of order. Is it not in order, Mr. Speaker, to ask the Minister whether he will not alter an Act?
    Mr. Speaker: Yes, very much so if the question arises out of the Answer. The difficulty here was that the hon. Lady's question went floating round a wider range.
    Dame Irene Ward: Jolly good.
    Sir J. Fletcher-Cookeasked the Minister of Overseas Development how many overseas service pensioners in the United Kingdom fail to qualify for relief under the Double Taxation Agreement in respect of tax deducted from their pensions by the Government of Ghana.
    Mr. Oram: I regret that this information is not available but I understand that the great majority of Ghana pensioners in this country pay Ghana tax at the effective United Kingdom rate and thus qualify for full relief in respect of tax paid to Ghana.
    Mr. Woodnuttasked the Minister of Overseas Development what is the average period which elapses between the death of a colonial service pensioner who served in Ceylon and the payment of a pension to his widow.
    Mr. Oram: Delays have averaged five to six months but the Ceylon Government have now authorised the Crown Agents, as soon as a contributor's death is notified, to pay the widow a provisional pension of three-quarters of the registered pension pending a final calculation.
    Mr. Woodnutt: I thank the hon. Gentleman for that reply. I am sure
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    that it will please all ex-colonial civil servants, but does not the hon. Gentleman agree that, as we constantly have these problems of one sort or another, it would be far better if Her Majesty's Government assumed responsibility for paying these pensions and reclaiming them from the Governments concerned?
    Mr. Oram: This matter was quite recently discussed during an Adjournment debate in the House, in which I stated the Government's position. We have discussed it with the Association of the officers concerned, and I am afraid that we cannot accept the hon. Gentleman's suggestion.
    Dame Irene Ward: A bad decision.
    Mr. Woodnuttasked the Minister of Overseas Development why an ex-colonial civil servant who served in the territory formerly known as Nyasaland, is eligible for a supplement under the Pensions (Increase) Act if he retired to Tanganyika but is not eligible if he retired to Nyasaland.
    Mr. Oram: With one exception the Act does not provide for the payment of supplements to pensioners who live after retirement in the country in which they served since local pensioners are not within its scope.
    Mr. Woodnutt: Does not the hon. Gentleman think that this is extremely unfair? All these colonial servants served under the same conditions of service, and they are all British subjects. Should not they all be treated in the same way? The hon. Gentleman says that the Government cannot take over these pensions, and that he has discussed this matter with the Overseas Pensioners' Association, but he did not say that that association wishes the Government to take them over.
    Mr. Oram: I thought that that was well known, as the House has discussed this matter on several occasions. The distinction is between the country where the officer served, and other countries. Although it meant creating some anomalies by drawing the line where it was drawn—and I remind the hon. Gentleman that it was drawn there by the previous Government—
    Dame Irene Ward: Alter it.
    Mr. Oram: —it is not possible to draw the line at any other point without raising much worse anomalies than those which appear to exist under this system.
    Mr. Ridley: In view of the deep disquiet felt on both sides of the House about the fairness of some of these arrangements, will the hon. Gentleman institute a thoroughgoing review of the whole system of the payment of these ex-colonial pensions to see whether he can improve on the standards that were laid down in the last Act?
    Mr. Oram: I assure the hon. Gentleman that in relation to many individual cases, and in relation to the whole question of pensions for overseas officers, the matter has been thoroughly considered by the Government, and we believe that no change is appropriate.
    Mr. Michael Foot: Henceforth, will my hon. Friend act on what might be a wiser assumption, that anything decided by the previous Government was harsh, senseless and utterly outrageous?

    Family Planning
    Mr. Patrick Jenkinasked the Minister of Overseas Development whether Her Majesty's Government will now give full support, financial and otherwise, to international programmes for the education of the peoples of the developing countries in the techniques of family planning.
    Mrs. Castle: We are ready to give sympathetic consideration to initiatives that have the agreement of the Governments of these countries and appear likely to be effective.
    Mr. Jenkin: In thanking the right hon. Lady for that reply, may I ask her to recognise that many people have been disappointed with the amount of support and encouragement given by this country to international programmes for family planning? Could she not undertake to give more wholehearted and enthusiastic support for these programmes, which many people recognise as lying right at the root of solving the problem of poverty in under-developed countries?
    Mrs. Castle: I have made clear on more than one occasion the great importance which I extend to this section
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    of the whole planning problem in developing countries. We stand, however, as did the previous Government, on the thesis that the request must come from the countries concerned. The initiative must come from them. If it does come, and from wherever it may come, we will give it our full support, whether through bilateral technical assistance or through international programmes of various kinds.

    Cocoa Producers
    Mr. Alisonasked the Minister of Overseas Development if she will take steps on a Government-to-Government basis which will assist cocoa producers in Ghana and elsewhere affected by the slump in commodity prices.
    Mrs. Castle: Although I feel great sympathy with the cocoa producers, I have, so far as my own responsibilities are concerned, no proposals to make at present.
    Mr. Alison: I thank the right hon. Lady for the sympathy that she has expressed, but may I suggest a proposal which she might consider under the circumstances, namely, the abolition of the 15 per cent. Purchase Tax on chocolates? Is she aware that the import of cocoa beans has been falling steadily, and that it is quite indefensible to finance our Budget deficit at the expense of Ghana?
    Mrs. Castle: That is not a question for me, but for the Chancellor of the Exchequer.
    Mr. Longbottom: Has the right hon. Lady had any discussions with any of her colleagues about instituting a plan in consultation with other countries, to have an international commodity agreement on cocoa?
    Mrs. Castle: That is a matter for other Ministers, who are currently considering it.
    Mr. Dell: Is my right hon. Friend aware that these matters are currently being considered in New York by the United Nations Trade and Development Board and by a council which was set up under that Board? Will she assure us that its efforts to stabilise commodity prices will have the full support of the Government?
    Mrs. Castle: I must repeat that that is a matter for other Ministers.

    Aid (Co-ordination)
    Mr. Alisonasked the Minister of Overseas Development what steps she has taken to co-ordinate British aid with other donor countries through the Development Assistance Committee.
    Mrs. Castle: We continue to play a major rôle in the Development Assistance Committee of the Organisation for Economic Co-operation and Development with representatives of other donor countries who are members of the Committee to improve the co-ordination and effectiveness of donors' aid policies.
    Mr. Alison: Since this is clearly within the purview of the right hon. Lady's Department, will she undertake, within the D.A.C., to initiate fiscal reforms inside member countries to facilitate and encourage a greater increase in the volume of cocoa bean imports to the 12 countries concerned?
    Mrs. Castle: I would have to give a little thought to whether that was appropriate to the current activities of the D.A.C.
    Mr. R. Carr: Is the right hon. Lady, within the D.A.C., giving full support to the investigation of schemes of multilateral insurance for capital investment, because that might do something to offset the Chancellor's recent measures to discourage it?
    Mrs. Castle: The O.E.C.D. has drawn up a draft Convention which has been submitted to the World Bank for its comments, and it has not yet been finalised.

    Bahamas (Adviser on Social Development)
    Dame Joan Vickersasked the Minister of Overseas Development what arrangements she is making to send a senior welfare officer to the Bahamas to help with the planning and organisation of a department of welfare for the islands.
    Mr. Oram: An experienced officer has been found for the post of Adviser on Social Development, Bahamas, and is
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    expected to take up his appointment later this month.
    Dame Joan Vickers: May I ask the hon. Gentleman how long this appointment is going to last, and whether it will be part of this officer's duty to train local personnel for work in this service? For some time there has been a Minister of Welfare without an office, or a secretary to help him, and I think that the Department should be set up properly.
    Mr. Oram: I am afraid that, without notice, I am unable to say how long this appointment will last, but I am fully confident that the functions which the hon. Lady has in mind will be fulfilled by this officer.

    Voluntary Organisations (Financial Assistance)
    Mr. R. Carrasked the Minister of Overseas Development what is the target number for overseas volunteers for the year beginning September, 1966; and what financial assistance she proposes to offer the voluntary organisations concerned in respect of that year.
    Mr. Oram: No decision has yet been taken. But we are actively considering the question in consultation with the voluntary societies.
    Mr. Carr: Is not the hon. Gentleman aware that last year these targets and financial arrangements were fixed as early as February, thus giving voluntary organisations 18 months in which to plan a very big expansion? Is not the hon. Gentleman aware that they were very much of the opinion then that any major expansion, which we all hoped would take place, must be planned a long time in advance?
    Mr. Oram: I agree that the announcement was made earlier last year, but we are in consultation with the voluntary bodies. Indeed, my officials and I spent last weekend discussing these matters with them. They are less anxious about the size than about the problems connected with the quality of the programme, the projects to be met, and so on, and it is along these lines that we are discussing the matter. They have expressed no anxiety about any undue haste in setting the targets.
    Mr. Carr: Does this mean that the arrangements for finding suitable projects and volunteers of sufficient quality are such that we cannot look forward to continued expansion on the previous scale?
    Mr. Oram: We are expecting to expand, but we also plan to put emphasis on quality as well as quantity.

    Aden and South Arabia (Aid)
    Mr. R. Carrasked the Minister of Overseas Development what was the estimated amount of aid provided to Aden and the Federation of South Arabia in 1964–65; how much this represents on a per capita basis of the population of the territories concerned; and whether she anticipates making any significant change in the amount of aid to this area in the current year.
    Mrs. Castle: During 1964–65 schemes under the Colonial Development and Welfare Act were approved for the Federation of South Arabia to a total of £2,578,000, which represents about £3 10s. per head of the estimated population. Cash issues during the year, which relate both to these and to schemes previously approved, together with assistance in other forms, excluding budgetary and military aid, amounted to £1,153,618, or about £1 10s. per head.
    Budgetary and military aid, which is the responsibility of my right hon. Friend the Secretary of State for the Colonies, amounted to £8·2 million.
    I shall be consulting my right hon. Friend about the provision of further development aid during the coming year, in the light of the total C.D. & W. provision made by the Overseas Development and Service Bill now before the House. Issues are likely to increase substantially, as schemes recently approved get under way.
    Mr. Carr: I welcome the large amount of aid which the right hon. Lady has mentioned in connection with these territories, but can she tell the House by what criterion she allocates what is a very high amount of aid compared with that which is given to many other developing countries where the needs for and the prospects of the effective use of aid are just as great? Why is it so much bigger in this area?
    Mrs. Castle: I am rather surprised at the attitude which the right hon. Member is taking. I thought that it would have been agreed by hon. Members on both sides of the House that a backlog of development work needs to be done in this part of the world. I am only sorry that in the past the issues have not proceeded more speedily against allocations. It will be my aim to speed up the allocations.

    Professional Consultancy Services
    Sir R. Russellasked the Minister of Overseas Development what was the cost of technical assistance in 1964–65 made available to developing countries in the form of professional consultancy services; and whether she will increase this amount in the coming year.
    Mrs. Castle: Full details of expenditure in 1964–65 are not yet available. In the calendar year 1964 expenditure on professional consultancy services provided for developing countries was £179,000.
    The money provided for technical assistance is not hypothecated in advance to any particular form of assistance. Expenditure on consultancy services in 1965–66 will depend upon the demand for these services, and the trend is for the demand and expenditure to increase.
    Sir R. Russell: I thank the hon. Lady for her reply. Would she agree that this service is particularly valuable in that it helps these countries to help themselves if this professional advice is given? Will she do her best to extend it?
    Mrs. Castle: This point was raised particularly with me during my recent visit to Pakistan and India, and I expressed a willingness to consider requests in this field.

    Commonwealth Projects
    Sir R. Russellasked the Minister of Overseas Development what progress has been made in defining and providing assistance for the special Commonwealth projects envisaged at the Commonwealth Prime Ministers' Conference held in the summer of 1964.
    Mrs. Castle: Senior Commonwealth officials have recently considered means of implementing this proposal, and their

    1151
    recommendations are now being considered by Commonwealth Governments. We hope that the proposed Commonwealth Secretariat will be able to play a part in furthering the scheme.
    Sir R. Russell: As this is meant to be an exercise in increasing Commonwealth co-operation as well as in giving assistance, will the right hon. Lady do her best to keep it going and to speed it up?
    Mrs. Castle: Yes. In particular, my Department is very glad that it has been suggested that the Deputy Secretary-General of the Commonwealth Secretariat should have special responsibility for economic problems. When he has been appointed my Department will keep in close touch with him in order to promote Commonwealth co-operation in this matter.

    Economic Aid (Grants and Loans)
    Mr. J. H. Osbornasked the Minister of Overseas Development if she will publish in the OFFICIAL REPORT, the total values of grants and loans made to under-developed and developed countries respectively, for the years 1959 to 1964; what was the total value of outstanding loans to the under-developed countries and the more developed countries on 31st December, 1964; what has been the total amount of interest remitted to this country and the rate of interest on outstanding loans in each of the last six years; if she is satisfied with the current position; and what proposals she has for changes.
    Mrs. Castle: The hon. Member will understand that my Departmental responsibility is limited to economic aid to developing countries. I am circulating in the OFFICIAL REPORT details of aid grants and loans since 1959, and the amounts of these loans outstanding on 31st December, 1964. Some loans to developing countries are interest-free; others are based on the rate at which the Exchequer itself has borrowed for comparable periods, but not infrequently with interest waivers and grace periods as well as capital repayment for the initial years of the loan. The rates of interest have varied, therefore, between nil and 7 per cent.
    1152
    It must be borne in mind that nearly one-half of our economic aid is in grants, and that the waivers of interest, made in a number of cases since 1963, reduce the effective rate over the whole loan substantially. The terms of our loans to developing countries are under review.
    Mr. Osborn: I thank the right hon. Lady for that detailed reply, but may I ask if she is aware that the First Secretary of State has written to private industry asking it to look at the return on its investment overseas? How does she expect this to affect her judgment on rates of interest on loans and grants overseas?
    Mrs. Castle: The terms of Government aid are a quite separate issue from that of private investment.
    Mr. Tilney: Is the right hon. Lady aware that the Budget of her right hon. Friend militates against private enterprise investment in many developing countries?
    Mrs. Castle: I cannot accept that assumption. It has not been established on the lines that the hon. Member has suggested, and my right hon. Friend has told the House that he will watch this matter.
    Mr. Chapman: Can my right hon. Friend say when she expects to make an announcement about rates of interest on Government loans to developing countries? Is she aware that we have been very patient in this matter, fully understanding her difficulties, but that it is now time that Her Majesty's Government's policy in this matter was stated in a clear form?
    Mrs. Castle: I shall certainly make the announcement at the earliest possible moment.
    Mr. R. Carr: How can the right hon. Lady say that the Budget will not have an effect on aid by private investment when it is the avowed intention of her right hon. Friend to reduce capital outflow by £100 million a year?
    Mrs. Castle: Because one of the byproducts of this tax might be that firms overseas will plough back more of their profits in the developing countries themselves.
    Following is the information:

    ECONOMIC AID TO DEVELOPING COUNTRIES* (£000)

    1959

    1960

    1961

    1962

    1963

    1964

    Bilateral Grants

    …

    …

    55,000

    57,549

    73,063

    74,090

    69,286

    81,997

    Bilateral Loans

    …

    …

    54,000

    66,645

    82,239

    69,055

    69,693

    92,484

    Multilateral Grants

    …

    …

    —

    6,200

    5,900

    6,628

    11,945

    9,426

    Drawings on I.B.R.D. and I.D.A. subscriptions

    …

    …

    21,000

    19,100

    600

    600

    6,986

    6,597

    *No financial aid was extended to developed countries during these years.

    TRIPARTITE DECLARATION
    Viscount Lambtonasked the Prime Minister if Her Majesty's Government are still committed to the tripartite agreement.
    The Prime Minister (Mr. Harold Wilson): The Tripartite Declaration of 1950 was intended to express the policy of Britain, France and the United States at that time. It has not been retracted. I expressed the Government's deep concern for the peace and stability of the Middle East when, in the course of the Foreign Affairs debate on 16th December, 1964, I endorsed Mr. Macmillan's statement of 14th May, 1963.
    Viscount Lambton: I thank the right hon. Gentleman for his reply and at the same time congratulate him on the fact that his illness was not of the type to necessitate his having a rest. Does his reply mean that England and France still stand by all the intentions of the tripartite agreement?
    The Prime Minister: However hard the hon. Member tries he will not manage to attack those who sit on this Front Bench with the vehemence he used in attacking those who preceded us. The noble Lord will realise that at the time of the 1950 Declaration there was a very different situation, in that the three Powers virtually controlled such arms movements as there were. There is now a big difference in the situation, but we feel that the statement made in 1963 is the right one for us to follow, and I give the assurance for which the noble Lord asked.
    Mr. Shinwell: Is my right hon. Friend aware that there are differences of interpretation in respect of the tripartite agreement? In the book which I understand my right hon. Friend is now reading on the Suez crisis—or what was alleged to be a crisis—he will find that President Eisenhower and the late Mr. Dulles gave a quite different interpretation from that given by Mr. Harold Macmillan or the United Kingdom Government. Will he take an early opportunity of defining the meaning of the agreement?
    The Prime Minister: I went to some lengths on this matter in the debate a fortnight ago on the Middle Eastern question. Certainly in all our contacts with Middle Eastern countries we have been emphasising—particularly in what is the most vital issue at the moment; the question of the water scheme—the need for maximum restraint by all the countries concerned.
    Mr. Grimond: Is the Prime Minister aware that it is just because the situation is so different now from what it was when the agreement was brought up that we feel that it should be renegotiated? Am I right in thinking that the agreement is an agreement to maintain the frontiers of Israel, and that if it were invoked we might be forced to go to the aid of one side or the other to put back a frontier, quite irrespective of the rights and wrongs of the initial controversy which had led to the violation of that frontier?
    The Prime Minister: The original Declaration, as the right hon. Gentleman knows, was signed at a time when the signatories could regard themselves as

    1155
    virtually the arbiters of Middle East policy. This is no longer the position today, partly because of the intervention of the Soviet Union and other countries, partly because of certain aspects of Israeli and Arab nationalism going far beyond national frontiers in the area. We regard our interest in it now as going far beyond the maintenance of particular frontiers, as the right hon. Gentleman has suggested, and certainly if the circumstances became appropriate, I am sure that there is nothing that the House would like better than to get some kind of agreement on arms supplies, arms control and the banning of nuclear weapons in that area.

    MINISTERS (LETTERS TO THE PRESS)
    Sir Knox Cunninghamasked the Prime Minister what are the current instructions to Ministers regarding the writing of letters to newspapers on subjects within their responsibilities.
    The Prime Minister: I would refer the hon. and learned Member to the Answer I gave to Questions by my hon. Friends the Members for Birmingham, Ladywood (Mr. Victor Yates) and Glasgow, Pollok (Mr. Garrow) on 9th March.
    Sir Knox Cunningham: Would the right hon. Gentleman say if his attention has been drawn to the First Secretary's letter to The Times, when he was stung into replying to criticism of his policy in that newspaper? Would the right hon. Gentleman call on his marvellous memory—or possibly on notes prepared in his office—and give us a list of the occasions in previous Administrations on which Ministers have written to the Press about their own responsibilities when in office?
    The Prime Minister: I am sorry that I have not got notes on the letter in question, but if it is the one of 22nd December to which the hon. and learned Gentleman is referring, I do happen to recall it. It was not that my right hon. Friend was stung into replying to any question about policy, it was in fact an attack on his integrity to which he replied. It has always been the policy for Ministers to have the right to do that. If the hon. and learned Gentleman
    1156
    wishes me to tax my memory further, I can remember some very powerful articles, and interviews, as well as letters, written on policy matters by right hon. Gentlemen opposite—a number, if I remember rightly, in the News of the World, though I think that the Daily Mail got a share of them as well.
    Sir Knox Cunningham: Is not the right hon. Gentleman aware that the Minister of Education—
    Mr. Speaker: Order. Mrs. Kerr.

    MINISTERS (CORRESPONDENCE)
    Mrs. Anne Kerrasked the Prime Minister if he will request all Ministers to ask their Departments to provide them with an analysis of all correspondence on subjects within their responsibilities.
    The Prime Minister: It is for Ministers themselves to give whatever instructions they think necessary to ensure that they are informed of matters within their responsibility.
    Mrs. Kerr: Does my right hon. Friend feel that this method of democratic channelling is being fully utilised by his Ministers at this time? Will he ask them to see correspondence relating to problems, which are coming in in large numbers, particularly on the question of Vietnam and the needs of very elderly people who are not receiving pensions?
    The Prime Minister: I do not think it is necessary for me to draw the attention of Ministers to the need to have an analysis made of correspondence. Where the correspondence is light, the Minister is able to read every letter. In any case it would, I think, be automatic that there would be summaries of this kind. Certainly I get a summary in my own Department. I can assure my hon. Friend that the priorities in my correspondence—which ought to be a pretty fair guide—do not quite follow the priorities she has laid down.
    Sir W. Bromley-Davenport: If all of the right hon. Gentleman's correspondence were produced, would not it prove to be a red-letter day?
    The Prime Minister: I think it a very good thing that the House is shortly to have a holiday so that we may have time

    1157
    to appreciate all the more the inner witticism of the hon. and gallant Gentleman's remark. I should say that I miss from my correspondence any regular letters from the hon. and gallant Gentleman. I know that he is one of the more literate of the hon. Members of this House and I should like to hear from him more often.

    EUROPEAN FREE TRADE ASSOCIATION AND COMMON MARKET
    Mr. Martenasked the Prime Minister what steps he is taking within the machinery of Government to increase the bridge-building between the European Free Trade Association and the Common Market.
    The Prime Minister: I would refer the hon. Gentleman to Answers I gave to Questions on this subject on 25th February and 6th April.
    Mr. Marten: While we would all agree that aviation is a very desirable form of co-operation, would not the Minister agree that so much has been said about aviation co-operation in these days almost to the exclusion of other matters? Would he consider setting up a council, on the lines of the Export Council, consisting of businessmen, industrialists and Government representatives, to keep under permanent review such opportunities for bridge-building between the Six and the Seven as we may have?
    The Prime Minister: As the hon. Gentleman will be aware, there is an export council for Europe which is functioning together with the export councils in that area, and they are doing very valuable work. I hope that in the past few weeks we have shown that any opportunities for bridge-building of this kind have been seized upon. As I said in the Answers to which I referred when answering the Question today, it will be a matter for us to discuss with our E.F.T.A. partners what can be done to build bridges between the two trade groups, quite apart from bilateral bridges.
    Mr. Orme: Will my right hon. Friend bear in mind that many of us on this side of the House consider that the most important bridge to be built is between
    1158
    this country and the British Commonwealth?
    The Prime Minister: Yes, Sir. This is a matter which I have often emphasised from both that side of the House and from this side. We are hard at work to see what can be done to stop the rot and decline in trade between Britain and the Commonwealth.
    The Earl of Dalkeith: Since the Prime Minister seems so anxious to use the happy cliché of bridge-building, will he say what steps he is going to take to repair some of the boats he burned as between E.F.T.A. and ourselves on account of his import surcharge?
    The Prime Minister: The cliché in question was taken from the Order Paper. I thought it only courteous to use it. It is in any case a very useful one. If the noble Lord wishes us to refer to the digging of tunnels, I have used that particular cliché myself in Paris, but hon. Members, noble Lords and right hon. Members really cannot go on for ever living on the memories of the difficulties of the first few weeks after we took office, with what they left us.

    HOUSE OF LORDS
    Mr. William Hamiltonasked the Prime Minister whether he will initiate legislation to curb the delaying powers of the House of Lords in respect of legislation.
    The Prime Minister: The need for such legislation is at present hypothetical. If the need were to arise, I would not think it right to propose any change in the constitutional position without first seeking an electoral mandate.
    Mr. Hamilton: Is my right hon. Friend aware that the hypothetical situation may be translated into reality within a few hours? If it is, will my right hon. Friend be assured that everyone on this side of the House and most of the people in the country will support him in the ruthless action that he may take to liquidate the Lords?
    Mr. Speaker: Order. The basis of the question being hypothetical, it is out of order.

    HER MAJESTY THE QUEEN (VISIT TO WEST BERLIN)
    Mr. Rankinasked the Prime Minister whether, in advising the Sovereign to accept an invitation to pay an official visit to the Federal Republic of Germany, Her Majesty's Government took into account the fact that a visit to West Berlin was likely to be arranged; and if he will make a statement.
    The Prime Minister: Yes, Sir. The initiative in advising a visit to West Berlin came from Her Majesty's Government.
    Mr. Rankin: In view of the fact that the City of Berlin is 100 miles within the Communist frontiers, was it not always a possibility that the presence of the Queen in West Berlin might intensify political differences? If these should become worse, would my right hon. Friend reconsider this part of the visit in conjunction with the West German Government?
    The Prime Minister: While it was the previous Government who advised Her Majesty to visit Germany, I take full responsibility for the later advice that she should visit Berlin. So far as advertising differences or being provocative is concerned, I cannot agree with my hon. Friend. Less than three years ago I led what was, I think, the biggest delegation abroad from this House—over 40 hon. Members. I am sure that all those who went there would feel that the visit of Her Majesty on the advice of Her Majesty's Government would be a reassurance to the people of West Berlin and a sign of our determination to preserve their rights.
    Sir Alec Douglas-Home: Is the Prime Minister aware that the visit of Her Majesty to West Berlin would be no excuse for the Communist Powers to make any demonstration of any kind? In view of the wide anxiety in the country about this visit, no doubt the right hon. Gentleman would not hesitate, should he feel it right to modify his point of view, to come to the House for support? I hope that he will not have to do so.
    The Prime Minister: The right hon. Gentleman is correct. If we felt that there was any danger or anything which
    1160
    was inappropriate, we should not hesitate to modify the advice which has been given, although, as the House will know, President ennedy and other Heads of State have visited as a perfectly normal part of the visit by a Head of State.
    Mr. Rankin:Is my right hon. Friend—
    Mr. Speaker: I think we must pass on.

SOUTH ARABIAN FEDERATION (INCIDENT, ADEN-DHALA ROAD)
Mr. J. Ameryasked the Secretary of State for Defence whether he will make a statement on the incidents in the South Arabian Federation, when two British Service men lost their lives and a number of others were wounded.
The Deputy Secretary of State for Defence and Minister of Defence for the Army (Mr. Fred Mulley): The Army is at present engaged on a programme of road construction and bridge building on the road from Aden to Dhala. This work is of considerable civil and military importance to the Federation of South Arabia. It is being undertaken by Engineer units of the Regular Army, assisted since the beginning of April by 300 men from 131 Parachute Regiment (Royal Engineers) (Territorial Army) who have been doing the work as part of their annual training of 15 days.
In the middle of last Saturday night one of the camps these troops were occupying was attacked with rocket and small arms fire. I regret to inform the House that as a result of this attack a warrant officer of the T.A. unit and a sergeant of the Royal Army Pay Corps were killed. Two members of the T.A. unit were wounded and three Regular soldiers, one of them severely. The next-of-kin have been informed.
I know that the House will wish to join me in expressing sympathy with the families concerned.
Mr. Amery: While joining with the hon. Gentleman in expressing our sympathy to the families concerned, may I ask the right hon. Gentleman whether he or the Colonial Secretary can tell us

1161
whether this is a new dissident movement, or one of the dissident groups with which we were already engaged?
Mr. Mulley: I am asking for a full report of the incident, which has not yet reached me. Questions to my right hon. Friend the Secretary of State for the Colonies would be outside the scope of this Question. The right hon. Member will know that my right hon. Friend dealt to some extent with this problem in reply to a Question on 1st April.
Mr. Paget: Will my hon. Friend find out whether this attack was carried out with Egyptian weapons and by a force organised and supported by Egypt? If it turns out to be so, will he take the necessary measures?
Mr. Mulley: The main difficulty in trying to meet my hon. and learned Friend would be to capture the weapons. I am not at all sure that that is likely to be possible.
Mr. Paget: The Minister knows what came—the missiles. Will that not tell him where they came from?
Mr. Goodhart: Is the Minister aware that training in Aden has been very popular with the Territorial Army, and that a decision to cancel any further training schemes as a result of this tragic incident would be badly received? Can the Minister say whether the dependants of the Territorial soldier who was killed will receive the same pension as those of a Regular soldier?
Mr. Mulley: I can confirm, in answer to the second part of the question, that Territorial soldiers are treated exactly as Regular soldiers for pay and pension purposes.
On the first part, I reconsidered very carefully the decision taken some while ago for this T.A. unit to go to Aden in the light of recent developments. I came to the conclusion that, in view of the value of their work, I did not feel that the Territorials would want to be precluded from going because of the increase in tension. I value the hon. Member's assurance that the Opposition agree that, where appropriate, Territorial units should be used in these circumstances.
Mr. Edward M. Taylor: As the warrant officer who was killed was a
1162
constituent of mine and personally known to me, and was a Territorial soldier on Army annual camp, would the Minister agree, in the special circumstances, if the family desired it, to fly the body home?
While we appreciate the value of having annual training camps abroad, would the Minister look again at the question of units going to places of extreme danger?
Mr. Mulley: I did not take the view that this location—working on this road—was particularly dangerous, although at present our troops are unfortunately liable to be attacked in Aden proper or any part of the Federation. We could not have guaranteed that such an incident would not occur. My view is that the Territorial Army would not wish to be precluded because of the possibility of danger.
I should like to consider the first part of the hon. Gentleman's question. I will keep in touch with him.
Mr. Amery: Can the hon. Gentleman tell us whether this is an area which was previously disturbed, or an area which was formerly regarded as peaceful?
Mr. Mulley: The work and the base camp which was attacked were on the southern part of the Dhala-Aden road. This has been relatively quiet in recent months. The camp was set up on 1st February and there has been no incident until the most unfortunate events of last Saturday, except for the discovery of a mine on the road some weeks ago.

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 the first week after the Easter Recess.
The Lord President of the Council (Mr. Herbert Bowden): Yes, Sir. The business for the first week after the Easter Recess will be as follows:
MONDAY, 26TH APRIL—Second Reading of the Redundancy Payments Bill.
TUESDAY, 27TH APRIL—Private Members' Motions until seven o'clock.
Afterwards, the remaining stages of the Teaching Council (Scotland) Bill.
WEDNESDAY, 28TH APRIL—Second Reading of the Commons Registration Bill [Lords].
Remaining stages of the Development of Inventions Bill.
THURSDAY, 29TH APRIL—Supply [15th Allotted Day]: Committee.
Debate on a subject to be announced later.
As the House is aware, the Chairman of Ways and Means has set down opposed Private Business for consideration at seven o'clock.
Afterwards, the remaining stages of the Firearms Bill.
FRIDAY, 30TH APRIL—Private Members' Motions.
MONDAY, 3RD MAY—proposed business will be: Second Reading of the Race Relations Bill, and the remaining stages of the Criminal Evidence Bill.
Sir D. Renton: May we take it that the Report stage of the Firearms Bill will start at a reasonable hour? Could the Leader of the House give us an undertaking about that and say what time it will start?
Mr. Bowden: Yes, Sir. It is hoped that the opposed Private Business down for
1164
that day will finish long before ten o'clock, which will give reasonable time for the Firearms Bill. The majority of Amendments to the Firearms Bill are to meet Opposition points. There should be reasonable time.
Mr. Sharples: Is the Leader of the House aware that we appreciate that there may have to be a large number of Government Amendments to the Firearms Bill? As I informed the Home Secretary, we did not put down Amendments until the Government Amendments had been tabled, but there will be Opposition Amendments and the Report stage may take longer than he thinks.
Mr. Bowden: We shall watch the position, but I think that there will be a fair amount of time.

SITTINGS OF THE HOUSE
Mr. Bowden: House to meet on Thursday at Eleven o'clock; no Questions to be taken after Twelve o'clock; and at Five o'clock Mr. Speaker to adjourn the House without putting any Question.—[Mr. Bowden.]
ADJOURNMENT (EASTER)
Mr. Bowden: House, at its rising on Thursday, to adjourn till Monday, 26th April.—[Mr. Bowden.]

STRENGTHENING OF MARRIAGE
3.40 p.m.
Mr. John Parker: I beg to move,
That leave be given to bring in a Bill to enable a further marriage to be contracted by either spouse when a separation has persisted for five years.
The House gave me leave towards the end of the last Parliament to introduce a Bill on rather similar lines to the one which I am proposing to introduce today. I say at the outset that the law on marriage needs drastic alteration to meet the needs of the present day. Since it was made known that I proposed to introduce this Measure. I have received many heart-rending letters from people throughout the country who wish to marry in order to legitimise their children, something which they cannot at present do because of our marriage laws.
A great deal has been made of the fact that there has been a big increase in the number of illegitimate births in recent years. I submit that this has been largely due to the fact that a large proportion of the population does not accept the present marriage laws as being reasonable.
At present, about 40 per cent. of illegitimate births—these figures are for last year—are in stable "families"; that is, families in which the man and woman live together and are endeavouring to bring up their children as members of a family unit. If one considers the number of illegitimate babies born to women over the age of 25, well over two-thirds of that number are born to women in such stable "families."
The trouble is that at present these unions are, to all intents and purposes, de facto but not legal marriages. Remarriage is possible after three years' desertion and I suggest that it should also be possible after five years separation. Why five years? I suggest, first, that if one considers the expectation of the average adult life—that is, people between the ages of 20 and 70—then one-tenth of that time would seem a reasonably long period to have to wait in order to go in for a second marriage if the first one has been a failure.
My second argument in favour of this period of five years is that if a second marriage is to have a reasonable chance
1166
of success it is desirable that it should take place before the parties to it are too old.
Hon. Members may be interested to learn that this is the law in Australia. Since 1959, when the Australians decided to have a Federal law covering marriage, this has been the law in that country. It was decided then to adopt what had been done in Western Australia for many years. Because this marriage law in Western Australia had been found to be such a success it was decided to adopt it for the country as a whole.
Our learned Archbishop has stated that we should discuss whether or not we should end marriage by consent. I personally believe that that is not the problem at all. If people jointly wish to end a marriage they have no difficulty in doing so. All that they have to do is to arrange for one of the parties to commit adultery, or to appear to have committed adultery. There is no difficulty about ending a marriage by consent. The real difficulty is the problem of ending a marriage without the consent of the other party if that other party tries to stop the legal marriage being ended in this way.
This raises some questions of great importance. The first is the moral question whether or not one should continue to treat the guilty party differently from the innocent party when a marriage breaks up. I take the view that that should not be the criterion on which one should judge whether or not a marriage should be ended. It takes two to make a marriage and two to break one. We should, therefore, not take this issue of whether or not one party is guilty as being a legitimate reason or not for allowing a divorce.
If the parties have been living together for a long time that is a good reason for allowing them to make their marriage legal and not have to continue with a merely de facto marriage. For there is no real marriage at present if the parties who are legally bound are not living together. Surely living together is an essential part of a real marriage.
The second objection might be on religious grounds. I submit that the marriage laws of any community should meet the needs of all the people in that community, irrespective of their religious

1167
beliefs and should not represent only the views of one section of the population. Our marriage laws should meet the needs of Catholics, Anglicans, Congregationalists, Methodists, Humanists, Jews and all religious denominations in the community. At present, our marriage laws do not do that.
I recommend to the House the views expressed on this matter by Archbishop Cranmer, who believed that if a marriage broke down the sooner it was ended the better so that both parties could set about building new marriages. That view has been held by many people since then in this country and I submit that it is very widely held today.
About one-tenth of our population are regular churchgoers. Even if all the churchgoers in the community wished to keep our present marriage laws I suggest that that would be no reason why their views should be allowed to dictate to our society. What right has one ex-partner to refuse the right of remarriage to the other ex-partner? If one ex-partner is opposed to a second marriage that ex-partner need not remarry, but he or she should certainly not have the right to veto the right of remarriage of the other. This is a form of religious persecution. There should be no room in the marriage laws of this country for religious persecution today.
Only too often an ex-partner to a marriage wishes to have revenge upon the other ex-partner. Such revenge is often gained by preventing what would otherwise be a happy remarriage from taking place and, in too many cases,
1168
an ex-partner will take the view that because a success has not been made of their first marriage a second marriage should not be permitted. That attitude is thoroughly wrong and should not be encouraged by the law.
I appreciate that the important problem of the children in such circumstances must be considered, although I submit that that problem is a separate issue. It is desirable that the problem of children in all fatherless families, should be treated as a common problem, whether the reason for fatherlessness is caused by divorce, a wife having been deserted, because the woman has been widowed, or because a mother wishes to bring up her illegitimate child or children on her own.
This is a problem which my right hon. Friend the Chancellor of the Duchy of Lancaster should be tackling as part of his review of the social services. There should be a common approach to the whole question of fatherless children. Their needs—especially financial ones—are largely alike.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Parker, Mr. Marcus Lipton, Mr. Michael Foot, Mr. Taverne and Sir Barnett Stross.

STRENGTHENING OF MARRIAGE
Mr. John Parker: Bill to enable a further marriage to be contracted by either spouse when a separation has persisted for five years, presented accordingly and read the First time; to be read a Second time upon Friday 30th April and to be printed.
ORDERS OF THE DAY

  WAYS AND MEANS [6th April]
  Resolutions reported,
  [For particulars of Resolutions, see OFFICIAL REPORT, 6th April, 1965; Vol. 710, c. 296–311.]
  Question, That this House doth agree with the Committee in the said Resolution, put forthwith on each Resolution, pursuant to Standing Order No. 90 (Ways and Means Motions and Resolutions).
  First to Twenty-first Resolutions agreed to.

  FINANCE [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session relating to finance, it is expedient to authorise—

  (a) any increase in the sums to be issued out of the Consolidated Fund or in the moneys to be raised under the National Loans Act 1939 which is attributable to any provision of the said Act of the present Session increasing the limit in section 2(1) of the Miscellaneous Financial Provisions Act 1950 on the sums which may be advanced to the Exchequer of Northern Ireland by way of loan under that section;

  (b) the payment out of moneys provided by Parliament of the expenses of making to operators of stage carriage services payments, limited to sixpence for every gallon of fuel used or estimated to have been used in operating any such service after the commencement of section 2 of the Finance (No. 2) Act 1964, towards defraying customs or excise duty charged on such fuel;

  (c) in connection with any new provision for the taxation of companies and company distributions, the making to companies of payments out of moneys provided by Parliament with a view to offsetting such increases in the total taxation charged on any trading income of the company and dividends paid by the company as may be expected to result from reductions in the credit allowed to the company for overseas taxation on its trading income; and

  (d) the payment out of moneys provided by Parliament of grants for affording relief from tax (including, in such cases as may be provided by the said Act of the present Session, tax in respect of periods before the passing of that Act) to housing associations not trading for profit whose functions consist of or include the provision
  1170
  of housing accommodation for letting or hostels, being tax in respect of rent or other receipts accruing to such associations in consequence of the exercise of that function.

  Resolution agreed to.

  WAYS AND MEANS [12th April]
  Resolution reported,

  AMENDMENT OF THE LAW
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance, so, however, that this Resolution shall not extend to making—

  (a) amendments of the enactments relating to purchase tax so as to give relief from tax, other than amendments making the same provision for chargeable goods of whatever description, or for all goods to which any of the several rates of tax at present applies;

  (b) amendments of the provisions of the Finance (No. 2) Act 1964 relating to temporary charges on imports so as to give relief from the duty imposed by those provisions, other than amendments making the same provision for all goods chargeable with that duty.

  Resolution read a Second time.
  Question, That this House doth agree with the Committee in the said Resolution, put forthwith, pursuant to Standing Order No. 90 (Ways and Means Motions and Resolutions), and agreed to.
  Bill ordered to be brought in upon the said Resolution and upon the other Resolutions reported from the Committee of Ways and Means and the Resolution reported from the Committee on Finance [Money] and agreed to this day, by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Diamond, and Mr. MacDermot.

  FINANCE (No. 2)
  Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance, presented accordingly and read the First time; to be read a Second time Tomorrow and to be printed. [Bill 128.]

  AIRCRAFT PROJECTS (CANCELLATION)
  3.55 p.m.
  Mr. Christopher Soames: I beg to move,
  That this House deplores the action of Her Majesty's Government in cancelling the TSR2 project, believing that this decision, following on the cancellation already announced of the HS681 and the P1154, will have grave effects on the future of the British aircraft industry and on the development of science-based industries, while denying to the Royal Air Force these advanced weapon systems; and strongly deprecates the method which Her Majesty's Government chose for announcing their decision to this House.
  Mr. Speaker: It is probably convenient that I should indicate that the Amendment standing in the names of the right hon. Member for Orkney and Shetland (Mr. Grimond) and other hon. Members is not selected.
  Mr. Soames: It would be in the tradition of the House if I were at once to declare a personal interest, in that I am associated with a firm that was connected in a minor way with the TSR2 project.
  The three major points of criticism in our Motion are the effects which the cancellation of the TSR2, coming after the cancellation of the HS681 and the P1154 will have, first, on our defences, and, secondly, on the aircraft and associated industries. The third point is the manner in which the announcement was made to the House.
  To deal, first, with the manner of the announcement, we feel most strongly that if the right hon. Gentleman the Secretary of State for Defence had wished to deal fairly with the House on a matter of such importance as this, he would have made a statement after Questions one day, which would have enabled both sides of the House to cross-question him upon it. The House would then have been entering on this debate today with much more information available to it. As it is, we only have the information which the right hon. Gentleman chose and saw fit to give in the body of his statement.
  Furthermore, as far as I have been able to discover, there is no precedent for an announcement affecting a particular major item of defence expenditure being made, in the first instance, in the Budget speech, let alone for the Secretary of
  1172
  State for Defence to intervene in the Budget debate to make an announcement, many aspects of which were far removed from matters financial.
  Why was it done in this way? Our interpretation is that the Government knew that both this decision and the Budget would be unpopular and would give rise to much criticism, and it was, therefore, politically advantageous to them to wrap up the two together on the same day. While no one would deny to the Government the right to organise their affairs in such a way as to attract the minimum of public criticism, they should not take this to the point of denying to Parliament the right to question the Government at the time of the announcement.
  In this instance, the right hon. Gentleman used Parliament as nothing but a platform to make his bare announcement. We were not given the opportunity which the Press conference had—to which the right hon. Gentleman hurried after making his announcement—to question him. I wonder what sort of reception he would have had from the Press if he had used that conference merely to make the statement and to deny Pressmen the opportunity to ask questions? This is exactly what he contrived to do to Parliament. As I said at the time, it amounted to a cynical contempt of Parliament, and it deserves censure.
  I now move to the military aspects of the decision to cancel these three aircraft, and I want, first, to deal with the P1154 and the HS681. When, on 9th February, we debated the cancellation of these two aircraft, the burden of the Government's case rested on the time scale. The Secretary of State for Defence quoted the 14 or 15 years in which our existing Beverleys, Hunters and Canberras would have been in service before the new aircraft took over from them. He said that it would have been criminal for any Government to ask the Royal Air Force to continue to fly these aircraft for so long. The picture he painted was of the Air Staff forming up and begging him to cancel these new aircraft and buy something else to keep them flying, even if that was very much the second best. In fact, the story was very different.
  First, we must remember that when a new type of aircraft comes into service,

  1173
  it is phased in over a number of years, so that the fact that a type of aircraft may have been in service for X number of years does not mean that any individual aircraft has been flying for that time. Secondly, it is open to the R.A.F., which is really master of its craft, to stretch an aircraft's life, within limits, by regulating its flying hours. In any event, in view of the great cost of modern aircraft, we want to get the longest possible life out of every type in service, and that becomes even more the case as the cost of producing new types rises, taking account both of its serviceability and also its operational performance in relation to any likely opposition. So, both on this account and to take advantage of ever-developing technology, it is advantageous to close the development order for each new project as late as possible.
  Of course, this involves calculating military risks and weighing them against the financial and technological advantages gained by delay. Certainly, it can be argued that in a perfect world the P1154 and the HS681 would have come into service a year or 18 months earlier than the dates ruling at the time of cancellation. The point at issue is whether the risks involved in delay beyond this utopian time, as it were, were or were not acceptable. We say that here the Government have taken the wrong decision, primarily because they failed to give sufficient weight to the relative capabilities of the new aircraft compared with the alternatives they were offered by the United States.
  The vital factor here is vertical- or short-take-off-and-landing. This is by far the biggest development between our existing and what was to be our next generation of aircraft. It was always, in the opinion of our military advisers when we were in power, an essential feature of the requirement. In the debate on 9th February the Secretary of State for Defence gave the impression that he had totally failed to appreciate the full significance of this when he brushed it aside with the remark that the phantom
  "lacks only vertical take-off and landing capability". —[OFFICIAL REPORT, 9th February, 1965; Vol. 706, c. 331.]
  "Only", indeed. V.T.O.L. and V/S.T.O.L. revolutionise military strategy in every theatre of war and bring boundless advantages to the possessor.
  1174
  More than once we put to our military advisers that if we were to sacrifice this then replacements would come sooner. They were adamant that we would not be right to forfeit the V/S.T.O.L. capabilities. The reasoning for this is quite simple. Owing to the sophistication and accuracy of modern methods of attack, airfields with a 3,000-yard runway are becoming ever more vulnerable, and will continue so to do. This puts at risk the operational ability of aircraft which are tied to the use of such airfields. It follows that fighting aircraft should be V. or S.T.O.L., so that they may be dispersed in penny packets over a number of small strips into which and out of which they can operate.
  If they are to be able to do this, they must be supplied with fuel, spares, ammunition, and so on, on those very strips. Hence the need for S.T.O.L. transport aircraft which can fly in and out of those same strips. If the transports are not S.T.O.L., and are tied to long runway airfields, not only does this fact itself make them more vulnerable, but we then require long land, or even sea and land, communications to take supplies forward from the airfield to the strips and thus both increase risks and sacrifice flexibility.
  The P1154, the HS681, and the TSR2 as well, were, therefore, interdependent, as it were, and each an integral part of the V/S.T.O.L. family of aircraft needed in the 1970s for strike, defence and supply with a high survival capacity. What is the right hon. Gentleman putting in the place of the P1154 and the HS681? He has put three aircraft, the P1127, the Phantom and the Hercules. Let us look at the military effects of this. The right hon. Gentleman tells us that the P1127 is to have—of course, it has not anything like it at the moment, but will have once it is up-engined—operational S.T.O.L. capabilities and be able to use the short strips. But it will be interesting to know what degree of engine thrust must be put into this aircraft to have a V.T.O.L., or even an S.T.O.L., capability and carry an operational load.
  At the moment, it is totally inadequate with a thrust of 12,000 lbs., or of that order. But the P1127, given that it can be operational and dispersed on these airstrips, cannot be supplied on those strips by air. So half the advantage is

  1175
  lost. Furthermore, it will be subsonic and have to rely at all times on air cover from Phantoms which themselves will be tied to the large airfield further back. Again, we have lost the essential flexibility in a battle. Then, of course, both the Phantoms and the Hercules will be based on large airfields which are highly vulnerable. So it would be the greatest mistake if anyone should think that the issue confronting the House today is merely a question of substituting one aircraft for another. By cancelling two V/S.T.O.L. aircraft and buying others without that capability the Minister is to lose the strategic and technical advantages which flow from this.
  Since we must assume that these aircraft are to have a life of 10 to 15 years, the Government have denied these untold advantages to our forces until the 1980s. Knowing the enormous importance which the Defence Staff attached to this—indeed, the staff were adamant upon it—I cannot believe that they accepted this serious downgrading except under grave duress. What must have happened is that they were told by the Government that the Government had decided to cancel the HS681 and the P1154, that this was irrevocable, and they were offered the Hercules and the Phantom on a take-it-or-leave-it basis. It was like saying to a man that he could not have a rifle whether he would like it or not, but would he care to have a bow and arrow.
  Turning from the fighter and transport aircraft to the TSR2, just as the Phantom and Hercules fall short in many respects of their military requirements, so, also, will the F111. This aircraft as it now is lacks many of the avionics which are vital for strike and reconnaissance in modern war. But, says the right hon. Gentleman, it is the Mark 2 that we shall be getting and this will have the avionics in it. I wish to ask some questions on this.
  First, have the Americans given a firm date of delivery for the Mark 2? Has it been funded and is it firmly in the U.S. programme? Has it been put through Congress yet? Secondly, is the right hon. Gentleman satisfied that terrain following, navigational accuracy and bombing delivery systems in the F111 will be such as to meet the staff require-
  1176
  ments laid down for the TSR2? Thirdly, what about reconnaissance?
  Even given, which I doubt, that the F111 could satisfy the requirements of the T and the S of our TSR2, what about the R, for it is not a reconnaissance aircraft? The Americans have other aircraft to do this job. I understand that it will not have sideways-looking radar, line scan or moving target indicators, all of which are essential for all-weather reconnaissance.
  All sorts of aircraft with primitive equipment can be used for reconnaissance in good weather, but in bad weather reconnaissance, which is an essential feature of modern battle, there must be very sophisticated equipment. Space is essential in aircraft design. I understand that the Mark 2 is to have the same airframe as the Mark 1. Was the Mark 1 designed to leave enough room for all these electronic devices which are not included in it? Whatever else it may have, the Mark 2 will not have the capability for all-weather reconnaissance. Will the right hon. Gentleman tell us, when he replies to the debate, what aircraft will be available to the R.A.F. for all weather reconnaissance in the late 1960s, when the Canberras and the V-bombers are no longer in service, a function which the TSR2 would have performed? The right hon. Gentleman knows the answer. There will be none, but perhaps he is hoping that his defence review will show him that reconnaissance is no longer a requirement of modern war.
  The Government have not decided to order the F111. There is talk that the R.A.F. may be made to take a jazzed-up Buccaneer, but that is way behind any single feature of the operational requirement for the TSR2. To begin with, it was designed as a low-level aircraft to fly over sea and not over land, so its gust response, which is far greater over land, is thoroughly bad. Neither is it supersonic. So if it goes up it will be shot to pieces by fighters, and if it stays on the deck it will be bounced to pieces. Anyway, its navigation, attack and reconnaissance systems just do not compare in any respect with the requirements of the TSR2.
  So it would seem to us that both in regard to the Hercules and the

  1177
  Phantom, which they have ordered, and in regard to any other aircraft they may order to take the place of the TSR2 for the latter part of this decade, the Government have seriously downgraded the staff requirements and that the R.A.F. will not now be able to fulfill certain functions which up to October of last year the Government's professional advisers insisted were essential.
  It is not agreeable ever to talk of war, but in a defence debate we must think of these possibilities. Supposing we were involved in a localised war in the Far East in the early 1970s, how would the right hon. Gentleman like to explain to our soldiers that the reason that they were under constant air attack was because their protective air umbrella, Phantom-based, had been put out of action, and he had cancelled the P1154? How would he like to explain that our own battlefield strike air power was spasmodic owing to lack of logistics because the C130 lumbering propellered transports had been denied the use of the supply airfield which was targeted by the enemy, and he had cancelled the HS681?
  How would the right hon. Gentleman like to explain that the enemy supplies and reinforcements were unimpeded because it was raining and we had no all weather reconnaissance ability, and he had cancelled the TSR2? And, worst of all probably, how would he like to explain that we were in danger of having to escalate into nuclear war because our conventional deficiencies had proved so serious, and he had cancelled all three aircraft? This is the order of gravity of the military decision that he has taken to cancel this whole family of aircraft.
  The Government's decision to cancel the TSR2 came as no surprise to us on this side of the House. We always knew that they would do it if they won the election. As must be fresh in the mind of the hon. Member for Preston, South (Mr. Peter Mahon), my right hon. Friend the Member for Preston, North (Mr. J. Amery), who was then Minister of Aviation and, therefore, had great concern for these matters, told the people of Preston beyond peradventure that, if the Labour Party won the election, it would cancel the TSR2. Apparently the hon.
  1178
  Member for Preston, South did not believe him and he issued the famous, or infamous, leaflet averring categorically that Labour must not cancel it. He must be worried at having so misled his constituents. We look forward to hearing his views on this serious matter, if he is lucky enough to catch your eye, Mr. Speaker.
  Mr. Peter Mahon: I am grateful to the right hon. Gentleman for giving way. I hope that his subsequent statements will have more veracity than the statement he has just made, namely, that I issued the leaflet. Nothing could be further from the truth. This is a calculated lie.
  Hon. Members: Oh.
  Mr. Speaker: The expression "lie" must be withdrawn. It would require a substantive Motion.
  Mr. Peter Mahon: I do not attribute that statement—I have not attributed that statement—[HON. MEMBERS: "Withdraw."] I have not attributed this statement—
  Mr. Speaker: If the hon. Gentleman explains to me that he was not making it with regard to any conduct or words of the right hon. Member for Bedford (Mr. Soames), of course I accept it. I thought that that was what he was saying.
  Mr. Peter Mahon: Thank you, Mr. Speaker. Actually, this statement which has been issued, and to which the right hon. Gentleman has given voice today, is entirely wrong and it does me a severe injustice. In my own interests, I had to take—
  Mr. Speaker: Order. It is rather hard lines on the right hon. Gentleman who is in possession of the House for this intervention to be so prolonged. The hon. Gentleman will understand this.
  Mr. Soames: All I was saying was that we look forward to hearing the hon. Gentleman explaining this to the House, if he is lucky enough to catch your eye in the debate, Mr. Speaker. If the hon. Gentleman really believed that the Labour Party would not cancel the TSR2, he must have been exceptionally naïve politically. We all knew that it would, for two reasons: first, because it had a nuclear—
  Mr. Simon Mahon: On a point of order. The right hon. Member for Bedford (Mr. Soames), whether he likes it or not, has quoted an article—I suppose it is the Daily Express of yesterday's date. The name of my hon. Friend the Member for Preston, South (Mr. Peter Mahon) is especially mentioned. I wish to state that this is not true, that the agent, James Page, is not—[HON. MEMBERS: "Order."] This is a most serious thing.
  Mr. Speaker: What is serious is that the hon. Gentleman rose to a point of order. If so, it must be a point of order with which he is concerned, otherwise it is just cheating. What is the point of order?
  Mr. Simon Mahon: I am grateful to you, Sir, for your Ruling. Is it not a fact that if a statement has been made which is erroneous and out of order it should be withdrawn by the right hon. Gentleman?
  Mr. Speaker: Order. I do not propose to hear any more. The hon. Gentleman and the House must understand that corrections of statements of fact alleged to be inaccurate or in fact inaccurate do not raise points of order for the Chair. It should not be imagined that they do, otherwise we shall not get rid of this tiresome form of cheating.
  Mr. Soames rose—
  Hon. Members: Withdraw.
  Mr. Soames: I certainly do not withdraw it. I have in my possession the leaflet, and doubtless the hon. Member for Preston, South will explain how it came to be made public.
  I was saying that there were two reasons why we were certain—
  Mr. E. Shinwell: I may have misunderstood the right hon. Gentleman, but apparently he suggested that my hon. Friend the Member for Preston, South (Mr. Peter Mahon) issued a leaflet. Does he stand by that?
  Mr. Soames: I have in my possession a leaflet which was issued in the Preston constituency, which was printed by M. Bottomley, of Tenterfield Street, Preston, and the responsibility for publication rested with Mr. James Page, of Deepdale Road, Preston. The hon. Gentleman can
  1180
  explain this. The impression which the whole country has is that this was a leaflet issued by the Labour Party in Preston. The hon. Gentleman will have an opportunity to correct that impression later, if he catches your eye, Mr. Speaker.
  Mr. Sydney Silverman: On a point of order. The right hon. Member for Bedford (Mr. Soames) made a statement, which I am sure he sincerely believed, but it was a statement of fact about another hon. Member. That other hon. Member has intervened to deny that this was a fact attributed to him. Ought not the right hon. Gentleman to accept that denial?
  Mr. Speaker: As far as I know, there is nothing unparliamentary about saying, accurately or inaccurately, that somebody has issued a statement or a pamphlet. The House will have heard the hon. Gentleman's denial and the right hon. Gentleman's assertion.
  Mr. Soames: I should not like to do any injustice to the hon. Member for Preston, South. That is the last thing that I would wish. I can only tell him that to the best of my knowledge this was issued by the Labour Party in Preston, for which I imagine he had some responsibility during the election campaign. Further than that I do not think I should go into this matter.
  Mr. Peter Mahon rose—
  Hon. Members: Give way.
  Mr. Soames: The reasons why we knew that the TSR2 would be cancelled if the Labour Party got into power were twofold. The first was that it had a nuclear capability and that was enough to horrify the Prime Minister. He was going to have difficulty enough disposing of Polaris submarines in a way which would satisfy his C.N.D. supporters without having another nuclear weapon system on his hands. The second reason was that the Paymaster-General has always been against the TSR2. Indeed, he tabled a Motion critical of it, together with his hon. Friend the Member for Penistone (Mr. Mendelson), and what a formidable combination that is in the Labour Party.
  The Paymaster-General, to do him credit, has been against it from the start.

  1181
  He has been perfectly consistent on this. If whoever was responsible for issuing this leaflet had had the Paymaster-General to mark his card he would never have issued it, for the Paymaster-General is regarded very highly by the Labour Party as a sort of witch doctor on defence. His views are highly regarded. Perhaps it is no wonder, for in the country of the blind the one-eyed man is king. Nevertheless, it was plain to us that he would get this way over the TSR2 and I hope that any member of the Labour Party who thinks in future of issuing leaflets affecting this sort of matter will consult the right hon. Gentleman before he does so.
  I now turn to the financial aspects of this complex—the Hercules, the Phantom and the F111, on the presumption that the Government will decide to order the F111. It is exceedingly difficult to be precise on this, because the Government have given us so little information. To take, first, the comparison in price between the TSR2 and the F111. How much cheaper would it be to cancel the one and order the other? It will be cheaper, of course, since the Americans are prepared to offer it at a price which ignores the cost of research and development and in the long term it is well worth their while to do it. When I say that the Americans are prepared to offer it at a price ignoring the cost of research and development, is the Secretary of State for Defence shaking his head?
  The Secretary of State for Defence (Mr. Denis Healey): Yes.
  Mr. Soames: Then the right hon. Gentleman says that it does not ignore the cost of research and development, in which case I refer him to a statement to the House of Representatives by Mr. McNamara, in February of this year, when he said that 146 million dollars had been spent in purchasing 10 F111 aircraft, that is, 14½ million dollars per aircraft. This is something over £5 million and out of proportion to the figure about which the right hon. Gentleman was talking to us, and it stands to reason that it does not contain the very heavy research and development costs. Certainly, it would be well worth the while of the United States Government to sell on these terms, taking into consideration the advantages which they will gain in
  1182
  the long run. But how much cheaper will it be?
  The right hon. Gentleman told us in his statement that the order would be cheaper than the TSR2 by £300 million on a full programme of 150 aircraft. He also told us that the cost of a full order of TSR2 would be £750 million, less £125 million already spent, which comes to £625 million to spend from now. Looking at the same sum from the F111 point of view, Mr. McNamara tells us that the full programme was about £357 million and to this must be added what the Minister of Aviation told us yesterday was a sum of £70 million for cancellation charges. These added together come to £427 million, compared with £625 million for continuing with the TSR2, that is, a difference of £200 million and not £300 million.
  The right hon. Gentleman gives us a sum of £70 million for cancellation charges. I agree that he did not give that as a firm figure, but as the sort of figure he had in mind. I hope that he will bear in mind that not only is there the immediate loss of the TSR2 itself to the company concerned, but, also, there is the effect on the company and its sales of the BAC111 and of the VC10, and the proportion of overheads which those aircraft will have to bear without the loading of the TSR2. This will have to be taken into account when it comes to the cancellation charges. It may be, therefore, that the cancellation charges will be more than £70 million, but, apart from that, the figure for the difference is £200 million and not £300 million.
  The right hon. Gentleman said that if we were to go for 100 of the TSR2 aircraft they would cost less than £5 million each to be spent from now and that would come to £500 million minus, but we do not know how much minus. A hundred Fl11 aircraft, on the basis of the price for 150—for I gather that it would be in the same proportion if we bought fewer aircraft—would cost £238 million. Again, there are the cancellation charges to add to that, bringing the total to £308 million against £500 million. Therefore, the saving again would be less than £200 million and I cannot see how the right hon. Gentleman can come to make it £300 million.
  Then there is the vital question of dollar expenditure. When the Chancellor

  1183
  of the Exchequer announced the cancellation he made the announcement in the context of releasing resources which would help our balance of payments. To buy the F111 would cost between £240 million and £360 million in dollars, according to the number bought. Let us strike the mean and for argument's sake say that we buy 125 aircraft for £300 million. Then there are the Hercules and the Phantom orders coming to £230 million. Therefore, with the three orders together, the total commitment would be for £530 million in dollars. And what about the spares? It is usual to allow for the whole of an aircraft's life about 40 per cent. of the cost of the aircraft as the cost of spares. I agree that the more British engines and equipment are put in the aircraft the less the dollar expenditure on spares, but allowing for that it seems to me that the Government are committing us to a dollar expenditure over a period of years amounting to £600 million.
  At the same time, the cancellations, added together, would have a most serious effect on the future of the aircraft industry's exports, running at between £100 million and £150 million a year, and which this year seemed to be achieving a higher figure. Quite apart from the effect on our defences and on the aircraft industry, let hon. Members look at the effect on our balance-of-payments. How do we make up this loss across the exchange? Are there military orders which the right hon. Gentleman has agreed with the Americans to be placed here to make up to some degree for these vast orders, or is he hoping to make it up from the redistribution of skills and resources out of the aircraft industry? If so, how many men does he expect will leave the industry? Quite apart from the intense human problem which this creates, how will the shifting of people into other industries make up in exports for anything like such prodigious dollar expenditure on aircraft and equipment? We await with interest the right hon. Gentleman's argumentation on this.
  I ask the right hon. Gentleman to arrange for two things. The House has totally inadequate information on the extent to which the Government have entered into commitments with the United States. We have to piece the picture to-
  1184
  gether from snippets of information divulged here and there, mostly from across the Atlantic. Will he, please, collate all he feels able to give the House and put it in a White Paper? What financial commitments has he made, and over what period will they have to be paid?
  We fear that, as the last Labour Government did with the American Loan, this Government are mortgaging the future, trying to get their defence on the cheap by buying hardware on the "never-never" and leaving the next Government to be saddled with the dollar bill. But at least in the 1945 Parliament we knew what the deal was both in terms of cash and in terms of time. Will the right hon. Gentleman, therefore, let us have a White Paper setting it all out and including something for spares?
  I know that he has not yet decided how many F111s he will buy, but could he set it out on the basis of the sort of order he has in mind, perhaps doing one sum with 100 aircraft and another with 150? We feel strongly that the House and the country are entitled to this information in full.
  Secondly, I ask him to ask his right hon. Friend the Minister of Labour to do a special operation over the next 12 months or so to follow up all those who leave the aircraft industry as redundant. We shall then be able to see how many go into exporting industries, how many into others, and how many go abroad. Only thus will the Government be in a position to show the advantages which they claim will flow from a run-down of the industry. I hope that the Government will agree to both those suggestions.
  I turn now to the effect which the cancellations will have upon the aircraft industry, of which the main components are the two airframe companies and two more making engines. The industry's gross takings have been running at something between £300 million and £400 million a year from home sales, both military and civil, and between £100 million and £150 million a year in exports. Its exports are solid worth to this country since the import content in aircraft is minimal. For example, only 6 per cent. of the cost of the BAC111 is contained in imports.
  The industry has been highly successful with both its military and its civil

  1185
  projects. In recent years, it has encountered growing difficulty with foreign sales owing to the hard selling techniques which the American industry has been indulging, with all the advantages flowing to it from the much bigger base from which it operates. Nevertheless, our industry is just now in a cycle of high exports, thanks principally to the BAC111, the VC10 and the Hawker 125. These, together with the Concord, are its main civil projects.
  On the military side, it has the HS681, the P1154, the TSR2, and the P1127. The cancellation of its three big military projects has pulled the carpet from under the industry's feet. It was having a hard enough struggle anyway to sell the BAC111 and the VC10 in the face of American competition, but things will be much harder for it now. It is natural that its American competitors should now be saying that, with the loss of these three military projects, the British industry is on its way out and anyone who buys British aircraft needs his head examined. It is like buying a motor car, so the argument runs, from a firm which is going out of business. It is no wonder that we read in the Press that people in Washington are cock-a-hoop.
  The mere fact of these cancellations has already done great damage and, as I said before, the overheads are put up on the aircraft which the industry is now selling. But what of the long-term effects?
  Recently I have frequently heard and read the Minister of Aviation saying that he wants to see a virile and prosperous aircraft industry. Very well. Will he tell us what will be the loading of the industry in three years, by mid-1968? Let me tell him how I see it. He can confirm or deny what I say when he speaks. The orders for the VC10 and the BAC111 will have run out in 1968, and so will those for the Trident and the HS125. So on the civil side the industry will be left with the Concord as its only major project.
  Mr. Eric Lubbock: Is the right hon. Gentleman assuming that there can be no development of these aircraft, particularly the BAC111 and the Trident? Has he read in the Press about the follow-on orders from B.E.A. for a longer-range Trident?
  Mr. Soames: Yes, but this must be a factor which one cannot weigh. One cannot tell to what extent they will be developed. As things now stand, on the other hand, one cannot see the run for the VC10 and the BAC111 continuing beyond 1968. So the industry will be left with just the Concord as the only major project.
  On the military side, orders for both the P1127, as I see it, and the modified Comet for Coastal Command will be through to all intents and purposes. So, as things now stand, apart from the Concord, which will be occupying a few thousand men, perhaps 20,000—and the Government have cast a pretty black cloud over that—the airframe industry cannot see production orders for one rivet to be put into one metal sheet after 1968. Nothing at all. The gestation period for an aircraft is long. If there is to be anything in production on any factory floor by 1968, the initial R. and D. contracts have to be placed now, and they must be followed up with production contracts.
  This is the point I put to the right hon. Gentleman: what are these R. and D. contracts going to be?
  The Minister of Aviation (Mr. Roy Jenkins): Will the right hon. Gentleman explain why, for the purposes of one argument a short while ago, he says that the industry, had we left. it alone, was at the beginning of a most brilliant export cycle, and for the purposes of a different argument now, he says, in a way which is most damaging to the industry, that we have no export prospects of any sort?
  Mr. Soames: Not a bit. I said that at present the industry is on a peak cycle of exports, and that this is the moment the right hon. Gentleman chooses to pull the carpet from under its feet and cancel the orders on which its strength depends.
  Mr. Roy Jenkins: Surely, even the right hon. Gentleman knows that, so far from being on a peak, we are now at the end of a four-year decline in exports. He really ought to choose his language about the industry a little more carefully.
  Mr. Soames: These are the figures which I have in mind. The right hon.

  1187
  Gentleman will be able to confirm or deny them. The average over the last considerable number of years shows exports running at £100 million to £150 million a year, and this year, 1965, the forecast is of exports of £180 million.
  Sir Arthur Vere Harvey: In answering the Minister, will my right hon. Friend take into account that the British Aircraft Corporation has taken options to sell 21 BAC111s, and only last week in Australia, the Americans, by using despicable methods, obtained the order against the 111?
  Mr. Soames: It is natural that the American industry should try to take the fullest possible advantage of the situation into which the Government have put our industry.
  From the industry's point of view, it is no good the right hon. Gentleman talking in vague terms of possible co-operation on this, that or the other project with European countries. We all have long experience of the difficulty of agreeing on both time-scale and requirements with other countries. The fact that a certain project has been canvassed is not of itself any good to the industry. The industry needs firm orders if it is not to stand down its design teams and its labour, not in thousands but in many tens of thousands.
  Will the right hon. Gentleman, therefore, tell us what firm orders he can see being placed with B.A.C. and Hawker during the next few months, and what these orders will be worth? Will he also say what size in terms of manpower he expects the industry to be by the middle of 1968?
  If the right hon. Gentleman cannot talk in terms of firm orders at this juncture, when the industry cannot look forward to future development of these military aircraft, then I know that the industry hopes that he will spare it the platitudes about wanting to see a virile and prosperous industry, for this cannot be achieved without Government orders and only the Government can tell the industry what those orders will be.
  Mr. William Hamilton: Oh.
  Mr. Soames: The hon. Member for Fife, West (Mr. William Hamilton), who follows these matters very carefully, is astonished to hear me talk in terms of an aircraft industry of the size of ours or anything like it being viable without the Government placing military projects. Does he realise that the American aircraft industry survives and gets its strength by 80 per cent. military orders and 20 per cent. civil orders? The proportion here has been about 75 per cent. military and 25 per cent. civil.
  There is no difference between the Minister of Aviation and me over the need and desirability to make arrangements which will enable the British aircraft industry to co-operate on projects with European industries to provide it with a larger base and market. But this does not come about from one month to the next. It takes time. A good start was made by my right hon. Friends the Members for Preston, North and for Monmouth (Mr. Thorneycroft), first, with E.L.D.O., then with the Concord and then with the agreement with the French that no firm operational requirements would be issued until there had first been an attempt to harmonise them with the other country.
  We always considered that this family of aircraft—the P1154, the HS681 and the TSR2—that we were developing was the last generation which would be built purely by the British industry to a purely national requirement. We were sure that, between now and the time when the next requirement would need to be considered with the industry, we would catch the tide with Europe and would be proceeding with general European requirements. This would have followed on the industry's present loading but the Government have withdrawn projects from the industry before it has caught the European tide.
  The Government have cancelled the projects without having any firm orders even of research and development contracts to put in their place. It was not many months ago that the Minister of Aviation set up the Plowden Committee to look at the future of the industry. But, as things stand, there will be no aircraft industry in 1968 for that Committee to look at unless the right hon. Gentleman puts orders into it. Does he think that

  1189
  the Committee will be able to discuss the future with the industry and be able to give worth-while answers when the industry first needs to know what orders he has to put into it and at the moment right hon. Gentlemen cannot tell it?
  The Secretary of State for Defence has set up a defence review to make recommendations about commitments, on the one hand, and what is necessary in the way of weapons, on the other. But before he knows what those recommendations are he has decided, on existing commitments, to cancel all these aircraft, denying the forces the weapons systems they need to fulfil those commitments.
  The Government have got themselves into this mess by their bad decision to cancel all three of our military aircraft projects. We deplore it for the harm it does to our defences, for the harm it does to the aircraft industry and its associated industries, for the burden it puts on our balance of payments, for the effect it will have on the country's future in the technological race and for what it symbolises as the Socialist view of the Welfare State—free prescriptions, subsidised coal mines and inadequate defences. It deserves censure both by the House and by the country.
  4.45 p.m.
  The Secretary of State for Defence (Mr. Denis Healey): I appreciate very much the tone in which the right hon. Member for Bedford (Mr. Soames) moved the Motion—as much, indeed, as I disagree with the Motion. I will try to answer him in the same terms. He asked me a large number of questions about the facts which lie behind the decision that the Government have taken, and I shall try to answer most of them during my speech. Those I miss, and which it is possible to answer on this occasion, my right hon. Friend will try to deal with later.
  I agree with the right hon. Gentleman on one basic point. The Government's decision to cancel the TSR2 raises the gravest questions of defence, economic and foreign policy. I shall deal with these questions first before dealing with the way in which the Government announced their decision. I know that there are deep and genuine divisions of opinion in the House on the merits of the decision, but I hope that at least
  1190
  hon. Members, on both sides, will consider the facts on which we based that decision with the serious attention that they deserve.
  The right hon. Gentleman put his finger on the main point at the beginning of his speech. The fundamental reason for our decision on the TSR2 was that the cost of the programme we inherited was out of all proportion to the aircraft's military value. In this, our decision differs from the decisions we took two months ago on the P1154 and the HS681, where the operational requirements of the R.A.F. were decisive, even if the economic factors had not been important too.
  From a great deal of what the right hon. Gentleman said, I could not help feeling that he believes that the Defence Secretary has no right to concern himself with questions of cost—that, somehow or other, this is the Chancellor of the Exchequer's problem and that the Defence Secretary should concern himself only with the military needs of the Services. That is probably the most fundamental division of opinion between the two sides of the House. This sublime indifference to costs, which betrayed itself throughout the right hon. Gentleman's speech, is one of the major reasons for the economic difficulties in which the country finds itself, and at a time when defence costs are rising steeply it is the job of the Defence Secretary, as well as that of the Chancellor, to make certain that the taxpayer gets the maximum value for every £ allocated to defence. If he fails in this duty, either defence costs will bankrupt the nation, or we shall find that excessive expenditure in one particular field of defence is ruling out expenditure in other fields which may be equally vital—and the result may be dangerous deficiencies in manpower or equipment and that we send our forces into action short of men or without the tools of their trade.
  This, in fact, was the danger we faced when we took office last October and looked at the aircraft programme to which the previous Government had committed themselves. During the four years from 1969 to 1972 the total cost to the taxpayer of the three projects in the aircraft programme that we have cancelled would have been over £1,200 million, and of this, the TSR2 alone

  1191
  would have cost about £740 million. That was simply in those four years. I ask hon. and right hon. Members opposite to accept that, if we had been prepared to accept this bulge in defence expenditure, we would have faced a choice between drastic cuts in the social services or no less drastic cuts in other vital items of military equipment for all three Services throughout this period.
  Sir Ian Orr-Ewing rose—
  Mr. Healey: I will give way in a moment.
  Sir Ian Orr-Ewing: If I rightly understood the Minister, he said that the cost of the TSR2 alone in the four years 1969 to 1972 would be £740 million. How can this be so, when we were earlier led to believe that the total cost of the TSR2, including the R. and D. programme, was £750 million, of which £125 million had already been spent?
  Mr. Healey: As the right hon. Gentleman may remember—or perhaps this happened after he left office in the Defence Ministry—long-term costings in the Ministry of Defence have for some years been based not only on the capital cost of military equipment, but also on the running cost and spares throughout the period concerned. This is fundamental to an understanding of the problem.
  The hard fact is that the TSR2 was too expensive. It was using up far too much of the resources available not only for defence, but for the expansion of our exports and of our economy at home. I honestly do not believe that any right hon. Gentlemen opposite could in their hearts deny that they would never have authorised full development of the TSR2 in September, 1960, if they had properly assessed the research, development and production cost of the aircraft. The tragedy is that when costs began to mount right hon. Gentlemen opposite did nothing to control them; they simply sat helplessly by and let things rip.
  It was eight years ago that the Air Ministry produced its general statement of its needs for a tactical strike and reconnaisance aircraft to replace the Canberra. At that time the R. and D. cost
  1192
  was expected to be under £40 million. Two years later, the Air Staff issued the detailed operational requirements for the TSR2. That was in May, 1959.
  It is important, I think, to point out that this operational requirement—I think that right hon. Gentlemen opposite will confirm this—has remained substantially the same throughout the last years. It is not true, as has been so often stated in the Press, that the staggering increases in cost arose through the Air Staff continuously demanding new and improved capabilities for the aircraft.
  But staggering the increases were, The first detailed estimates of cost were made in October, 1960, when the contract for full development was placed with B.A.C. By that time the R. and D. cost for the aircraft had more than doubled—it was estimated at £90 million—and the production cost was estimated at at least £1·5 million each. On the basis of these figures, and assuming an order for rather more than 150 aircraft, which was the previous Government's programme, the total capital cost for research, development and production would have been about £330 million. At this stage the target date for the aircraft's entry into service was the end of 1965—the present year.
  I readily admit that if these targets for cost and delivery which were set and accepted in 1960, had been maintained, the aircraft would have been worth the money. Indeed, we might have sold a substantial number to other countries, too. But by October, 1963, only three years later, the time when the Australian Government decided in favour of the American aircraft as against the TSR2, the forecast of total costs had doubled again. The writing was on the wall. A year later, when we assumed office last October, the total bill for research, development and production was about £750 million. This would have meant a levy of £50 on every family in Britain. The conclusion is inescapable: either right hon. Gentlemen opposite completely failed, five years ago, to recognise the complexity of the project which they were launching, or they failed to exercise the necessary control of the programme once it had been endorsed.

  1193
  By the time we took office in October last year—and I confess that this came as a great surprise to all my right hon. Friends who were concerned with the problem—only something under £100 million of the total estimated costs had been spent. But the estimated "inservice" date for the aircraft had slipped back by two or three years to 1968. In other words, we still had £650 million to spend if we decided to complete the programme we had inherited.
  On a programme of about 150 aircraft, each TSR2 would have cost us at least £5 million in capital expenditure—twenty times the cost of the aircraft which it was supposed to replace. But because there was still more than half of the R. and D. costs to pay, if we had reduced the programme to about 110 aircraft, each aircraft would have cost at least £6 million, of which £5 million still remained to be spent. Unit costs would increase still further as the total order for the aircraft was reduced. For example, about 50 aircraft would have cost on the average nearly £10 million each.
  Against this background, any Government with the slightest sense of responsibility to the taxpayer would have had to get a review of the programme going. The tragedy is that right hon. Gentlemen opposite funked the decision for so long. All of these facts were known to the previous Government. In fact, they had been known for nearly a year before they finally left office. If they had had the political courage to take the decision then, the nation could have been saved some £40 million. By October, 1964, the TSR2 programme was costing us £1 million a week.
  Yet the decision was far more daunting then than it would have been in October, 1963, because when we came into office, about £100 million had already been spent on the TSR2 and the first aircraft was flying. To cancel at this stage was a far more difficult decision than it would have been a year before.
  Sir A. V. Harvey: The right hon. Gentleman referred to the loss of the Australian order, just over a year ago. Does he recall that when the Australian mission was in London, considering buying the TSR2, he and his colleagues were indicating that if they came into power it was quite likely that the contract would
  1194
  be cancelled? How can he blame the previous Government for the loss of a large order which went to America?
  Mr. Healey: I have had the advantage of discussing the Australian decision with members of the Australian Government since I have been in office, and I can assure the hon. and gallant Gentleman that they were absolutely certain, when they looked at the comparative cost of the two aircraft, that there was no alternative open to them, although, as Sir Robert Menzies said at the time, he was British to the boot straps. It was simply a fact that on the costs available to them, provided by the right hon. Gentlemen then in power, there was no alternative for any Government which had an interest in their taxpayers' welfare.
  Mr. Julian Ridsdale rose—
  Mr. Healey: I will try to give way fairly regularly in the course of my speech, but I must be allowed to ration my declension as I go along.
  As I say, it was a very much more difficult decision for us to take when we came into power last October than it would have been for the previous Government a year earlier. We therefore felt that it was essential for us to obtain the best possible information on the likely cost and performance of the TSR2 and of possible alternative aircraft so that both the financial and the military consequences of cancellation could be fully assessed before the decision was taken. This we have now done, and it will be many months before any further information of real significance becomes available.
  I honestly do not believe that we could excuse any further delay in taking a decision when every week the TSR2 continues it costs the taxpayer a further £1 million.
  Mr. Victor Goodhew rose—
  Mr. Healey: I will give way in a moment.
  My right hon. Friend the Minister of Aviation has been in constant contact with the manufacturers of the TSR2 to see whether it would be possible to obtain a fixed-price contract as a protection against any further escalation in its cost.

  1195
  We told the House two months ago that we were doing so. But, as I told the House last Tuesday, the manufacturers were unable to offer a fixed price. What they did instead was to offer what they called a target price. Savings below or costs above this target price would have been shared between the manufacturers and the Government. But above a comparatively small figure any further substantial cost increase would have fallen on the Government alone.
  The total liability which the airframe and engine firms were prepared to accept was £11½ million, only 2 per cent. of the target price—and hon. Members will see that B.A.C., which was the airframe firm, confirmed this in posters which it put on the notice boards at Weybridge yesterday—for a project which has already escalated by £400 million, or 150 per cent., in the last four years and has at least three more years to go before delivery starts. In other words, the firms were unable to give us any assurance that the Government's ultimate liability would be limited.
  Even on the basis of the target price, the cost of the programme would have been substantially higher, about £30 million higher than the forecasts which we had received when we came into office last October. I do not believe that any Government would be justified in inflicting an open-ended commitment of this kind on the British taxpayer. We had no alternative but to decide on cancellation.
  Mr. Soames: Has the right hon. Gentleman any experience of any aircraft company, making any sophisticated military aircraft, ever being prepared to give any Government the sort of assurances to which the right hon. Gentleman is now referring?
  Mr. Healey: I do not deny that we faced B.A.C. with a difficult question when we asked it for this assurance, but, against the background of our experience of this programme over the previous six years, we would have been defaulting in our duty to the public if we had not tried to get such an assurance. Our announcement that we would try to get it was welcomed by right hon. Gentlemen opposite, who now complain that the company was unable to give
  1196
  us the assurance. They did not complain when we tried to get it.
  I now turn to the military implications of this decision.
  Sir Alec Douglas-Home: Will not the right hon. Gentleman say something about the cost of the alternative?
  Mr. Healey: Of course I shall, but I cannot talk about the cost of the alternative until I have discussed the military implications of the decision.
  I now turn to the military implications of the decision. We should have been failing in our duty to the Royal Air Force and to the nation if we had cancelled the TSR2, despite the powerful economic arguments, without ensuring that if the Royal Air Force was required to carry out tasks which demanded an aircraft with characteristics similar to those of the TSR2, we should be able to obtain such an aircraft at a cost the nation could afford. I know that some of the more irresponsible stories which have circulated in the last few weeks have caused grave anxiety throughout the R.A.F. I speak not only for myself as Secretary of State for Defence, but for all my colleagues in the Cabinet when I say that there is no member of the present Government who would consider for a moment sending the R.A.F. into action without the aircraft which are militarily necessary for the job to be done.
  I want to discuss what is necessary. The TSR2 was designed as a successor to the Canberra for tactical strike and reconnaissance. I hope that the House will bear with me if I describe what is the rôle of a tactical strike and reconnaissance aircraft in our military strategy, and what characteristics such an aircraft may require in the 1970s, for it is essentially the period 1970 to 1980 that we are now considering.
  First of all, reconnaissance. I agree with the right hon. Gentleman that reconnaissance is absolutely indispensable. Besides its importance to the commander in the field, reconnaissance can be of critical importance to the Government in Westminster as a means of providing them with reliable and up-to-date information in what may be a very rapidly developing situation. Accurate knowledge, in time, of what is going on may

  1197
  often enable the Government to control and influence a political crisis so as to ensure that fighting does not take place.
  Where there are good defences, reconnaissance in the 1970s may well demand an aircraft which is able both to penetrate at low level and also, when a picture with wider coverage is necessary and possible to obtain, to fly supersonic at high level.
  These types of sortie—low-level penetration capability and the high-level supersonic capability—are just what is needed for the tactical strike rôle as well. That is why it was decided both here and in the United States that one basic aircraft design could carry out both these tasks.
  I therefore come now to the second task—tactical strike.
  Mr. Soames: Before the right hon. Gentleman leaves reconnaissance, is he implying thereby that the F111 will have an all-weather reconnaissance capability? If so, I draw his attention to the fact that Mr. McNamara has said that he is not proceeding with the reconnaissance version of the F111.
  Mr. Healey: If hon. and right hon. Gentlemen opposite will contain themselves a little, they will find that I shall answer all their questions in the course of my argument. Certainly, I shall answer that question.
  I agree entirely with the right hon. Gentleman that control of the air above the battlefield is indispensable to any land operation. This was a lesson which we learnt the hard way in the last war and all subsequent experience has confirmed it. Nobody hopes more than I do that we shall never have to use this type of capability in actual war, but we must face the fact that a growing number of countries in all parts of the world now have formidable air striking forces of their own, often provided at small cost by the Soviet Government. It is our known ability to strike back at such forces in case of need which provides the best assurance that they will not be used against us or against our friends.
  I do not want to be specific here, for reasons which we will all understand, but if hon. Members think for a moment
  1198
  about our present problems outside Europe they will realise that it is the knowledge that we could, if necessary, strike successfully at the enemy's main bases which is the best guarantee against the dangerous escalation of a local conflict into major war. I am talking here, of course, exclusively in terms of conventional weapons.
  This is the case, and I fully accept it, for having as part of our total defence capability some aircraft with a capacity for tactical strike and reconnaissance. In my view, it is an irrefutable one if Britain proposes to maintain any capacity for military action on her own in any part of the world. In fact, if our commitments were cut so as to enable us to do without this capacity, we would be able to do without most of our Army and most of our Navy as well. But it is a much more complicated matter to decide how many such aircraft we require and what specific performance they should be capable of.
  As the House knows, the Government are now looking at Britain's defence needs in the 1970s right across the board; at the political premises; at the proportion of our national resources which we can afford to devote to defence; at the relative cost and effectiveness of alternative weapons systems; at the nature of the commitments and tasks which we shall require our forces to meet; and at alternative ways of meeting these tasks. Indeed, if the previous Government had carried out studies of this kind and had taken the trouble to relate equipment to tasks in this way, we might have avoided the serious crisis in the defence budget which is the cause of the current debate.
  We recognise, at any rate, that we must decide what commitments it is right for us to accept in the 1970s; on what measure we must allow for the unforeseen contingency, which is usually the contingency which occurs in fact; on how far we must be prepared to act on our own; and on what it is essential as opposed to just traditional to do in order to preserve our interests and discharge our legitimate responsibilities.
  If our studies show that it will still be necessary to retain in some or all overseas theatres a tactical strike capability, then we must relate the type of aircraft we require to the various levels of threat and to the various geographical theatres or areas in which we may have to operate.

  1199
  It is only then that we can finally decide whether some aircraft with characteristics similar to the TSR2 will still be needed, or if some or all of the tasks allocated to our forces can be met by other aircraft, for example, the Buccaneer or the Phantom—though I must point out that these are aircraft which have to operate from relatively long concrete runways or carriers at sea, and that they have a smaller range and payload. For example, at 900 miles from base the Phantom could not operate at all and it would take five Buccaneers to drop the same weight of bombs as one F111A.
  This is a very large and complex problem which demands a full analysis before decisions can be made. We cannot decide what kind of aircraft we need until we have completed our defence review. If we can perform all or part of the tasks with British aircraft, or with aircraft already in the programme, of course we shall do so. But we cannot guarantee that we shall be able to do so without an aircraft with performance similar to that of the TSR2.
  That is the reason why we have taken an option on the F111A, and it is also the reason why, however much we sympathise with the aspirations which lie behind the Liberal Amendment, we would not be able to accept it.
  Mr. Neil Marten: One rôle of the TSR2 which the right hon. Gentleman has not mentioned is its ability to penetrate very deeply, carrying the nuclear deterrent. I do not know whether the right hon. Gentleman will raise this question during the debate. Was not one of the Government's reasons for cancelling the TSR2 their dislike of the nuclear deterrent?
  Mr. Healey: I sometimes wonder whether the hon. Gentleman, with all his past experience in the Services, takes the problem today at all seriously. If he did, he would not make such silly remarks.
  Mr. Marten: On a point of order. The right hon. Gentleman has just accused me of not taking this matter seriously. I do take it very seriously. I should like—
  Mr. Deputy-Speaker (Dr. Horace King): Order. That is not a point of
  1200
  order. Hon. and right hon. Gentlemen must take the cut and thrust of debate.
  Mr. Healey: I will answer the hon. Gentleman. I tell him, as he should have known, that the TSR2 is designed purely for a conventional rôle. Hon. Members and right hon. Members opposite discovered a nuclear bonus when Skybolt collapsed and they found it necessary to dress up the pretence of a nuclear deterrent for purely political purposes.
  The F111A is the name of the Air Force version of the plane now under development in the United States which was earlier referred to as the TFX. As hon. Members will know, it has now been flying for several months. Like the TSR2, the F111A will use a low-level high-speed flight as a means of penetrating defences and will use relatively short take-off and landing as a means of dispersal and forward deployment. Because of its variable geometry, the F111A will combine these two features with a rather wider capability, including air defence, which, incidentally, was not planned for the TSR2, and it will have a substantially greater ferry range than the TSR2.
  But, without going into detail, I think that the right hon. Member for Preston, North (Mr. J. Amery) was right when he wrote in the Sunday Telegraph last weekend that there is little to choose on military grounds between the F111A and the TSR2. With respect to the right hon. Member for Bedford, I think that, if he had the knowledge of capabilities which his right hon. Friend the Member for Preston, North has from having served for so long during a critical period at the Ministry of Aviation, he would agree with his right hon. Friend on this, and he would agree with me.
  Mr. Soames: I would agree that on performance there are pluses and minuses on both sides which, perhaps, come out more or less the same, but where the F111 Mark 1 or Mark 2 is seriously deficient is in the avionics and electronics which can be put in it for the reconnaissance rôle.
  Mr. Healey: That is not the view of my advisers. I hesitate to quote advisers, although right hon. Members opposite took pleasure from sheltering behind the

  1201
  advice which they got when they were in office. But I will give the right hon. Gentleman some of the answers to the questions which he asked on this point, because I agree with him that it is very important.
  The bulk of our purchase, if we took up the option, would be the F111A Mark 2—that is to say, the Mark 1 airframe and engine with an improved avionics fit which the United States Government are now considering. We have discussed this arrangement thoroughly with the United States authorities. We now have a very clear picture of their intentions and of the costs involved. We have taken full account of these in our calculations.
  On the question of reconnaissance capability, we have been able to satisfy ourselves that it would be possible to fit into the F111A the TSR2 reconnaissance pack, including linescan, sideways-looking radar and cameras. Therefore, from the reconnaissance point of view, the Fl l lA will be in every respect the equal of the TSR2. Incidentally, the right hon. Gentleman asked me when the Mark 2 of the F111A would come into service. If we took up the option, we would get our first deliveries at the beginning of 1969—that is, the same time as the first deliveries of operational as distinct from training aircraft of the TSR2, although the order would be completed a good deal earlier because the American rate of production, given their domestic run, is considerably faster than ours.
  On the Nav/Attack system, it is the view of my advisers that, on balance, there are pluses and minuses, as the right hon. Member for Bedford said. There is no significant difference between the Mark 2 avionics for the F111A and the Nav/Attack system planned for the TSR2. It may well be possible to accommodate some of these systems in the F111A, but this is something on which I should not like to commit myself until we have studied the possibilities in more detail. These improvements in the avionics fit which are the only difference between the Mark 1 and Mark 2 represent only a small part of the total cost of the aircraft.
  So far as the rest of the aircraft is concerned, we have succeeded in obtain-
  1202
  ing a maximum price from the United States Government for the F111A if we choose to buy it, and this enables us to give the House some idea of the difference in cost between this aircraft and the TSR2.
  Mr. Stanley R. McMaster: I should like to be clear on this. Is it the Fl11A Mark 1 or Mark 2 which is to be delivered in 1969? If it is the A type, will that be capable of flying below enemy radar?
  Mr. Healey: The answer to both questions is "Yes". I made it clear that no decision has been taken on the F111A. We have nearly nine months to consider whether to place even a very small initial order for training purposes, and we have nearly two years to decide on any follow-up order. This policy gives us the flexibility which we need to complete our defence review, to decide what commitments must be met and the best way of meeting them. Even if we decided to buy the maximum number of F111A aircraft covered by the option, we should save £300 million compared with thesame number of TSR2 aircraft. This includes account of money already spent on the TSR2 cancellation, costs, spares and running costs. [HON. MEMBERS: "What about the balance of payments?"] I will come to the balance of payments question in a moment. I will try to give right hon. and hon. Members opposite all the information that they need to come to the same decision as we have.
  This saving of £300 million is the most pessimistic view, and I should certainly hope to increase it. At this size of order the F111A is under half the total research, development and production cost of the TSR2. For the reasons which I have already given, because of the large research and development cost of the TSR2, over half of which has yet to be spent, the cost advantage of the F111A increases dramatically as the size of the order is reduced. The nature of he option gives us a degree of flexibility which we simply could not have achieved under the previous Government's programme.
  I must remind the House, because it is important as regards our balance of payments, that, although we intend to place initial orders within the next two or three months for the Phantom and the C130,

  1203
  we have choices there also as to the final numbers that we decide to order. If dollar saving were the main consideration, we might reduce our purchase of these aircraft to accommodate the necessary order of the F111A.
  I turn now to the economic consequences —
  Mr. Cranley Onslow: To assist us in our arithmetic, can the Minister tell us the maximum price which he has been able to obtain from the United States Government?
  Mr. Healey: I would like to be able to give it, but I am not empowered to do so by the nature of my agreement with the United States authorities.
  I turn now to the economic consequences. Inevitably, the picture cannot be completed at this stage, but the arrangements which the Government have made over the whole aircraft programme not only save us very large sums of money—a minimum of £600 million all told—but will also free resources for more constructive work at home and give us the flexibility which we need to review not only our commitments, but also the choices there are in the kind of forces that we need to meet them.
  I see that the right hon. and learned Member for St. Marylebone (Mr. Hogg) has dismissed this saving of £600 million as a paltry thing that is beneath consideration. Let me point out to him that it represents a saving of well over £40 in taxes for the average family in this country, or to put it another way, the cost of 200,000 houses. And this is only the saving if we order the maximum number of aircraft allowed for under the various options. If, as I hope, we are able to reduce the numbers we require, the saving will increase proportionately.
  It is true, of course, that the cost of the F111A, if we buy it, will have to be paid in dollars. But the terms of the credit facilities which the United States Government have agreed should be made available to us will greatly reduce their impact on the balance of payments. As my right hon. Friend the Chancellor of the Exchequer has already pointed out, over the next five years the cancellation of the TSR2 will free for redeployment resources of at least £350 million. During
  1204
  this time, we have to pay out only about £20 million in dollars. Incidentally, this is almost exactly the dollar cost of the American components in the TSR2. The bulk of our dollar payments would be spread fairly evenly over the following eight years. There is every reason to suppose that if we make proper use of the released skill and resources that will result from this cancellation there should by then be a substantial improvement in Britain's balance of payments.
  Our export industries are crying out for the sort of skilled manpower which will be released by the decision to cancel the TSR2. As far as we have been able to judge, the TSR2 was supporting up to 20,000 jobs. Not all the people who filled them will now have to find new jobs. But in any case, at the moment there are 25,000 vacancies nationally for skilled engineers, or 3¼ vacancies for every engineer unemployed. For draftsmen, who will be released in very large numbers by this decision, there are 5 vacancies to every draftsman unemployed. We deeply sympathise with those who have worked so hard and so long on a project on which such hopes were based, and we shall do our level best to help them.
  The Government are already closely in touch with both the employers and the unions. The Employment Service will make special arrangements, where necessary, to send in special teams of employment officers to the factories involved in the cancellation. Where retraining is necessary, and cannot be provided by the new employer, we shall make available the facilities of Government training centres and other schemes. The terms of severance payment, an all-important consideration for those concerned, are by negotiation between individual employers and their employees, but the Government expect that their contractors will act as good employers and the Government will themselves be prepared through their contractual payments to bear a reasonable share of the burden of severance payments.
  My right hon. Friend the Minister of Aviation will be dealing later in the debate with the effect of our decision on the aviation industry. But I should like to say a few words on this from the purely defence point of view. The

  1205
  fact is that for too many years we have been spending far too much money on too few aircraft. This has not been in the interest of the Services, the aviation industry or the nation. The day of national self-sufficiency in aviation is past. We must co-operate with other countries to share research and development costs and to provide a sufficiently large market for production. The British aviation industry cannot hope to prosper, as right hon. Gentlemen opposite seem to think, by producing smaller and smaller batches of military aircraft for this country alone at higher and higher costs. It just is not on. Man for man, our aviation industry is the equal of any in the world. The basic cause of its difficulties is that until now the Government have consistently chosen the wrong sort of military projects for the size of the potential market.
  I know that the American aircraft companies often employ unscrupulous methods in making sales, but the fact is that, so long as the American domestic market for military aircraft is 10 times the size of ours, we can hope to retain a capacity in this field at a time when the cost and complexity of aircraft is continually rising on one condition only: that is, if we decide from the start to co-operate with our allies. That is why my right hon. Friend the Minister of Aviation and I went over to Paris a month ago to discuss collaboration with the French on the development and production of a strike/trainer and a joint programme for a variable geometry aircraft in the second half of the 1970s.
  That is why I spent half of my time with the German Defence Minister last week discussing the possibility of co-operation in meeting our common needs for vertical take-off aircraft. That is why we are continuously in touch with the United States on collaboration in the development and production of aircraft engines.
  But the future of our aircraft industry is likely—
  Mr. Stephen Hastings: As a result of what he has told the House, can the Minister name any one firm project which he has agreed which will be presented as an order in some form to the British industry?
  Mr. Healey: We hope to sign an agreement with the French Government on the first two aircraft which I have mentioned, possibly in the next few weeks.
  The future of our aircraft industry—and this, I think, is common ground on both sides of the House—is likely to lie essentially with Europe rather than with the United States, and above all with France, because the French aircraft industry is of the same order of size as our own and faces similar problems. My experience in recent weeks in discussing the situation with representatives of various European countries is that all the European aircraft industries are beginning to recognise that they must hang together or they may hang separately.
  It is quite clear that the sort of co-operation that we are now able to discuss with the French and German Governments would have been totally impracticable had we kept the TSR2 in our programme. I ask right hon. and hon. Members to remember the costs of aircraft production of the previous Government's programme: £1,200 million in the four years from 1969 to 1972; £740 million on the TSR2 alone. If we kept these aircraft in the programme, the resources for development of other aircraft during those years simply would not have been available. The country would not have been able to afford it. So that by the time the TSR2 programme was finally completed in the middle 1970s, we would probably have found that there was no European industry left with which we could co-operate, and for that reason we would have come to the end of the line ourselves as well.
  It is this fact that no country of our size can any longer afford to produce the more sophisticated modern weapons for itself alone which makes so much nonsense of all the talk by right hon. Members opposite that, by co-operating with our allies or buying foreign equipment, we are somehow giving up our independence—[Interruption.] This was said at great length in the last debate by the hon. Member for Stratford-on-Avon (Mr. Maude), who is to wind up the debate for the Opposition tonight.
  Right hon. Gentlemen opposite know perfectly well that independence in the

  1207
  field of defence has been impossible for many years. Interdependence is the only possible basis for a defence policy in the second half of the twentieth century. Right hon. Gentlemen opposite recognised this basic fact when they decided to base Britain's nuclear power in the 1970s on Polaris missiles bought from the United States. They recognised it when, a year ago, they decided to base the protection of the Royal Navy against air attack on Phantom aircraft bought from the United States. They recognised it when they allowed British forces in Germany to become dependent on American nuclear weapons by cancelling Blue Water in 1962. Right hon. Gentlemen know, if their hon. Friends behind them do not, that the Royal Air Force in Germany and the B.A.O.R. do not have a single atomic weapon which they can use until and unless, the United States have given their consent.
  Right hon. Gentlemen opposite know these facts, but they have done their best to hide them from their supporters in the country. They know as well as we do that even the TSR2 is a symbol not of British independence but of interdependence with the United States. It would have depended entirely on American computers made or assembled in Britain under licence. We are living in a world which is technologically one today. If we accept that fact and act upon it, we can draw benefit for ourselves and others. If we sink into daydreams of total national independence in defence or in technology, or in foreign policy, we shall sink inexorably into national decline.
  Mr. David Price: Will the right hon. Gentleman explain why in my constituency during the election campaign—this is a real matter in terms of integrity—the Labour Party published a pamphlet saying that a Labour Government would
  "reverse the Tory policy of increasing dependence on foreign supplies, for example the VC10 and the Phantom incidents?"
  Can he explain this statement which had the imprimatur of the Labour agent in my constituency?
  Mr. Healey: I cannot explain it, any more than I can explain the pamphlet which was published in Smethwick by
  1208
  the Conservative candidate on the question of racial segregation.
  It is because they know in their hearts that what I have said is true that right hon. Gentlemen opposite have felt it necessary to attack not so much the decision that was taken as the way in which we announced it. I regret that it was necessary to make the announcement in the Budget speech—[HON. MEMBERS: "Why was it?"] If hon. Gentleman opposite listen, they will get the answer and will be wiser after getting it. As I was saying, I regret that it was necessary to make the announcement in the Budget speech, but I believe that if hon. Gentleman opposite had not so disgracefully abused the rules of the House by raising bogus points of order there would have been little in practice to complain about. It would have been impossible to make the announcement before Tuesday, because I did not agree the nature of our option on the F11A with Mr. McNamara until late on Monday afternoon—well after Question Time.
  It would, I suppose, have been possible to make a statement after Questions on Tuesday, but I do not believe that the House would have wanted to delay the Budget by that procedure, and certainly the right hon. Member for Bedford raised no objection when I suggested to him on Monday that I should give the details in the course of a speech in the Budget debate, following the Leader of the Opposition and the Leader of the Liberal Party. Neither I nor anyone else undertook to make this speech precisely at 7 o'clock. We would have been infringing our privileges if we had done so. But in suggesting that I might speak at about 7 o'clock—
  Mr. Soames: I do not know to which conversation the right hon. Gentleman is referring, but I imagine that it must have taken place after the last possible opportunity had gone by for him to be able to make that statement in the House.
  Mr. Healey: It was a conversation on Monday afternoon after Questions.
  Sir Ian Orr-Ewing: May I draw the right hon. Gentleman's attention to the fact that no statement—
  Mr. Deputy-Speaker: Order. I cannot have two hon. Gentlemen on their feet at once. If the right hon. Member who has the Floor does not give way, the hon. Member who is seeking to intervene must sit down. May I suggest to the House that the Budget debate is over.
  Sir Ian Orr-Ewing rose—
  Mr. Healey: I will give way to the hon. Gentleman.
  Sir Ian Orr-Ewing: I am sure that the right hon. Gentleman would not like to mislead the House. The Chancellor said:
  "I hope that they will not feel that it is an undue inconvenience to wait from five o'clock until seven o'clock."—[OFFICIAL REPORT, 6th April, 1965; Vol. 710, c. 284.]
  Mr. Healey: Exactly. In suggesting that I might speak at about 7 o'clock, we were assuming, a little too readily, that the Leader of the Liberal Party would want to speak on the first day of the Budget debate, and that hon. Gentlemen opposite might divide on some of the Budget Resolutions, but I really do not see how, by getting up at twenty minutes past six instead of at seven o'clock I inconvenienced anyone. The Leader of the Liberal Party left the House before I rose to speak and did not return until after half past seven, and I took care to give the right hon. Member for Bedford a copy of what I had to say in plenty of time for him to read it before I spoke.
  Mr. Lubbock: The right hon. Gentleman has referred to my right hon. Friend. My right hon. Friend did not realise that it was necessary for him to speak to enable the predictions of the Chancellor to come true.
  Mr. Healey: I am sure that that is the case. Our error, if we committed one, was to ensure that the House obtained the fullest possible details of our decision as soon as possible. I agree that in doing this we were breaking the precedent set by right hon. Gentlemen opposite.
  Lord Balniel rose—
  Mr. Healey: I cannot give way. The last major cancellation which right hon. Gentlemen opposite announced was the cancellation of Blue Water in 1962, but
  1210
  they took care to wait until the House had risen for the Summer Recess before they revealed their intentions to the public. In fact, of the 30 major aircraft and missile projects which the right Member for Preston, North told us in 1963 had been cancelled by the previous Administration after spending more than £250 million, they announced the cancellation of only six in Parliament. Twenty-four were announced by the Ministry to the Press, or were concealed until long after the cancellations had been made.
  The fact is that the complaint of hon. Gentlemen opposite about the way the announcement was communicated to them is as bogus as the points of order which wasted 50 minutes of parliamentary time last Tuesday. It is a fainthearted attempt to conceal from the nation the fact that the decision which the Government have taken in cancelling the TSR2 is one which they themselves would have taken years before if they had had any sense of financial responsibility and an ounce of political courage. They simply lacked the guts to face the facts. They funked the decision when they should have taken it. We did not. It is as simple as that, and I ask the House to reject their Motion with the contempt that it deserves.
  5.39 p.m.
  Mr. Julian Amery: I think that the House would have appreciated the right hon. Gentleman's speech rather more if he had come out with a full apology for the way in which the announcement was made. It is common ground that it was a great mistake on his part not to submit himself to the normal cross-examination to which all of us have often submitted ourselves in announcing unpopular decisions. Of the great decisions which had to be announced by our Front Bench when we were in power, I can remember none that was not made at the Dispatch Box. There may, of course, have been some smaller incidents which were not so announced. The decision on Blue Water was taken after the House had risen.
  Before I turn to the right hon. Gentleman's other remarks, I want to register the strongest possible protest against the shabby confidence trick which the Prime Minister inflicted upon my constituents

  1211
  and the whole of the aircraft industry. The right hon. Gentleman came to Preston in June last year and assured the workers of the English Electric Company of the B.A.C. that he foresaw a long and useful life for this magnificent aircraft in a conventional rôle. He said:
  "Mr. Amery is always spreading rumours that Labour will cancel the TSR2. I repudiate these rumours. Our position with the TSR2 is exactly the same as the Government's. If it works and does what is expected of it at a reasonable cost"—
  [Interruption.] I am glad that hon. Members opposite rose to that fly, because the right hon. Gentleman went on to say:
  "we shall want it, although not in the nuclear rôle. We look forward to its success, although we shall not know for many months whether it is successful. We look forward to its production."
  Only two things could possibly have justified the Government's cancelling the TSR2 after that statement. One would have been if the aircraft had failed to perform adequately, and the other would have been if, when right hon. Gentlemen opposite came into power, the costs had proved to be very different from what they thought they were at the time.
  The Secretary of State for Defence, in a discussion with me six months before his right hon. Friend spoke in Preston, said that he thought that the total cost would be £1,000 million. This was the advice which the then Leader of the Opposition was receiving from his right hon. Friend. When the right hon. Gentleman made this statement about the £1,000 million, I countered it by saying that I thought that the development costs would be about a quarter of that and the production costs slightly more. The Press, which was quite good in its arithmetic, concluded that the programme—and we were thinking of 110 and not the full 158 aircraft—would cost £550 million. The right hon. Gentleman has told the House that 100 aircraft would cost about £600 million, so there is not a big gap in the figures.
  This was the information which was in the mind of the Prime Minister when he spoke in Preston. It could not have been less than £550 million, and it might have been as much as £1,000 million. Yet, with this information in his mind,
  1212
  he assured the workers of Preston that their jobs would be safe and that the Labour Party would go on with the programme. This was to treat them with a disgraceful lack of candour, even in an election year.
  Mr. Healey: The right hon. Gentleman is a master of candour. He will recall telling me—and he was the man with the facts; I was not—that when I gave those figures I was exaggerating the unit costs by a factor of 10. This was the information that he gave me, speaking as Minister of Aviation, at a time when he knew that the information he was giving me was totally incorrect.
  Mr. Amery: I am glad that the right hon. Gentleman has referred to that passage. At the time, because he thought that we were ordering only 30 aircraft, he claimed that they would cost £50 million each, and I said that on research and development and production this was ten times exaggerated. I was not far out as it proves. The right hon. Gentleman and his colleagues owe a large proportion of their majority in this House to the way in which the Prime Minister misled the electors of Preston. The trick worked in Preston, South. It will not work again. I was interested to see that at a meeting held there the other day, outside the English Electric Works, Labour Party supporters put up posters saying "Don't Blame Labour For Wilson".
  The truth is that the right hon. Gentleman certainly—and I believe that this is true of his right hon. Friend—always meant to scrap this programme. It seems pretty clear that the decision was taken before a full consideration of the implications and the possible alternatives. I have been very alarmed by the replies which the right hon. Gentleman has given my right hon. Friend about the TFX Mark 2. It is still not clear from what he said whether a development order for the TFX Mark 2 has been placed. If so, will he say what American agency has placed it? Are we certain that it is going ahead? He told us that he was advised that the necessary electronics and avionics could probably be fitted into it. He did not seem to know for certain. Yet, in his responsible position, this is something that he ought to be absolutely

  1213
  clear about before cancelling one aircraft in favour of another. Or is all this talk about the TFX Mark 2 a smokescreen to delude the air marshals so that he can give them, instead, the Buccaneer?
  I thought that the right hon. Gentleman was a stout defender of the rôle we need the Royal Air Force to fulfil. I read with great admiration the speech of Lord Shackleton in another place on the subject of aircraft, but I was rather alarmed to hear the right hon. Gentleman say that in certain circumstances the Buccaneer and the Phantom might discharge some of the rôles—with perhaps fewer aircraft—of an aircraft of the TSR2 or TFX Mark 2 type.
  He went on to suggest that the balance of payments problem might make it attractive to buy fewer of these aircraft. When we have a Government downgrading the operational requirements of certainly two and possibly three major military aircraft projects, and when we have them now downgrading or cutting the numbers to be supplied to do a job, we are getting very near to making the Royal Air Force a laughing stock among the air forces of the world. If this is what the Government succeed in doing the right hon. Gentleman will not get recruits to come forward. He will not be able to maintain the high standard which the Service has maintained through the years.
  There is much loose talk about aircraft being over-sophisticated. I hope that the right hon. Gentleman does not pay lip-service to the idea, or believe in his heart, that there is very much in this doctrine. We are facing potential enemies all over the world who are extremely well equipped, and it is essential that the Royal Air Force should have the best possible weapons system available.
  I want to say a word about the implications of the decisions that have been taken upon Britain's standing in the world. Policy has to be matched with power. The two must go hand in hand, and in step. If we were to cut out the TSR2 or the TFX Mark 2 type of aircraft in Europe—and on an earlier occasion the right hon. Gentleman suggested that his mind was moving in that direction—the alliance in Europe would become entirely dependent upon the Americans and the French for its reconnaissance and its strike power. Is
  1214
  this desirable? If we were to cut it out in C.E.N.T.O. we would be unable to give nuclear support to the C.E.N.T.O. Alliance. If we were to cut it out in the Middle East we should be unable to repeat the successful Kuwait operation after the Canberra goes out of service. If we were to cut it out in South-East Asia we should be unable to fulfil the rôle which is now filled by the Canberra.
  The greatest importance attaches to this decision, and I do not understand why there has to be this full analysis and this fresh defence review of commitments which, if there they are accepted, can be discharged only by weapons systems of this sort. We hope and believe that the right hon. Gentleman stands by these commitments, although it is clear that many of his hon. Friends do not and that there is a serious division in the Government on this point.
  The other day, in a public speech, the First Secretary of State said that many of these overseas commitments must go, and the Chancellor of the Exchequer at the Dispatch Box last night talked in the strongest terms about cutting our overseas commitments. I hope that the right hon. Gentleman and Lord Shackleton, together with others who have the right ideas, will fight for the maintenance of the Royal Air Force even if they cannot fight for the maintenance of the aircraft industry. But they have weakened their own case by already cancelling the best equipment that was available and by increasing our dependence upon foreign purchases of foreign aircraft.
  The right hon. Gentleman made very great play with the savings which he claimed would be obtained by this cancellation. I should like to ask him a simple question, has he allowed for the tax element? I know that it is not a major one, but it is a point of some importance. The aircraft industry is a very high wage industry and large amounts of money spent on these projects must come back in taxation. It strikes me as rather ironical—the Minister of Aviation, who is an economist, may share my surprise over this—that the Chancellor should have announced the cut in the TSR2 in the same speech in which he talked about the importance of restricting overseas

  1215
  investment. The reason he advanced, the main reason, for restricting overseas investment was the proceeds of overseas investment were taxed by foreigners and the money did not come to the Revenue. In this case the right hon. Gentleman is authorising a massive investment overseas on which he will get no revenue and no dividends. I think that a point which might be looked at.
  A lot of the argument about the wisdom of buying overseas seems to me to involve a lot of careless thought. On the same argument our whole agricultural policy would go overboard. The computer policy recently announced would go overboard, and so would the coal policy. I was interested to see that the Minister of Power declined combat with my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), who took him to task on that subject yesterday.
  While on the issue of redeployment, I would say that we shall get a brain drain to some extent which will injure the balance of payments in so far as people transfer to rival industries. You will also get a skill drain within the country. In my constituency skilled men will be going out of aviation, in one case to a very good firm, Leylands, who make motor buses and lorries for export as well as home consumption. And there is the Bond mini-car factory which makes a three-wheeled car. I have seen that in the constituency of the Under-Secretary of State at Wednesfield they hope to get people in the trapping industry. They make all sorts of traps there—bear traps and mouse traps. This is a reverse of what happened to cotton.
  From the cotton industry people went to more advanced technology. Here they will be taken out of advanced technology to go into less advanced technology. This will in the long run do damage to the economy. You are gambling as a result of redeployment that you will earn very large sums of additional exports. You will have to earn something like £600 million more over the next five to ten years to pay for the aircraft you are buying from abroad. Will you really get such a great increase in exports?
  Mr. Deputy-Speaker: Order. I have listened to the right hon. Gentleman's use of the word, "you" and it seems to be getting personal. In this case "you" is the Chair.
  Mr. Amery: Yes, I was addressing you, Sir, individually. I was asking you, Sir, as the Deputy-Speaker of this House, whether you do not see the matter arising in this way. I hope, Sir, that I was in order in doing that because the crux of the matter, as I would like to put it to you, is that if you dismantle the industry now, and you are dismantling it—
  Mr. Deputy-Speaker: Order. I thought that the hon. Gentleman's defence of himself was most ingenious. But he has now saddled the Chair with dismantling the aircraft industry.
  Mr. Amery: I stand corrected, Sir.
  The fact is that the Government are dismantling the industry. Nine of the greatest design teams, in engines, airframes and electronics, have become redundant. Only the Concord is left of the new projects. There is still no evidence of any firm new projects to replace the cancellations.
  The right hon. Gentleman says that in a few weeks he hopes to announce an agreement with the French. Perhaps his right hon. Friend will tell us something about this. When I was negotiating the early stages of this agreement with the French Government last year, the projects were not very big and we did not think that they would take up a great deal of the strength of the industry.
  The design teams are going and the production teams will follow. This is, of course, the policy which the right hon. Gentleman wishes to pursue. But it has desperate implications. We have been spending between £300 million and £400 million a year on the aircraft industry. If we are to remain major operators of civil or military aircraft, we shall have to go on spending something like this sum over the years. We may need fewer aircraft, but they are likely to grow more expensive with advances in technology.
  If the industry is dismantled, we shall have to spend an increasing proportion of the money abroad and lose valuable exports which we are getting at the

  1217
  present time. What is more, the quality of our design work will fall. You cannot maintain the highest standards of aircraft and aero-engine design unless your designers are swimming in a big pool, unless there is a wide range of activities from which they can gain experience and which will give them the necessary scope. I think it necessary to look at the Government's decision in the context of the programme which we were pursuing. We had a full programme to meet nearly all our civil and military ends—
  Mr. Roy Jenkins: May I ask the right hon. Gentleman, from his experience of being for several years in the job which I now hold, whether he is satisfied, looking back, that the country really got full value for money out of an aircraft industry which, in relation to our population, is 1½ times the size of the American aircraft industry, and whether he feels that everything was right with matters as he left them?
  Mr. Amery: Anyone who said that everything is right with any situation would be intolerably complacent, but I think that the industry was very strong.
  I should like to turn to another side of the right hon. Gentleman's statistics. The American industry amounts to about 2 million people. We are hoping, and I hope that the right hon. Gentleman—
  Mr. Roy Jenkins: The figure is 620,000.
  Mr. Amery: It is considerably more than that if you take the engine and electronics people as well as airframes. We are only a little more than 10 per cent. of it. If we as Europe, are going to compete with the Americans, if we are to build a European industry which can stand up to the massive onslaught of American competition, it is going to be a pretty formidable task. The whole of the European industry taken together is less than 500,000 strong and we represent more than half of that amount. Our plan as my right hon. Friend was explaining was that when the family of aircraft that we had under development was completed we should go into Europe for the next generation of aircraft. If we dismantle the industry before we go into Europe, we shall have nothing with which to get into Europe and no nucleus around which the Euro-
  1218
  pean industry can be built. Believe me, we are facing a tremendous task in competing with the Americans at all, even collectively with Europe, but it can just be done. It cannot be done if we dismantle the industry here first.
  I find it difficult to discover what the Government really mean about Europe and where they stand on this issue. They talk of Europe, but they buy American. They talk of standing up to American competition, but they proceed to dismantle the industry. They talk of enlarging the market, but they contract the source of supply. I cannot discover where these European aircraft will fit into their programme. There are two French aircraft under discussion and the right hon. Gentleman talked about two German aircraft. Where do they fit in? What is the operational requirement to which they correspond? What is their relation to the 1127 and the Phantom? What is the time scale in which we are going to see them? Is all this reality or is it a smokescreen to camouflage the sell-out of the British industry to the United States?
  Tonight the Prime Minister leaves for Washington, with a visit to New York first. I understand that on Thursday he will be lunching with the President. I think the right hon. Gentleman deserves a good lunch for the help he has given to the American industry. He deserves also a welcoming dinner from the hon. Gentlemen opposite who sit below the Gangway and constitute the Left-wing It is a strange alliance between the Left-wing of the party and American big business to knock out the British industry. Our view is that we need to maintain a strong British aircraft industry until we can establish a lasting partnership with our partners in Europe. The Government talk as if they agreed with this view, but if they cannot stand up to pressure from their American creditors and from their own Left-wing, they had better make way for people who can.
  6.0 p.m.
  Mr. John Cronin: I admire the courage of the right hon. Member for Preston, North (Mr. J. Amery) in coming again into a discussion of aviation. My recollection is that, when he was responsible for aviation

  1219
  affairs, every few weeks—with rather limited success—he defended a fresh scandal at the Dispatch Box. I recall the Ferranti affair, the B.O.A.C. crisis, and numerous other occasions when he certainly did no credit to the office he held.
  I think that the right hon. Gentleman's courage becomes foolhardy when he criticises the present Government, because he was the person who should have made the decision when he was in office, long before the election. The right hon. Member, and his predecessor, the right hon. Member for Monmouth (Mr. Thorneycroft), took no useful decisions through the whole of the last three years of government as far as the aviation industry was concerned.
  I should like to accept the verdict of a person who was in constant contact with the right hon. Gentleman. I refer to the chairman of Hawker Siddeley, the biggest aviation factory in the whole business. He said, on 20th February:
  "The Conservatives would not make up their minds about anything. They just waffled."
  That represents exactly the contribution made by the right hon. Gentleman when he was in office.
  I think that this occasion is in some ways a sad one. The TSR2 was obviously a triumph of British technology and it is a sad occasion that we have to cancel it. It was the view of the Labour Party before the election that we did not intend to cancel it, provided that it could do the job for which it was intended and provided that it was economic. Obviously, we have had to have second thoughts, because, until the Labour Government took office, nobody on this side of the House knew what the total cost was, or what would be the economic situation which we were to inherit from right hon. Gentlemen opposite. That came as a complete surprise. Nevertheless, this is a sad decision. I think that I should be very happy to accept the verdict in a headline in a paper which is far from being Left-wing, the Financial Times. The headline was, "A sad but right decision." I think that this is definitely a right decision.
  We ought to examine the TSR2 from two aspects. One is the economic rôle
  1220
  and one is the military rôle. We heard from the right hon. Member for Bedford (Mr. Soames) a lot of talk about the desirability of aircraft having short takeoff and landing capabilities. He drew a picture of our embarrassment in a war in the East if we were not equipped with such aircraft. He spoke as though the TSR2 were the only aircraft with short take-off and landing capabilities. These capabilities are certainly obtainable in the TFX, the F111, they are certainly obtainable in the Phantom—particularly if it is powered by Rolls-Royce engines, which make it more efficient—and they are even obtainable in the Hercules if it is fitted with an apparatus which blows air downwards and gives it more short take-off capability. I would suggest that the right hon. Member for Bedford completely misled the House in saying that there was any possibility of deterioration in the efficiency of the R.A.F. from the point of view of the short take-off lift capabilities.
  The right hon. Member for Preston, North made play of our dependence on the United States. This is also a two-way process, because the United States is, to some extent, dependent on us as far as aircraft are concerned. The right hon. Gentleman knows perfectly well that 95 per cent. of United States military aircraft are fitted with the Martin Baker ejection seat. If we ceased to supply that seat to the Americans, they could not produce any aircraft fitted with a capable ejection seat for a year, and they would be powerless for that time. I think that he is taking a somewhat lugubrious view of our dependence on the United States and such dangers as it might produce.
  I should like to examine the purpose for which the TSR2 was built. One purpose, of course, is the nuclear interdiction rôle, the purpose of planting nuclear weapons on targets. I do not think that there is any hon. Member who believes now that nuclear weapons would be used in a limited war. I am sure that we must have abandoned at least that conception. Certainly, from the point of view of the nuclear interdiction, and even from that of a strategic nuclear rôle, the TSR2 is completely obsolete compared with the modern missiles which are available, such as the Polaris missiles.
  I agree that the TSR2 is probably the best reconnaissance aircraft available.

  1221
  There is no doubt about it, but it is best only to a marginal extent. I think that after the F111 is fitted with the TSR2's radar dome, as my right hon. Friend the Secretary of State for Defence said it would be, nothing will be lost from the point of view of reconnaissance.
  One comes then to the question of the conventional strike rôle, in other words, the attacking of communications, airfields, rail junctions, bridges and bottlenecks of communications—such as mountain passes, forests and concentrations of troops—with conventional bombers. I would suggest that all these rôles, the whole of the conventional strike rôle, could be easily taken over by aircraft such as the Phantom and the Buccaneer and performed with equal efficiency. I would suggest that there is no prospect of any appreciable impairment of the efficiency of the R.A.F. in the future in the cancellation of the TSR2.
  I think that there is an actual advantage, in this respect. If we had ordered the TSR2 it would have had to be ordered in very large numbers, 150 or 100 to be ordered economically. If one ordered 50 TSR2s, the cost would escalate to about £10 million each or perhaps more. By cancelling this, we have left ourselves with the option of having a much smaller number of strike reconnaissance aircraft to do the job just as well and to allow firm military resources to be deployed by the R.A.F.
  I turn now to the economic aspects of the TSR2 cancellation. I think that both the right hon. Member for Preston, North and the right hon. Member for Bedford have been excessively melancholic about the effects on the aircraft industry. It is time that hon. Gentlemen on that side of the House had a sense of proportion about this. The total number of people employed on the TSR2 represents less than 10 per cent. of the total labour force of the aircraft industry. [An hon. Member: "At this stage."] At this stage.
  It seems to me unreasonable that the right hon. Member for Preston, North should talk about the aviation industry being dismantled by the present Government, dismantled by causing redundancies among less than 20,000 workers out of a total labour force of 268,000. I suggest that that is the language of exaggeration. Obviously, the whole TSR2 project
  1222
  has to be considered in the light of our economic difficulties, which have persisted ever since the war. We have been able to keep solvent as a country only by repeated bouts of deflation. This has weakened our industrial power.
  Last year we inherited from the previous Government the incredible balance of payments deficit of £745 million, which would have been £800 million had we not been able to escape paying interest on the capital of the American loan. These economic difficulties can be overcome only by increased production, at competitive prices, of goods for export. It is urgent that all our resources are deployed and that any project is considered at least partially in that light.
  A lot has been said about the contribution which the TSR2 and other projects make to industry by technological fallout, but I suggest that this argument has been greatly overstated, for when we consider countries like Germany and Japan nobody can possibly question their technological expertise, although neither of those countries have aircraft industries worth talking about. Thus, the argument of technological fall-out is a very limited one indeed.
  I suggest to hon. Gentlemen opposite that the cancellation of the TSR2 will free immense numbers of skilled workers and make them available to be deployed on productive resources for the export market. There is a great shortage of labour in most industries of a technological nature. I hope that hon. Gentlemen opposite will bear in mind that a large proportion of the workers in the aviation industry—workers employed on the TSR2, the Hawker Siddeley 681 and the P1154—are not aircraft engineers, but are merely skilled men employed on aircraft work. They could use their skills as easily in other industries, deploying their resources in other ways.
  Mr. John Wells: The hon. Gentleman made a point a short while ago about the United States being dependent on us for the Martin Baker ejection seat. Is he seriously likening a relatively unsophisticated item of that sort with the highly-sophisticated electronic equipment on which the people he is now mentioning are employed? Is he aware that a comparison between a relatively simple piece of equipment like an ejection seat

  1223
  and highly technological manpower is not a realistic one?
  Is he further aware that the workers about whom he is now speaking are highly skilled technologically, are devoted to the aircraft industry and that many of them would, I believe, rather emigrate to the United States or elsewhere, and so be able to follow the trades requiring their impressive skills, than—
  Mr. Deputy-Speaker: Order. This intervention is becoming a speech.
  Mr. Cronin: That intervention came rather like a delayed action bomb, because I referred to the ejection seat about 10 minutes ago. I am not suggesting that the Martin Baker ejection seat is something which the United States Air Force could never do without. What I am saying is that it could do without it, but that it would turn that country's production in this connection into chaos.
  I was speaking about the labour force. It will, as a result of the TSR2 and other cancellations, be released to the extent of about one-third of the force employed on electronics. And, heaven knows, the electronics industry is desperately short of skilled workers. There are myriads of uses to which the skills of these worker could be put. I see nothing but advantage to the country's economy in electronics workers being freed to go to other industries where they could make an important contribution to our exports drive.
  Mr. Douglas Dodds-Parker: Has the hon. Gentleman any proposals for the few top design teams on whom the whole of this industry depends and who depend on the continuation of top aircraft production projects in this country?
  Mr. Cronin: That is an extremely useful question. Unless action is taken I agree that there will be some redundancy among the design teams. This is something which the Minister will have to take energetic action to prevent. If super-projects are undertaken, particularly in co-operation with the French, there will be work for most of the design teams. I suggest, however, that it is obvious that engineers who are operating
  1224
  lathes, drills, metal cutting machines, and so on, could equally use their skills, and certainly very profitably so, in other industries, to the advantage of our exports.
  Mrs. Anne Kerr: Would my hon. Friend not agree that as far as possible we should bring jobs to the men rather than uproot men and their families and take them to the jobs?
  Mr. Cronin: I am always prepared to accept such a contention. However, I suggest that keeping large quantities of skilled labour tied up making a project which makes no contribution to our balance of payments difficulties is something which we cannot tolerate in our present economic situation.
  The aviation industry is theoretically an industry which could make a very large contribution to our exports, for it uses the minimum of materials and the maximum of skill. However, at present it is not using that skill to advantage. Aero-space exports in 1959 were worth £150 million. They have now shrunk to about 100 million and I suggest that this indicates that something appears to be wrong. This view is perhaps reinforced when we see that although the British aviation industry employs 268,000 men, it produces roughly the same amount of exports, about £100 million worth, as the French aviation industry, which employs only 90,000 men.
  It is clear that the British aviation industry is not making its contribution to the export market which it should. It exports 2½ per cent. of the national exports, while it employs 10 per cent. of the nation's scientists and technologists. This imbalance must be corrected and I suggest that the industry must to some extent be contracted. There is nothing appalling about such a contraction, although it will obviously cause some temporary hardship to some workers. That hardship could be reduced to the minimum if the workers concerned were given the maximum help—as I am sure they will be—to obtain other jobs, which are waiting for them immediately in other industries, and if they are given reasonable redundancy payments.
  Mrs. Anne Kerr: Generous.
  Mr. Cronin: Yes. I accept the use of the word "generous" here. I accept that

  1225
  correction. I am glad that my hon. Friend used the word.
  I suggest that there is a big future in changing the character of the industry, making it smaller and directed much more towards the export market. Hon. Gentleman opposite might be interested to know that in a survey recently made in America it was found that the aviation industry there, in spite of its enormous home market, would have to be contracted by about 30 per cent. in the near future. How can we, with any sense of realism, maintain an aviation industry at the same very high level as it is at present when the United States, with that country's tremendous advantages, cannot maintain its present industry? Therefore, certainly a small amount of contraction is essential and, as I have explained, the hardship involved can be of a minimal nature.
  If our economy is to go ahead as we all desire there must be much more mobility of labour. If the present Government baulked at taking such a decision, then I do not believe that they could claim to be worthy of consideration as a Government who take a serious view of the country's future. I suggest that the Government are making a courageous and effective decision which will greatly help the nation's economy in future. It is a courageous decision and I am sure that the majority of people recognise it as such. I trust, therefore, that the result of the Division tonight will also recognise it.
  6.19 p.m.
  Sir Lionel Heald: I am very grateful to have the opportunity to speak on behalf of another of the constituencies—unfortunately, there are several of them—which are seriously affected by the cancellation we are discussing, and my constituency may be much more seriously affected than others by the after-results in the years ahead.
  I have had, by means of correspondence and conversations, the strongest evidence of the indignation that has been caused both by the manner in which the decision was announced and the basis upon which it has been sought to be justified. Many of my constituents, employed in the industry and not, have pressed me to make the strongest protest against what
  1226
  has been done and the way in which it has been done.
  I intend to do so, but I think that my first duty is to refer to one part of the speech of the Secretary of State for Defence with which I can agree. Our concern today must be to insist on the Government giving proper attention to those who will suffer from this tragic event—for a tragic event it is. It is quite as bad as scrapping a great ship that is under construction—taking it out to sea and sinking it. One can imagine the feelings of the men, the keen and skilful craftsmen, engaged in such work.
  Where Governments have power of life and death over an industry—as Governments today have over the aircraft industries of most countries, in view of the vital importance of the military aspect—any Government must accept a very special responsibility when they exercise that power of life and death. I believe that the whole House will agree that the Government ought to accept this responsibility quite fully in this case, and should give the problems of the individual constituencies a very sympathetic consideration. I also hope that the Government will allow those hon. Members who represent those constituencies to take part in discussions and consultations, if these can be helpful, and make suggestions for the alleviation of the suffering.
  The Chertsey division is sometimes regarded as simply a suburban constituency. It is nothing of the kind. We send at least 5,000 workers every day across the Southern Railway to the B.A.C. Vickers factory, and the other factories alongside it which make constituent component parts, as they do also in my constituency itself. That is by no means all. There are the many small traders who supply these thousands of men and their families with the goods that they need, and the prosperity of this industry is, therefore, of vital importance to them.
  The fact is that Vickers has for many years been the premier industry in northwest Surrey, and the most important provider of employment in that area. As our excellent local newspaper the Surrey Herald well said recently:
  "The problem ahead of our area is of such formidable magnitude that no rapid assessment of it is possible."

  1227
  I was, therefore, very sorry to hear the hon. Member for Loughborough (Mr. Cronin) make such a very cold-blooded and unsympathetic assessment of that problem. The hon. Gentleman is not now present—[HON. MEMBERS: "Where is he?"]—but he spoke in the coldest possible way, and used the word "only" in relation to the several thousands of people affected by the decision. I should have thought that "only" was not the word to use in connection with this very grave problem.
  It is not only a question of the immediate redundancy, though that is bad enough. I have no figures, and I should not like to alarm anyone, but we must realise that even in one constituency the numbers may run into several thousands at once and, in the long term, a factory like that at Weybridge might well have to be closed altogether. One can see what the repercussions of that would be for the whole locality. It is very easy to talk glibly about redeployment into other and more important fields, but that cannot be done overnight. I read in a newspaper the other day an article that appeared to suggest that one could close down an aircraft factory on Friday evening and open it up for the manufacture of machine tools on Monday morning. I should have thought that anyone who said that or thought that should have something very serious done to his head.
  My first complaint on behalf of those concerned, therefore, is the lighthearted way in which members of the Government, and their numerous public relations apologists—and they are numerous nowadays, both inside and outside Whitehall—have tried to play down the consequences of the decision. That process of playing down has been enormously assisted by last week's quite unworthy political trick, which gave the Government a period of a week's parliamentary silence. They no doubt hoped that with a week's delay the Press would find some news more interesting than this, and so not pay so much attention to this item. I believe that they made a mistake there; and that we will find that the public take the matter very much more seriously than the Government do. I therefore most sincerely hope that we can all agree on insisting that in this matter a heavy responsibility lies on the Government.
  1228
  On a longer view, we must all be concerned, and we are all concerned, with the future of the industry. The effect of cancelling the TSR2 cannot be confined to its immediate impact. As my right hon. Friend the Member for Preston, North (Mr. J. Amery) pointed out, it might well render almost futile the deliberations of the Plowden Committee—perhaps that is what it was intended to do—by creating a fait accompli in the shape of an emaciated, dispirited aircraft industry, much easier to knock over.
  If the country wants to continue, as I believe it does, to have any aircraft industry—I add, any Air Force—it had better say so now very loudly and clearly, and serve notice on the Labour Government of what it intends to do to them if they persist in allowing these great national assets to be destroyed.
  I do not believe that the present Government want either of those two things. They are certainly going the best possible way about it to produce and ensure the eclipse of both. This is no afterthought; a number of us have been saying this for months past. We simply did not believe that the Government intended to give the R.A.F. either the TSR2 or the TFX. I know no more about it than anyone in this House, but I am entitled to form my views as much as anyone is. It looks to me, and I believe to many other people, as if the Royal Air Force chiefs have been led up the garden.
  It is quite a clever scheme, but of course, the Prime Minister is a very clever man. First, he tells the Royal Air Force, "You cannot have the TSR2. That is clearly understood, but I know you are a hungry animal, so here is another bone for you. It is nearly as good; it is called the TFX." What was the poor dog to say? Of course he said, and the Press duly announced, that the R.A.F. chiefs accepted the TFX. That was used as a basis for saying that the R.A.F. chiefs prefer the TFX.
  We on this side of the House believe that the R.A.F. will not get that either. We have some circumstantial evidence for that. Mr. "Ted" Hill was interviewed when coming away from a meeting. He is a fairly well-informed man. He said that it might be possible that this dollar expenditure would not

  1229
  be necessary after all. So the poor dog gets none. The Prime Minister can in due course put on a very fine Mother Hubbard attitude in which, when the time comes, he would probably blame the wicked Americans for jacking up the price.
  Although he can claim to have penetrated a very successful confidence trick, I wonder whether he realises what foreign countries will think of what he has done. I shall tell the House what was said to me on this subject during last week-end by a very intelligent and extremely substantial foreign observer. He said, "We cannot understand how the British Government can square the TSR2 decision with the new and very sound Labour policy which was developed by the Foreign Secretary in the House of Commons the other day. The Foreign Secretary seemed to be saying quite clearly that Britain intends to be really strong east of Suez." Of course, the gentleman was speaking for himself, but he is a well-informed man and many people know that that was exactly the rôle for which the TSR2 was designed.
  It is quite clear that the nuclear capacity, as the Prime Minister himself said, was a bonus, but, of course, it was no doubt one reason—and a very important reason—why it should be possible to cancel it in favour of the American aircraft. He would be able to say to his Left-wing, "I have done something for you. I have scrapped that nuclear plane, whatever the result for the Royal Air Force or anyone else." "Now", said my friend from abroad, "it appears that Britain is to scrap not only the TSR2, but the whole military requirement. If that is so, I think that you ought to realise that your friends and allies abroad, and others who are not your friends or allies, will conclude that the British Government are only bluffing."
  I believe that there is grave reason to fear that the Government are bluffing over our defences. After all, why should the leopard change his spots, the leopard in this case being the Prime Minister? When I came here in 1950 the present Prime Minister was busily engaged with Mr. Aneurin Bevan and the so-called "Heinz Group"—because there were 57 of them—sabotaging the then Labour Government's defence policy. When the
  1230
  Labour Defence Estimates for 1951 appeared, both right hon. Gentlemen resigned. It is an interesting coincidence that at the same time there was a proposal by the then Labour Government to put a charge on National Health teeth and spectacles. That provides a rather remarkable parallel, because the Prime Minister then said that social security must come before national security.
  That is "where we came in" with a vengeance. The vengeance is the personal vengeance of the present Prime Minister. He is able to say, "Now I have the power to do what I wanted to do then." Many of us will remember his saying during the General Election, "We have to go back to 1951. We have been on the wrong road ever since and have to start again." Some people thought that he was talking about the time when the Conservative Government came in, but I suggest that he was talking of the time when he was turned out by his own party.
  The right hon. Gentleman says, "Now I can do what I always wanted to do." Fortunately, the present Prime Minister, Mr. Aneurin Bevan and their friends failed to destroy our defences as they intended to do at that time. They wanted the defences scrapped for all practical purposes. Thanks to the courage—let us face it and acknowledge it—and patriotism of Mr. Attlee, Mr. Morrison and Mr. Gaitskell, they were prevented from doing this. If they had not been, the whole of the American alliance, S.E.A.T.O. and all these things, the whole atmosphere, would have been altered.
  As it was, the Labour Government maintained the same line and there was a very common view on policy—
  Mr. R. T. Paget rose—
  Sir L. Heald: I am sorry but, as there are so many hon. Members who want to speak in this debate, I cannot give way.
  There was continuity and, in 1952, when the Conservative Party's Defence Estimates were produced both the present Prime Minister and Mr. Aneurin Bevan voted against them. They thereby opposed the relatively agreed foreign policy—at any rate in relation to the broad principles of defence.

  1231
  So why should we expect the present Prime Minister to be a champion of our defences? Surely he is much more interested in saying, "I told you so and I am now in a position to tell you so." That, of course, is the reason why the decision announced a week ago was greeted with howls of joy from below the Gangway. My constituents have told me that they read in the newspapers and heard on the radio about that disgraceful episode. It was a horrible thing, which is rather well described in a phrase coined a month or two ago by one of the political commentators, as "Feeding time at the Labour zoo." Here were the hungry animals who were able to take in—not digest, but chew—a decision that they really thought was a good one, irrespective of its human consequences.
  The other day I heard a description of the TSR2 cancellation in racing parlance. I am sorry that the Paymaster-General is not here, because I know that he thoroughly appreciates this sort of thing. It was said that there was a problem of naming a horse. The House will know that this is always an interesting and difficult problem. The parents proposed had rather unusual names: it was by a well-known stallion, "Periwig" out of "Spite". I think that the name given was rather a good one—"Uncle Sam's Joy". That is what is the result of this operation.
  With regard to the question of cost, one fact should be mentioned, because there was a mis-statement of a serious character. It was suggested that we had lost the Australian order for the TSR2 because of the cost. The fact of the matter is—I have this on good authority—that the cost was not the decisive element. The decisive element was the view in Australia that the Labour Government would cancel the TSR2. This is another example proving that the country has not been done very much good by the Labour Government.
  Finally, I come to the method adopted of announcing this decision. This is the responsibility of the Leader of the House. I am sure that the Leader of the House knows only too well what his duty to the House is, but I believe that during the last few weeks he has not been allowed to perform it. I am sure that
  1232
  everyone in the House knows that the Leader of the House is not a paid Minister as such. His duty, first and foremost, is to the House. This matter is well described in "Todd's Parliamentary Government", a well-known book. One of the most important duties of the Leader of the House is that he should direct the Government Chief Whip
  "in facilitating by mutual understanding the conduct of public business."
  The Leader of the House appears to have taken no part whatever in this announcement the other day, and I hope that he did not, because I believe that he is above that kind of thing. But he should be allowed to take part in these matters and advise upon them. Mr. Gladstone said of the Leader of the House, "He is the man who is there to help the House of Commons through all its difficulty". The Leader of the House was apparently not allowed to take part in this matter. The same thing happened with regard to the terrible episode which occurred when my hon. Friend the Member for Abingdon (Mr. Neave) had a Private Member's Bill for Second Reading on a recent Friday. I believe that the Leader of the House was short-circuited then. The matter was dealt with in such a way that he had no opportunity of exercising his elementary duty of protecting the rights of private Members.
  I believe that there may be people who do not appreciate that that is his duty. It is necessary to remind the House of the statement which was made—[HON. MEMBERS: "Oh."] Hon. Members who do not like this have probably never heard the statement. I have heard it referred to by two former Leaders of the House—Lord Butler and Lord Chuter-Ede. This is what was said by Mr. Disraeli to Lord Palmerston in regard to the Leader of the House:
  "It is not merely as the Chief Minister of the Crown that he sits on that bench—it is not merely to pass measures which he deems necessary for the welfare of the country—not merely to attend to the interests of his party that he sits there. He occupies a post second only in dignity and honour to that of Chief Minister of the Crown."
  I acknowledge that the Leader of the House performed his duties today in arranging that we had an opportunity to deal with this debate properly and were not delayed by other matters. I

  1233
  believe that the Leader of the House has been prevented from performing his duties in other cases, and I am sure that the House would wish to express its opinion with regard to that.
  6.46 p.m.
  Mr. R. T. Paget: The right hon. and learned Member for Chertsey (Sir L. Heald) does not often take part in defence debates. I think that that may be as well. His observations about the resignations of Aneurin Bevan and my right hon. Friend the Prime Minister, many years ago, were interesting. I disagreed with Aneurin Bevan and my right hon. Friend at the time, although events proved them to have been overwhelmingly right. They said that our then defence programme was far beyond our capacity. Within a year the Tory Government of which the right hon. and learned Gentleman was a member cut that defence programme by more than twice the amount that Aneurin Bevan had asked for.
  The right hon. and learned Gentleman also dealt with the tragedy of redundancy. We have seen the Tory Party cut the dockyards by very nearly one-half. There was no moan then. We have seen what happened with the closing of the Royal Ordnance Factory, Woolwich. There was no moan then. We had the announcement of what the National Coal Board was doing to protect redundancies. There was then a scream of indignation from hon. Members opposite. Now, the party which had 13 years to bring in a Bill to provide compensation for redundancy, but did not do so, is awash with crocodile tears.
  I turn to the subject of the debate. I want at once to say how much I enjoyed the speech of my right hon. Friend the Minister of Defence. I enjoyed it very nearly as much as I disliked the last one that he made on the subject of defence. It must be realised that what we are concerned with is a matter of defence. Defence is the question. Defence is the purpose of weapons. We do not and should not, although we very often run the risk of doing so, provide ourselves with weapons to support our armaments industry. The lobby which has been put up here provides a very good case for nationalising
  1234
  this industry. This is an industry which serves the Armed Forces as to 75 per cent. of its capacity, leaving 25 per cent.—a mere by-product—for civil aviation
  I am not at all happy at a state of affairs such as this, in which the nation owns no segment of that industry. When it comes to the Army we have the Royal Ordnance factories. This enables us to test the tender figures which we receive. We have the Royal dockyards for the Navy and, again, this enables us to test the prices put to us, but with the Royal Air Force we have nothing and we are Ferrantified.
  Sir A. V. Harvey: The hon. and learned Gentleman forgets that the Government own 75 per cent. of Short Bros. and Harland, at Belfast.
  Mr. Paget: It is true that the Government are the major shareholders there, but they are not using that firm as my right hon. Friend and his predecessors have used the Royal Ordnance factories and the naval dockyards. We certainly ought to do so. It is highly important that there should be at least a section of an industry serving the Government to this degree which the Government can use, as a yard stick to test tenders and proposals coming from private firms.
  I do not believe that there is a rôle for a British aircraft industry to produce major aircraft developments. There is a large rôle for production on licence and we can develop and produce smaller planes, helicopters, hovercraft and things of that sort, but I believe that our experience here shows that we cannot compete with the Americans in the really major developments when development costs run into hundreds of millions of pounds. Here, with the TSR2, over five years we have been spending £125 million on development and we have been behind schedule all the time. The Americans can spend £350 million on development in 17 months. This simply means that the Americans can start three years behind us and end up two years in front of us. It is simply a question of capacity. I do not believe that we shall cure that absence of capacity for this type of major development by aligning ourselves with the French.
  I believe that the Concord is a damnosa hereditas from which we cannot escape. It is one of the follies of the right hon.

  1235
  Member for Preston, North (Mr. Amery). We have to go ahead with it and we shall do our best, but my own view is that we shall have just the same experience and find the Americans, starting later, coming in with newer developments. In the case of the TSR2, they have come in with the folding wing. In the case of the Concord, other things will happen and we shall find that they have developed a newer plane in a shorter time.
  I now turn to the defence rôle which seems to me to be the essence of this quarrel. The TSR2 was designed as the successor to the Canberra, which, in its turn, was the successor to the Mosquito. Its design cost is ten times as much as that of the Canberra and a hundred times that of the Mosquito. The original conception was that the replacement for the Mosquito should cost a hundred times as much as the Mosquito, but it has turned out to cost as much as 200 Mosquitoes. This gives a conception of what is happening here. And the plane was required for a rôle within a tactical doctrine which has now been abandoned.
  The tactical doctrine was the defence of Europe by the use of tactical atomic weapons. The conception back in 1959, when this replacement was required, was a defence held right back almost to the Rhine, the enemy being allowed to advance to a point where the axis of his thrust became identifiable and then he was struck with nuclear weapons which would destroy his advance. It was for that rôle that the TSR2 was primarily required.
  I say this in some slight disagreement with my right hon. Friend the Canberras were there to play a part in that rôle. They were bombed-up with their nuclear bombs, ready to take that rôle. The TSR2 was to take over this all-vital rôle within that doctrine of defence, and an aeroplane two hundred times the cost of a Mosquito was justified only by a power two hundred times as great; in other words, by a nuclear strike plane and nothing but a nuclear strike plane. Other rôles—reconnaissance and rocket strikes—can be done with very much cheaper and simpler planes than that. It was only the nuclear rôle within this doctrine of defence which justified the TSR2.
  1236
  Now that doctrine is gone. It went as soon as advance defence was adopted about 1961. As soon as one's idea became to meet one's enemy and become involved with him right at the frontier one was bound to make one's concentrations far too vulnerable to use the tactical nuclear weapon. At that point of the conception of the battlefield, use of the tactical nuclear weapon, the defence of Germany by nuclears, to be used in Germany, was abandoned largely for the political reason that the Germans did not fancy a defence to be fought by nuclear means on German territory. I said at the time that justification for this aeroplane went and that we ought to have cancelled it. We should have cancelled it at least three years ago.
  For what other rôles do we require this sort of plane east of Suez? Again, reverting a little to what I said in the defence debate, I believe that we have no British interest there.
  Sir Ian Orr-Ewing: Does not the hon. and learned Gentleman agree that half our oil supplies come from the Persian Gulf, and that this is of some interest to Britain?
  Mr. Paget: I do not accept that for one moment. It is a complete delusion that it is worth while trying to defend by arms one's sources of materials. Whoever got the oil of the Middle East would be only too anxious to sell it. If the Communists got the oil in the Middle East, they would sell it a great deal more cheaply than it is now sold because the oil would not be maintained at Mexican Gulf prices, where production costs are about twice as great as they are in Arabia and Persia.
  I have for years tried to elicit an answer as to whether or not the additional price which we pay for our oil is more or less than the profits which we draw from the oilfields. I strongly suspect that the additonal price is greater, because otherwise I should, I think, have got the figures from the oil companies which I have so far not succeeded in getting.
  The same applies to tin and rubber in Malaya. The idea that one can seriously defend one's sources of raw materials throughout the world by one's military capacity is a total delusion. Our concern

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  there is as a member of the Western Alliance. We are not concerned with saving oil, with deciding who supplies us with oil, with who sells rubber to us or who does not. We are there trying to keep the peace of the world. That is our only excuse and justification for being there. We are in Malaysia to meet flagrant aggression. In Kuwait, we moved in very effectively to prevent an instance of unjustified aggression. Our purpose in these places is as peacekeeper. But this is something which we should not do alone.
  At one point my right hon. Friend said something—this was really the only line in his speech to which I took slight exception—about not being able to take military action on our own without certain weapons. I very much hope that we are not in a position to take military action on our own in these distant fields. This is exactly a line of thinking which we ought not to have. These are alliance matters.
  We are told that we require a particular type of highly-sophisticated aircraft because the Russians may supply the Indonesians or the Middle Eastern nations with highly-sophisticated weapons. Quite frankly, I do not take this very seriously. I believe that the best way to disarm a relatively uneducated and not technologically developed country is to supply it with highly-sophisticated weapons. That is what disarms people. One need only think of the successes of the Chinese against the Americans and Chiang kai-Shek, the Chinese in Korea, and the Russians themselves against the Germans. Each time a relatively primitive nation succeeds, it does so using very simple weapons. Give such a nation a sophisticated weapon and its whole balance goes wrong.
  How many trained technical men does our own Air Force require to put an aircraft into the air?—about 600 or 700. Our own Air Force requires that number of trained men to put each aircraft, excluding trainers, into the air. That is the kind of support required just to fly the planes. None of these other air forces has 600 or 700 men of that quality all told, let alone that number per aircraft. To use highly-sophisticated weapons requires a technological background of which nations of this kind are quite in-
  1238
  capable. They just could not use them. We have seen what happened to the Egyptians, in their campaigns against Israel, and the disasters suffered by the Arab nations in trying to use sophisticated weapons. They were successful as Bedouins led by Lawrence of Arabia, but they run into disaster with modern weapons.
  If we require this kind of support, let the Americans provide it. This is not a British interest. It is not an interest in which we are acting independently. We are acting for a common cause within our great alliance, and, if the most unlikely requirement for this kind of aircraft arises, there is an ally with a surplusage of such things. Therefore, from our independent point of view, either east of Suez or in the Mediterranean, I can see no justification for either of these aircraft. They are not something which we require.
  Today, we are a European Power. That is all we are. We were a great sea Power because we are an island nation, but even back in 1940 the air battle settled the control of the Channel. We are no longer an imperial Power. We are just part of Europe, a contributor to the defence of Europe. This is a matter for the Western Alliance, a matter for N.A.T.O. We shall have to revive and strengthen the N.A.T.O. concept.
  I have not the slightest objection to the main military aircraft for the alliance being provided by the Americans. After all, they are giving us the prodigious service of their nuclear shield, and they are the only people who can do it credibly. Geography and our vulnerability make it impossible for us to be credible in a nuclear sense. Only the Americans can do it. They are giving us this great service, and they have the right to lead the alliance. If supplying these military aircraft, with their great defence costs, eases, that is not something which I should wish to deny them.
  Our rôle is to support the N.A.T.O. Alliance and to fulfil our rôle in it, to be a European Power, and to realise that the other far-flung commitments are something to which we contribute only as part of an alliance, something in which we desire no independent rôle and for which we ought not to have an independent capacity.
  7.9 p.m.
  Colonel C. G. Lancaster: In the ordinary course of events, I should hesitate to take part in a discussion on a matter so technical and complex as the one under review this afternoon, and I do so only for the reason that I have a very real constituency interest in it. If I do not follow the hon. and learned Member for Northampton (Mr. Paget) in his wide-ranging speech, that is the reason. Why the hon. and learned Gentleman should have stepped below the Gangway to make that speech I am a little uncertain, but I think that we all enjoyed listening to him.
  I cannot claim to know very much about aviation although I have taken part in two long inquiries into civil aviation. And I have little or no claim to any great knowledge of military aviation. In my constituency, however, the English Electric Company operates at Warton; I have an assembly factory at Salmesbury and between 4,000 and 5,000 men are employed in my constituency and at the English Electric works in Preston. Moreover, the design and research effort of the company is centred at Warton.
  During the war, Warton was an American bomber station. After the war, English Electric set up its research and design department there and for 20 years that team of experts has been working together. I have watched their growth and their development as a team with great interest and admiration. Their first great success was the Canberra bomber which is now being made under lience in the United States and is taking part in activities in Vietnam. They went on to the Lightning, which, I believe, has given great satisfaction in operation with the R.A.F.
  The team then moved on from the sub sonic to the supersonic in the creation of the TSR2. I believe that they are the most experienced team in the world in supersonic work. They changed from subsonic to supersonic without a hitch and up to date have had no failures. It is a very remarkable record.
  In saying all this I do not want to ignore the interests of the 4,000 or 5,000 men on the shop floors who are also facing redundancy. No doubt a great many of these men will find other employment without much difficulty, although one
  1240
  cannot ignore the dislocation of their lives, of their families and their homes, which is a very severe thing.
  Nevertheless, the situation of the design team is much more serious. If these men are dispersed they will never come together again. We shall lose something which the country can ill afford to lose. It is all very well hon. Members saying that we cannot afford this, that or the other. Can we afford to have the sort of men who do the work in this design team scattered to the four winds? They will not find jobs in the aviation industry other than by going to the Commonwealth or the United States. They will be dispersed and, having been dispersed, will not come together again. Therein lies the tragedy.
  The most unsatisfactory aspect of last Tuesday was the relish with which so many hon. Members opposite cheered the announcement of the cancellation of the TSR2. Little can they have realised what lay behind that decision. These men in the design team are dedicated. They have put their hearts and souls and lives into something and they will not recover from this. If nothing is found meanwhile for their services, they cannot be held together.
  I say the head of the concern on Saturday morning, when we had a long talk. He said that discipline in the team was first class, but that unless something came along within a short while he could not hold the men together; they would disperse and once that happened they would be lost forever.
  I do not want to make a long speech. I want just to devote myself to this one aspect. I hope that, even at this last moment, the Government have plans whereby we can hold together the design team and all its ability and experience—a team consisting of about 1,200 men, each one a great expert but no greater that the team of which he is part. I hope that something will be done either in collaboration with Western European airlines or in some other direction. To see them disperse at this moment would be a loss that it would be difficult for us to recover from.
  That is not the only aspect. The same concern, B.A.C., which has been engaged in making the TSR2 is at this moment trying to sell the BAC111 in America.

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  That firm asks, "Can you imagine the situation of our salesmen over there at the moment?" "The Americans, who are very tough negotiators, are saying to their airlines, "What is the use of buying from Britain when her aviation industry is being sold down the river? What is the situation of our salesmen trying to sell the BAC111 under these circumstances? It is utterly frustrating."
  This is the eleventh hour and I do not imagine that there is a great deal that can be done now. But I hope that, even at this late moment, the Government will recognise that in dispersing this team of research experts they are striking a blow at this country from which it will take many years to recover and that time is running out fast.
  7.16 p.m.
  Mr. Peter Mahon: Ingrained deeply in the recent debates has been the inevitability of far-reaching changes in the aircraft industry. It is a sad reflection that were not the economic plight of the country so apparent the industry would not have commanded the soul-searching attention rendered to it in recent months. In the cut and thrust of an industrial crisis, circumvention must not be allowed for too long. It is at best a dishonourable display and for far too long circumvention has been the sop thrown to the industry.
  A bold decision has been made. The die is cast and it is now the responsibility of the Government to unfold, on behalf of the industry, new and braver concepts, aware of the needs of the industry and mindful also of the urgent stimulants our economy requires. To achieve a happier landing means that it is incumbent upon us to reflect deeply on the life blood of industry—men—for here is the crux of the point of differentiation.
  No one has forfeited the right, particularly when employment is at stake, to an honest exposition of hard facts. If fundamental changes are indeed necessary, I regard it as a fundamental need to impart some knowledge to the Member of Parliament for the constituency which is vitally affected rather than abandon him to "The slings and arrows of outrageous fortune". This the Prime Minister properly did—but only after I had sent him a telegram. I was sent for, and I did not appear before the Prime Minister in sackcloth and ashes.
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  As I informed him at the time, I put my best suit on. He imparted his opinions sincerely and realistically. He said that it was an agonising decision to have to take and that he had lost sleep over it—and that this was an unusual happening for him.
  I suggested that we could perhaps give ourselves extra breathing space by deciding to produce fewer planes—say 75 or even 50. Here again he patiently explained to me that if the number were reduced the cost would escalate from £6 million per plane for 140 to £6 million per plane for 75 and to an even higher cost per plane for 50 planes. I believed him then and I believe him now. In fact, the authenticity of his submission has been vouched for by the manufacturers. If they could have maintained production by reducing costs they would have been very happy to do so. The plain truth is that costs have militated against the TSR2 and if persisted in it would have seriously retarded the economic recovery of the country.
  With all the sincerity of which I am capable, I believe that the test of statesmanship has not been in cancelling the TSR2. The test is to come, and it is embodied in the challenge of the future—how best can we maintain our resources of manpower and technological "know-how" in order to keep the British aircraft industry in being on a basis not-too-financially crippling to the nation?
  The eventuality which will strike fear in the mind and heart of any worker from Preston, Weybridge or anywhere else, be he skilled, unskilled or semiskilled, is unemployment. Heaven knows that it can be devastating enough to lose a job. If a man has not got a job, he has nothing else, and dignity is gone. With the loss of a job a man can lose what to him is the priceless utility of skill. He cannot be compensated for this by severance pay, mobility schemes or even retraining. Even worse, he can lose the wherewithal to enable him to discharge his obligations to his family. In addition, the upheaval and dislocation of family life will reap embitterment. Anyone with the slightest conception of the lives of ordinary people knows this to be true.
  This dire change in the lives of workers, consistent as it is with retrenchment or recession in a particular industry, must never be secondary to any

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  economic machinations. Nor is it true to say, unless we intend to live in cloud-cuckoo-land, that we have not been troubled when miners, railwaymen and cotton operatives have been rendered unemployed. To say it represents a travesty of the truth. Redundancy, whenever and wherever and however it rears its ugly head, has been the bane of people's lives.
  When, in the manner in which this crisis was approached, it seemed that the interest of the workers engaged in the industry was not number one priority, then Preston, where there are 12,500 aircraft workers, became a seething cauldron of rumour and discontent. I will not suppose for one moment that I am more concerned about the consequences of redundancy than are other hon. and right hon. Gentlemen. Suffice it to say that in my industrial baptism on the Liverpool docks I have known unemployment, and I know that it is a cutting experience for any man to undergo.
  Being a new Member of Parliament in the pot-boiling environment which has surrounded us during the past four months is not all beer and skittles, but Members of Parliament are not chosen for their beer and their skittles ability. The vast throngs of aircraft workers which flowed into London were not here for beer and skittles. Feeling ran high. I was proud to lead the deputation to the Minister of Aviation. They presented their case with tremendous impact and honest argument. They moved the heart of London and impressed the Minister of Aviation with their lucid presentation of their case. No deputation could have achieved more. [HON. MEMBERS: "They achieved nothing."] I was proud at that time to be standing shoulder to shoulder with my constituents and not to be in Saudi Arabia.
  I have represented the feelings of workers, and their feelings only. This is the only way I know, and this, indeed, is what comes naturally to me. If some people think that there is in me a want of statesmanship, I trust and pray that in this Administration, with whom so many momentous decisions rest, there is no want of statesmanship. In Preston we have awaited with bated breath a prudent adjudication.
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  The decision has been made with the interests of the whole nation in mind. Let it not be forgotten that the people of Preston are a loyal and industrious section of Britain, too. Many hon. Members have received the stunning lists of highly qualified engineers and technicians expressing their mortification at the possible loss to the country of a large part of the aircraft industry and the sacrifice of so much scientific and technological "know-how" and ability. To me industry means the people who are in it. I will make one promise, and I know that I am not alone in this. I will contend, and contend fiercely, against unemployment and the loss of technological skill. Coming out of any fracas the worse for wear will not deter me providing that I can still live with my conscience.
  I know that Ministers are ever willing to receive advice, and if we are willing to be fair we will recognise that they have had a harrowing time in reaching a decision. A popular decision is very easy to make, but an unpalatable decision needs courage. I trust that I shall be believed when I say that I have a respect for the American nation, many of whose people are my friends, many of them my own kith and kin.
  Having said that, may I advise my right hon. Friends to take the sting out of the TSR2 decision by stating categorically that it will not be replaced by American planes? To the British aircraft worker this is the unkindest cut of all, and we will not be forgiven for it. To take an option on an American plane which does not exist is unthinkable. To be brutally frank—and I take it that that is why we are in Parliament—this is a momentous problem which it was not possible to swamp by thoughts of coppers on smokes and beer. Associating it with the Budget was, in my humble opinion, a tactical error and I sincerely trust that Liverpool does not make a tactical error of this proportion when it is at Wembley in a few weeks' time.
  I should like to refer to a proverbial event in my constituency, the time-honoured ceremony of the Preston Guild which, over 800 years, has portrayed the crafts, skills and industry of the people of this fine old Lancashire town. For dignified people to be thrown repeatedly into the maelstrom of industrial change

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  is one thing, but to make them the victims of redundancy is another. This is not a new phenomenon. The names Skybolt, Blue Streak and Blue Water come to mind.
  My constituents have by no means outlived the dislocation in their lives endured largely as a result of the recession in the cotton industry. For them dignity was lost as their industrial endeavours were discontinued. Bitterness still exists, as the right hon. Member for Preston, North (Mr. J. Amery) will agree. Incidentally, I hope that after this afternoon he will be distinguished as the right hon. Member for Preston, North and not the right hon. Member for Preston. I think that I ought to feel adamant about that. Bitterness still exists as men and women, many of them reaching the end of their working lives, recognise that the possibility of rehabilitation is remote.
  The cancellation of the TSR2 will not be a nine-day wonder. Only indefatigable efforts will revive the aircraft industry. It must not be forgotten that the succession of still-born projects has bred an intense frustration. Thousands of men's lives and future prospects are deeply involved in these large projects. When cancellation comes, there is often personal loss and the frustration which comes from the feeling that the hard work of years and of inborn skills has been wasted. Too often the lessons of the Light Brigade have been forgotten and again someone has blundered.
  Why in heaven's name do we continue to go wrong? It is the task of the Government—and I am sure that, given time, we will aspire to it—to define our rôles in such a way that they enlist the heart and will of the people. The cost to the nation of ill-conceived plans and ineptitude in the aircraft industry, with at least a dozen Ministers of Aviation in almost as many years, has been astronomical. A new approach is long overdue. The economic inheritance bequeathed to the Government has dictated the need for a re-appraisal.
  Because of this issue and only because of this issue and despite the fact that there are 1001 soul-searing issues in my constituency, I have been challenged to give up my seat by a gentleman with a majority of 14 votes, one of the greatest cliff hangers in the country. One must be ever ready to give an account of one's
  1246
  stewardship and I am quite reconciled to the fact that when the time comes—
  Sir Rolf Dudley Williams: You will be out on your ear.
  Mr. Mahon: —the right hon. Member for Preston, North will have to talk about other things besides the TSR2. It would perhaps allay the sadness of workers if they could be told how much work will come to Preston following on the Anglo-French liaison. Perhaps my right hon. Friend the Minister of Aviation can enlighten us about that aspect of the matter.
  If it is within the province of a back bench Member to offer a word of advice, I would say, "Maintain the British aircraft industry". Let us not burn our boats or our planes. If we foresake the skills and endeavours of our own people in this sphere, the day will undoubtedly come when we will regret it.
  The right hon. Member for Preston, North said that the Prime Minister had performed a trick and that the trick had worked. He really is harking back to the days of the inarticulate masses if he is naïve enough to believe that this is so. It is some trick which reduced a 4,500 majority to 14. He was almost beaten on his merits and it was not to his taste. It is about time that he got it out of his system and settled down to hard work within the constituency. There was no trick in Preston, North. There was certainly no trick in Preston, South, where the election was fought on domestic issues and on the promises of the respective parties—or at least on the policy of the Labour Party. The policy of the Conservative Party, as always, was non-existent. It is significant that the former Member for Preston, South has issued no challenge. It was in Preston, North that the issue of the TSR2 was debated, and it was in Preston, North that the right hon. Gentleman almost lost his seat.
  I was informed today that I was responsible for the issue of a leaflet, and because I objected to being told that this was so I was accused of being politically naïve. I accept the soft impeachment, despite the fact that I had a lot of political experience before coming here, but I am not politically dishonest. I would ask the right hon.

  1247
  Gentleman, who has had time to reflect, to accept that his statement contains a glaring inaccuracy. I did not issue this leaflet.
  Sir Rolf Dudley Williams: Who did?
  Mr. Mahon: I am not accountable for the leaflet. I am not even expected to say who did issue the leaflet. It is not my responsibility. I did not issue the leaflet. I did not cause it to be issued. [Interruption.] Listen carefully, because I am trying to let hon. Members opposite down gently. I say in all honesty that I fervently believe that in the next few days some people will be eating humble pie about this, and it is as well, in view of what has been said today, to set the record right.
  I did not issue the leaflet. I did not cause the leaflet to be issued. The person who issued it was not my agent. A lot of misrepresentation on this score was directed against me personally by the right hon. Gentleman this afternoon. He based a large part of his case on the issue of the leaflet. The fact is that an injustice has been done, and I must receive advice.
  Sir A. V. Harvey: Perhaps the hon. Gentleman would clear up this point. I accept what he says to the effect that neither he nor his agent issued the leaflet. But would he say whether the cost of distributing it in his constituency was charged against his election expenses?
  Mr. Mahon: I was brought up by an old-fashioned Irish mother who always told me that if I told a lie I would go in the big burning fire. I must in answer to the hon. Gentleman say that I cannot tell at this point—I will find this out for him; I will let him know the answer—whether the expense was shared or borne by one constituency.
  Mr. Soames: I accept the hon. Gentleman's statement that it was not he who issued the leaflet. I can only tell him that naturally I believed that it was him at the time that I spoke. I understand that it was issued by the Labour Party in his constituency and therefore, not unnaturally, I thought that he was responsible for it.
  Mr. Mahon: I accept the right hon. Gentleman's statement.
  7.44 p.m.
  Mr. Eric Lubbock: I do not wish to take up all the points which the hon. Member for Preston, South (Mr. Peter Mahon) raised, but I should like to refer to the question of the timing of the announcement of the cancellation of the TSR2.
  I do not agree with all the criticisms which have been made about this matter. I believe that the explanation given by the Secretary of State for Defence this afternoon was entirely satisfactory and that probably most of the indignation expressed at the time by the Tory Party on this score was wholly synthetic, bearing in mind the figures which were quoted in the opening speech this afternoon.
  I think that it was said that out of 30 important cancellations which took place in the lifetime of the last Government only six were announced in the first place to the House and that the rest were dealt with by an announcement in the Recess, or through a statement to the Press, or in some other way. A particular example which comes to mind is Blue Water. I can remember distinctly that the announcement about that was made just after we rose for the Recess.
  We should like to be quite certain about the position concerning the discussion between the Minister and the right hon. Member for Bedford (Mr. Soames), who is now leaving the Chamber. If he did put it to the right hon. Gentleman that this announcement would be made during the Budget debate and no objection was taken, I cannot see what the Tory Party is grumbling about.
  Mr. F. V. Corfield: Would not the hon. Gentleman agree that this cancellation, being the culmination of three successive cancellations, which has dealt almost a death blow to the aircraft industry, is in a different category from the other matters to which he has referred?
  Mr. Lubbock: This cancellation is more important in financial terms than many of the others, but I dare say that if we were to add up the 24 cancellations which were made by the Tory

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  Government without an announcement being made to the House they would come to a lot more than the £125 million which has been spent on the TSR2. [An HON. MEMBER: "The hon. Gentleman does not know that."]
  The hon. Gentleman says that I do not know that. He is the one who is complaining about the decision to announce this cancellation in the Budget debate. Therefore, I should have thought that he would come to the House primed with the relevant figures.
  The timing of the announcement is the most trivial part of the debate, and I want to deal with it as quickly as possible. It was suggested by the Minister that my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) would make a speech in the Budget debate and that that was how he calculated that his announcement would begin at seven o'clock. I have checked on this with my right hon. Friend. He had no intention of speaking on the first day of the Budget debate. He has never spoken on Budget day—at least going back as far as 1956—and the Minister had no reason for assuming that he would make a speech in this year's Budget debate. He did not consult my right hon. Friend, and I do not see why my right hon. Friend should have made a speech just to facilitate the timing of a Government announcement.
  On the last occasion that we debated the affairs of the aircraft industry we were concerned with the cancellation of the P1154 and the HS681 and their replacement by two American aircraft—the Phantom and the Lockheed Hercules. In the case of the Lockheed Hercules we considered that the new and much less sophisticated military requirement could very easily have been met by the British aircraft industry, for example, by developing a more powerful version of the Rolls-Royce Tyne engine and thereby improving the performance of the Short Belfast.
  Secondly, at that time my hon. Friends and I were concerned about the announcement made by the Minister of co-operation with the United States in the field of advanced lightweight V.T.O.L. engines. We felt that there was a danger that this arrangement would be of very much greater benefit
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  to the United States than to the British aircraft industry since Rolls-Royce has for some time led the world by a wide margin in this branch of aero-engine technology. We should be giving something to the Americans and there was no indication that we would get corresponding advantages in return.
  Thirdly, we felt that insufficient attention was being given to the possibility of co-operating on new aircraft projects with our friends in Europe, and particularly with the French. I quite agree with what the Secretary of State for Defence said, namely, that the day of national self-sufficiency in aviation is past. Since that debate we have had the visit of M. Jacquet. We have had the announcement that five different fields of co-operation are under examination by the British and French Governments—the strike-trainer, the variable geometry project, airborne early warning radar, military helicopters and the subsonic air bus. I was delighted to hear the Minister say that the first two of these were likely to result in a firm arrangement within a few weeks. I look forward very much to hearing the announcement about that. These projects are in addition to those on which we are already co-operating with the French and with our other partners in N.A.T.O.
  We still feel, however, that Government thinking has not gone far enough on this matter and that if we are really serious about long-term collaboration with the Europeans, not only will we need more permanent machinery for arriving at common operational requirements, but, as the experience of N.A.T.O. shows, there has to be an irrevocable commitment to whatever designs are arrived at jointly. In the past, it has happened in N.A.T.O. that a certain country has won a design competition and then the separate countries have gone their own way and patronised their own national aircraft industries. That is why we have not been able to secure much more extensive co-operation within Europe.
  Finally, in the earlier debate it seemed to us that there had been totally inadequate discussion of the changes in the rôles which our forces would be expected to undertake in the immediate future when the aircraft then being cancelled might have come into service. In the

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  defence debate of 4th March, my hon. and learned Friend the Member for Montgomery (Mr. Hooson) exposed the folly of trying to maintain some kind of nuclear umbrella single-handed over all our allies east of Suez. He pointed out that our economic position would be seriously undermined if we insisted upon maintaining these large military commitments over one-quarter of the globe when our principal competitors on the Continent of Europe had no such obligations. It seems to me that this wide rôle east of Suez to some extent determined the requirement for an aircraft of the TSR2 type.
  Both the right hon. Member for Bedford and the Secretary of State for Defence referred to this matter in their speeches. The right hon. Member for Bedford postulated a situation in which we might be involved in a localised war in the Far East in the 1970s. He illustrated the various operational requirements that would arise and which, he said, would need aircraft of the P1154, HS681 and TSR2 type. Referring to our rôle outside Europe, the Minister said today that
  "if hon. Members think of our problems outside Europe at the present time, they will realise that it is the knowledge that we could, if necessary, strike successfully at the enemy's main bases which is the best guarantee against the dangerous escalation of a local conflict into major war".
  I agree very much with what was said by the hon. and learned Member for Northampton (Mr. Paget) on this subject, that the sooner we get away from this idea of having a general military commitment over a vast section of the Middle and Far East, the better it will be for this country both economically and militarily. We must decide that we are members of an alliance and that we cannot maintain those commitments single-handed as we have tried to do in the past.
  Similarly, and here again I agree with the hon. and learned Member for Northampton, we must give up pretending that we are in the same league as the United States and the Soviet Union when it comes to developing whole families of sophisticated new weapons. Nobody in this country seriously believes today that we should develop our own intercontinental ballistic missile, not even
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  those members of the Tory Party who beat the nuclear drum hardest during the General Election campaign. The reason is simply that they know that such a policy would impose unacceptable burdens of taxation upon our people. These, therefore, are the reasons why we have no alternative but to cancel the TSR2 and, at the same time, take every possible step to mitigate the difficulties which this decision will create for the workers of the British Aircraft Corporation and of Bristol Siddeley engines.
  It follows from what I have been saying about our military posture that there should be no question whatever of purchasing the F111A instead. If we did so, there would be no scaling down in our defence commitments and I doubt very much whether the saving would be of the order that the Minister of Defence has alleged.
  We are very unlikely to get the Mark 2 aircraft at a lower price than the Australians paid for the Mark 1, even bearing in mind that the Secretary of State for Defence said that the airframe and engine would be the same, the only difference between the two marks being in the avionics package. The Mark 2 is not likely to be any cheaper. We know how much the Australians paid for the Mark 1. That figure has been quoted. In the last debate, I did some calculations in which I worked out that the saving was nearer £200 million than £300 million if we were to have the 150 aircraft that were originally contemplated. Certainly, we do not have enough figures. We have only the bare result of the calculations given to us at the end. The Minister should give us the details of the calculations from which this saving is arrived at.
  When I asked the Minister, on 9th February, what the cancellation charges on TSR2 would be, he said:
  "I should in any case not be willing to disclose figures from which cancellation charges might be deduced as they are a matter for negotiation with the contractors."—[OFFICIAL REPORT, 9th February, 1965; Vol. 706, c. 64.]
  Ministers can always give excuses for refusing to divulge figures to the House, but when it suits them, as it does in this case, they have to tell us that the cost will not exceed, I think, £70 million. Therefore, why should we not have the whole calculation set out, preferably in

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  the form of a White Paper, so that we can study it at leasure? This dribbling out of figures from which we all have to do our own calculation is not the most satsfactory way of getting the confidence of the House and of the country in a decision of this importance.
  I am glad to note from the speech of the Secretary of State for Defence in the Budget debate that on certain hypotheses about long-term commitments it might even be possible to reshape our defences in such a way as to dispense altogether with this type of aircraft. When the Minister of Aviation appeared on "Gallery" the other day, in answer to a question whether the F111 would ever really be bought, he said:
  "I think there is a very good chance that we may not need to do so."
  That was what we said in our Amendment: that the decision to cancel the TSR2 was acceptable only on the assumption that we would not replace it by an American aircraft. We shall certainly resist any proposal to do so. Many of the rôles which the TSR2 would have undertaken can be fulfilled in other ways.
  Mr. Paget: I agree largely with what the hon. Member has said, but I have this point in mind. We are committed to N.A.T.O. to the extent of an air group. It might be necessary, for standardisation and re-equipment of N.A.T.O., to include this aeroplane, and in those circumstances I think we would be justified in getting it, but not otherwise.
  Mr. Lubbock: I do not know whether there is any prospect of the French or the Germans agreeing to buy the F111. Certainly, there would be no point in our committing ourselves to the purchase of this aircraft for the N.A.T.O. rôle unless our partners in Europe were to do the same. As far as I know, there is no intention on their part of purchasing the F111.
  I should like to ask the Minister of Aviation a question concerning the use of the Phantom and the Buccaneer in some of the rôles intended for the TSR2. The Secretary of State for Defence said that the Phantom would be very restricted in range and could not operate more than 900 miles from its home base. I want to know whether in giving that figure he had in mind the American
  1254
  plane or the Spey-engined version which we hope the Royal Air Force will get finally.
  Also in this connection, I asked the Minister, again on 9th February, what discussions he had had with the British aircraft industry and with McDonnell Aircraft about building or assembling the Phantom aircraft under licence in the United Kingdom, and he said that they were examining the possibility of having British firms supply materials, components, sub-assemblies, and further items of equipment, together with the possibility of assembly in this country. I should like to know how far he has got with those discussions, because now is the time when we should seek to provide as much work as possible for the British aircraft industry to compensate for the loss of these TSR2 contracts. If we can do this in some way in connection with the purchase of Phantoms, I am sure that it will be helpful in mitigating the effects of the cancellation.
  The B.A.C. and Bristol Siddeley will face serious difficulties as a result of losing their most important military orders and the Government must do everything possible to help the companies as well as the workers employed in them. For example, I think that the Minister should consider whether it is desirable to build the nine pre-production TSR2 aircraft to be used as flying test beds for the Olympus engine which is likely to be fitted in the Concord, and perhaps also for the inertial navigational system which will go into the Concord airliner. He should examine how far the design staff at present engaged on the TSR2, numbering about 2,000 people, can be redeployed on to this proposed strike-trainer and the development of variable geometry in co-operation with the French.
  On the production side, as opposed to the design side, it may be that the build-up of orders for the BAC111 and the possibility, which seems brighter now than it did a few months ago, of further orders for the VC10 will enable serious dislocation to be avoided. Can the right hon. Gentleman tell us anything about further developments on the VC10, and indeed on the Trident, of which reports have been noticed in the Press in the last few weeks? It seems to me that in that way we can provide both the B.A.C. and

  1255
  Hawker Siddeley with continuing programmes which will keep their shop floor people occupied until the co-operation projects with our friends in Europe come on to the shop floor.
  I do not believe that Bristol Siddeley will find itself in quite such a difficult position, because I am told that it will be receiving substantial orders for Spey engines, due to the production facilities at Rolls-Royce not being extensive enough for the numbers that will be required. I should like that to be confirmed.
  It must be a terrible blow for the workers in the B.A.C. and Bristol Siddeley to find that these years of endeavour have been wasted. They are having to pay for the extravagant decisions taken by politicians a long time ago, and I can well understand the bitterness and frustration which they must be feeling. But every country has experienced the cancellation of important aircraft projects from time to time, even though, in proportion to the resources of Britain, the TSR2 was probably one of the most expensive of all time.
  It would be only too easy to cast all the blame for what has happened on the previous Tory Administration, but I do not think that that will help us to avoid making the same mistakes in future. The lesson that we have to learn is that unless there is informed discussion of military policies and a realistic assessment of the cost of alternative weapon systems, we shall go on falling into this sort of trap again and again.
  The Government must "come clean" with the House and with the country in future, and not continue to run up nine-figure bills for any project without the most stringent public examination and justification of need.
  8.5 p.m.
  Mr. Tam Dalyell: The hon. Member for Orpington (Mr. Lubbock) chided the Minister on not providing forward figures, but it was the experience of those of us who examined Sebastian de Ferranti last year in the Committee of Public Accounts that whatever else may have been learnt by subsequent experience on Bloodhound, it became clear to the Members of that Committee that until we were three-quarters of the way through the pro-
  1256
  duction line of a missile or any sophisticated equipment it was extremely hard to determine costs, and as an engineer I think that the hon. Member for Orpington does not do too well to chide the Minister on this particular score.
  I represent a comparatively small number of highly skilled men who have been contributing to the electronics sector of the TSR2, working either in Edinburgh or in Dalkeith. Many of them know that I have been, and am, wholeheartedly behind the Government's decision to cancel the very project which has not only been the source of their bread and butter, but in which they have had—and I admit this freely—a legitimate professional pride, and when the hon. and gallant Member for South Fylde (Col. Lancaster) referred to them as dedicated men I echoed that feeling.
  Although my views are well known, I have had no abuse, and there has been no great tizzy of recrimination. On the contrary, those to whom I have spoken have shown an impressive breadth of vision which does them credit, but those in Scotland who are working on the TSR2 are asking some pertinent questions. They want to know soon about the Buccaneer, because if we are to have what I think we must admit is a poor man's version of the TSR2, we must know before the design teams begin to disperse themselves. My right hon. Friend must realise that the time unit here is not months but weeks, and that if he wants to prevent the disintegration of design teams he must act soon.
  Already Scotland-based skilled men are looking for jobs in the South where once they have been able to find a home they will have a great variety of jobs. I think we may take it that they will not trot back 400 miles to Scotland which does not offer the variety of jobs which the south of England does. A man moving from Scotland to this industry has a limited choice, and if for some reason his face does not fit in the first firm to which he goes he may not have the alternative employment which he may expect after he has gone to all the trouble of uprooting himself from his home.
  Then there is the question of the Phantom. If Britain is to have Phantoms, is there any reason why we should not insist on having British fire-control equipment and British forward-looking

  1257
  radar equipment in the planes that we buy? In our capacity as purchasers, do not we hold the whip hand, and cannot we impose our will to have installed our fire-equipment and forward-looking radar? That is, of course, if we want the Phantom at all.
  Suggestions have been made that by installing British equipment in the Phantoms there will be an unacceptable delay in the Phasing of R.A.F. equipment, but my information is that co-operation between Elliotts and G.E.C., Marconi and Ferranti would involve no delay, that British quality in the sophisticated equipment is at least as good as the American, and that the British price is substantially favourable in this kind of labour-intensive product.
  Scotland's position is that the cancellation of the TSR2 is a serious blow to the growing electronics complex around Edinburgh. Some redundancy seems inevitable. It is nothing like what Scottish miners went through in the late 1950s. But should the Government make up their mind soon to go ahead either with the Buccaneer or the Phantom—containing British-made intestines—Scottish jobs would be safe, allowing that some who were declared redundant were absorbed elsewhere in Scotland.
  If, however, the Government reject both the Buccaneer and the Phantom we must face the prospect in east Scotland of at least 1,000 unemployed—this in a part of the country where there are few of the 25,000 vacancies for engineers to which the Minister referred. Again, it is all very well to talk about there being five vacancies for every one draughtsman, but that is true only of certain parts of the country—the English Midlands and the South-East. Draughtsmen do not find it so simple to get jobs in the North and in Scotland.
  So much for the Scottish position. From time to time a politician finds that he has things to say which may not be at all popular with a large number of his constituents. I am obliged to state bluntly that if the military need for the Buccaneer is in doubt and the need for Phantom is in doubt I shall not lift my little finger on behalf of those in central Scotland, even if it means much needed skilled work for my constituents and for those around me. The question
  1258
  whether we have the Buccaneer or the Phantom is in no way related to job-giving. This argument should take place on the military criterion, and on the military criterion alone.
  The right hon. Member for Bedford (Mr. Soames) said, in effect, that it was necessary to have armaments to keep up with technical progress. That is a modern variation of the old argument that we need to build dreadnoughts to keep jobs. The right hon. Gentleman put forward the view that by cancelling military orders we were "pulling the carpet from under the feet of the aircraft industry." He spoke as if it were taken for granted that in order to have a modern aircraft industry we—like the United States—had to have up to 80 per cent. of military orders. This point of view was stated most succinctly by the right hon. Gentleman in his television interview with my right hon. Friend. He then said:
  "Every aircraft industry must depend on its military orders. It is from there that come all the evolutions that go into civil aircraft. The cancellation of military orders takes away the life-blood of the industry."
  He went on to talk about the effect of the cancellation of military orders on the technological race.
  It is a sombre fact that as the twentieth century rolls on more and more science-based developments have evolved from armaments. The right hon. Gentleman is, tragically, historically accurate when he says that armaments have been the life-blood of industry at the frontiers of knowledge, but the fact that he is historically right casts a pretty damning reflection on contemporary capitalism.
  Is the Tory Motion really saying that an armaments drive is an essential condition for developing modern science-based industries? Is that really the argument? One of the reasons why I became a Socialist was my belief that in a Socialist set-up at least one had a chance of creating conditions in which technical progress could be freed from the armaments race. It should be one of the ambitions of this Administration in Britain to show the world that great industries can flourish at the frontiers of knowledge independent of massive military spending. In this spirit, and with due modesty, I offer my right hon. Friends a programme which I believe to be realistic.

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  In the first place, will they make an early and definite decision on the need for the Buccaneer or the Phantom in relation to our military commitments? I am not convinced that there is any such military necessity. Secondly, will they recognise that the F111 has no realistic operational use for the United Kingdom? Although the initial procurement will undoubtedly be subsidised, we shall be stung hard—and I am not anti-American—when it comes to spares and test gear. The sooner this option is clearly rejected the better.
  Will my right hon. Friends also recognise that licensing agreements are at best a partial answer? The thinking here is done back in the United States. No lasting benefit accrues to British industry. It really is a case of their having the brains and our having the brawn. This does not get us very far.
  I now come to my positive suggestions. Can we switch some of the expertise and enthusiasm which we are currently devoting to the TSR2 to other projects? Let me give two specific examples. Can we make a great effort in initial inertial navigation and micro-circuit digital computers, which tell us where we are in space without ground aids? These clearly become very important not only in the Phantom but in regard to supersonic airliners, such as the Concord. Inertial navigation will forecast with such accuracy that it will make it possible—if all aircraft are fitted with it—for separations on the North Atlantic route to be significantly cut down and can almost certainly make it possible for the crews of transoceanic airliners to be cut down in number from four to three, and this would be a great saving during the current acute shortage of pilots.
  My second example concerns computeraided design. Here I must declare an interest in Midlothian and in thinking of the new Ferranti project at Dalkeith, where they will have no direct TSR2 redundancies but will certainly suffer from the machine tool cancellations due to aircraft redundancies. The computer-aided design, based on an investigation which is going on at the National Engineering Laboratory at East Kilbride, will make it possible for projects to go
  1260
  straight from the design drawing board to the actual machine tool. The significance of this is that it will speed up the whole process of modernisation to which we are committed.
  In the 1970s we shall have to deal with speeds measured in nano-seconds. A nano-second is to a second as a second is to thirty years. It is a sliver of time so thin that it is too difficult for the human imagination to grasp. The computers of tomorrow will respond to handwriting, to images, and even to spoken comments. The computers of tomorrow will communicate tirelessly with each other over any distance. They will recognise a face, a voice or a symbol amongst tens of thousands. By processes very much like logic computers will have the power to learn from experience, which is more than some human beings and some nations can do. In the electronic future it will be possible, for example, to maintain a complete medical profile of any person from birth onwards. The record, begun at birth, will be constantly brought up to date in a central community or regional computer for instant access by a doctor or a hospital as required. Because so many factors will have been tabulated in advance examination and diagnosis will be easier, more comprehensive and revealing than by any of the traditional methods. This points in the direction of a science-based industry which in my view would be far more fruitful than spending expertise on the TSR2 programme.
  To become a little more earthy for a moment, we might turn to my right hon. Friend the Minister of Labour to ask what he intends in the way of retraining and to ask particularly what he proposes to do to retrain highly skilled men to become computer programmers because the shortage of programmers is the limiting factor in the computer revolution. At the moment the situation is that whereas the United States has 120 computers per million of the working population and France has 56, we have only 28. When the right hon. Member for Bedford suggested to my right hon. Friend that perhaps some follow-up should be done for those declared redundant, I completely agreed and thought it a good suggestion from the Opposition Front Bench. We should like to hear from the Minister about what he proposes to do.

  1261
  If it could be shown that those declared redundant in relation to the TSR2 project go into worth-while occupations such as computer-aided design and inertia navigational diagnosis we shall have done something for the future.
  This debate also concerns the Minister of Education, and I wish to ask what he proposes to do for the retraining of men declared redundant who could become teachers. This applies less in the schools than in the technical colleges. If we believe that the subjects of lasers and semi-conductors can be taught in technical colleges at a lower level than ever before, here is a golden opportunity to do something about it. I do not say that those working on the TSR2 are experts on lasers and semi-conductors, but they are the sort of people who could be retrained. This is where the future of British industry lies as much as in the making of airframes.
  As was said by my right hon. Friend the Minister of Aviation, our future lies also in co-operating with other countries. We have the example of British-French co-operation over the Concord, and that has our wholehearted support. Perhaps we might hear a little about British-German co-operation. I should have thought that the best sphere of co-operation would be that of vertical take-off flight, and particularly—though this was not mentioned by the Minister—in E.L.D.O., where the Germans have great expertise and where co-operation would be helpful. Let us be enthusiastic about British-American co-operation. If anything in this debate surprised me it was some of the vitriolic remarks about the Americans from hon. Members opposite. Are the Americans our friends or not? On this side of the House they certainly are, but when I heard the remarks of the hon. Member for Macclesfield (Sir A. V. Harvey) in his intervention I wonder how anti-American one could get. As the Minister said, there is here a great opportunity for co-operation in relation to aircraft engines.
  Nothing was said about a form of co-operation which might prove still more basically fruitful, and, quite unashamedly, I wish to say something about British-Russian co-operation. If we are to achieve a lasting peace, one way to do it is to initiate positive co-operation when we have not a crisis on our hands. It
  1262
  should be done in a time of comparative quiet. It is then that the initiative should be taken. It is difficult to solve problems in the middle of a crisis. The time to do so is either before or after the crisis.
  I have had the good fortune to go to both the European High-Energy Nuclear Physics Centre at Geneva and the Russian equivalent at Dubna. Here is a specific example of the way in which co-operation on a great scale would be welcomed in relation to high energy physics. I respectfully suggest that particle physics is just as fruitful a source of knowledge as anything to do with the aircraft industry. When there is talk about the development of science-based industries, it is in this field as much as in the aircraft field that we should direct our enthusiasm.
  Another example of potential British-Russian co-operation would be joint projects, using our knowledge in microcircuit electronic devices, and Russian expertise in semi-conductors. When I had the good fortune to be a member of a science delegation to the Soviet Union last March, Peter Kapitza who spent many of his best years in Cambridge thought that after 50 years of knowledge of both the Soviet Union and our own country positive co-operation in respect of computers and semi-conductors was one of the best avenues to a firm peace. Those of us who were guests of the Royal Society when the Soviet academicians came to this country as guests of the Royal Society felt that they were sincere in wanting far more co-operation in their sphere than we had had before, after conversations with Mr. Keldysh and his colleagues.
  It may be argued that I am being naive and that scientists all over the world want co-operation with one another. I do not think that a feeling for co-operation is limited to pure scientists. When I was fortunate enough to take part in a conference with hard-headed Soviet politicians, Deputy-Premier Rudnev and Mr. Guishiani, they said they would like far more positive co-operation. Their qualification was that we were not to partake in what they would call "industrial spying". If it took place, so-called "industrial spying", it has been a two-sided matter in the past, and the Russians know it as well as we do. If

  1263
  any guarantee is wanted that Russian attitudes have changed, it is to be found in the extremely significant announcement that, for the first time since the Bolshevic Revolution, they have actually signed the Paris Convention on Patents. I would say that this would have been inconceivable in the 1950s. Things have really changed. If they are prepared to sign a convention on patents, their attitude towards co-operation with the West is very different from anything which has gone before. So I urge on the Government a positive action in this respect and not simply a negative look at the problem of this or that weapons system.
  Again, I shall be very brief, but I wish to talk about the Middle East. I asked myself if there are any circumstances in which I would be prepared, on behalf of my constituents, to support a TSR2 attacking Cairo and Alexandria. The answer was a flat no. If one takes this position, one comes back to the criticism of the Government in the Opposition Motion linking the frontiers of knowledge and the developing industries with armaments. I suggest that it is relevant in the debate to say that if we are to offer to our younger generation things which are technologically exciting, it should not be the TSR2 but co-operation on the great post-Aswan projects such as the pumping to ground level of the parallel Nile, irrigation of Quattara Depression and on all that arises out of the projects which Nasser has for desalinisation of water. This is where the future lies, not in a discussion of weapons systems. Sometimes I think that many of us politicians have blinkers on when we look at the Middle Eastern problems.
  It is possible to be naive, of course. One can be told that 50,000 Egyptians are massing in South Arabia, but this does not affect the problem of the TSR2. If we are talking about industry on the frontiers of knowledge, it is more useful to talk in terms of joint projects with those who might be inconvenient to us but who, if we co-operate with them, might take a changed military attitude towards us.
  My guess is that the answer may come back from the Government Front Bench, "The speech of the hon. Member for West Lothian (Mr. Dalyell) is
  1264
  outside our Department." In my view, there has been far too much departmental compartmentalisation of thought in the British Civil Service. Too often, the excuse has been given that something should go to someone else's Department. It is about time that the Ministry of Overseas Development, the Foreign Office, the Department of Defence and the Ministry of Education got together and thought out what Middle Eastern policy should be in spheres other than weapons systems. These may be critical words, but I think that it should be done and done quickly.
  In conclusion, I would say that perhaps we can deny that part of the Opposition Motion which talks about grave effects on the science-based industries of the TSR2 cancellation in present circumstances, but certainly it need not be true if the Government follow the kind of initiatives which I have tried to outline. It has been the purpose of my speech to bring positive initiatives to their attention. Then we may say with a clear conscience that the decisions which we make promote a forward-looking science-based industry in Britain.
  8.32 p.m.
  Captain John Litchfield: I must start by expressing surprise and regret that no senior Minister has been present for a considerable part of the debate. The debate is about one of the most important decisions in the defence world for many years. It will certainly have very far-reaching implications for the British aircraft industry and for the Royal Air Force. It may well, in the future, come to be seen as a point of departure for a new concept of strategic policy, and I should have liked to have heard more from the Secretary of State for Defence on this aspect.
  Many great interests and many lesser individuals will be hurt by this decision. This debate and speeches from both sides of the House have shown the sympathy which we all feel for these people. But sympathy is not enough. As one of my hon. Friends pointed out in a very moving speech on behalf of his constituents, we hope to hear more from the Government about how they will meet this human problem, quite apart from the industrial interests affected.

  1265
  No Government, not even the present Government, could, in my judgment, contemplate taking a decision so obviously unpopular and difficult as this one if they did not feel convinced that it was right. I give the Secretary of State a good mark on this account. I chalk up one good mark on this score. But I must immediately take it away and, indeed, subtract several more marks for the exceptional ineptitude of the Government's handling of the announcement last week. I regret that the right hon. Gentleman was entirely unrepentant today.
  The Leader of the House gave the show away in his business statement, last Thursday, when he gave this censure debate today as the excuse for bringing the House back a day earlier after the Easter Recess. Had the Government assumed that a statement wrapped up in a speech on the Budget statement would satisfy the House? Did they really hope to get away with it without any debate at all? This smells of Government by edict.
  And there are dark rumours that the right hon. Gentleman the Paymaster-General was behind this operation, as he has been behind one or two others. It certainly appears to be part of a pattern which has been set by the Paymaster-General since he became the Government's drill sergeant.
  First, we had no debate on the attempt of my hon. Friend to bring in a Bill to help the very old over their pensions. They got no pensions. Now the Government have sought to deny us the opportunity to question them immediately on their decision on the TSR2. No questions, and no TSR2. And not since the days of Molotov have there been so many negatives in one afternoon as we heard from the Paymaster-General when he answered Questions last Wednesday. Whatever else he may be, he is a "Master of Negation".
  I do not recall that in the last Parliament the present Paymaster-General was often at a loss for words. Now he seldom speaks and, when he does, his answers are brief. I wondered whether perhaps some words which I have discovered written by Thomas Moore might explain his current brevity:
  "As bees, on flowers alighting, cease their hum,
  So, settling upon places, Whigs grow dumb."
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  Now, it is one thing to cancel the TSR2 project altogether, but it is quite another to take an option on an American aircraft as a substitute. I could understand the Government's argument on purely defence factors; the argument that, for example, we do not need this type of aircraft at all, which is a debatable point, and I will come to it later. Even allowing for the significant saving of money—what the true saving will be is debatable and difficult to calculate—it does not seem to make any kind of sense to abandon the TSR2 and then opt for the F111 at such huge cost in dollar exchange. Surely this would give us the worst of both worlds. I simply do not follow the right hon. Gentleman's arguments here.
  There is another, I think more important, point which the House should consider. The right hon. Gentleman has told us on several occasions that he has set in train a radical and comprehensive review of defence policy in every spere. He was right to have done that and I do not disagree with him on this issue. But is this the moment, when this massive review is still in progress and when the right hon. Gentleman is, presumably, unaware of what conclusions will be arrived at as a result of it, to take a decision so radical as this; to cancel the TSR2 at this juncture?
  It is not as if the project had just been started. It is not as though there were any very obvious reasons why the decision, if he is not to wait for the defence review to be concluded, should not have been taken last October or November—or December. We know that it is costing £1 million a week—that is accepted—but we are not here dealing with a few millions of pounds, but with hundreds of millions of pounds, and, moreover, with a very important element in our defences. I should have thought that it would have been prudent and sensible for the Government at least to have waited until they knew what was to come out of this great defence review, because that is the factor on which the merits of this decision turn.
  The right hon. Gentleman, now that he is Secretary of State for Defence, and with his knowledge of the Services, will know what "Appreciating the Situation" means. I have no doubt that he will also

  1267
  understand what "Situating the Appreciation" means, and I hope that he has not been guilty of that. I see right hon. Gentlemen opposite looking a little confused over the expression "Situating the Appreciation"; it means that one first decides what one will do and then finds reasons for doing it afterwards. I am sure that the right hon. Gentleman will know what I am getting at there.
  The right hon. Gentleman has said that this defence review will not be completed for six months or more—perhaps much longer. If that is so, I can only say that he should inject a little more urgency into his organisation. I cannot believe that it is necessary to wait all this time before he knows what this review will give birth to. His predecessor, Sir Winston Churchill, would not have accepted a delay of six or eight months before being told the answer, however massive and comprehensive the review. The right hon. Gentleman's argument would have been much more convincing had he been able to tell the House that the decision was based on the conclusions of the review that is now in progress.
  I now come to the very much more difficult side of the argument relating to the merits of the decision itself. I must say that with the little information that has been disclosed to the House by this Government or by the last Government, I find it most difficult to form a personal judgment. Just look at the story of this aircraft. The TSR2 was originally envisaged as a highly-sophisticated tactical strike reconnaissance weapon which could be produced at a fraction of the ultimate cost—that is to say, something under £100 million—and would have a good export potential. Later, we were told that it had also a nuclear capability—but by then, of course, our money had gone on Polaris. If the expectations of the TSR2 had been fulfilled—and they have never been proved in full yet—I have not the slightest doubt that it would have been the most advanced weapons system in the world, and a most valuable asset to the country.
  What, I feel some doubt about, and I say it in all honesty, is whether, in the tactical rôle, a cost of £5 million or £6 million per aircraft, can be justified. In my judgment, it could be justified, and
  1268
  would be justified—almost any expense would be justified—if the weapon were really vital—and I use the word "vital" advisedly—to our defences. I am not satisfied about that yet, I do not know whether the right hon. Gentleman is—there is doubt—but, for the nuclear rôle, we have Polaris, and I do not regard any substitute for that or any addition to that as more than a bonus in the strategic rôle.
  There is another point on which I hope the right hon. Gentleman may be able to give us some information to strengthen his case. At the present rate of progress in weapons systems development, for how long can the invulnerability of an aircraft such as TSR2 or F111 be relied on to survive? When we get into these enormously costly projects, which absorb such a high proportion of the national scientific and defence effort, it is right to look very hard not only at the cost itself, but at the effect of this effort on other defence requirements and at the relative importance of all those great projects in the overall national defence effort.
  I accept everything that has been said from this side of the House about the effects of cancellation on the aircraft industry and possibly on the Royal Air Force, but one has to make up one's mind whether, when one is arguing either for the cancellation or against the cancellation, it is on defence grounds or on economic grounds. The figures which we were given this afternoon are startling. I quite see the force of these arguments on the support of the British aircraft industry, but I do not think it is a sustainable argument to say that one must indulge in projects of this magnitude in order to keep an industry in business. Where defence projects are concerned, the industry exists to support the Services, not the other way round. Nor do I think it sustainable to argue that particular weapons or weapons systems for any Service should be introduced to keep a particular Service, or arm of a Service, in business.
  As my right hon. Friend the Member for Bedford (Mr. Soames) said in opening the debate, we have had no opportunity of getting information since the right hon. Gentleman's statement, for it was wrapped up in a speech on the Budget

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  which we could not question at the time. If the right hon. Gentleman had made his statement at an appropriate time when he could be immediately questioned, and if his decision to cancel the TSR2 had not been made a nonsense by the option on the F111—if he had been able to tell the House that the decision had been based on the massive defence review and its conclusions—I should have felt, in all honesty, bound to support the decision.
  The right hon. Gentleman may conceivably have done the right thing—we shall see how his case develops in future months—but he has done it in the wrong way. For this reason, and because of all the evasions which have been thrust upon us, I feel bound to support the Motion of censure on the Government in the names of my right hon. Friends.
  8.49 p.m.
  Mr. Raphael Tuck: A rumour appears to have been circulating that I shall vote for the Motion. Let me say here and now that, having given this careful consideration, I shall vote against the Motion. On the basis of the facts given by my right hon. Friend the Secretary of State for Defence, the case for the cancelling of the TSR2 is unanswerable. In fact the cancelling of the TRS2 is absolutely essential. I shall, therefore, vote against the Motion.
  I want to make it clear that, although I am not opposed to the cancellation of the TSR2, I am opposed to the scrapping of the TSR2 in favour of an American substitute which we are not even sure of. It must be remembered that it will cost many American dollars before we pay for it. I believe that the Phantoms and the C130s already ordered will involve us in a cost of about £230 million. If the F111A is added to that, it will put up the bill to £700 million, all to be found in American dollars. Serious consideration must be given to this.
  Quite apart from that, I want to issue a solemn warning to my right hon. Friend and to the Government not to repeat the unhappy experience of Canada in the late 1950s. I know something about it, because it happened during the 14 years when I was a Canadian citizen. The Canadian Avro Arrow supersonic interceptor was a magnificent aircraft.
  1270
  It was very fast. It could travel, in the 1950s, at twice the speed of sound. Two or three of them had been completed and they flew successfully at about 1,200 miles per hour, which, in the late 1950s, was something. They climbed at supersonic speeds. About 300 million dollars—that is, about £100 million—had been spent on the development of this aircraft by September, 1958. The average cost per unit for 100 of them was about £7 million to £8 million, including weapons and spare parts. It was very successful indeed.
  In February, 1959, Mr. Diefenbaker went to America. He had conversations with top people in Washington. After those conversations, he telegraphed Ottawa and cancelled the whole of the Avro project, which involved the instant dismissal of about 14,000 men. I believe that Mr. Diefenbaker was lured by the Americans who convinced him that their Bomarc missile was the thing he really wanted. That was a ground-to-air missile, and it was to have nuclear warheads, provided by the United States Government. The whole of the AvroArrow project was therefore scrapped in favour of the Bomarc missile.
  The Bomarc missile turned out to be unsatisfactory. First, it was not ready in time. Secondly, it did not solve the Canadians' problems as they thought it would. At that stage they could not go back to the Avro Arrow, because it had all been dismantled and the men had dispersed. They had to have something, however. So they took the Lockheed CF104. It was built by Canadair, under licence. Canadair is a subsidiary of General Dynamics of America. All the money therefore flowed into America and, I may add, the CF104 was not a patch on the Avro Arrow.
  I ask my right hon. Friend the Secretary of State for Defence to beware of being lured in this case into sacrificing perhaps a less attractive substance for a very much more attractive shadow, with the possible dire consequences which Canada experienced in the late 1950s. I want to emphasise that I am not anti-American, but I do not want Great Britain to be in pawn to the United States. Nor do I want to advance one step along the road towards our country's becoming the 51st State of the Union. I therefore ask that

  1271
  my right hon. Friend and the Government should give this their most earnest consideration before taking any step in the direction of the purchase of the American F111A, or any other American aircraft.
  Finally, we have heard a great deal about a European industry. Why not a Commonwealth industry? Why do not we have a Commonwealth conference to co-ordinate and unify plans for the aircraft industry throughout the Commonwealth? This may not have been canvassed before, but I suggest that it offers great opportunities and opens up wide vistas. I ask my right hon. Friend to consider it very seriously indeed.
  8.56 p.m.
  Sir William Robson Brown: I entirely endorse everything that the hon. Member for Watford (Mr. Raphael Tuck) has said. He has been talking the kind of language which I and many of my hon. Friends understand. At this late hour, I do not intend to take a single moment to talk of defence problems, or anything of that kind. I want to get to the core of the question as it affects my constituency. I believe that my interests lie not in a complicated discussion of defence problems, but in trying to state the problems of my constituents as rapidly as I can in the short time available to me at the end of a long debate, much of which has been wasted unnecessarily in disputation.
  The whole of the Government Front Bench have pledged themselves to the proposition that we need an expanding aircraft industry and that it is essential to our economy. Let us back our sentiments with positive action. The whole House wants to see our aircraft industry carrying British prestige on the commercial sky routes of the world. I address myself, in particular, to the Minister of Aviation, who, I know, is as much interested and concerned in these matters as I am.
  We have lost the TSR2 in Weybridge, but we must not lose the VC10 or the BAC111. Without the support of the TSR2, in overheads, the British Aircraft Corporation cannot support for long unaided the VC10 or the Super VC10, or the developments which come from them and which are certainly attractive to this country. Already, great damage has been done to the sale prospects of these spleen-
  1272
  did aircraft. I call on the Government now to satisfy the airlines of the world that Her Majesty's Government are behind the VC10 and the BAC111. Unless they do that, and take positive steps within weeks, not months, no more orders will flow for either aircraft, and not only will the TSR2 project at Weybridge go, but the whole of that plant will gradually and inexorably close down and, by 1968, be for sale.
  I have no doubt that the British Aircraft Corporation, in its plans for the development of a two-tier multi-passenger type of VC10, will be in advance of everything that is wanted, but the Corporation cannot stand alone on the Concord. It is absurb and ridiculous to imagine or contemplate it. I therefore put to the Government the propositions that they must stand behind the VC10 and the BAC111 and spell out a coherent programme for the future. They must do this in such a way that every firm which has already placed orders will be confident that it will receive them. Firms prepared to place orders—and there are many of them throughout the world—will know not only that the British Aircraft Corporation will execute the orders, but that Her Majesty's Government are a partner in the deal. If the Government fail to do this, they will have driven the VC10 clear out of the skies.
  We should be co-operating not only with the French, but with the Belgians, Italians, Dutch and Germans and we should create one big consortium in civil and military spheres. I believe that we should also address ourselves to the United States, particularly in the matter of commercial aircraft. The American nation is great and understanding. I do not for the moment believe that it wants to drive our aircraft industry into the ground. It has the possibility, within the next few days, of showing and proving this in a most positive way.
  I urge the Minister of Aviation to give support to Dr. Barnes Wallis, in whom we have a British aviation genius of a kind never known in this country before. [Interruption.] Do hon. Members opposite want to denigrate Barnes Wallis? [HON. MEMBERS: "No, but the Tory Government did."] We must be laying the foundation of a real European technology in air and space. I am thinking about these things as they are tonight. Let us not forget them.

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  We have had enough amputations in the aircraft industry. Let us now bandage up some of its wounds. Otherwise, it will bleed away. The House will forgive me if I make absolutely plain my deep concern in fighting for the staff and workers in my constituency. Whatever may be said about finding alternative jobs all over the country for them, things will not be easy for the men of Weybridge. There are no other industries in or around Weybridge or in the County of Surrey to which they can go. They will have to leave their homes. Families will be split up. They will have to go all over the country, even if the work can be provided for them.
  A very special and singular situation confronts Weybridge, and I beg the Minister of Aviation to treat it in a special and singular way. I want him to link up with B.A.C. I want the Government to stand behind the company, behind the VC10 and the BAC111. The men and the staff there would support them. They know that cuts have to be accepted, but they do not want to see their plant and all it stands for wither away, with no alternative employment for them in the area, and men, many of whom have devoted a quarter of a century to their work in the drawing office and design teams, not able to find alternative work worthy of their skill, knowledge and experience.
  My appeal to the Minister is straight and it is positive. Will he, please, come and see me personally and the other Members of Parliament for the area, the trade union officials and the management. Let us together see what we can do to save the British Aircraft Corporation's future, the VC10, the BAC111 and the life of Weybridge itself.
  9.2 p.m.
  Mr. Angus Maude: The speech of my hon. Friend the Member for Esher (Sir W. Robson Brown) was one of a series from my hon. Friends who represent constituencies in which the TSR2 or parts of it are manufactured. The Minister and the whole House will have been impressed by the sincerity of his appeal and those of my right hon. and learned Friend the Member for Chertsey (Sir L. Heald), my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) and my right hon. Friend the Member for Preston, North (Mr. J. Amery).
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  When he replies, the Minister of Aviation will, I am sure, try to tell us what the Government's intention is for the future of the aviation industry. It would be futile to deny that there is real concern in the areas where the TSR2 was not merely a means of livelihood but an object of the greatest pride, something which people felt they could devote their lives to with a reasonable hope of seeing a worthwhile aircraft flying in the skies with R.A.F. roundels on it.
  The Motion is divided into three parts. One part—I do not want to spend very much time on this, but I must say something about it—deals with the method by which the Government announced the cancellation of the TSR2 project to the House. The Secretary of State for Defence brushed off the attack by my right hon. Friend the Member for Bedford (Mr. Soames) on these lines with a kind of counter-attack which, it seemed to me, did less than justice to the gravity of the Parliamentary tactics which the Government employed. I cannot see for the moment why the Secretary of State should not at least be willing to admit and to express some mild contrition to the House—we do not ask for more—for what was a serious piece of discourtesy to the House, and, indeed, worse than discourtesy, what looked like a deliberate attempt to prevent the House from questioning him about the statement.
  I do not think that hon. Members opposite can have thought this thing out very much. I am not speaking now of all the newer Members, but there are hon. Members opposite who have been in the House a long time and know that the whole esprit de corps that makes the House work is dependent upon certain conventions being observed and upon Government treating Oppositions and private Members with reasonable courtesy and consideration.
  The fact is that not only was a method devised which would make is impossible for Members to question the right hon. Gentleman about his statement, which would have been the normal process, but, secondly—and perhaps more important—the fact that the statement was made during the Budget debate made it out of order even for the Defence Secretary himself to discuss more than quite a limited number of aspects of the cancellation.

  1275
  Finally, it was made even naughtier by the fact that, after it had been deliberately leaked to the Press and stated by the Chancellor of the Exchequer that the Defence Secretary would get up at 7 o'clock, he got up at twenty minutes past 6. I am glad that the right hon. Gentleman has now joined us. I am sure that he will not be in doubt as to what I have been saying about what happened on 6th April. [Interruption.] Hon. Members may not like this, but Oppositions do not like being treated with tricksiness of this kind.
  The Defence Secretary spent a considerable part of his speech today discussing why it was that the Government found the cost comparison between the TSR2 and its possible substitute conclusive for cancellation. He said clearly that the TSR2 was in this respect quite different in the Government's minds from the cancellation of the HS681 transport and the P1154 fighter. The main reason which they gave for cancellation of these two earlier projects was that they would not be in service early enough for the R.A.F. to be adequately armed. Now, as we understand it, the one suggested substitute for the TSR2 is likely to be in service in a form which is comparable slightly later rather than earlier than the TSR2 would have been. Therefore, the whole justification for the cancellation is based on cost. I do not think that I am misrepresenting the right hon. Gentleman in saying that. But when he got on to the question of cost he became less and less clear, more and more diffuse and more and more contradictory.
  There are one or two of the things which the right hon. Gentleman said about costs to which I want to direct the attention of the Minister of Aviation, who is to reply to the debate. First, there was the example of the Australian purchase of the TFX. The Secretary of State for Defence said that he understood from members of the Australian Government tha the sole reason why they did not buy the TSR2 was that it was uncompetitive in cost and that the cost of the TSR2 was too high. This, I am bound to say, is quite contrary to the information which we had. I do not know whether the right hon. Gentleman asked these Australian Ministers what was the price at which they had been offered the TSR2. My understanding is that they
  1276
  were offered it as a price of £2·1 million per plane, and that they accepted this as being perfectly competitive. It was not because the cost was too high that the Australians did not buy the TSR2. They did not buy it—and they admit this in conversation—because they were convinced that if a Labour Government were returned to power they would cancel it—and that is exactly what they have done, which shows that the Australians are pretty shrewd judges.
  The right hon. Gentleman went on to give some quite ridiculous illustrations of costs. He said, for example, that if one bought 50 TSR2s the cost would be more than £10 million per aeroplane. Who ever suggested during the development of the TSR2 that an order for 50 aircraft should be placed? He might just as well have said—and I am a little surprised that he did not say it—that if they had bought one aeroplane it would have cost £750 million. That would have been about as sensible as his observation that 50 would have cost £10 million each.
  He said that the Government would have defaulted on their duty if they had not insisted on asking for a fixed price from the British Aircraft Corporation for the TSR2 and if they had not refused an open-ended commitment for the taxpayer. He knows quite well that no aircraft company in the world would quote for an aircraft of this kind on terms such as that. It simply is not on, and it is not the way in which complicated aircraft projects, breaking new ground not only in aerodynamics but in electronics, have ever been developed anywhere. The plain fact is that the right hon. Gentleman and his hon. Friends had decided to cancel this aircraft. They went through the motions of facing B.A.C. with an ultimatum, well knowing that there was not the slightest chance that it could possibly be accepted.
  The Secretary of State for Defence said that the Government were carrying out a long review of their defence commitments and resources. He suggested that if the previous Government had done the same the situation would now be rather better. Of course, the previous Government, and all Governments, have always carried out continuing reviews of their future defence commitments. But the difference between the previous Government and this Government is that

  1277
  the previous Government did not cancel viable aircraft projects before they knew what the demand for aircraft was going to be.
  I turn to the question of cost, on which the right hon. Gentleman dwelt, I am bound to say, rather confusingly for some time. I hope that the Minister of Aviation will come a little cleaner and, if possible, completely clean on the question of the comparative cost of the TSR2 and the TFX. We can get a little way on the figures which we have been given, but we cannot get an honest and clear comparison which will enable the House to judge how good is the Government's case on grounds of cost. Surely since they now say specifically that this is the one reason why they are cancelling it, we are entitled to know how good the case it. Surely that is not asking too much.
  The answer which we are given when we ask about the costs of the TFX Mark 2, if such an aircraft is ever developed, or if we ask at what cost per aircraft the option has been arranged, we are told that it is not the practice to divulge the costs of aircraft being purchased by Her Majesty's Government. But they are perfectly willing to bandy cost estimates of British aircraft, of the TSR2. There is no hesitation in giving us all the development costs, the projected costs and putting the most unfavourable possible construction on them. Yet when we ask for a comparative cost for the American substitute, we are unable to get anything at all, except what the right hon. Gentleman states to be the difference between the total projects, and he does not say on what basis the total is calculated.
  It may not even be argued that he was justified in giving all the estimates for the TSR2 because the TSR2 has been cancelled, because if he is to argue that he has to explain why the Prime Minister gave exactly the same cost estimate figures for the TSR2 in a speech in the House on 2nd February—unless the truth is that the decision to cancel the TSR2 had already been taken on 2nd February. It may be that the Prime Minister was then already speaking of the dead, but that the Government did not have the courage to admit it.
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  If we read the statement of the Secretary of State for Defence during the Budget debate on 6th April, in columns 319 and 331 of the OFFICIAL REPORT, what we get is the estimate that in total the TSR2 will cost £750 million for a full programme, including production, and I assume that that is production of 150 aircraft. We also find that he stated that a full programme of F111As, including the TSR2 cancellation charges, would cost approximately £300 million less than the full TSR2 programme. This suggests that the full cost of 150 F111As would be £450 million, give or take £10 million or so. Since he has gone so far as to give us this subtraction sum, which gives us some sort of figure for the F111A of around £450 million, surely we are at least entitled to know on what basis the figures are calculated and how fair the comparison is. For example, is it not a fact that the £750 million includes the £125 million which has already been spent on development?
  Mr. Healey indicated assent.
  Mr. Maude: So I understood the right hon. Gentleman. Why does he go on comparing the figure of £750 million with a figure of £300 million less? If he is saying that the figure from which he is deducting £300 million is not £750 million but £625 million, he is giving a total figure for 150 TFX Mark 2s of £325 million, which is not the figure which Mr. McNamara has been suggesting. Even so, supposing that there is a difference of £300 million, we want to be quite sure that this is true.
  I will give the right hon. Gentleman another question to which we should like an answer. The £750 million quoted for the TSR2 does, and indeed must, include all the expenses for Royal Air Force training and introduction costs. Does the figure for the TFX include those? If it does not, this is a very considerable difference between the two figures.
  Let us assume that it does. Will the Minister of Aviation, when he replies to the debate, do what nobody on the Government side has yet done—given us some estimate of the comparative net costs to the Government of these alternative projects? So far there has been no attempt to calculate the kick-back to the Treasury from developing and manufacturing an aircraft wholly in this country

  1279
  and buying an aircraft wholly from abroad which involves no recoupment in taxation or wages or in general economic prosperity to this country. This is not very difficult. It is true that the Chancellor of the Exchequer has made it a little more difficult by not telling us what the Corporation Tax will be at the appropriate time. But we can calculate the figure on the basis of a Corporation Tax of 40 per cent. I should be very much surprised if on a net basis the calculation was not favourable to the TSR2 rather than to the TFX. Hon. Members opposite shake their heads. The Government should tell us the figures. Otherwise, how can we possibly know the answer?
  Another point in the Secretary of State's speech on which we should like an answer concerns the reconnaissance capability of the TSR2 and the TFX. We understood the right hon. Gentleman to say that it was hoped that the TSR2 reconnaissance equipment pod might be fitted to the TFX. He did not mention any other possible way in which an allweather reconnaissance capability could be mounted.
  Mr. Healey: I thought that the hon. Gentleman would prefer this way, using British equipment designed for the TSR2.
  Mr. Maude: Other than the TFX. The right hon. Gentleman has not grasped my point. He did not suggest any other way in which an all-weather reconnaissance capability could be mounted for the R.A.F. other than by either the TSR2 or the TFX carrying the TSR2 equipment. Is that right? I gather that the right hon. Gentleman mentioned no other alternative.
  Presumably the Secretary of State does not propose to leave the R.A.F. without any reconnaissance capability, because he said how important it was. Does this mean that he has decided to buy the TFX? Or is he, having cancelled the TSR2, leaving the R.A.F. without an adequate reconnaissance capability? [HON. MEMBERS: "Answer."]
  Let us assume that the decision has not yet been taken. What we have a right to know is how this possible alternative is to be mounted. As I understand it, the TSR2 reconnaissance equipment has yet
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  to be tested in the third TSR2 aircraft. There is, therefore, a considerable amount of research and development work to be done. Although the great majority of the avionics of the TSR2 are already tested, this is one lot which has still to be tested in flight, I think. Surely it is not very much to ask a Government which look like leaving the R.A.F. with a pretty considerable gap in its capabilities that the TSR2 aircraft should be kept in flight to test this reconnaissance equipment until the Government make up their mind about whether they will buy the TFX for which they may need this British equipment. Otherwise how does it get tested?
  Another very good reason why the Government should do this is that they might succeed in selling it to the Americans for their own TFX. Has it occurred to them that this might be a good idea?
  Sir A. V. Harvey: What a hope.
  Mr. Maude: My hon. Friend says "What a hope". The whole tale of the Government has been about interdependence. Unless they admit that this is a farce, they must surely, sometimes, have some hope of selling something to the Americans. At least, let them keep this equipment under test and keep at least one TSR2 aircraft in testing flight before they have to take the decision whether to buy the TFX or whether to leave us without any capability of this kind.
  We hope, finally, that the Minister of Aviation will tell us something a little more constructive about the future of the aircraft industry. We have a situation in which out of the four most advanced aircraft projects in this country, only one is left—and that, incidentally, is the only one which in the Brown Paper was suggested for cancellation. The other three which were not mentioned have all been cancelled.
  The Government have set up a Committee to tell them what shall be the future structure and rôle of our aircraft industry, having knocked the props completely out from under the aircraft industry before the Committee has reported. They have done all this in flat contradiction of a pledge which was given to the aircraft workers during the election.
  The House listened with sympathy to the speech of the hon. Member for

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  Preston, South (Mr. Peter Mahon), who had clearly been left in a difficult position. The House and the country, who would like to know just how much credence can be given to Labour promises in any subsequent election, are surely entitled to know the answer to the question: Who authorised these promises? This is not asking too much.
  When a pamphlet is circulated during an election stating, in terms,
  "Labour will not cancel the TSR2".
  is it so unreasonable that we and the electors should ask the Government who authorised the issue of that pamphlet? We accept the statement by the hon. Member for Preston, South that he did not issue it and that it was not issued by his agent. Let us be told. Was it a bit of private enterprise by Mr. Clive Jenkins and A.S.S.E.T., or was it authorised by somebody in Transport House or in the Government?
  When a pamphlet is headed
  "Harold Wilson tells TSR2 workers—"
  Mr. Peter Mahon: On a point of order. If I deny that the leaflet was issued by me or that I had any responsibility for its issue, is it incumbent upon me to say who issued it—[HON. MEMBERS: "Yes."]—when, in fact, I do not know who issued it?
  Mr. Speaker: No point of order arises, but I am sure that the hon. Member may rest quietly knowing that the hon. Member for Stratford-on-Avon (Mr. Maude) has not alleged anything of the kind.
  Mr. Maude: Let me reassure the hon. Member for Preston, South that we accept that it is not his responsibility. We are simply trying to find out whose responsibility it is. We are not asking the hon. Member; we are asking the Government. This is surely not unreasonable.
  Mr. Simon Mahon rose—
  Mr. Maude: I cannot give way. I was kept a little late and I have only one minute more. I do not want to hold up the Minister.
  When a pamphlet states:
  "Harold Wilson tells TSR2 workers 'Your jobs are guaranteed under Labor'",
  do the Labour Party take no responsibility for this? Was it authorised by
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  the Prime Minister, by the Secretary of State for Defence, by the hon. Member for Loughborough (Mr. Cronin) or by some official in Transport House? Surely, we ought to know this. Otherwise the electors of this country will have a pretty clear idea of how much faith they can have in any labour pledge in any constituency.
  Let the Government not be shy about revealing the authority behind this pamphlet. All we want is for them to tell us who authorised it and then all we want is for him to resign. It is not much to ask, and we expect a little more honesty and a little more straightforwardness from right hon. Gentlemen like the Secretary of State for Defence, who was a pretty forthright spokesman before he was down-graded to play the penny whistle in McNamara's band.
  Right hon. and hon. Gentlemen opposite cannot deny that the action which they have taken breaks a pledge clearly made to aircraft workers in Britain. They cannot deny that on the evidence and statements so far made the case on cost grounds for cancelling the TSR2 is not simply made at all, and they must come clean about this. They cannot deny that they have left the British aircraft industry shorn of its major projects and that the future is so obscure that they had better either give us a policy quickly or resign.
  9.32 p.m.
  The Minister of Aviation (Mr. Roy Jenkins): In many ways this has been a quiet, and even constructive, debate, at least until the last few minutes of the speech of the hon. Member for Stratford-on-Avon (Mr. Maude), during which he was trespassing on my time. Despite the loss of two minutes, I should like to answer as many of the points as I can, and I hope that the debate will remain quite and constructive to the end.
  The Opposition's case as deployed throughout the day seems to fall under three main heads. First, they say that we have killed an aircraft which was the glory of British aviation achievement. Secondly, that we have made a bad bargain with the United States. Thirdly, that by so doing we have fatally weakened the British aircraft industry and impaired its ability to form a basis

  1283
  for Anglo-French and wider European collaboration. [Interruption.] I hope that hon. Gentlemen opposite will let me try to answer the points which have been made which I think are worth answering.
  Those are the three main points which have been developed during the day. I leave aside the point about the way in which the statement was made. [HON. MEMBERS: "Why?"] Because I thought that my right hon. Friend dealt completely and conclusively with that, and because I would have thought that if hon. Gentlemen opposite had their hearts in this Motion of censure they would want to debate the real issues of the aircraft industry.
  I come to the first point, that we should never have axed the TSR2, because its very existence marked such an achievement, because it was the foremost of our "prize projects", as the right hon. Member for Monmouth (Mr. Thorneycroft) put it in a previous debate. Is this true? From one point of view, it is true. It was a fine technical achievement. It was an advanced aircraft. It handled well in flight, and it was a tribute to many of those who worked on it. There is nothing technically wrong with this or any other British aircraft.
  But, to be a success, aircraft projects must be more than this. They must have controllable costs; they must fulfill the country's needs at a price that the country can afford; they must be broadly price competitive with comparable aircraft produced in other countries, and they must have the prospect of an overseas market commensurate with the resources tied up in their development. On all these four counts I regret to say that the TSR2 was not a prize project, but a prize albatross.
  The spiralling cost figures have already been given by my right hon. Friend the Secretary of State for Defence. We were confronted with a development cost of £300 million—well over three times the original—and a production cost estimate which had more than doubled. The most important question that we had to ask ourselves was whether, in the matter of spiralling costs, we were at the end of the road. This was one of the major questions. [Interruption.] I am coming to the F111 in a moment. This
  1284
  was one of the major questions to which we applied ourselves between February and the Budget. With one aircraft flying and another nearly ready it looked as if we might be past the worst dangers of escalation. On the other hand, we were only 40 per cent. of the way through the development programme, let alone the production runs.
  We thought that one of the best tests was the attitude of the firms themselves. We asked them for a fixed or maximum price. The hon. Member for Stratford-on-Avon complained strongly about this this evening. My right hon. Friend the Prime Minister announced that we were doing precisely this in February and there was not a word of complaint from anyone on the Opposition side. The firms tried very hard to give us a maximum price, but they could not do so. They had to say, "No". I say quite frankly that I do not blame them for this. They knew the hazards and they felt that they had to consider the position of their shareholders. But the implication of their not being able to offer such a price was clear.
  They offered a target price. At this target price there would have been no profit, and for a limited stage beyond it they would have shared losses—up to a maximum of £9 million for B.A.C. and £2½ million for Bristol Siddeley Engines. After that the Government's liability remained complete and open-ended. Furthermore, the target price was £30 million more than the worst estimates on which we were working in January and February, and which we were then told were ludicrously high.
  Mr. Soames: Will the right hon. Gentleman tell us whether General Dynamics has given a firm price for the F111?
  Mr. Jenkins: I will deal with that precise point when I come to the second aspect of my speech, which concerns the bargain with the Americans. I outlined the fact that I wanted to try to deal with the three main points, and it would be a great deal better if I were allowed to answer the points in some sort of logical sequence.
  So much for the cost history of the project. I can summarise it by saying that at the quantity we would require

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  we were left with the prospect of a cost of £6 million per aircraft—over a thousand times the cost of a Spitfire. [Interruption.] That is merely by way of comparison. The hon. and gallant Member for Chelsea (Captain Litchfield), who made a very considered speech, pointed out the great disadvantage of having a £6 million aircraft in a tactical rôle.
  We were also faced with the position that if the full cost were to be recovered we could not have offered this aircraft abroad at a price remotely comparable with the F111. In those circumstances, and for other reasons, the overseas market was non-existent. That is an extremely important point. Even the home market was narrowly circumscribed. If we were to be committed to this vastly expensive plane it might at least have been made a common requirement for the Royal Air Force and the Navy—as the United States, with much less need, has tried to do and looks like succeeding in doing with the F111.
  The TSR2 was a plane for the Royal Air Force, and the Royal Air Force alone. The export prospects were never bright. The Australians looked the most likely customers. They ceased to be so in late 1963. They opted for the Fl l 1 and they did so for four extremely hardheaded reasons which had nothing to do with the attitude of the Labour Party—[HON. MEMBERS: "Oh."] The right hon. Member for Preston, North (Mr. J. Amery), who always prefers to live in a world of hobgoblins than one of facts, said at that time that it was due to the attitude of the Labour Party. I am very surprised that the right hon. Member for Bedford (Mr. Soames) who, I think, has more respect for facts, could swallow that so completely as he has done.
  Mr. Hugh Fraser: As the Minister who went to Australia to try to negotiate this deal, may I say that the one question asked by every Australian was, "Is it true that the Labour Party will cancel this plan when it can?".
  Mr. Jenkins: This point was not mentioned in the conversations which I had, well before the cancellation, with Australian Ministers. On the contrary, they
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  gave some very hard-headed reasons, price, support arrangements, the longer ferry range, the lower costs of maintenance, and matters of that sort. These are what I meant by hard-headed reasons.
  The loss of the Australian deal was a clear warning light for the TSR2. The right hon. Member for Preston, North, responded to it by accepting development cost increases immediately afterwards from £200 million to £260 million and suggested that they were acceptable because of the nuclear bonus which looked useful after Skybolt. From this stage onwards all traces of responsibility disappeared from the previous Government's approach to the TSR2. The nearer to the precipice they got the harder they ran, and they left it for us to avoid falling over. If this is the history of what right hon. Gentlemen opposite call a successful project, I tremble to think what one of their failures would be like.
  Put in another way the decision to cancel is a matter of acute controversy between two parties, although, in my view, of less acute controversy in the country. I do not believe that there is any right hon. Gentleman on the Opposition Front Bench who, if he could have foreseen the whole story in 1958—the ever-mounting costs, the non-existent export prospects, the excessive dependence of the industry on this one plane, the crippling burden on the taxpayer—would nevertheless, have followed the same course. Therefore, do not let us have any talk about betraying a success. It was an inflated albatross with which we were bequeathed.
  I turn now to the argument about a bad bargain with the Americans. We have taken an option—no more—on the F111. We have until next January to decide whether we need any and another 15 months after that to decide, if we need them, how many we need.
  Mr. Soames rose—
  Mr. Jenkins: I am just beginning—
  Mr. Soames rose—
  Hon. Members: Sit down.
  Mr. Jenkins: Oh, very well. I will give way.
  Mr. Soames: The Minister of Defence told us that the only way in which the Government could get reconnaissance

  1287
  capability for the R.A.F. was with the F111. Does this mean that he has made up his mind to order the F111?
  Mr. Jenkins: My right hon. Friend said nothing of the sort. As I am now in the first sentence of that part of my speech which hon. Gentlemen opposite pressed me to mix up with the first part, surely they might like me to develop this a little, if they want to hear the answer.
  There are no penalties if we place no order. There is no extra price if the numbers are substantially reduced. How firm is the price of the Mark I? We have a fixed maximum. We might pay less, but we could not pay more. That fixed maximum—
  Mr. MacMaster: What have sums got to do with it?
  Mr. Jenkins: Because we need sums. I shall explain in a moment, if the hon. Member will listen.
  Mr. MacMaster rose—
  Hon. Members: Sit down.
  Mr. Jenkins: That fixed maximum is 20 per cent. less than the price at which we did all our comparative calculations with the TSR2. [Interruption.] Hon. Members really must make up their minds whether they are saying that we are getting the planes too cheap or too dear. They cannot have it both ways. [An HON. MEMBER: "The Mark 2, not the Mark I."] I am now about to talk about the Mark 2, but unlike the hon. Member, I like to proceed in a logical direction, from the Mark I to the Mark 2.
  We would need a quantity of Mark Is for training purposes if we decided to exercise the option. About the Mark 2, there is a little uncertainty, but it is limited and it is definable. The difference between the two marks is not one of engine or airframe, but only of avionics. The cost of the avionics is likely to be about 15 per cent. of the total. For this we have an estimated price which the United States Government will use their best endeavours to see is not exceeded. This, clearly, is not as good as the fixed maximum which we have for the Mark I, but I would put three points to the House.
  The first is that, even if the estimate for the extra cost of the avionics were
  1288
  exceeded by 150 per cent., we would still be within the total cost figures on which we did our comparison. Secondly, in our discussions with the British contractors, we had to leave a roughly equal proportion for components and electronic equipment—15 per cent—completely open-ended, without even a target price. Thirdly, escalation is less likely with the American plane. That is because the run is so much longer and because, if R. and D. costs on the avionics did escalate, we should have to pay only less than 10 per cent. of the total, and not the whole amount, as is the case with the TSR2.
  I do not want in the least to be unfair to the British industry—[HON. MEMBERS: "Oh."] Certainly not. Hon Members must realise that facing facts, even unpleasant facts, is not being unfair to an industry. It is a pity that some hon. Gentlemen opposite did not face some of these facts earlier.
  The American plane will cost about the same—£350 million—to develop, but the American estimates were more realistic. They foresaw the rough total from the beginning. The Government of the party opposite foresaw nothing. They just put themselves on an escalator and allowed themselves to be carried blindly upward. The price arrangements with the Americans are, therefore, broadly satisfactory. On a full purchase, we should save at least £300 million after making full allowances for the TSR2 cancellation charges, on the one hand, and the lower running costs of the F111, on the other. Such uncertainty as there is in the comparison means that, because of our failure to get a maximum price for the TSR2, the saving would be more likely to turn out greater than less.
  Therefore, if we were doing a straightforward switch from TSR2s to F111s, the change would be overwhelmingly justified on budgetary grounds. What about the dollar costs? They would, of course, be substantial, even though we should have a number of years in which to prepare for their impact. The balancing of budgetary saving against expenditure across the exchanges is never easy. The question at issue is the kind of protection which the home industry should receive from the Government. Let no one doubt how protective we would have had to be to keep the TSR2 going.

  1289
  Starting from scratch—and this is not allowing for the money already spent—we would have had to have had the equivalent of a tariff of 135 per cent. Even allowing for the money already spent, a tariff rate of 90 per cent. would have been necessary. Either figure makes the 15 per cent. surcharge, about which some hon. Gentlemen opposite got so excited, look fairly small stuff.
  Even allowing for the dollar costs, therefore, there would be a strong case for a straight switch, but what makes the general case as overwhelming as the purely budgetary case is that we are not doing a straight switch. We are giving ourselves more time for thought as to what are the necessary minimum requirements of our defence programme and what are the possibilities of meeting them by a development of existing planes.
  Mr. Soames rose—
  Hon. Members: Sit down.
  Mr. Jenkins: I must get on.
  Mr. Soames rose—
  Mr. Jenkins: I must continue.
  So long as we kept the TSR2 going we had to pay for this room for manœuvre at the rate of £1 million a week, £4 million a month, £50 million a year. We felt justified in paying for time at this rate so long as there were important facts about the two planes which we did not know. However, once we saw that we could not get a fixed price for the TSR2, and knew how high was the target price, we could justify no further postponement.
  We knew that the TSR2 had become a plane we could not afford. If we can do without a plane of this sort altogether, or manage with only a very few, the savings will be immense. If we need a substantial number of F111s the savings will still be big. By the option we have taken we can keep these different possibilities open without paying for them at the rate of £1 million a week.
  Had we gone on further with the TSR2, all the incentive would have been to keep a need for the plane, and to keep a need for a very substantial number. With no orders it would have been totally impossible to justify the
  1290
  money we have spent. With a small number the costs per plane would have risen towards £10 million.
  We shall not leave the R.A.F. without the equipment it needs to discharge—[Interruption.] Hon. Gentlemen opposite who left the R.A.F. in the position it was in should not gibe at us—the rôles, not necessarily unchangeable, which the Government lay upon it.
  But in defence matters the objective should always be to discharge a rôle as economically as possible. This objective should be a particularly compelling one for a British Government today and in the next few years. The purpose of many of our current rôles is not to defend this island, but to give us influence in the world, to make our foreign policy more effective. But nothing is more crucial to the effectiveness of our foreign policy than our national solvency, here at home. If we sacrifice that we shall achieve nothing by world-wide commitments.
  While we were prisoners on the TSR2 escalator the pressures were against such an economical approach. With the F111 they will operate the other way. The fewer we can buy the bigger the budgetary saving, the smaller the dollar expenditure, the same the unit cost.
  I turn to the third main charge, that we have weakened the British aircraft industry and thereby damaged the prospects of Anglo-French co-operation. On the latter part of this charge, it is not merely untrue but the reverse of the truth. We are now at a crucial planning stage for Anglo-French co-operation. We are very near to a firm agreement on the fixed-wing trainer, we are making good progress with our discussions on a joint versatile light variable geometry aircraft and we are hopeful of an arrangement on helicopters and on an airborne early warning plane.
  Had the TSR2 continued in the programme it would have been quite impossible, with any sense of financial responsibility, to have made funds available for all these projects. When I hear hon. Gentlemen opposite complain that we did not continue with all three existing projects, as well as starting some new projects with the French—and the French showed no interest in any of the existing projects—I sometimes think that they must have taken leave of their financial senses. The budgetary

  1291
  commitments would have been quite impossible to sustain.
  Will the cancellation damage the British aircraft industry? [HON. MEMBERS: "Yes."] In particular, will it damage us in the face of American competition? I do not under-estimate this, but it seems to me to be the most extraordinary proposition that the correct way to deal with American competition is to keep a vast quantity of men, money and skill tied up in a project which the country cannot afford and for which the export prospects are nil.
  I turn to more detailed export consequences—to the effect which it is suggested the cancellation will have on the VC10 the BAC111 and the Concord. The main argument here is that the effect of cancellation on the allocation of overheads of B.A.C. will damage the price competitiveness of the planes, particularly the first two. That is not so. In negotiating compensation payments we will take into account the overhead problem for the next three years or so, by which date the firm will have had plenty of time to make its own adjustments.
  Then there is the question of the Concord engine—the Olympus 593. This is not the same as the TSR2 engine, the Olympus 320, but it has something in common with it. However, the designs have diverged a great deal recently. Most of the basic engineering work on the 320 was complete, so that much of the Concord benefit that could be derived had already been derived from it, and the managing director of Bristol Siddeley Engines yesterday expressed complete confidence in his firm's ability to carry out the Concord project.
  There is a wider point about the effect of the cancellation on the competitive future of the British aircraft industry. If we had not cancelled, everything in the industry would have gone on very much
  as before; it would have remained very much the same size and the same shape, and it would have continued to nestle equally comfortably on the cushion of easy Government spending. And that pattern would have remained fairly fixed up to 1970. Confronted with this very big industry, with its voracious appetite for skill and money, with its export difficulties, with its output per man—which is only four-sevenths that of the French industry, although its labour force is three times as big—I did not believe it right to maintain that frozen pattern.
  There must be some changes, of course, and these changes will mean difficulties—[HON. MEMBERS: "Resign."]—both for the firms and for their workers. As my right hon. Friend said this afternoon—[HON. MEMBERS: "Resign."]—20,000 jobs are involved—
  Mr. Soames rose—
  Hon. Members: Sit down.
  Mr. Jenkins: No. The right hon. Gentleman knows perfectly well that it is not usual to disclose such prices. If it were so, why did the Government of the party opposite not disclose anything about the price of the Phantom? We heard nothing about that.
  Mr. Speaker, I ask the House to reject the Opposition's Motion. In putting it forward they are, I believe—[HON. MEMBERS: "Resign."]—far out of touch with most opinion in the country. Nearly every newspaper with any claim to independence—[Interruption.]—nearly every commentator with any expert knowledge, supports our decision. Some commentators say that it is a sad decision—so do I—but hardly anyone disputes that it is a right decision, and one which, if the previous Government had faced up to their responsibilities, ought to have been taken long ago.
  Question put:—
  The House divided: Ayes 290, Noes 316.

  Division No. 89.]

  AYES

  10.0 p.m.

  Agnew, Commander Sir Peter

  Baker, W. H. K.

  Berry, Hn. Anthony

  Alison, Michael (Barkston Ash)

  Balniel, Lord

  Biffen, John

  Allan, Robert (Paddington, S.)

  Barber, Rt. Hn. Anthony

  Biggs-Davison, John

  Allason, James (Hemel Hempstead)

  Barlow, Sir John

  Bingham, R. M.

  Amery, Rt. Hn. Julian

  Batsford, Brian

  Birch, Rt. Hn. Nigel

  Anstruther-Gray, Rt. Hn. Sir W.

  Beamish, Col. Sir Tufton

  Black, Sir Cyril

  Atkins, Humphrey

  Bell, Ronald

  Blaker, Peter

  Awdry, Daniel

  Berkeley, Humphry

  Bossom, Hn. Clive

  Box, Donald

  Griffiths, Eldon (Bury St. Edmunds)

  Monro, Hector

  Boyd-Carpenter, Rt. Hn. J.

  Griffiths, Peter (Smethwick)

  More, Jasper

  Boyle, Rt. Hn. Sir Edward

  Gurden, Harold

  Morgan, W. G.

  Braine, Bernard

  Hall, John (Wycombe)

  Morrison, Charles (Devizes)

  Brewis, John

  Hall-Davis, A. G. F.

  Mott-Radclyffe, Sir Charles

  Brinton, Sir Tatton

  Hamilton, Marquess of (Fermanagh)

  Munro-Lucas-Tooth, Sir Hugh

  Bromley-Davenport. Lt.-Col. Sir Walter

  Hamilton, M. (Salisbury)

  Murton, Oscar

  Brooke, Rt. Hn. Henry

  Harris, Frederic (Croydon, N. W.)

  Neave, Airey

  Brown, Sir Edward (Bath)

  Harris, Reader (Heston)

  Nicholls, Sir Harmar

  Bruce-Gardyne, J.

  Harrison, Brian (Maldon)

  Nicholson, Sir Godfrey

  Bryan, Paul

  Harrison, Col. Sir Harwood (Eye)

  Noble, Rt. Hn. Michael

  Buchanan-Smith, Alick

  Harvey, Sir Arthur Vere (Maccles'd)

  Nugent, Rt. Hn. Sir Richard

  Buck, Antony

  Harvey, John (Walthamstow, E.)

  Onslow, Cranley

  Bullus, Sir Eric

  Harvie Anderson, Miss

  Orr, Capt. L. P. S.

  Burden, F. A.

  Hastings, Stephen

  Orr-Ewing, Sir Ian

  Butcher, Sir Herbert

  Hawkins, Paul

  Osborn, John (Hallam)

  Buxton, R, C.

  Hay, John

  Page, John (Harrow, W.)

  Campbell, Gordon

  Heald, Rt. Hn. Sir Lionel

  Page, R. Graham (Crosby)

  Carlisle, Mark

  Heath, Rt. Hn. Edward

  Pearson, Sir Frank (Clitheroe)

  Carr, Rt. Hn. Robert

  Hendry, Forbes

  Peel, John

  Cary, Sir Robert

  Higgins, Terence L.

  Percival, Ian

  Channon, H. P. G.

  Hiley, Joseph

  Peyton, John

  Chataway, Christopher

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

  Pickthorn, Rt. Hn. Sir Kenneth

  Chichester-Clark, R.

  Hirst Geoffrey

  Pike, Miss Mervyn

  Clark, Henry (Antrim, N.)

  Hobson, Rt. Hn. Sir John

  Pitt, Dame Edith

  Clark, Wiliam (Nottingham, S.)

  Hogg, Rt. Hn. Quintin

  Pounder, Rafton

  Clarke, Brig. Terence (Portsmth, W.)

  Hopkins, Alan

  Powell, Rt. Hn. J- Enoch

  Cole, Norman

  Hordern, Peter

  Price, David (Eastleigh)

  Cooke, Robert

  Hornby, Richard

  Prior, J. M. L.

  Cooper, A. E.

  Hornsby-Smith, Rt. Hn. Dame P.

  Pym, Francis

  Cooper-Key, Sir Neill

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

  Quennell, Miss J. M.

  Cordle, John

  Howe, Geoffrey (Bebington)

  Ramsden, Rt. Hn. James

  Corfield, F. V.

  Hunt, John (Bromley)

  Rawlinson, Rt. Hn. Sir Peter

  Costain, A. P.

  Hutchison, Michael Clark

  Redmayne, Rt. Hn. Sir Martin

  Cou tney, Cdr. Anthony

  Iremonger, T. L.

  Rees-Davies, W. R.

  Craddock, Sir Beresford (Spelthorne)

  Irvine, Bryant Godman (Rye)

  Renton, Rt. Hn. Sir David

  Crawley, Aidan

  Jenkin, Patrick (woodford)

  Ridley, Hn. Nicholas

  Crosthwaite-Eyre, Col. Sir Oliver

  Jennings, J. C.

  Ridsdale Julian

  Crowder, F. P.

  Johnson Smith, G.

  Roberts, Sir Peter (Heeley)

  Cunningham, Sir Knox

  Jones, Arthur (Northants, S.)

  Robson Brown, Sir William

  Curran, Charles

  Jopling, Michael

  Rodgers, Sir John (Sevenoaks)

  Currie, G. B. H.

  Joseph, Rt. Hn. Sir Keith

  Roots, William

  Dalkeith, Earl of

  Kaberry, Sir Donald

  Royle, Anthony

  Dance, James

  Kerby, Capt. Henry

  Russell, Sir Ronald

  Davies, Dr. Wyndham (Perry Barr)

  Kerr, Sir Hamilton (Cambridge)

  St. John-Stevas, Norman

  d'Avigdor-Goldsmid, Sir Henry

  Kershaw, Anthony

  Sandys, Rt. Hn. D.

  Dean, Paul

  Kilfedder, James A.

  Scott-Hopkins, James

  Deedes, Rt. Hn. W. F.

  Kimball, Marcus

  Sharples, Richard

  Dodds-Parker, Douglas

  King, Evelyn (Dorset, S.)

  Shepherd, William

  Doughty, Charles

  Kirk, Peter

  Sinclair, Sir George

  Douglas-Home, Rt. Hn. Sir Alec

  Kitson, Timothy

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

  Drayson, G. B.

  Lagden, Godfrey

  Smyth, Rt. Hn. Brig. Sir John

  du Cann, Rt. Hn. Edward

  Lambton, Viscount

  Soames, Rt. Hn. Christopher

  Eden, Sir John

  Lancaster, Col. C. G.

  Spearman, Sir Alexander

  Elliot, Capt. Walter (Carshalton)

  Langford-Holt, Sir John

  Speir, Sir Rupert

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

  Legge-Bourke, Sir Harry

  Stainton, Keith

  Emery, Peter

  Litchfield, Capt. John

  Stanley, Hn. Richard

  Errington, Sir Eric

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

  Stodart, Anthony

  Farr, John

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

  Stoddart-Scott, Col. Sir Malcolm

  Fell, Anthony

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Studholme, Sir Henry

  Fisher, Nigel

  Longbottom, Charles

  Summers, Sir Spencer

  Fletcher-Cooke, Charles (Darwen)

  Longden, Gilbert

  Talbot, John E.

  Fletcher-Cooke, Sir John (S'pton)

  Loveys, Walter H.

  Taylor, Sir Charles (Eastbourne)

  Forrest, George

  Lucas, Sir Jocelyn

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

  Foster, Sir John

  McAdden, Sir Stephen

  Taylor, Frank (Moss Side)

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

  Maclean, Sir Fitzroy

  Teeling, Sir William

  Fraser, Ian (Plymouth, Sutton)

  Macleod, Rt. Hn. Iain

  Temple, John M.

  Galbraith, Hn. T. G. D.

  McMaster, Stanley

  Thatcher, Mrs. Margaret

  Gammans, Lady

  McNair-Wilson, Patrick

  Thomas, Sir Leslie (Canterbury)

  Gardner, Edward

  Maginnis, John E.

  Thomas, Rt. Hn. Peter (Conway)

  Gibson-Watt, David

  Maitland, Sir John

  Thompson, Sir Richard (Croydon, S.)

  Giles, Rear-Admiral Morgan

  Marples, Rt. Hn. Ernest

  Thorneycroft, Rt. Hn. Peter

  Gilmour, Ian (Norfolk, Central)

  Marten, Neil

  Tiley, Arthur (Bradford, W.)

  Gilmour, Sir John (East Fife)

  Mathew, Robert

  Tilney, John (Wavertree)

  Glover, Sir Douglas

  Maude, Angus

  Tweedsmuir, Lady

  Glyn, Sir Richard

  Maudling, Rt. Hn. Reginald

  van Straubenzee, W. R.

  Godber, Rt. Hn. J. B.

  Mawby, Ray

  Vickers, Dame Joan

  Goodhart, Philip

  Maxwell-Hyslop, R. J.

  Walder, David (High Peak)

  Goodhew, Victor

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

  Walker, Peter (Worcester)

  Gower, Raymond

  Meyer, Sir Anthony

  Walker-Smith, Rt. Hn. Sir Derek

  Grant, Anthony

  Mills, Peter (Torrington)

  Wall, Patrick

  Grant-Ferris, R.

  Mills, Stratton (Belfast, N.)

  Walters, Dennis

  Gresham-Cooke, R.

  Miscampbell, Norman

  Ward, Dame Irene

  Grieve, Percy

  Mitchell, David

  Weatherill, Bernard

  1294

  1295

  Webster, David

  Wise, A. R.

  Yates, William (The Wrekin)

  Wells, John (Maidstone)

  Wolrige-Gordon, Patrick

  Younger, Hn. George

  Whitelaw, William

  Wood, Rt. Hn. Richard

  Williams, Sir Rolf Dudley (Exeter)

  Woodhouse, Hn. Christopher

  TELLERS FOR THE AYES:

  Wills, Sir Gerald (Bridgwater)

  Woodnutt, Mark

  Mr. McLaren and Mr. MacArthur.

  Wilson, Geoffrey (Truro)

  Wylie, N. R.

  NOES

  Abse, Leo

  Evans, Albert (Islington, S. W.)

  Jones, T. w. (Merioneth)

  Albu, Austen

  Evans, Ioan (Birmingham, Yardley)

  Kelley, Richard

  Allaun, Frank (Salford, E.)

  Fernyhough, E.

  Kenyon, Clifford

  Aldritt, Walter

  Finch, Harold (Bedwellty)

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

  Allen, Scholefield (Crewe)

  Fitch, Alan (Wigan)

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

  Armstrong, Ernest

  Fletcher, Sir Eric (Islington, E.)

  Lawson, George

  Atkinson, Norman

  Fletcher, Ted (Darlington)

  Leadbitter, Ted

  Bacon, Miss Alice

  Fletcher, Raymond (Ilkeston)

  Ledger, Ron

  Bagier, Gordon A. T.

  Floud, Bernard

  Lee, Rt. Hn. Frederick (Newton)

  Barnett, Joel

  Foot, Sir Dingle (Ipswich)

  Lee, Miss Jennie (Cannock)

  Baxter, William

  Foot, Michael (Ebbw Vale)

  Lever, Harold (Cheetham)

  Beaney, Alan

  Ford, Ben

  Lever, L. M. (Ardwick)

  Bellenger, Rt. Hn. F. J.

  Fraser, Rt. Hn. Tom (Hamilton)

  Lewis, Arthur (West Ham, N.)

  Bence, Cyril

  Freeson, Reginald

  Lewis, Ron (Carlisle)

  Benn, Rt. Hn. Anthony Wedgwood

  Galpern, Sir Myer

  Lipton, Marcus

  Bennett, J. (Glasgow, Bridgeton)

  Garrett, W. E.

  Lomas, Kenneth

  Bessell, Peter

  Garrow, A.

  Loughlin, Charles

  Binns, John

  George, Lady Megan Lloyd

  Lubbock, Eric

  Bishop, E. S.

  Ginsburg, David

  Mabon, Dr. J. Dickson

  Blackburn, F.

  Gourlay, Harry

  McBride, Neil

  Blenkinsop, Arthur

  Greenwood, Rt. Hn. Anthony

  McCann, J.

  Boardman, H.

  Gregory, Arnold

  MacColl, James

  Boston, T. G.

  Gray, Charles

  MacDermot, Niall

  Bottomley, Rt. Hn. Arthur

  Griffiths, David (Rother Valley)

  McGuire, Michael

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

  Griffiths, Rt. Hn. James (Llanelly)

  McInnes, James

  Bowen, Roderic (Cardigan)

  McKay, Mrs. Margaret

  Boyden, James

  Griffiths, Will (M' Chester Exchange)

  Mackenzie, Alasdair (Ross & Crom'ty)

  Braddock, Mrs. E. M.

  Grimond, Rt. Hn. J.

  Mackenzie, Gregor (Rutherglen)

  Bradley, Tom

  Gunter, Rt. Hn. R. J.

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

  Bray, Dr. Jeremy

  Hamilton, James (Bothwell)

  Mackie, John (Enfield, E.)

  Brown, Rt. Hn. George (Belper)

  Hamilton, William (West Fife)

  McLeavy, Frank

  Brown, Hugh D. (Glasgow, Provan)

  Hamling, William (Woolwich, W.)

  MacMillan, Malcolm

  Brown, R. w. (Shoreditch & Fbury)

  Hannan, William

  MacPherson, Malcolm

  Buchan, Norman (Renfrewshire, W.)

  Harper, Joseph

  Mahon, Peter (Preston, S.)

  Buchanan, Richard

  Harrison, Walter (Wakefield)

  Mahon, Simon (Bootle)

  Butler, Herbert (Hackney, C.)

  Hart, Mrs. Judith

  Mallalieu, E. L. (Brigg)

  Butler, Mrs. Joyce (Wood Green)

  Hattersley, Roy

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

  Callaghan, Rt. Hn. James

  Hayman, F. H.

  Manuel, Archie

  Carmichael, Neil

  Hazell, Bert

  Mapp, Charles

  Carter-Jones, Lewis

  Healey, Rt. Hn. Denis

  Marsh, Richard

  Castle, Rt. Hn. Barbara

  Heffer, Eric S.

  Mason, Roy

  Chapman, Donald

  Henderson, Rt. Hn. Arthur

  Maxwell, Robert

  Coleman, Donald

  Herbison, Rt. Hn. Margaret

  Mayhew, Christopher

  Conlan, Bernard

  Hill, J. (Midlothian)

  Mellish, Robert

  Cousins, Rt. Hn. Frank

  Hobden, Dennis (Brighton, K'town)

  Mendelson, J. J.

  Craddock, George (Bradford, S.)

  Holman, Percy

  Mikardo, Ian

  Crawshaw, Richard

  Hooson, H. E.

  Millan, Bruce

  Cronin, John

  Horner, John

  Miller, Dr. M. S.

  Crosland, Anthony

  Houghton, Rt. Hn. Douglas

  Milne, Edward (Blyth)

  Crossman, Rt. Hn. R. H. S

  Howarth, Harry (Wellingborough)

  Molloy, William

  Cullen, Mrs. Alice

  Howarth, Robert L. (Bolton, E.)

  Monslow, Walter

  Dalyell, Tam

  Howell, Denis (Small Heath)

  Morris, Alfred (Wythenshawe)

  Darling, George

  Howie, W.

  Morris, Charles (Openshaw)

  Davies, G. Elfed (Rhondda, E.)

  Hoy, James

  Morris, John (Aberavon)

  Davies. Harold (Leek)

  Hughes, Cledwyn (Anglesey)

  Mulley, Rt. Hn. Frederick(Sheffield Pk)

  Davies, Ifor (Gower)

  Hughes, Emrys (S. Ayrshire)

  Murray, Albert

  Davies, S. O. (Merthyr)

  Hughes, Hector (Aberdeen, N.)

  Neal, Harold

  de Freitas, Sir Geoffrey

  Hunter, Adam (Dunfermline)

  Newens, Stan

  Delargy, Hugh

  Hunter, A. E. (Feltham)

  Noel-Baker, Francis (Swindon)

  Dell, Edmund

  Hynd, H. (Accrington)

  Norwood, Christopher

  Dempsey, James

  Hynd, John (Attercliffe)

  Oakes, Gordon

  Diamond, John

  Irvine, A. J. (Edge Hill)

  Ogden, Eric

  Dodds, Norman

  Jackson, Colin

  O'Malley, Brian

  Doig, Peter

  Janner, Sir Barnet

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

  Donnelly, Desmond

  Jay, Rt. Hn. Douglas

  Orbach, Maurice

  Driberg, Tom

  Jeger, George (Goole)

  Orme, Stanley

  Duffy, A. E. P.

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

  Oswald, Thomas

  Dunn, James A.

  Jenkins, Hugh (Putney)

  Owen, Will

  Dunnett, Jack

  Jenkins, Rt. Hn. Roy (Stechford)

  Padley, Walter

  Edelman, Maurice

  Johnson, Carol (Lewitham, S.)

  Page, Derek (King's Lynn)

  Edwards, Rt. Hn. Ness (Caerphilly)

  Johnson, James (K'ston-on-Hull, W.)

  Paget, R. T.

  Edwards, Robert (Bilston)

  Johnston, Russell (Inverness)

  Palmer, Arthur

  English, Michael

  Jones, Dan (Burnley)

  Pannell, Rt. Hn. Charles

  Ennals, David

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

  Pargiter, G. A.

  Ensor, David

  Jones, J. Idwal (Wrexham)

  Park, Trevor (Derbyshire, S. E.)

  1296

  1297

  Parker, John

  Silkin, John (Deptford)

  Tuck, Raphael

  Parkin, B. T.

  Silkin, S. C. (Camberwell, Dulwich)

  Urwin, T. W.

  Pavitt, Laurence

  Silverman, Julius (Aston)

  Varley, Eric G.

  Pearson, Arthur (Pontypridd)

  Silverman, Sydney (Nelson)

  Wainwright, Edwin

  Peart, Rt. Hn. Fred

  Skeffington, Arthur

  Walden, Brian (All Saints)

  Pentland, Norman

  Slater, Mrs. Harrlet (Stoke, N.)

  Walker, Harold (Doncaster)

  Perry, Ernest G.

  Slater, Joseph (Sedgefield)

  Wallace, George

  Popplewell, Ernest

  Small, William

  Warbey, William

  Prentice, R. E.

  Smith, Ellis (Stoke, S.)

  Watkins, Tudor

  Price, J. T. (Westhoughton)

  Snow, Julian

  Weitzman, David

  Probert, Arthur

  Solomons, Henry

  Wells, William (Walsall, N.)

  Pursey, Cmdr. Harry

  Soskice, Rt. Hn. Sir Frank

  White, Mrs. Eirene

  Randall, Harry

  Spriggs, Leslie

  Whitlock, William

  Rankin, John

  Steel, David

  Wigg, Rt. Hn. George

  Redhead, Edward

  Steele, Thomas (Dunbartonshire, W.)

  Wilkins, W. A.

  Rees, Merlyn

  Stewart, Rt. Hn. Michael

  Willey, Rt. Hn. Frederick

  Reynolds, G. W.

  Stonehouse, John

  Williams, Alan (Swansea, W.)

  Rhodes, Geoffrey

  Stones, William

  Williams, Clifford

  Richard, Ivor

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

  Williams, Mrs. Shirley (Hitchin)

  Roberts, Albert (Normanton)

  Summerskill, Dr. Shirley

  Williams, W. T. (Warrington)

  Roberts, Goronwy (Caernarvon)

  Swain, Thomas

  Willis, George (Edinburgh, E.)

  Robertson, John (Paisley)

  Swingler, Stephen

  Wilson, Rt. Hn. Harold (Huyton)

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

  Symonds, J. B.

  Wilson, William (Coventry, S.)

  Rodgers, William (Stockton)

  Taverne, Dick

  Winterbottom, R. E.

  Rose, Paul B.

  Taylor, Bernard (Mansfield)

  Woof, Robert

  Ross, Rt. Hn.William

  Thomas, George (Cardiff, W.)

  Wyatt, Woodrow

  Rowland,Christopher

  Thomas, Iorwerth (Rhondda, W.)

  Yates, Victor (Ladywood)

  Sheldon, Robert

  Thomson, George (Dundee, E.)

  Zilliacus, K.

  Shinwell, Rt. Hn. E.

  Thornton, Ernest

  Shore, Peter (Stepney)

  Thorpe, Jeremy

  TELLERS FOR THE NOES:

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

  Tinn, James

  Mr. Sydney Irving and

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

  Tomney, Frank

  Mr. George Rogers.

  BUSINESS OF THE HOUSE
  Ordered,

  That the Proceedings on the Lords Amendments to the Rivers (Prevention of Pollution) (Scotland) Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Lawson.]

RIVERS (PREVENTION OF POLLUTION (SCOTLAND) BILL
Lords Amendments considered.

Clause 9.—(PENALTIES AND PROCEEDINGS FOR CERTAIN OFFENCES.)
Lords Amendment: In page 10, line 25, at end insert:
"( ) Without prejudice to the exercise of the functions of a river purification authority in relation to any discharge of an effluent from a vessel, in a case where the provisions of the Oil in Navigable Waters Acts 1955 and 1963 apply to restrict such a discharge, no proceedings for an offence against this Act or against the principal Act shall lie in respect of that discharge."
10.15 p.m.
The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): I beg to move, That this House doth agree with the Lords in the said Amendment.
Hon. Members will recollect that, during the Committee and Report stages—[Interruption]—I resisted, on behalf of the Government, Amendments in the name of—
Mr. Speaker: Order. We cannot prevent the pollution of Scottish rivers unless hon. Members be more quiet.
Dr. Mabon: As I was saying, Sir, I resisted Amendments in the name of the noble Lord the Member for Edinburgh, North (The Earl of Dalkeith) which would have provided that nothing in Clause 1 of the Bill or in Section 22 of the principal Act as applied to tidal waters would apply to discharges of oil which were subject to the Oil in Navigable Waters Acts, 1955 and 1963.
I resisted the Amendments on the ground that Parliament clearly intended that both the 1951 and the 1955 Acts should apply to polluting discharges—this is Section 24 of the 1955 Act—and that river purification authorities had a general duty under Section 17 of the Rivers (Prevention of Pollution) (Scotland) Act, 1951, to promote the cleanliness of the rivers and tidal waters in their areas.
However, hon. Members will recollect that I undertook to have conversations with the Lord Advocate and that I recognised that there were difficulties in relation to criminal prosecution in Scot-
1300
land, despite my reference to the Interpretation Act, 1883. I sought the advice of the Lord Advocate and, during the Report stage, I read out his proposal that an instruction would be issued by him to procurators fiscal that all cases of alleged contravention of the Oil in Navigable Waters Acts or the Rivers (Prevention of Pollution) Acts in respect of oil discharges from vessels be reported to the Crown Office for consideration by Crown Counsel so as to make certain that prosecutions proceeded under the appropriate code.
None the less, after further consideration in another place, the Government decided to adopt this present proposal in the Bill and so allay any further apprehensions of ship masters against whom proceedings might be taken for discharging effluent at sea by providing that, if the provisions of the Oil in Navigable Waters Acts apply to a discharge of effluent from a vessel, no proceedings will be taken under the Rivers (Prevention of Pollution) Acts.
The Amendment agreed to in another place provides, therefore, that no proceedings for offences will lie under the Rivers (Prevention of Pollution) (Scotland) Act, 1951, or the Bill, where the provisions of the Oil in Navigable Waters Acts of 1935 and 1963 apply to restrict discharges of effluent from vessels. The special defences in the Oil in Navigable Waters Acts, 1955 and 1963, continue to be available to owners or masters of vessels.
The Amendment ensures at the same time—this is the point I made when resisting the Amendment originally moved by the noble Lord the Member for Edinburgh, North and this is the compromise—that the exercise of the functions of river purification authorities is not prejudiced, having regard to their general duty to promote the cleanliness of our tidal waters, in relation to any discharge of effluent from vessels.
I commend the Amendment to the House. I suggest that hon. Members on both sides may be satisfied by the other place having sought to strike a balance between the difficult propositions which we discussed in Committee and on Report. I hope that those of my hon. Friends who were most anxious that I should stand my ground in resisting the noble Lord's Amendment will recognise

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that we have in this way managed to maintain without prejudice the position of river purification authorities and, at the same time, as an earnest of their good intentions, the Government have sought still further to meet the point raised quite legitimately by the noble Lord and those of his hon. Friends who supported him.
Mr. Gordon Campbell: As the hon. Gentleman has said, during the passage of the Bill through this House we raised the point about overlapping between two sets of legislation—the Oil in Navigable Waters Acts and the legislation concerning pollution of rivers and tidal waters to which the Bill will add.
We realised that when the Bill became an Act a ship which discharged oil might be prosecuted under the Act. We thought it better that the Oil in Navigable Waters Acts should apply instead. One of our reasons was that the penalties under that legislation would be greater. We also thought that the dubiety should be removed so that it was clear that, if a ship fell within the law under the Oil in Navigable Waters Acts, it would be charged under that legislation.
As the hon. Gentleman has also said, he told us at a later stage about the direction which the Lord Advocate intended to give to procurators-fiscal. This went some way to meet our point because we hoped that interpretation of this would be in accordance with what we were putting forward. We now find that, in another place, the arguments which were again put strongly seem to have had effect and that the Government have had further thoughts on the matter, bringing forward this Amendment.
I have noted the point that the Amendment, besides making it clear which legislation is to apply, safeguards the position of the purification authorities in dealing with pollution within the waters for which they are responsible. Therefore, when the hon. Gentleman speaks of a compromise, it is not so much a compromise as that two points are covered in the Amendment. We felt sure that something on these lines should be drafted when we were arguing our case before. Our view has been confirmed and we welcome the Amendment.
The Earl of Dalkeith: I, too, express my appreciation to the Under-Secretary of State for having produced this compromise solution and also congratulate his noble Friend in another place who has co-operated with him in producing a sensible answer. Perhaps the process of argument and stalling might have been short-circuited a little if we had had the good fortune to have the Lord Advocate in this place.
Nevertheless, I thank the hon. Gentleman, but now that he has gone so far he might perhaps have gone a little further. Never mind! Perhaps most people are happy. It is said that one cannot please all the people all the time but only some of the people some of the time. But I think that, in this instance, the hon. Gentleman has got very near pleasing all the people all the time.
I want to make it clear that, at no time during the process of putting forward this Amendment at an earlier stage, was I ever approached by shipping authorities. It was suggested by some hon. Members opposite that I was being subjected to pressure from shipping Interests. At no time did I have any approach from any shipping representatives about the Amendment. I thank the hon. Gentleman for going as far as he has.
Mr. Forbes Hendry: Like my hon. Friends, I welcome the Amendment, although I wish that it had come earlier. I welcome it for another reason besides that brought up by my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell). The law as originally proposed in the Bill would have been in breach of certain international conventions which contained provisions concerning prosecution under the Oil in Navigable Waters Acts. It is well that we should record the fact tonight that those provisions were included in international conventions and I am glad this point has been brought up.
It is amazing to think back to the speeches made by the Under-Secretary of State when he described the enormous difficulties of putting into effect an Amendment of this sort. It would be wrong for me to quote from the Report of the Committee stage, but I remember him using the words "immense task" in describing the task which confronts the authorities in separating a pollution of an

1303
oily nature under the Oil in Navigable Waters Acts from an oily pollution coming from some land-based installation. I am extremely glad that he has discovered that these difficulties are not so immense after all.
Mr. William Baxter: They have been overcome.
Mr. Hendry: I am very glad that even at this late stage the Government have accepted our argument.
Mr. Edward M. Taylor: Although my hon. Friends have indicated that the Amendment clears up dubiety on this matter, there is one small point on which I think dubiety still remains. It is true that there was need for some action to clear up a very difficult situation. We were presented with a situation in which it was not clear under which law an offender might be acted against. A shipowner coming into tidal water could be acted against under one or perhaps another of the laws. The whole point of the Amendment which we moved in Committee was to remove this doubt, and I am still not certain that the Amendment now under consideration removes that doubt entirely, because one of the points with which I was concerned was the question of the defences available to a shipowner who emitted oil.
We appreciate that the essential differences between the Oil in Navigable Waters Acts and the Rivers (Prevention of Pollution) (Scotland) Bill was, first, that there was a substantial difference in penalties. The penalties under the former Act were greater. But another difference concerned the defences available to someone who had contravened one of the laws by discharging oil. Section 2(1) of the Oil in Navigable Waters Act, 1963, reads:
"Provided that it shall be a defence to prove that by reason of special circumstances it was impracticable or unreasonable to retain the oil or mixture in the ship."
Under the Rivers (Prevention of Pollution) (Scotland) Bill there was no such defence, and even if a person on board ship could prove beyond the shadow of a doubt that he had no practicable alternative but to discharge the oil, this was no defence. For that reason my personal view was that the Oil in Navigable Waters Act should apply.
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The Under-Secretary of State has said that the Amendment now before us removes the doubt entirely. I feel that if the words "to restrict such a discharge" were removed from the Amendment there would be no doubt, because it would simply say that in cases where the Oil in Navigable Waters Acts apply no proceedings would be taken under this Bill. But, in fact, the Amendment reads:
"Where the provisions of the Oil in Navigable Waters Acts 1955 and 1963 apply to restrict such a discharge …"
I suggest that if someone had no alternative but to discharge oil and was looking to this Clause as a defence, there would be some dubiety that he was covered by the Amendment.
The provisions of the Oil in Navigable Waters Act would not apply to restrict a discharge but would provide a defence for someone forced to do this. This is one point which the Minister will have to clarify.
It may be that there is some point which is obvious but which I have not seen. We have not a great deal of experience of the Government accepting Amendments to any Bills, particularly Scottish Bills. It may be that I have not the ability to see these things as clearly as I should. It certainly has cleared up the question of penalties.
10.30 p.m.
The other point which must be made, even at this late stage, is that the implication of some of the remarks of the Minister in the previous debate was that in some ways the wishes and the best interests of people who are concerned with clean water were conflicting with the interests of shipowners. It is quite clear from what was said in that debate and from what has been said since that their interests do not necessarily conflict. In fact, in the Clyde district where my constituency is situated in some of the tidal stretches there is severe corrosion of the equipment on a number of large ships because of the pollution of the river in this area. The river for a distance of eight or 10 miles downstream from Glasgow is in an appalling state, and this is having an adverse effect on many ships in the area. In these circumstances, I feel that there is no conflict here, and that is why I am glad that this Amendment has been moved.

1305
I still feel, however, that there is an element of doubt, and I should like the Minister to clear up the point concerning the ship from which oil is discharged, because there is no practical alternative. In such circumstances, would such an occurrence fall within the terms of the 1963 Act or would it be possible, particularly in view of the first few words of the Amendment, for action to be taken against the ship under this Bill?
Dr. Dickson Mabon: I am grateful to the House for receiving the Amendment so well and for the thanks which have been expressed.
I do not want to re-open all the arguments that we had in Committee, and I do not want to respond to the challenge of the hon. Member for Aberdeenshire, West (Mr. Hendry), who wondered whether we were contravening international agreements. In Committee I said that that was not so, and I stand by that. I would not like the record to show merely his view as reflecting the view of the House. It certainly is not the view of the Government. I do not want to re-open old sores; this is a rather tender and delicate role for me to play tonight!
On the other matter which the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) raised, I would not like to get involved—and I am sure his hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Wylie) would not like to get involved—in arguing the case of some of the instances which he recited in exemplifying the doubt. It is for the courts to resolve whether or not a particular offence is one which should be considered under the Oil in Navigable Waters Acts, 1955 or 1963. It is not for me, or for anyone in the House, to decide. It is for the courts to interpret.
This Amendment makes it absolutely clear that a prosecution in respect of this offence is under one series of Acts only, namely the Oil in Navigable Waters Acts with the penalties that those Acts apply in respect of these offences if they are so proved.
When I used the word "compromise" I meant it in relation to giving a locus in law to the river purification authorities, so that a river purification authority could take action with a view to prosecution, including offences under the Oil in Navigable Waters Acts. This is the original compromise which I attempted,
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on Report, to convince the House was the only reasonable one to achieve in the circumstances. In that case, it would be for the Lord Advocate to sort out what he felt ought to be the prosecution which counsel should conduct.
This is part of the immense task which we have had to undertake, and we have done so gladly. It has been very difficult, and although we have met on only three occasions—in Committee, on Report and tonight—I should like to assure hon. Members that there has been a good deal of work behind the scenes to try to resolve all these difficulties with all the interests and to try to get everybody content in the belief that we are doing the best thing. That is what I meant by saying that we were appalled by the immense task ahead of us. I am glad that we have managed to get over this Herculean affair, and I hope that the House will agree that this is a reasonable Amendment.
Mr. Edward M. Taylor: This is of some interest. Will the hon. Gentleman agree to remove the words "restrict such a discharge"; if not, will he say precisely what difference they make?
Dr. Mabon: If the hon. Gentleman reflects on this a little and reads the report of the debate in another place, it will become quite clear to him that these words could not be removed without completely distorting the whole passage. There are offences outwith the Oil in Navigable Waters Acts and in which the river purifications authorities have their own rights, which are preserved. It is only when offences clearly come under the Oil in Navigable Waters Acts that these words are so used and when there is an option for the prosecution to proceed under the Oil in Navigable Waters Acts. The words
"Without prejudice to them"
position of a river purification authority are deliberately inserted to give such an authority a locus which it would not otherwise have.
Question put and agreed to.

Clause 10.—(SAMPLES OF EFFLUENT.)
Lords Amendment: In page 12, line 12, after "accordingly" insert:
",and any reference to land includes a reference to premises"
Dr. Dickson Mabon: I beg to move, That this House doth agree with the Lords in the said Amendment.
This is a drafting Amendment to make it clear that "land" in this context includes "premises".
The Clause, taken in conjunction with Section 19 of the 1951 Act, empowers river purification authorities to obtain and take away samples of any effluent passing from any land or vessel into any stream in its area. Having regard to other Clauses in the Bill which refer specifically to "land or premises," for example, Clauses 1(3), 2(2) and 10(1), and so on, it would be questionable whether "land" in this context included "premises." It was for that reason that it was decided in another place to clarify the position.
Mr. Hendry: Alas and alack! I cannot welcome the Amendment. I have listened with great care to the hon. Gentleman's explanation, which he gave at high speed, but which I was able to follow. He suggested that because in some other subsections of the Clause the expression "land or premises" is used, whereas in this provision only the word "land" is used, there might be some doubt.
I dislike the Amendment for two reasons. One is that the subsection substitutes a new Section in the principal Act which will stand alone without any reference to any other subsection in the Clause and will fall to be construed in that way. This is one of those unfortunate instances which arise because we have no Scottish Law Officer in the House. It is most unfortunate that Ministers, with the best of good will, should have imperfect legal advice on matters of this sort. My first objection to the Amendment is that the Government has completely misunderstood the construction of the subsection.
My second objection is that the Amendment is completely and utterly unnecessary. If the Under-Secretary had been properly advised by a Law Officer, he would have been told straight away that "land" includes "premises." There can be no question about that. It is one of the basic and cardinal features of the law of Scotland that what is built on the land forms part of the land. That derives from the ancient Roman law, incorporated in the Scottish law, of Quod
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inaedificatur solo solo cedit. That, of course, is basic. Had the hon. Gentleman been advised by a Law Officer, he would have known this.
Although I dislike the Amendment, however, I cannot see that there is any harm in it, and in these circumstances I do not propose to press my objection.
Question put and agreed to.

Schedule 3.—(MINOR AND CONSEQUENTIAL AMENDMENTS OF THE PRINCIPAL ACT.)
Lords Amendment: In page 17, line 20, after "words", insert "of".
Dr. Dickson Mabon: I beg to move, That this House doth agree with the Lords in the said Amendment.
This is another drafting Amendment, on which, I understand, the most expert legal advice has been given and on which the Lord Advocate has been consulted. It is an Amendment to Schedule 3, and, therefore, to subsection (4) of Section 22 of the 1951 Act, which prohibits the use of streams for disposing of polluting matter, and so on, to insert the word "of", which had been omitted.
Since I spoke so swiftly in Committee, I will read somewhat slowly the amended form of the subsection. It will now state:
"Subsection (1) of this section shall not by virtue of paragraphs (b) or (c) thereof penalise the depositing with the consent of the river purification authority of any solid refuse on any land so that it falls or is carried into a stream if no other site for the deposit is reasonably practicable and all reasonably practicable steps are taken to prevent the refuse entering the stream."
I hope that this commends itself to all hon. Members.
Question put and agreed to.

LAND DRAINAGE (SCOTLAND)
10.43 p.m.
The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): I beg to move,
That the Land Drainage (Scotland) Amendment Order, 1965, a draft of which was laid before this House on 31st March, be approved.
I hesitated to rise because I thought that this could be a matter to which the House might agree without discussion. I am, however, delighted to have the

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opportunity of explaining the purpose of the Order. It is to increase the maximum estimated cost per acre which limits the power of the Secretary of State to make an improvement order without the agreement of all the owners involved.
It was the intention of Parliament in passing the Land Drainage (Scotland) Act, 1958, that subject to the Secretary of State's approval a majority of interested proprietors should not be prevented from improving their land by the opposition of a minority, but it was also thought right that some limit should be placed on the powers of a majority to coerce a minority.
Accordingly, the Act provides that where there is not unanimity, the Secretary of State shall make an improvement order only if a majority of the proprietors concerned agree, and only on two conditions. The first is that the majority are liable to meet more than half the cost of the work, and the second is that the estimated cost of the work does not exceed £20 per acre of land to be improved.
This limiting figure of £20 per acre was first mentioned in the Duncan Committee Report, 1950—hon. Members will recall that the late Dr. Duncan, who did excellent work in his time, has not long left us—but the Report said that the figure of £20 related to the then current conditions.
Although £20 was, possibly, on the low side by the time the 1958 Act was under consideration, it was accepted by the National Farmers' Union and Scottish Landowners' Federation as being a figure unlikely to meet with any adverse criticism. Since 1958, the cost of drainage works has risen steadily and £20 is no longer realistic. Experience has shown that of the 24 improvement orders which have been made under the Act, only two were estimated to cost less than £20 per acre, and of 111 schemes which never got beyond the investigation stage only 13 were estimated to cost less than £20 per acre.
It is important that the Act should work effectively, since it is the only Scottish Act for dealing with larger scale arterial drainage works.
I know that hon. Members will recognise that I cannot argue a case outside the Order, or in relation to Acts which might have been, or Acts which ought to have been. I can only argue a case within the context of this Order, and I
1310
regret that as much as hon. Members do. This is the only Scottish Act for dealing with larger scale arterial drainage works, and therefore we as a Government seek to make the best of what is the only job that we have on our hands.
The Secretary of State has no authority to coerce owners or occupiers to undertake drainage schemes, however necessary or desirable they may be, and, unlike England and Wales, we have no river authorities responsible for arterial drainage or flood prevention measures who are able to levy funds for these purposes by means of precepts on local authorities within their areas. Hon. Members may recall the opposition of local authorities during the passage of the Bill to us following that procedure, and that is why we have our present system.
The coming together of proprietors with a common drainage or flood protection interest to propose a drainage scheme for the Secretary of State's approval and for grant-aid is the only remotely parallel arrangement in Scotland compared with England and Wales. It is clear that the figure of £20 is a definite limiting factor in preventing more drainage being carried out, and we are satisfied that it is not now a realistic figure in relation to present-day costs. I recognise that there is probably room for argument as to whether £40 is the right limit, but the Government consider that it is reasonable in relation to the increases which have taken place in drainage costs since 1958. Both the Scottish National Farmers 'Union and the Scottish Landowners' Federation have agreed to the change, and accordingly I commend the Order to the House.
10.47 p.m.
Mr. J. A. Stodart: I thank the hon. Gentleman for his explanation of the Order, and I agree with his comments on the costs of drainage today.
As the hon. Gentleman mentioned Dr. Duncan, I should like to say that the death not long ago of one of its great stalwarts was a great loss to Scottish agriculture. Dr. Duncan did extremely valuable work for the industry.
From the figures which the hon. Gentleman gave, it was clear that £20 was not adequate for the number of schemes which were carried out. It seems that the scope of the Order was being

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severely restricted by this limitation. Having said that, I wonder whether the hon. Gentleman can tell me what acres are involved. I know that this matter was discussed when the Bill was being considered, but when an Order is made involving this kind of expenditure per acre—£40 maximum—we should be told what acres are involved.
During the Second Reading of the Bill the then Under-Secretary of State for Scotland said that an improvement area was the actual area to be improved. That seems to be over-simplifying the case, and it is important, when we are giving the Secretary of State power to increase the amount of expenditure per acre, to know what experience has been gained since the Bill was passed in 1958 in dealing with what seems to be a somewhat ambiguous matter.
It is very difficult to isolate precisely an improvement area. I should like to give the House my experience in this matter, and I am sure that this will be borne in mind by those on both sides of the House who farm and have to attend to drainage matters.
I have just carried out a drainage scheme on an 18-acre field. If it is of any interest to the Minister, it has worked out at almost precisely a gross cost of £40 an acre. But of the 18 acres that I have drained only about four were in quite glaringly obvious need of draining, and I can imagine that not only the 18 acres in the field but an area in the vicinity, of perhaps 50 or 60 acres, will be improved by this operation.
Mr. Deputy-Speaker (Sir Samuel Storey): The hon. Member is going rather wide of the terms of the Order. It applies only to the adequacy or otherwise of £40 in the light of increased costs.
Notice taken that 40 Members were not present;
House counted, and, 40 Members being present—
10.51 p.m.
Mr. Stodart: I immediately bow to your Ruling, Mr. Deputy-Speaker. I have finished with that point. All I would say in self-defence and in mitigation is that when we are considering an expenditure of the size which is allowed
1312
by the Order it is important to know the possible acreage involved.
My final question is this: can the hon. Member say whether there has been any evidence of hardship to a minority of these cases—that is, objectors—in operating the scheme at £20 an acre? If there has been any evidence of this, with the somewhat disastrous recent Price Review, which has made money even shorter within the industry than it was, it is quite clear that that hardship will be increased.
Perhaps the hon. Gentleman will answer those questions.
10.52 p.m.
Dr. Dickson Mabon: I very much doubt whether I could improve on the definition which one of my predecessors gave on the question of the acreage involved. What happens under the Order is that the acreage is defined as an area of benefit, which is by agreement in relation to any improvement scheme that is being proposed, and it is agreed between all those who are concerned. We hope that the majority can be persuaded to act accordingly, even though the interests of a minority may be affected.
The hon. Member asked a fair question about evidence of hardship. If we look even at the improvement that we are making here in doubling the amount of money per acre, this is in respect only of the works carried out, and not in maintaining the schemes which are so financed. It may be fairly said that this represents hardship, and that in many cases it is impossible for some quite genuinely concerned persons to proceed with an improvement scheme. But that is not a criticism of the Order; it is a criticism of the Act from which the Order flows.
I very much regret that as a Government we cannot make any speeches or any promises for the future. It involves legislation, and we are confined at the moment to an Order. Within the existing instrument which we were left by our predecessors, that is all that we can do. The hon. Gentleman is right, there is some evidence of hardship here. That is why our progress in these matters has been so slow. As I said earlier, there are 111 schemes which have been discussed but with which we have proceeded no further, compared with the very small number with which any progress has been made. This is, of course,

1313
a reflection of the absence of principal legislation parallel with that of England and Wales.
The House may be interested to know what money was spent in successive years since the Act was passed, under the Order which this Amendment seeks to alter. In 1958–59, 1959–60 and 1960–61, nothing was spent; in 1961–62, £1,555; in 1962–63, £310; in 1963–64, £6,997; in 1964–64, £8,772. The total in all these years was £17,634. That compares, although it is perhaps not a completely fair comparison, with, let us say, the money spent under the Agricultural Drainage Scheme itself, which amounts, in the same years, to £128,521. I think, therefore, that all hon. Members will readily recognise that while all that could be done is being done under the existing arrangements, none of us can be satisfied that those who are not seeking to co-operate are simply being obstreperous or difficult. There is genuine concern about this, and this is something which the Government will have to look into in good time.
But the Government, with its sense of priorities, must take all these matters as they come. This is the best guarantee at present, and I hope that the House will agree that this is generous and reasonable.
10.58 p.m.
The Earl of Dalkeith: This Order could be of considerable importance to Scotland. Scotland is a strange place and a land of contrasts: some places have too much water and others not enough. When I was a member of one county council's water committee people overhearing our meetings might have thought that we were talking about the Sahara Desert; while in other parts of the country there is too much water. One of the biggest problems in increasing our productivity from the land is that of getting rid of surplus water. This Order is extremely important in this respect, because it is bringing this operation into line with costs. If we are to encourage people to do the right thing, this is the sensible way of doing it.
The slightly ironical point is that while we are still gasping from discussing the Rivers (Prevention of Pollution) Bill, we spring straight into another Measure
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which may encourage further pollution. However, that is just a point in passing. I think that the hon. Gentleman is doing the right thing in this Order.
Question put and agreed to.

OCCUPATIONAL HEALTH SERVICE
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lawson.]
10.59 p.m.
Mr. Laurence Pavitt: One of the difficulties which I face in raising the subject of industrial health tonight is that there is a general acceptance of most of the case which I propose to put forward, and there is, behind the Ministry of Labour, a considerable amount of experience in safeguarding the health of people in industry. Nevertheless, what I am seeking to do is to put forward the case that the time has now come when there should be radical changes in the provisions which we make for the health of workers in industry and commerce, and that we need to take the first steps towards establishing a comprehensive occupational health service.
The idea of an occupational health service has been accepted by most people who have anything to do with the health of the nation. We had the British Medical Association's Report in 1961, the Dale Committee's Report in 1951, the Report of the Medical Practitioners Union in 1953, and the Socialist Medical Association has constantly campaigned for an extension of the Health Service to workers engaged in industry. In their White Paper of 1961, the former Government endorsed the recommendation of the International Labour Organisation that all Governments should seek to extend their occupational health services.
For some reason, it is difficult to get any sense of urgency into what is an extremely important problem. There is constant pressure on the public about the importance of production and exports. There is a constant demand for less industrial unrest and fewer disputes. The result is that strikes make headlines and news. In 1963 the total number of days lost through strikes was 1,755,000. In the same period the number of days lost to

1315
industry, and thus to the export drive, through illness was 288,860,000. In other words, the industrial position was affected by 164 days illness for every one day of strike that took place in that year.
Despite these figures, we can get all the personnel departments, the British Institute of Management and so on, all engaged in the problem of how to prevent industrial unrest and spending large sums in so doing, yet little is done about preventing the amount of production time—damage to exports and industrial capacity—lost through illness. If we could make a great inroad into the problem of this enormous amount of time lost through illness, think of the additional days that would be worked and consequent strength to the economy.
The fact that the public notices the one rather than the other is exemplified by the way in which the Press handles industrial news. I was looking back over the news published in the Daily Express last week. I was interested to discover 17 news items about strikes reported in that one newspaper in six days. On Monday items appeared on pages 11 and 17; on Tuesday on page 11; on Wednesday on page 11; on Thursday on pages two, nine, 13, 13 again and 20; on Friday on pages one, 10, 13, 13 again; on Saturday on pages nine, nine again, 15 and 20. There were 17 items about industrial unrest, yet no attention to the fact that for every one day lost to industry through strikes, 164 days were lost through illness.
Because this is so important a subject, I hope that the Joint Parliamentary Secretary will consider a few constructive proposals I wish to make towards seeking to ameliorate what I regard as a national danger. I make no claim for originality in the points I am putting forward, for these ideas are extant in the minds of many people who are interested in occupational health. I cannot mention them all, but to name a few, there are Professor R. S. F. Schilling, Professor of Occupational Health at the London School of Hygiene and Tropical Medicine, University of London, and doctors like Garland of Central Middlesex and O'Dwyer who organises the extremely good Unilever scheme for industrial health.
At present the country has three types of occupational health service. They are,
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first, the services provided voluntarily by employers; secondly, the services available to those employed by the nationalised industries, provided under the nationalisation Acts for the coal, gas and electricity industries; and, thirdly, the statutory services administered by the Minister of Labour and the Minister of Pensions and National Insurance. Under the Minister of Labour we have the factory inspectorate and the appointed factory doctors, supervised by medical inspectors, whose main task is to examine young persons and those employed in dangerous trades. In the Ministry of Pensions and National Insurance we have the pneumoconiosis panels. But the whole structure—and I would pay tribute to the work done by these Departments—had grown up primarily before the National Health Service, and there is no doubt that the provisions of the National Health Service have entirely altered the rôle which this service under the Ministry of Labour and the Ministry of Pensions and National Insurance should play in our community. This means that there should be changes in the system they are now operating.
I will not argue the case now but, in the long-term, it is inevitable that the service for health in industry should go to the Ministry of Health. We have not yet reached the stage when this is a viable proposition. In the meanwhile, I would suggest to the Ministry of Labour that it should so reorganise this department as to make it a more complete unit, and more able at a future date to be integrated into the general health system under the Minister of Health.
What is immediately needed is to hive off the whole service that has to do with health, and create a distinct department within the Ministry of Labour to deal with occupational health. It is not just a question of changing the title but also of a need to change the function because, at the moment, the whole system is based on medical inspectors with the idea of enforcing minimum standards decreed by Statute. I suggest that it is time that the medical inspectors became medical advisers, and so get us away from the negative idea of what we will stop to the positive idea of what we will create. The medical advisers in the Ministry should then seek to advise, not only the Ministry but also industry, not just to preserve

1317
minimum standards of safety but to promote maximum standards of positive health.
I suggest that to do this the Ministry needs reorganising by the appointment of a chief medical adviser having the task of co-ordinating and supervising a regional medical organisation with regional medical advisers. It would be the task of the chief medical adviser to control the Central Reference Laboratory which does so much excellent work in the kind of research needed to prevent illness in industry. I envisage that alongside the present trend towards regional government, which is being assisted by my right hon. Friend the First Secretary of State, there would be regional medical advisers whose job it would be to supervise the work of district medical advisers, to advise industrial medical officers already employed in industry and, more particularly, to organise training and educational programmes that would enable industry to cope with its health hazards.
There are at present more than 2,000 appointed factory doctors—usually general practitioners who do a part-time job, generally on Friday afternoons, and mostly engaged in examining young persons entering industry. The position has now been so vastly altered by changing social and economic conditions that the idea that every young person going into industry should be examined no longer holds good. I should like to see those 2,000 appointed factory doctors replaced by 300 district medical advisers, again drawn from the world of general practitioners. That would not only release some 1,700 doctors, who are very hard-pressed at the moment if we are to accept what is said in the general practitioners' charter, but would give a more responsible job to the 300 appointed to be district medical advisers, who would have a more specialised function to perform.
At the present time, the cost to industry of the appointed factory doctors is about £250,000. The appointment of the 300 district medical advisers would cost about the same amount. I suggest that the district medical advisers should have the statutory task of examining workers and their environments; very often we are not so much discussing sick people as sick factories, and we need to be able to diagnose the sick
1318
factories, and make them healthy. We should not examine all young people, but only those with medical records showing need, because of the National Health Service and the services organised in schools through the Ministry of Education, records are available. The people for whom examination would be necessary could be easily designated.
The district medical advisers would also need to examine all dangerous trades without waiting for regulations to be passed by the House. If they were in the rôle not of inspectors but advisers this could be a semi-voluntary operation in which I am sure industry would be only too ready to co-operate. It would be possible for the advisers fo examine conditions and advise employers, for example, in the case of battery manufacturers and others using chemicals and the number of trades where today radioactive substances are used. Managements are not malevolent. They are only too ready usually to help take care of the health of their workers. These medical advisers should also be specially trained to use modern techniques of biological and environmental monitoring.
An attempt should be made and the initiative taken among people who are interested, not among civil servants but among those engaged in health matters generally, so as to avoid splitting the occupational health service into separate disciplines. It might be possible with the co-operation of the Minister of Health to establish an Institute of Occupational Health which would bring together the Association of Certifying Factory Surgeons, the Association of Industrial Medical Officers, the British Occupational Hygiene Society, the Ergonomics Research Society, and other organisations which are at the moment engaged in occupational health therapy.
Reconstitution within the Ministry of Labour is the first step forward. One of the most difficult things in politics is to transfer from one Ministry to another. but we are missing out at the moment because the whole framework of health care is now of a comprehensive character and because, as a result of the vast experience built up in the Ministry of Labour, we have a pocket of people who are still thinking in terms of pre-National Health Service standards. Eventually I hope that we shall not only

1319
consider these things in industry but that it will be possible to extend an occupational health service to agriculture. There is a great need for as complete a coverage for agricultural workers as there is for workers in industry.
I should like to see the Ministry of Labour with its new Department having the power to initiate and be evangelical about joint schemes, like that in central Middlesex where factories at the Park Royal estate pay subscriptions to establish a health centre which serves, through a series of clinics in the area, the health needs of many factories. Large firms like Unilever and I.C.I. are able to operate first-class schemes for their large numbers of employees, but the vast majority of workers are employed in small firms. If they are to have any coverage at all it can be done only by co-ordinating these firms and having a federal system. But at present nobody has the responsibility to see whether firms can be persuaded to join and to get a scheme off the ground.
At present there are about half-a-dozen of these schemes and the Ministry of Health is most helpful in being able from time to time to give the part-time service of a hospital consultant to industrial health schemes. He is paid partly out of the funds of the scheme and partly by the Ministry. Here again, it seems to me that there is an opportunity for collaboration between the Minister of Labour and the Minister of Health in persuading more firms to adopt this kind of idea.
In our present economic circumstances, it is, I know, extremely difficult to envisage the expenditure of more money. Ideally, of course, I should like to see a completely new occupational health service started. I should like the same device to be used, if it were possible, as was used in the Departments responsible for the Colonies and for Commonwealth Relations when they were faced with a similar problem and set up the Department of Technical Co-operation, having a separate Department for the time being with a Minister for a Department of Occupational Health responsible to the House. But I realise that this cannot come in the immediate future.
For the present, I should like the Ministry of Labour to take steps to set up a
1320
health department within the Ministry in the next two or three years, a department so organised that we should get away from mere inspection, get away from the business of merely ensuring that certain standards are observed, and see that positive steps are taken. I acknowledge that it would cost more money, but not all that much more in the immediate future. It is not a question of whether the nation can afford to have an occupational health service. In our present economic circumstances, I submit, the nation cannot afford not to have an occupational health service.
11.17 p.m.
The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Ernest Thornton): I was pleased to learn that my hon. Friend the Member for Willesden, West (Mr. Pavitt) had chosen this subject for debate tonight, because it is one to which the Ministry of Labour has recently been giving increasing attention. I thank my hon. Friend for letting me have a note of certain questions which he intended to raise, questions concerned largely with the organisation of medical services. These matters are important because they raise the question of the rôle of the Government in industrial health in present-day conditions, which, as my hon. Friend said, are so different from those prevailing at the time when the services were started.
I go some way with my hon. Friend, though I cannot agree with all the points he made. I say at the outset that we are perfectly prepared to look critically at the way things are organised at present. In particular, we doubt, as my hon. Friend doubts, that the appointed factory doctor service is at present organised in the most effective way for promoting industrial health.
Before going on to discuss the medical inspectorate and the appointed factory doctor service, I should point out that such appointments are made under the Factories Act. Many of the provisions of that Act and the Regulations made under it are concerned with industrial health. Responsibility for their enforcement rests with the general factory inspectorate throughout the country. On the particular problems encountered in the course of their inspection, inspectors can, of course, call in their specialist

1321
colleagues, including doctors, chemists and engineers. These specialists are based either in London or in the 13 divisional offices and include 19 medical inspectors.
The senior medical inspector, two deputy senior medical inspectors and two other medical inspectors are stationed at headquarters, and 13 are stationed elsewhere, cn the general basis of one in each division. The senior medical inspector is responsible for the work of all medical inspectors throughout the country. Medical inspectors are responsible to him and report to him, but, of course, the out-stationed inspectors work very closely with the rest of the factory inspectorate.
One of the principal tasks of the medical inspector is to advise the general inspectorate in his division on any of the medical aspects of health, welfare and safety in industry. In parenthesis, may I say how pleased I was that my hon. Friend called attention to, and put into perspective, the amount of time lost through industrial illness as compared with the much publicised number of days lost by strikes. The medical inspector visits factories and also studies the health and related problems of local industries in pursuance of special inquiries begun by the medical inspectorate. He also advises factory occupiers on the provision and value of medical and nursing services and first-aid facilities. He maintains contact with the appointed factory doctors and advises the chief inspector through the senior medical inspector on their appointment.
One of the two medical inspectors stationed at headquarters is in charge of the medical laboratory. I am pleased that my hon. Friend paid tribute to the work done here. The purpose of the laboratory is not to undertake fundamental research. That is a matter for the research establishments to which, of course, we have access. The purpose of the laboratory is to provide a number of basic services. These services, with the development of new materials and new or improved diagnostic techniques, are necessary for the day to day working of the Inspectorate.
I have described the present duties of the medical inspectorate. I should make it clear, however, that we are not by any means certain that its organisation can-
1322
not be improved. My hon. Friend has made a number of suggestions to that effect. I am afraid that I have not time tonight to comment on these in detail but I can say that the question of the organisation and functions of the medical inspectorate is at present being reviewed by the Department. In deciding on our future policy we shall obviously have to take into account any changes which are agreed on as a result of the review of the appointed factory doctor system to which I now wish to turn.
Dr. Wyndham Davies: Would it not help to increase the number of medical inspectors? They are so overloaded with work at the moment that they are not able to do their jobs as efficiently as they would otherwise. If it were possible to increase their number this might be of great help.
Mr. Thornton: This is one of the many matters under consideration by the Department at the present time, and I will certainly bear in mind the point raised by the hon. Member.
My hon. Friend emphasised the need to reorganise the appointed factory doctor service and to change the approach from one of examination of fitness to a preventive medical service. With this I am very much in agreement. This is a problem to which we, in conjunction with the Industrial Health Advisory Committee, have been paying close attention recently. At its meeting last November the committee appointed a sub-committee with wide terms of reference—namely, "to review the appointed factory doctor service and to make recommendations."
The sub-committee includes persons from the B.M.A., the Association of Certifying Factory Surgeons, the Association of Industrial Medical Officers and also representatives of the B.E.C. and the T.U.C. It would be premature for me to anticipate the results of its review. But the appointed factory doctor service has a very long history, originating with the certifying surgeons who came into existence as a result of the Factory Act, 1844.
The present position is that those under 18 who start work in factories have to be medically examined within 14 days of starting. They are also required to be re-examined yearly until the age of 18, and on change of employment. In 1963,

1323
the appointed factory doctors carried out more than 500,000 such examinations. As my hon. Friend pointed out, only very few of those examined were declared unfit for their particular jobs or had conditions attached to their work.
The system was last modified in 1948 and was evolved before the National Health Service came into being and before the school medical service was organised. The re-examination currently being undertaken can be expected to assess the need for these medical examinations in present conditions. It will also see how the appointed factory doctor service should be related to the other medical services.
Certainly I agree that we must be satisfied that doctors are not given unnecessary routine statutory duties when their time could be devoted to more constructive purposes in the industrial health field.
Appointed factory doctors carry out a number of other duties which I am afraid I have not time to review tonight. The other main point to which attention will be paid is the question of the structure of the appointed factory doctor service. At present the service is basically in the hands of 1,500—my information is 1,500 and not 2,000 as my hon. Friend said—district factory doctors. It seems to me that it would be a good thing if, more often than at present, the factory doctor could be the local expert on industrial health to whom practitioners, employers, and the factory inspectorate would increasingly turn. The work of the medical branch would also be helped if the appointed factory doctor were able to play a more active part in special inquiries than is possible at present.
It will be apparent from what I have already said that whole we do not claim that the present organisation of our medical services is the best possible one, it does not follow that the right solution is to set up a separate department of occupational health within the Ministry of Labour or to transfer such a department to the Ministry of Health. Questions of occupational health are already dealt with as a special sub-
1324
ject of high importance in the headquarters of the Ministry of Labour. On the administrative side, one branch of the safety, health and welfare department is concerned solely with health matters. Apart from the Medical Inspectorate, one of the deputy chief inspectors of factories is concerned with health problems.
Any further separation of the administration of industrial health questions from that of other aspects of the administration of the Factories Act seems to me undesirable. Let us not forget the day-to-day responsibility for seeing that employers maintain their factories as healthy places to work in lies with the factory inspectorate who make routine inspections.
The suggestion that responsibility for occupational health should be transferred to the Ministry of Health is, as my hon. Friend said, not new. Those who take this view rightly emphasise the importance of co-ordinating industrial health services with the National Health Service and the need to avoid the duplication of facilities.
It is, however, not necessary for the responsibility for industrial health to be given to the Health Departments for these objectives to be achieved. We work in the closest collaboration with the Health Departments. One of the aims of the review of the appointed factory doctor service is to consider its relationship to other health services.
There is another question—the industrial hygiene services. As I told the House in an earlier Adjournment debate, on 26th November, we are carrying out a special random survey of factories to establish the extent and nature of toxic hazards so as to establish how much industrial hygiene services are really needed—
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-nine minutes past Eleven o'clock.

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Preamble
The House met at half-past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayer—Read by the Lord Bishop of Bristol
The Lord Baillieu—Took the Oath.

RE-INTERMENT OF ANNE MOWBRAY REMAINS
2.35 p.m.
LORD DERWENT: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the date has yet been fixed for the re-interment of Anne Mowbray, Duchess of York; whether a licence has yet been issued; and, if so, what are the terms of the licence.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, my right honourable and learned friend has issued a licence under Section 25 of the Burial Act, 1857, covering the removal of the remains. The licence includes the following conditions: first, no interference with the remains shall take place other than that necessarily required for the purpose of (a) the identification, cleaning and putting together in good order, and (b) the scientific measurement, comparison and examination of the remains; secondly, the replacement of the remains in the casket in which they were found shall take place not later than May 15, 1965, and no further interference shall take place after that date; thirdly, the Dean of Westminster has indicated his willingness that the remains should be re-interred in Westminster Abbey and accordingly when the remains have been replaced in the casket they shall be handed over by the Director of the London Museum to the Dean of Westminster for re-interment; fourthly, nothing in these conditions shall prevent
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any action necessary for the purpose of taking a cast of the inscription on the casket in which the remains were originally discovered.
LORD DERWENT: My Lords, I thank the noble Lord for that satisfactory Answer. It is nice to think that at any rate one Government Department, the Home Office, have behaved with discretion in this matter. May I ask the noble Lord whether the London Museum have found anything of interest?
LORD STONHAM: My Lords, I should like to thank the noble Lord for his kind remarks about my Department. As to whether any discoveries of interest have been made, I understand that a great deal of interesting information has been gathered. It is expected that a report will be published in due course by Her Majesty's Stationery Office, and I hope that this will clarify a great many questions.
LORD DERWENT: My Lords, I am obliged to the noble Lord.

OXFORD OUTER BY-PASSES
2.39 p.m.
LORD LUCAS OF CHILWORTH: 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 can confirm that the date of completion of the remaining unfinished portion of the Oxford outer by-passes, given on April 29 last as September, 1965, will be met; and, if not, whether they will state the completion date and give the reasons for the delay.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD LINDGREN): My Lords, my right honourable friend's engineers expect that the contractor will be able to finish in September, 1965.
LORD LUCAS OF CHILWORTH: My Lords, I thank the noble Lord for his reply, and I can only hope that the expectation is fulfilled. He will, I hope, absolve me from any seeming discourtesy if I beg leave to doubt whether that will

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be so. Would he allow me to give my reasons? Because, since the plan of a certain section of this road was first authorised—and I have a copy in my hand given to me by the courtesy of his Department—a radical alteration has taken place which turns a section of this road, that which goes off the Southern by-pass and crosses the main Oxford-Abingdon road, into a veritable deathtrap. I agree with the noble Lord's feelings in this matter, that this is not a subject which one can discuss on the floor of the House by way of question and answer.
SEVERAL NOBLE LORDS: Order, order!
LORD LUCAS OF CHILWORTH: The noble Lord should acquaint himself with the facts.
SEVERAL NOBLE LORDS: Question!
LORD LUCAS OF CHILWORTH: I am asking the noble Lord a question, if noble Lords will possess themselves of a reasonable amount of patience. To enable the noble Lord to ascertain those facts, will he accept my invitation to be my guest for one day during the Easter Recess—
SEVERAL NOBLE LORDS: Order, order!
LORD LUCAS OF CHILWORTH: —so that he and I can view this matter together, with any experts he likes?—because in these matters it is far better to be safe than to be sorry afterwards.
LORD LINDGREN: My Lords, on the question of the date of completion, my right honourable friend must, of course, take the advice of his technical advisers, and this is that the contract will be completed by the date of completion in the contract—namely, September, 1965. However, I should always be prepared, provided that it is not considered bribery, to spend a pleasant day in the company of the noble Lord, and I will look into it to see whether we can arrange a mutually satisfactory date, accompanied, as he has said, by my technical advisers.
LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble Lord. I can assure him that there is no question of bribery. I will entertain him to a very good lunch, for which I will pay.
LORD SEGAL: My Lords, can my noble friend also confirm that the case for or against a road through the Christ Church Meadows cannot be properly assessed until this Ring Road has been completed?
LORD LINDGREN: My Lords, that is another question, and it is one which, to my knowledge, has been on the stocks since 1950. There are varying points of view whether the completion of the complete Ring Road would or would not make the Meadow road unnecessary.

EXPENDITURE ON EUROPEAN NUCLEAR RESEARCH
2.43 p.m.
THE EARL OF BESSBOROUGH: 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 intend to make their financial contribution to the new plans of expansion drawn up by CERN, the European Organisation for Nuclear Research, including the construction of the proposed new "storage rings" and 300 GeV accelerator.]
THE MINISTER OF STATE FOR EDUCATION AND SCIENCE (LORD BOWDEN): My Lords, Her Majesty's Government will pay their contributions to the normal expanding programme of CERN. The size of these contributions for 1965 and 1966 has already been agreed. The CERN administration have formally proposed that storage rings should be added to their present machine. Her Majesty's Government are now considering whether, having regard to other calls on their resources, the merits of the proposal justify the expenditure involved. The design study of the possible 300 GeV accelerator is not yet complete. To assist this study, Her Majesty's Government have decided to put forward for appraisal a possible site for such a machine near Mundford, in Norfolk. This does not imply any commitment to participate in the building of a European 300 GeV accelerator.
THE EARL OF BESSBOROUGH: My Lords, I am most grateful to the noble

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Lord for that reply, and glad to know that we are pursuing this work. But am I not right in thinking that a very considerable expenditure is involved—I believe up to £25 million for the storage rings? If we go ahead with the 300 GeV machine it will cost some£130 million and Britain's contribution will be of the order of over £4 million a year over the next nine years, in addition to the large sums which we are already spending on nuclear physics in this country.
LORD BOWDEN: My Lords, it is difficult to reply to this question without giving a Written Answer. As a country we pay something of the order of 24 per cent. of the cost of CERN, this being the figure which has been agreed as representative of our gross national product as compared with that of the other participating countries. The programme of CERN is decided, as your Lordships know, by a committee which includes representatives of all the participating countries. It is hoped to reach a decision about the storage rings in June. It will add £5 million to £6 million a year to the expenditure from 1967-68 and we shall contribute about one-quarter of this. There are many proposals for the development of CERN, including the improvement of the existing machine—for example, an increase in the intensity of its beam—and the storage rings are a proposed ancillary. The big machine, if we come to build it, will be enormously more expensive. It will cost at least £120 million, as a minimum estimate. My own view is that this figure will be very considerably exceeded. No decision to build it has yet been arrived at. If it were to be built, it would be again a jointly organised enterprise, to which we should contribute about a quarter. The decision whether to proceed will not be taken until the autumn of this year, and will depend entirely on the total resources which are available for nuclear physics in this country and in Europe.
THE EARL OF BESSBOROUGH: My Lords, I am grateful for that reply, but does the noble Lord not think, in view of the vast cost of these new machines,
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that it would be desirable for Europe and America to join together to build one of these machines, and would it not be desirable, as I feel the noble Lord would agree, to locate it in this country?
LORD BOWDEN: My Lords, this again is a complicated question. Certainly collaboration with America would be most desirable. The Americans have proposed that, if ever the time comes to build an even larger machine, one of 500 to 600 GeV, this would certainly have to be financed internationally. At the moment they are not very receptive to the idea of collaborating with us in the smaller machine, but I hope very much that this can be done. The idea that it should be built in this country is one over which we can have no direct control. Many competing sites have been put forward—by Germany, France and Switzerland, to my knowledge—but our site seems likely to be as good as most and will have to be considered with the rest. As for the storage rings, they must inevitably be considered separately as a much smaller item. Large though the cost is, they will cost only one-tenth of the expenditure on the big machine and they will be part of the ordinary CERN expansion programme.
THE EARL OF BESSBOROUGH: I thank the noble Lord for that reply. Does he not agree that one of the main objects of this large machine will be the isolation of the rather elusive nutrino. Does he put a high priority on research of this kind?
LORD BOWDEN: My Lords, I think that I really must ask the noble Earl to allow me to discuss this matter with him in private, as it is hardly a matter for the House. I assure him that serious attempts have been made to isolate nutrinos, mostly in coal mines in remote parts of the earth, in very large tanks of liquid. I do not know whether this new machine would be used for that pupose; but none the less this subject is one of the most important and vital in the whole field of science. Many of the ablest physicists in the world are fascinated by it and it would be wrong for us not to give them such support as we can.

REPRESENTATIONS ON RAIL CLOSURE PROPOSALS
2.49 p.m.
LORD MERRIVALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what arrangements will be made to ensure that Regional Boards, when considering railway closure proposals, are fully representative of all interests;
Whether there will be opportunities for interested parties concerned to state their case;
Whether the Regional Boards will be able to take into account technical considerations and alternative proposals such as light railway operation;
And where there is no Regional Board, as in the South-East, whether consultation between Government Departments concerned will allow for representations to be considered as if by a Regional Board.]
LORD LINDGREN: My Lords, the Regional Economic Planning Boards are composed of officials drawn from Departments concerned with all aspects of regional planning. The members of the Regional Councils are drawn from various quarters, notably local government, industry, trade unions and universities. As has already been announced, they are appointed as individuals and not as representatives of particular interests, but they are widely representative of different types of experience within the region.
On rail passenger closures, the Councils will be advising on planning implications generally in the light of their special knowledge of their regions. The Government's machinery for considering closure proposals already provides an opportunity for representations from interested parties, and it is not expected that the Councils will themselves receive representations. I cannot forecast what considerations they will decide to take into account, but I should not expect these to include matters bearing on the management functions of the Railways Board. The Government's consideration of planning issues in the South-East
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already takes into account any representations made to them.
LORD MERRIVALE: My Lords, I should like to thank the noble Lord for his reply. If I understood him aright, an association that would possibly be interested in considering the feasibility of operating a line to be closed down could not send a representative, could not appoint a representative, to these boards. Am I right in assuming that? I should also like to ask the noble Lord whether Regional Boards or Councils would be empowered to express a view on a method of operation, in the light of any representations which might be made to them. Further, I would ask the noble Lord whether the hearings of the Regional Boards or Councils will be taken in public, and whether their findings will be given a certain amount of publicity.
LORD LINDGREN: My Lords, an outside body could not be represented on a Regional Council. The Regional Boards are made up of Government officials, who service the Regional Councils. They provide material at the request of the Regional Council, and the Council then make recommendations to the various Ministers, after taking account of economic and social planning considerations within the region. I should say that the method of operation of a particular railway line would be entirely outside the function of a Regional Council. They could quite rightly advise the Minister that it was necessary for a certain line to be kept open, but the method of operation surely must be for the Railways Board. So far as I am aware (I speak here subject to correction, and I will establish it definitely and let the noble Lord know), their meetings will not be public and their findings will not be published.
LORD MERRIVALE: My Lords, may I ask the noble Lord one further question? Would the Regional Boards have power, if they deemed it necessary, to co-opt someone who would have a knowledge of light railway operation, for instance within the whole question of planning implications for the area concerned?
LORD LINDGREN: My Lords, perhaps "co-opt" is not the right word. They are to find out all the information

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they can and make it available to the Minister. They will be empowered to take advice from any quarter which they think will be of advantage to them in coming to their decisions.
LORD BROCKWAY: My Lords, may I ask my noble friend whether there will be consultation with the associations which have been formed locally regarding these closures? I have in mind particularly the very representative association formed at Westerham, which has been formed because of the closure of the line between Dunton Green and Westerham. Will there be consultations with such associations?
LORD LINDGREN: My Lords, provision for consultation has been in existence for a considerable time under the old procedure. The transport users' consultative committees remain in existence, and they can receive representations from any interested source and consider them on a basis of hardship, so far as the community in the area is concerned.
LORD MANCROFT: My Lords, will the noble Lord also bear in mind the need for a review of the formula used by British Railways for calculating estimates of losses which are prepared for submission to the transport users' consultative committees?
LORD LINDGREN: My Lords, that, I would suggest, is an entirely different question; and, of course, the method of presentation of facts is a matter for the Railways Board and the consultative committee which considers them.

PEMBROKESHIRE COUNTY COUNCIL BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
LIVERPOOL EXCHANGE BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
SAINT ANNE, SOHO BILL
Read 2a, and committed to the Committee on Unopposed Bills.

SOUTH - EAST ASIA TREATY ORGANIZATION (IMMUNITIES AND PRIVILEGES) ORDER 1965
2.56 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (LORD TAYLOR): My Lords, I beg to move that the South-East Asia Treaty Organisation (Immunities and Privileges) Order 1965, which was laid before your Lordships' House on March 24 last, be approved. As your Lordships will know, this Order was examined by the Special Orders Committee and they thought that it did not raise any important questions of policy or principle, that it was founded on precedent, and could, therefore, be passed by your Lordships without special attention. Nevertheless, since it involves immunities and privileges, I thought your Lordships would wish to have a short explanation of what it is about.
The South-East Asia Treaty Organisation came into being as a result of the Treaty signed at Manila in September, 1954. The main aims of the Organisation are to provide for the collective defence of the area against outside aggression, and to promote the economic well-being and development of all the people in the Treaty area. There is an international Secretariat at Bangkok for continuing consultation by member Governments in pursuing these aims. The present Order is needed to give effect to an agreement concluded on March 12, 1965, and this agreement requires us to confirm certain privileges and immunities on SEATO and persons connected with it. The agreement is not reciprocal, because the other members of the Organisation have already accorded to SEATO appropriate privileges and immunities.
The United Kingdom has, of course, been a member of SEATO ever since the Manila Treaty was signed in September, 1954. However, Her Majesty's Government are only now preparing to grant it the treatment already enjoyed by other comparable organisations, such as NATO and CENTO, because for the first time since it was established SEATO is to meet in the United Kingdom. What has happened is that the meetings of the SEATO Council have revolved as it were, around

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the capitals of the various nations which belong to it, and it is now our turn. This meeting is the annual meeting of the Organisation at ministerial level which will be preceded by meetings of military advisers of the member States.
The Council meeting is due to begin at the end of April and will last a week, and it is expected that similar meetings will take place in the United Kingdom about once every ten years. So this is not a very serious volume of immunity, taking both time and people into consideration. Since SEATO has no establishments in Britain, the Order will have little effect when the meeting is over, except in relation to acts done in the course of the fleeting, and in so far as occasional official visitors may come here from time to time. For this reason, the Order is in rather simpler form than usual. So far as the representatives of member States are concerned, the Order confers no more than Section 4 of the International Organisations (Immunities and Privileges) Act, 1950, which provides that representatives of foreign sovereign Powers convening in this country should enjoy the immunities of an Ambassador. I think this is only after their names have been published in the London Gazette. Equivalent treatment is available to representatives of Commonwealth countries under a separate Act of 1961. Thus, even in the absence of an Order, the principle representatives—that is, the Ministers, the military advisers and the Council representatives at official level attending the Conference; and in all there will be 21 of them—would be immune from the jurisdiction of the English courts.
The other representatives coming under Article 5(2) of the Order will in fact enjoy less under the Order than they would under Section 4 of the 1950 Act, since their personal immunity is limited to immunity from detention and arrest. The staffs of both categories of representatives will have immunity only in respect of their official acts, and British Government chauffeurs will be provided for the representatives and high officers, so we hope there will be no problem there of chauffeurs having diplomatic immunity. Without an Order under the 1950 Act, however, it would not be possible to confer privileges and immunities on the Secretary General of SEATO, the Deputy Secretary General and the members
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of the Secretariat. Both these two gentlemen will in general be equated with Ambassadors in the matter of immunities, and the Secretariat—there will be about twenty members of the international staff coming to London for the Council meeting—will have immunity in respect of their official acts only.
There remains the question of fiscal privileges under the Order. The representatives and the Secretariat will be exempted from income tax on their salaries, but the exemption will have little, if any, practical effect since during their short stay in this country for the conference they will not in any event be likely to become liable to tax for emoluments they receive from an organisation functioning in Bangkok. British representatives and representatives of U.K. nationality are specifically excluded from benefiting under this Order. A privilege of which senior representatives and high officers may well avail themselves, and which is limited to those two categories, is exemption from customs duties on imported goods. Such exemption is made usually for official entertainment during the short conference and the amounts imported are unlikely to be large. The commitments upon us under the Order are just the same as for NATO and CENTO, and clearly we cannot treat our SEATO allies differently. I therefore ask your Lordships to approve the South-East Asia Treaty Organisation (Immunities and Privileges) Order.
Moved, That an humble Address be presented to Her Majesty praying that the South-East Asia Treaty Organization (Immunities and Privileges) Order 1965 be made in the form of the draft laid before this House on 24th March last.—(Lord Taylor.)
3.4 p.m.
LORD DERWENT: My Lords, I thank the noble Lord for having given us such a full explanation. As the noble Lord will know, many of us are very concerned about the numbers, increasing year by year, of those getting diplomatic immunities and privileges. In this particular case, of course, your Lordships have no option but to approve the Order; it is by agreement, and in any event the South-East Asia Treaty Organisation is a suitable organisation to have these immunities and privileges, which are, as the noble Lord has explained, limited.

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There are two general questions I should like to ask the noble Lord to answer. I believe I am right in saying that international discussions have been going on for some time as to whether—not in this particular case but in other cases—it might be possible to limit, in certain directions for various organisations, either existing or future diplomatic immunities or privileges. I would ask the noble Lord whether those discussions are still going on and, if so, whether there has been any progress.
LORD TAYLOR: My Lords, I thank the noble Lord for the courteous way in which he accepted the Order. I know that the House feels about the extension of diplomatic privileges in the way he has described, and that is true of another place also. But the remarkable thing is that this appears to be a British sentiment only, and we have had considerable difficulty in persuading other countries to think that this is an important matter. We have in fact recently circulated some 24 Governments, mainly those of Western Europe, the United States, Turkey and the old Commonwealth, with a memorandum suggesting that fresh thought should be given to the whole question of the privileges and immunities of international organisations; and they are aware of the public feeling on this matter in this country. The noble Lord is right in thinking that the question is before two international committees. The Committee on Legal Co-operation of the Council of Europe and the International Law Commission of the United Nations have the matter on their agendas. It is expected that the matter will eventually be discussed at the Sixth Committee of the United Nations, and possibly at an international conference. In the meantime, we will certainly maintain our contacts with other Governments on this matter. But I think it would be holding out false hopes if I suggested that they were likely to he sympathetic to our pleas. It is just worth remembering that these arrangements are reciprocal, and that in some cases the benefits which an international organisation obtains in other countries are most welcome to us, for very obvious reasons; the stability
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of the country concerned may be less than that of Britain. I think we need always to bear that in mind.
LORD BROCKWAY: My Lords, I am sure that all Members of this House will wish this humble Address to be presented to Her Majesty. While the South-East Asia Treaty Organisation is in existence we shall want to give the immunities and privileges to its representatives who come here. I would say to my noble friend that many of us are increasingly doubtful about the value of the South-East Treaty Organisation. It represents in South-East Asia only Pakistan and Thailand; it does not represent India or Ceylon or even Malaysia. And I think Her Majesty's Government will have to take into consideration the fact that our overseas defence expenditure is beyond what our economy will bear, and will have to reconsider the whole question of both CENTO and SEATO in the future in regard to our obligations. I think it would be insincere if, in passing this presentation of the Address, Members of this House who have these feelings did not express them.
LORD FARINGDON: My Lords, I find myself in a great deal of agreement with the noble Lord, Lord Derwent, and with other Members of the House who have expressed themselves on this particular question of immunities on other occasions. I should like to ask Her Majesty's Government whether, in their opinion, complete abolition of diplomatic immunities would interfere with the proper functioning of diplomats, either in this country or anywhere else.
LORD TAYLOR: My Lords, I think I can answer that without the slightest doubt; it most certainly would.
On Question, Motion agreed to: the said Address to be presented to Her Majesty by the Lords with White Staves.

LICENSING (SCOTLAND) BILL [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.

JUSTICES OF THE PEACE BILL [H.L.]
3.11 p.m.
Order of the Day for the Second Reading read.
LORD SILKIN: My Lords, I beg to move that this Bill be now read a second time. This is a short, harmless and, I hope, completely uncontroversial Bill. It seeks to amend Section 20 of the Justices of the Peace Act, 1949. This section sets out the qualifications for persons who desire to become justices' clerks. The main qualification is that they must be either solicitors or barristers of not less than five years' standing. But there is an exception under subsection (4)(c) of that section, which provides that solicitors need not be of five years' standing but can become clerks to the justices after serving in the office of the justices for a corresponding period which is regarded as a period of training. So that if, for example, a person became articled to a solicitor in the justices' office for five years that would be regarded as a qualification without his having to be a solicitor of five years' standing.
This opportunity has not been afforded to barristers, because until quite recently the Inns of Court regulations have not enabled barristers to take advantage of the period of training and count it as a qualification. But last year I presume that better judgments prevailed, and the Inns of Court have now made regulations which will enable barristers to count the period in which they may be serving in the offices of the justices. It is therefore proposed to extend to barristers the same rights as now exist in the case of solicitors; namely, that it should be possible to count the period which they serve in the office of the justices against the five years' qualification which they would otherwise require. That is the sole purpose of Clause 1(1) of the Bill. Subsection (2) makes certain verbal corrections to the Bill which are consequential on the pasage of Clause 1(1), and I hope that your Lordships will not ask me to explain them. That is the whole of the Bill, and I am quite sure that it will commend itself to your Lordships without a great deal of discussion. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Silkin.)
3.14 p.m.
LORD DERWENT: My Lords, I do not think it is right that this Bill should have a Second Reading until I have said that we on this side welcome it. It is a small Bill, but it will have quite an effect in a limited field. I may say that Clause 1(2) kept me up at night, trying to understand its content. I think I now understand it, but I, too, shall not try to explain it to your Lordships.
LORD STONHAM: My Lords, I, too, will detain your Lordships only for a minute, to express the Government's welcome to this Bill and my own personal thanks to my noble friend for his presentation of it. As he indicated, the Bill is a natural consequence of the decision of the Inns of Court, to which he referred, to remove the restriction that formerly prevented students for the Bar from serving as assistants in justices' clerks' offices—a decision which the Government welcome.
The importance, in our view, of this measure is that we hope it will draw into the service of magistrates' courts young men and women who seek this form of legal career. At present, it is possible for people to serve articles under a solicitor who is a justices' clerk, but not all justices' clerks are solicitors: some are barristers, and some do not possess either professional qualification. There is a serious shortage of professionally qualified assistants in justices' clerks' offices throughout the country. We want to see far more people entering this service and seeking the professional qualification of a barrister or solicitor that will equip them eventually for posts as justices' clerks. The ideal candidate for a justices' clerkship is the man who can combine the professional qualification and broad knowledge of the law with practical experience as a justices' clerk's assistant. In our view, this modest but useful measure is a not unimportant step towards supplying the need for suitable assistants in the offices of justices' clerks, and I hope that, as such, your Lordships will give it a speedy passage through the House.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

WAR DAMAGE BILL
3.17 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Champion.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1:
Abolition of rights at common law to compensation for certain damage to, or destruction of, property
1.—(1) No person shall be entitled at common law to receive from the Crown compensation in respect of damage to, or destruction of, property caused (whether before or after the passing of this Act, within or outside the United Kingdom) by acts lawfully done by, or on the authority of, the Crown during, or in contemplation of the outbreak of, a war in which the Sovereign was, or is, engaged.
(2) Where any proceedings to recover at common law compensation in respect of such damage or destruction have been instituted before the passing of this Act, the court shall, on the application of any party, forth with set aside or dismiss the proceedings, subject only to the determination of any question arising as to costs or expenses.
LORD McNAIR LORD McNAIR had given Notice of three Amendments to Clause 1, the first being, in subsection (1), to delete "whether before or". The noble Lord said: It may be for the convenience of the Committee if I make a few remarks upon the combined effect of all the Amendments, which is to extirpate all trace of the retrospective character of this Bill, though my remarks will have particular reference to Clause 1(2). In the earlier debate my noble friends on these Benches and I indicated that we should abstain from voting on the Second Reading, and would move in Committee certain Amendments to this Bill which, in its present form, puts in doubt certain questions of constitutional principle and international practice to which we attach great importance.
I refer in the first place to Clause 1(2) which empowers the Crown to stop an action pending against the Crown. The Crown Proceedings Act, 1947, enabled a subject for the first time to bring against the Crown an action in tort in England, or in delict in Scotland, in the same way
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as if he were suing another subject. How can we reconcile this subsection with that valuable right of the subject? It is most important that the subject should be able to sue the Crown without the fear of his right of action being destroyed in this manner.
Secondly, we objected to the confusion made by the same subsection between the legislative and the judicial functions and to the threat to the independence of the Judges who were told, upon the authority of the Government in power at the time, that if they decided in favour of the pursuers (that is, the plaintiffs) legislation would be introduced for the purpose of over ruling their decision. It is one thing for Parliament to amend for the future the law as laid down by the courts, including the House of Lords Appellate Committee—that happens from time to time; there is nothing retrospective about that. But it is quite another thing to pass a Bill empowering the Crown to stop an action against the Crown which has not yet reached a conclusion in the courts. As the noble Lord, Lord Shepherd, told us:
"… there is still a long way to go in legal proceedings."—[OFFICIAL RFPORT, Vol. 264 (No. 56), col. 738; March 25, 1965.]
One point of constitutional importance is beyond controversy—namely, that the Parliamentary and Judicial functions of your Lordships' House are completely separate, and any attempt to blur that line is fraught with danger to our appellate jurisdiction. The noble Lord, Lord Shepherd, who introduced the Bill has endeavoured to discredit the decision of the Lords of Appeal by counting judicial heads and by telling us, if you please (col. 734), that:
"Her Majesty's Government believe that the law as it now stands, after the Burmah Oil judgment, is utterly wrong…"
LORD SHEPHERD: Would the noble Lord permit me to interrupt him, because I think he has taken my remarks out of context? I certainly did not attempt to discredit the Judicial decision of this House. What I endeavoured to do was to show the considerable doubt that existed in the Common Law in regard to war damage.
LORD MCNAIR: I will leave your Lordships to draw your own conclusions from Lord Shepherd's words.

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We have been urged by more than one noble Lord to restore the Common Law as it was generally understood to be before the recent judgment of this House, but the noble and learned Lord, Lord Guest, has adequately dealt with that point. We object most strongly to being invited to sit in judgment upon a decision of our Appellate Committee—particularly in view of the action now pending in the Court of Session—and to concur in Lord Shepherd's opinion which I have just quoted, that the law as it now stands, after that decision, is "utterly wrong". Surely this must be the first time that a Minister has come to your Lordships' House and told us that a decision of our Appellate Committee is, in the opinion of Her Majesty's Government, "utterly wrong." Your Lordships may have noticed that in the Inner House of the Court of Session all the Judges agreed that there was a general principle that the Crown is liable to make compensation for acts done under the Royal Prerogative. They decided as they did only because they held that this case came within the exception of "battle damage."
Thirdly, I must again remind your Lordships that there are in certain parts of the world (I need not specify them) Governments which, if it suits them, do not hesitate to cancel or erode concessions and contracts granted by them to foreigners or to nationalise, with no compensation, or inadequate compensation, property acquired by foreigners in those countries according to the local law, and they will seize on any excuse to justify ex post facto legislation which may be required to carry out these sinister purposes. British subjects who suffer from such activities look to our Government to exercise their right of diplomatic protection.
The noble and learned Lord on the Woolsack, while expressing the opinion that, as a general proposition retrospective legislation is wrong and contrary to the rule of law, urged upon your Lordships that the argument for reversing the decision in this House in the Burmah Oil Company case was so strong as to justify the making of an exception to the general proposition. We should all agree with him that, however distasteful retrospective legislation may be, circumstances can arise in which such legislation is necessary,
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but a heavy burden of proof rests upon those who propose it. We were referred to a number of retrospective Acts. They included an Act indemnifying officials against mistakes, and Acts validating charges for wireless licences, and a levy of 2d. per bottle of milk and charitable trusts, and so forth. Every time a retrospective Act is passed, it becomes a precedent and makes it easier to pass the next one. The Lord Chancellor asked whether our international reputation had suffered as a result of these Acts. Why should it? These are all purely domestic matters. Why should they attract international interest and produce international repercussions? To-day, however, we are dealing with a very different situation.
The operations of these large companies are international, and their affairs attract world-wide attention. Such information as I have regarding the Burmah Oil Company comes solely from public sources. It appears from the Stock Exchange Intelligence book that the Burmah Oil Company is producing oil in six different countries, three foreign and three in the Commonwealth. Of course, the relations between the Crown and the Burmah Oil Company are not governed by International Law, but this case involves rules of public law which are of international interest, and at all stages in the proceedings numerous international authorities were cited, both by counsel and by judges. For example, Grotius, Vattel, and others, were quoted, as well as several American decisions, and a decision given on an appeal to the Privy Council from the British Prize Court. If this is a purely domestic matter, why should the 1964 volume of the American Journal of International Law, which probably has the largest circulation of any such journal, note both the decision of the Outer House of the Court of Session and the decision in your Lordships' House in this case?
With great respect, I do not consider the domestic precedents cited to us to be on a par with the matter in hand. This is not a purely domestic matter in which we can do what we like with our own affairs, regardless of foreign opinion and international consequences. The Financial Secretary to the Treasury, in introducing this Bill in another place, referred to it as a "purely domestic

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piece of legislation." That reveals, in our opinion, one of the profound misconceptions on which this Bill rests.
Why should we set this example to some predatory foreign Government which may be tempted to encroach upon the rights of British subjects carrying on business in their country? Any Government which is exercising its right of diplomatic protection over its subjects and their property abroad must come to the matter with clean hands. This Bill, if it becomes law in its present form, will place a black mark on our national reputation for the administration of justice, and will gravely hamper British Governments in the future protection of British subjects carrying on business abroad, and their property. The week before the Second Reading debate I happened to be in Holland. I met a foreign lawyer of my acquaintance and I told him about this Bill. His reaction was immediate and it hit the nail on the head. He said, "What a shocking thing to happen in Britain!" It is in your Lordships' power to prevent this shocking thing from happening in Britain. I beg to move.
Amendment moved—
Page 1, line 7, leave out ("whether before or").—(Lord McNair.)
3.32 p.m.
LORD SHEPHERD: I had intended to say that the noble and learned Lord, Lord McNair, had moved his Amendment with restraint. I suppose that, by and large, he has so done. But in his few words he attacked me, in the sense that I am said to have attempted to bring discredit upon, or to express criticism of, your Lordships' House sitting in its Judicial capacity. I should have hoped the noble Lord would give me some warning of what he intended to say. That would at least have given me the opportunity to consider the words that I had used. But I am afraid that, in trying to listen to him and at the same time trying to find in print what I said, I was unable to achieve my object. But I shall look again when I have sat down.
LORD MCNAIR: I must beg the noble Lord's pardon. It slipped my memory and I ought to have done that.
LORD SHEPHERD: I am quite sure of that, and I forgive the noble Lord. We
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all recognise the very strong opinions of the noble Lord, and he has expressed those opinions very clearly this afternoon. My task is infinitely easier in the sense that I am going to deal with only the facts of the case. It is on facts and facts alone that public policy must be decided, and I beg the House to consider the facts that I place before it. My task is not only to defend the Government's position in bringing this Bill before this House and this Committee, but also to ask your Lordships to reject the Amendments that are now on the Order Paper. In view of what the noble and learned Lord, Lord McNair, has said, may I say that we on this side of the House join with him and all others in a respect for the law and for those who administer it. We also believe that this country can set an example, and that it does set an example, not only in its law but in its administration, and I think we do so without appearing arrogant. I think, also, that we all accept the general repugnance of retrospective legislation. But the law—not the administration—is not perfect, and from time to time it has become necessary for Parliament to pass retrospective legislation, not simply to change the law but to bring it into line with what it has in the past been believed to he, because of a decision that has arisen which has shown up a clear difference.
My approach on this Committee stage will be identical to that on Second Reading, and that is to find as much common ground as possible. I believe that on the Second Reading we achieved considerable common ground. If these Amendments were not so important, and if they did not remove one of the main features of the Bill, my speech could be a great deal shorter. But, in view of the importance of the Bill and the importance of these Amendments, I hope the Committee will forgive me if I speak in some detail as to why the Government believe this Bill to be necessary, and why these Amendments should he disagreed to.
The circumstances which led to the need for this Bill are these. Twenty-three years ago, when this nation was fighting for its life, its very existence, when victory was perhaps hardly a glimmer except in our own hearts, when we faced massive destruction not only overseas but in our own home country, destruction of

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property, of business prospects and life, and when either victory or defeat was possible, it was quite clear that this country would face a grave economic situation. And as Lloyd George said in the First World War—and I used his words on Second Reading—it was quite clear that full compensation for damage would not have been possible. I think the Committee should consider not merely the legal arguments that are now put before it, but what was the policy accepted by Parliament during the last war. The Government maintain that we are not altering the law in any major way, but are endeavouring to restore the law and to maintain the intentions of Government and Parliament during the last war.
If I may, I will again read the declaration that was made by the Coalition Government on February 18, 1943:
"It will be the general aim of His Majesty's Government after the war that, with a view to the well-being of the people and the resumption of productive capacity, property and goods destroyed in the Colonial Empire should be replaced or repaired to such an extent and over such a period of time as resources permit. If the resources of any part of the Colonial Empire are insufficient to enable this purpose to be achieved without aid, His Majesty's Government would be ready to give what assistance they can in conjunction with such Common fund or organisation that may be established for post-war reconstruction."—[OFFICIAL REPORT, Commons, Vol. 386, col, 1942, February 18, 1943.]
That was the policy of Government and Parliament during the war years. It is a policy which was accepted by the Colonial Governments responsible for their territories, and, with a small exception, was a policy which was accepted by every manufacturer, merchant and trader in the areas affected.
Clause 1(1) of this Bill seeks to restore the Common Law of England and the law of Scotland, so that when war damage arises where the Crown has acted lawfully in the defence of the realm, no claim should lie against the Crown. This was the generally understood—and the noble Lord, Lord Conesford, I think, accepts it—and unchallenged view of the Common Law until the decision made by the House of Lords.
LORD CONESFORD: Not only do I not accept it, but I quoted from the judgment of Lord Dunedin in a case
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at the end of the First World War that proved the precise opposite.
LORD SHEPHERD: I read the noble Lord's speech, but my understanding was to the contrary. I think the noble Lord said that the judgment was untested. But that was the general view of Her Majesty's Government and of previous Administrations. The reason for that view was that in war there has to be a common burden, that one has limited resources, that one may have priorities for rehabilitation, and it can only be the Government and Parliament who can decide what resources can be made available by way of compensation or rehabilitation.
The noble and learned Lord, Lord McNair, in his notable speech on Second Reading, and I think again this afternoon, was prepared to accept this understanding of the Common Law for the future. I think he would do so for the reasons I have just mentioned; that one has a common burden and one must have a sense of equity between one war sufferer and another. While we may remove (shall we say?) a Common Law right to damages for war damage, we do not absolve the Government and the nation from a moral duty. Governments, Parliament and the nation in two world wars have accepted a moral duty and have, with the available resources, made considerable contributions to colonial territories and their inhabitants.
I suppose that the fundamental question is really one of administration. Can the courts properly assess the extent of the war damage, the circumstances in which it arose, and then make a just decision as to the amount of compensation to be paid? I believe it was the noble and learned Viscount, Lord Radcliffe, who used these words in his judgment:
"Has the law any principle for measuring compensation as a legal right when an act has been done in circumstances so special that the ordinary conceptions of property do not apply to it?"
I should have thought that any reasonable man, without any reflection upon the courts and the administration of the courts, would accept the view—taking the large number of cases of different circumstances that would be involved—that the courts are not built for that type of decision.

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But if, in the end, the amount of money that is available is decided by Parliament—and it is clear that Government and Parliament must be the ones to decide finally the amount of money that is available—how should it be apportioned? I should have thought, from reading the Second Reading debate, that this view was generally accepted by the House. I think that perhaps the other vital factor in this matter is that the colonial territories accepted this view, accepted the Coalition Government's decision, and all their own legislation and their own administration of war claims were based on this view. Therefore, I suggest that if the Amendments on the Order Paper were passed, they would strike at the very base of equity, for it would mean that twelve companies—not merely Burmah Oil—would be in a position to be treated differently from all the many hundreds, perhaps thousands, of companies which have accepted the payments made for compensation under their claims against the commissions set up by the Colonial Governments.
The noble Lord, Lord Conesford, drew our attention to the need for respect of the law. I do not know what the noble Lord had in mind, but I do not believe that he and I will be very far apart when it comes to the provision of justice. May I again repeat the definition that I gave your Lordships on Second Reading as to what "justice" means? I took it out of Jowitt's Law Dictionary. It is:
"The virtue by which we give to every man what is his due; opposed to injury or wrong."
I emphasise:
"to every man what is his due"—
no more and no less.
I suggest that if these Amendments were to be passed we should be striking against justice with regard to those who have accepted payment against their claims and these companies that have decided to continue to prosecute their claims against this country. May I remind the Committee that, if we look merely at Burma, the British European claims alone amounted to £67 million. The denial claims amounted to £60 million. If we were to take the Burmah Oil and those other companies which have made claims through the Scottish courts at about £20 million, if these Amendments were passed it would
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mean that companies with claims to the value of £40 million would be treated differently from those particular twelve companies, because they are time-barred. So in that sense one strikes at the base of equity between one claimant and another.
I would ask the Committee to take the view that, the Common Law having been found different from what we have always believed it to be, notwithstanding that we believe that the Common Law should be restored to what we thought it to be, all the war sufferers, except these twelve who have accepted the terms and conditions of compensation should not be placed in a different position because of these Amendments. I do not believe that on a basis of equity this House would feel that that was right. This is not the first time that this situation has arisen. It aros immediately after the First World War, and the Indemnity Act, 1920, had to be instituted to deal with it.
Now, did the Burmah Oil Company and those other eight companies who now have claims against the Government receive compensation? I am bound to ask this question in view of the speech that was made by the noble and learned Lord, Lord Parker of Waddington, when he said:
"… the issue here is whether it is right to deprive the subject, without compensation, of a form of property—the property being a right to such damages as the company can prove, … "—[OFFICIAL REPORT, Vol. 264 (No. 56), col. 777, March 25, 1965.]
I think the noble Lord, Lord Conesford, acknowledged that the Burmah Oil Company received compensation; it received a sum of £4¾ million. This was part of the amounts that the British Government contributed to thte British/European claimants in Burma. There were no strings to this sum; they could dispose of it as they wished. There was no need, no requirement, for them to plough it back into their business. They could have paid it out to their shareholders; they could have put it into pension funds; they could have disposed of that sum as they wished. They received £4¾ million out of a claim assessed by the Carter Committee at £17 million.
Your Lordships may ask: how did that compare with the treatment by the British Government of the war claimants

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throughout South-East Asia? I will repeat the figures that I gave your Lordships on Second Reading: the British contribution to the war claimants in Malaya represented one-eighth of their claim; in Borneo, one-sixth of their claim; in Burma, slightly less than one-seventh. The difference between one territory and another is largely due to the size of the country involved and the capacity of that country to help itself. Malaya received less than Borneo because Malaya was richer and had a larger population. But, by and large, those countries received from the British Government about the same sort of contribution. There has been no attack upon the Carter Committee as to the sum of money that was made over to Burmah Oil out of the £10 million that the British Government gave to Burma. They received it on the same basis of equity as others.
May I again remind the Committee (because it has been quoted in another place and in publications) of the comparison of British contributions in respect of war damage made to the Anglo-Saxon Petroleum Company in Miri and Seria—installations which were destroyed by contract—with the contributions made to the Burmah Oil Company? The Burmah Oil Company had a claim of £17 million as assessed by the Carter Committee. The British contribution, as I have mentioned, was £4¾ million—27 per cent. In the case of the Anglo-Saxon company, their claim for rebuilding and development was £12½ million, of which the British contribution was £2½ million—20 per cent. Burmah Oil received from this Government a greater percentage of its claim than did the Anglo-Saxon Petroleum Company, which destroyed its property under contract. I try to seek common ground here. Did these twelve companies receive compensation? I do not think there is any doubt that they did. Did they receive less favourable treatment than those who suffered denial or accidental damage? I should have thought, from the figures I have given to the Committee, that they had been treated in parity. Therefore, I hope that we have disposed of the bogy that these companies did not receive compensation.
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Now I would ask the Committee: is there any valid, concrete reason why these companies, 23 years later, should receive a greater contribution to compensation than all the other companies who have accepted the schemes of the local Colonial Governments? I have not yet heard one reason given why these companies should be treated differently.
LORD REA: If the noble Lord would forgive me, surely the reason is that it is the law of the land. It is that law, perhaps, which ought to be changed.
LORD SHEPHERD: I am at the moment talking about facts. These schemes were based upon agreements made by the Coalition Government and Parliament as to the proper, fair and equitable manner of dealing with war damage in our colonial territories. Is there any reason, on those facts, why these companies should be treated differently? I have not heard of any. It is interesting to see, from reading the speeches that were made in another place, that four Chancellors of the Exchequer took this view. Mr. Maudling, Mr. Selwyn Lloyd, Mr. Macmillan and Mr. Butler all took this view: that these companies were not entitled to further contributions from the British taxpayer. I sum it up in this way: that the Common Law in regard to war damage is acceptable in the Bill for the future; that, except for these twelve companies, all other claimants have accepted the compensation; that the British Government have made contributions on a basis of equity to all claimants; that these twelve companies have received compensation with no strings at all; and that there is no reason why these companies should be treated differently. This was the policy of the Coalition Government during the war, and I think has been the policy of all other Administrations, including this.
These are the facts and the circumstances. When we move into the area of the effect of the passing of this Bill on what colonial territories or new, independent territories may think, we are moving into the realm of opinion. We have passed retrospective legislation before. The noble Viscount, Lord Dilhorne, himself moved retrospective legislation in the Finance Bill, 1960.

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There was the Indemnity Act, 1920. True, that was not of a case which had reached your Lordships' House, but it cut off a decision that had been arrived at in the court of first instance—namely, in the case of the Newcastle Breweries. It deprived, and I think quite rightly deprived, the Newcastle Breweries of special compensation when all the other merchants in this country had received payment under (I think it was) Regulation 2 B, which was decided to be ultra vires. There is a whole host of retrospective legislation.
I have lived overseas; I have traded overseas; and I have never found that restrictive legislation passed by Parliament has had any influence upon the laws of that other country or upon the attitude of that nation or that Government to the British traders in that area. This is a matter of opinion. No Government moves forward in retrospective legislation without giving considerable thought to it. The previous Administration would not have issued the letter about which we have heard so much, this Government would not have introduced this Bill, without taking into account all the possible consequences. We do not believe that this Bill will have any effect on overseas relations between Governments and our traders or upon their own people. I do not believe this Bill changes the law in any material matter. We believe it restores the law—and I beg Lord Conesford's forgiveness in this—to what most people believed it to be, not only in this country but overseas. The compensation has been paid and has been accepted and, apart from these twelve companies, has proved acceptable. We have heard no reason why these companies should be treated differently. I hone that the Committee will disagree with these Amendments.
4.2 p.m.
LORD CONESFORD: The noble Lord, Lord Shepherd, always addresses the House with force and agreeably, and I am sorry if my speech on the last occasion left him with such a very erroneous impression of what I was saying. It was a long debate; he had to listen to all the speeches, and he may not have remembered what I said on the particular point on which I interrupted him. Perhaps I may quote that at the beginning in order to put the record straight. I agree with
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him, of course, that the view of the Common Law which he said was universally held was the opinion of a great many people. My point was that it was never universally held; and the passage of my last speech which I think he had in mind was this:
"But the only point I am on at the present moment is that there was no generally agreed view on whether action under the Prerogative did or did not carry a right to damages. I fully accept that the view expressed by my noble and learned friend"—
the noble and learned Viscount, Lord Dilhorne—
"was a widely held view. I would only say that it was by no means a universal view. I quoted the well-known passage from Lord Dunedin's speech in the de Keyser case to prove my point, and it was quoted amply in the speeches in the Burmah Oil case."—[OFFICIAL REPORT, Vol 264 (No. 56), col. 783; March 25, 1965.]
LORD SHEPHERD: Would the noble Lord not agree that the de Keyser case is not strictly a war damage case?
LORD CONESFORD: The point on which I quoted that made it a not unfair quotation. On that point, also, the noble Lord will remember the intervention of the noble and learned Lord, Lord Guest, and he may also remember some of the passages from the judgments which I quoted in my speech.
But let me say that the thing that mainly astonished me in the speech to which we have just listened is that the noble Lord seemed to think that the law courts in this country had nothing whatever to do with the administration of justice. That really is an illusion. He mentioned, for example, that a great many people in the past had taken a certain view of what the Burmah Oil Company, which is one of the claimants, ought to get from a certain claim; but none of them was then aware that the decision of the highest tribunal would be that the Common Law is what we now know it to be; although the judges in Scotland had very little doubt that that was the trend of all the cases and the noble and learned Lord, Lord Guest, had so advised the company.
But let me make it clear for myself and for my friends that if the view taken by the noble and learned Viscount, Lord Radcliffe, had been the majority view, then of course this matter would not have arisen at all. This matter arises because,

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as was explained in a masterly speech by the noble and learned Lord, Lord McNair, on the last occasion, there is now a decision of our courts in favour of the company—and that is a valuable decision although we do not know, of course, what is the sum, if any, that will finally be awarded if the matter proceeds to further trial—and it is proposed to deprive the beneficiaries without compensation of the benefit of that valuable decision. In my opinion—and perhaps it is impudent for me to say so—that clearly and fully justifies the exact words used by the noble and learned Lord, the Lord Chief Justice.
The Second Reading debate on March 25 made clear the issue before us to-day. The speeches then made by the noble and learned Lord, Lord McNair, by myself and others, make it possible, I think, to say less this afternoon than would otherwise be necessary. My view was that, while the Bill could not be passed by any self-respecting Parliament in its present form, we ought to give it a Second Reading and then amend it. I urged the House to give it a Second Reading and I said that, if the House did that, I should at once table the necessary three Amendments to strike out the retrospective provisions. I did that the same evening, and those are the three Amendments which we are now considering. The noble and learned Lord, Lord McNair, and his friends tabled the first and third of them in identical terms and they have subsequently been good enough also to add their names to my second Amendment: so the three Amendments now on the Order Paper represent the universal and unanimous view of those who are opposed to these provisions.
In the Division on the Second Reading —a Division which I had not sought—I voted for the Second Reading in accordance with the advice which I had ventured to give. I voted for the Second Reading and many of my noble friends abstained, relying on our undoubted right to move Amendments in Committee and to have those Amendments considered on their merits. In view of some very strange contentions that have been subsequently made outside the House and in the Press I would add this: if the House had not relied on the right to amend, it would certainly, I think, have rejected the Bill. I should myself have deplored that, and
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that was why I supported the Government on the Second Reading.
If, however, the House had rejected the Bill on the Second Reading, it would merely have done what the Party opposite urged this House to do less than two years ago, on April 24, 1963, when it divided the House against the Second Reading of the London Government Bill which the House of Commons had passed by a large majority. I noticed, with interest, that voting against the then Government and opposing the Second Reading of their Bill was the noble Earl, Lord Longford, the noble Lord, Lord Shackleton, the noble Lord, Lord Lindgren, and the noble Lord, Lord Shepherd, who was actually Teller on that occasion. That opposition was also supported by two noble Lords whom we greatly respected but who, I regret to say, have died in the interval—the noble Earl Lord Alexander of Hillsborough, and the noble Lord, Lord Morrison of Lambeth. We gave this Bill a Second Reading and are now considering the Amendments which we then foreshadowed, and which we claim should be considered on their merits. I am certain that Her Majesty's Government, whatever else they say, cannot properly deny the right and duty of this House to amend, where required, because amendment of Bills by this House is one of the principal uses that Her Majesty's Government themselves make of our proceedings.
Nobody who has studied our Second Reading debate can have any doubt about the importance of the issues before us. It was not only the lawyers—the noble and learned Lord, Lord McNair; the Lord Chief Justice, Lord Parker of Waddington; the noble and learned Lord, Lord Guest; the noble and learned Lord, Lord Morton of Henryton, and some far humbler lawyers—who took the view that the rule of law was involved. That was also the view of such distinguished laymen as the noble and gallant Viscount, Lord Slim, my noble friend, Lord Chandos, and many others. It really will not do to pretend that the issues before us this afternoon are unimportant. I have served in this House from the year 1955, and I do not remember ever addressing it on what seems to me a more vitally important issue. In my opinion, if the speech of the noble and learned Lord, Lord McNair, on the last occasion had stood alone, the House would still have

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had sufficient reason to pass the Amendments now before us.
The issues about retrospective legislation are important enough, but I agree with the noble and learned Lord, Lord McNair, that the issues now before us go even beyond those generally raised by the problem of retrospective legislation. I wonder if I may read a few sentences of what the noble and learned Lord said in the course of his speech on that occasion. He said this of the Bill (col. 762):
"It raises issues which, in my judgment, transcend Party politics; questions of the correct balance between the rights of the subject and the rights of the Crown; questions of the relations between the Judiciary and the Legislature, and certain international questions".
On all these matters, the noble and learned Lord speaks with authority and, on the last, with an authority unrivalled in this country.
The noble and learned Lord the Lord Chief Justice described the proposals in the present Bill as confiscatory", and gave his reasons. They were confiscatory, he said, because the Bill swept away a right without any compensation. Incidentally, I am sorry that the noble Lord, Lord Shepherd has again dwelt so much on the figures of the Burmah Oil Company's claim. As was pointed out on the last occasion by several noble Lords, by the noble and learned Lord, Lord McNair, and myself among others, we know nothing whatever of what the measure of damages will be, if this case proceeds, as it should proceed, to trial. And both of us quoted from some judgments in this case to make that fact perfectly clear.
There was one point on which I think the noble and learned Lord the Lord Chancellor was inaccurate, when he came to reply to that debate. He suggested—and reference to the speeches will show that he was wrong in that suggestion, though I am fairly clear, I think, about what he had in mind—that everybody accepted the first subsection and that the quarrel was over the second. I think that a more accurate statement would have been that everyone was prepared, though some with regret, to accept a change in the Common Law for the future, but that we made it clear, as he said in another part of the speech, that we proposed to put down Amendments to strike
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out the retrospective application of this Bill.
The first subsection indeed contains a great part of the mischief of this Bill, and it is true that the second subsection makes it even more obvious; but the second provides, so to speak, the machinery for carrying out the retrospective provisions contained in the first subsection. I mention that merely to explain to the noble and learned Lord the Lord Chancellor that the Amendments now on the Marshalled List are precisely what we foreshadowed in the debate. I think that the noble and learned Lord accepts that.
I must say a few words about what the noble and learned Lord the Lord Chancellor said about the retrospective provisions; and here I was very glad to learn with how many of his propositions I agreed. Some of them I will give, for convenience, in his own words. He said (col. 810):
"In my opinion, retrospective legislation is wrong and contrary to the rule of law, and I think any lawyer would agree with that as a general proposition."
With that, my noble friends and I completely agree. Secondly, he said:
"I cannot think off-hand of any case in which I should think that retrospective legislation was right in the field of the criminal law."
Again, with respect, we agree. Then I come to the third of these propositions (I am not quoting his actual words) that, in the field of civil law, retrospective legislation had sometimes been found necessary, but—and now I quote (col. 817):
"The real question every time is whether a particular case is a proper exception."
Again, I respectfully agree. Where I differ is in thinking that any of the examples which the Lord Chancellor cited gave any support at all to the idea that the provisions of this Bill were right and justified by the precedents. The noble and learned Lord the Lord Chancellor cited a number of examples which, if I may say so very respectfully, are, in general, as different from this Bill as chalk from cheese. And I shall give some examples.
But, first, may I make a preliminary comment? If retrospective legislation is prima facie wrong, but sometimes essential, if it is a necessary evil, there is

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much to be said for the view expressed in another place that to lengthen the list of precedents is not to strengthen the case for making another exception, but to weaken that case. When we talk of "necessary evils", it should not be part of our purpose to increase their number. The noble and learned Lord, Lord McNair, has already pointed out that the examples given by the noble and learned Lord the Lord Chancellor were not calculated to affect our international reputation. This Bill, as it now stands, is so calculated.
Just to show that I am not shirking the matter, I would mention one or two of the examples the noble and learned Lord the Lord Chancellor gave us. One was the Charitable Trusts (Validation) Act, 1954, which relieved testators and settlors who, through defective drafting, had failed to establish charitable trusts. Non-lawyers may like to know that a settlor or testator who left anything and used these words, "for charitable or benevolent objects", failed to establish a charitable trust. That subject was considered by the Committee on the Law and Practice Relating to Charitable Trusts, generally known as the Nathan Committee, which recommended legislation. That legislation was carefully considered by the then Government, and that Bill (now an Act) was introduced to enable testators and settlors who had made such a technical mistake, to bring about the result they intended. Who were the main losers as the result of that Act? The main losers were the Inland Revenue and the Estate Duty Office. The Government were not intervening to create legislation for their own benefit in litigation which they had conducted and lost. It is true that there were some individual beneficiaries who would have got the money because the trust had been found invalid, and whom the testator and settlor never intended to benefit, who were worse off as a result of the Act. But what has that got in common with the Bill now before us?
Then there was the Telegraph (Validation of Charges) Act, 1954, and the Truck Act, 1940, the first of which prevented proceedings, among other things, for the recovery of charges which were believed to be in order but had been
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found by the courts not to be in order. If I may mention the Truck Act, which I think was referred to by the Lord Chancellor, the proceedings which it made in effectual were in respect of transactions which might lawfully have been effected in another form. May I remind the layman of what it was all about?—employment for a wage plus meals is bad; employment for a higher wage, with agreement in writing to deduct the value of the meals, is good. That is a highly technical distinction. The Bill did not cause chaos, but was intended to correct what was in fact in the nature of a mistake. There is all the difference in the world between legislating retrospectively to remedy a mistake and legislating retrospectively to deny the subject his rights against the Crown.
May I give one more example of retrospective legislation which is quite interesting, but which has not, I think, been mentioned in the whole course of this discussion? It has been found necessary from time to time to pass a Statute to validate marriages conducted by bogus clergymen. An example is the Marriage Validation Act, 1888. These Acts validate the marriages, not only from the date of the Statute but from the date of the ceremony, and everybody thinks, and has always thought, that to be right. Acts of that sort do not bring the Lord Chief Justice down to the House to warn your Lordships of the dangers.
But consider what precedents will be set if we pass this Bill in its present form. Here the subject has been litigating against the Crown. There has been a long process in the courts, fought out with immense trouble and immense learning, and on which the courts have taken great trouble to give their decision. If we pass a simple Act of Parliament to declare that the successful litigant has lost the litigation, which is what this Bill does, nobody who wishes to justify retrospective legislation in the future will ever need to look for a further example. What will be the position in those countries all over the world in which British nationals and British companies are trading? How often may their only recourse be to take the matter to the courts of the country concerned? Do we really wish the Government of the country concerned to decide, perhaps retrospectively after the British national

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has won the case, that they will pass legislation to make the winner the loser, and then to be able to say: "The example we are following is the example of one of the most respected Parliaments, perhaps the most respected, in the world, the example set by the Parliament of the United Kingdom in the year 1965"?
What astonishes me about this Bill is that Her Majesty's Government do not seem to realise how much credit they could still gain by not proceeding with a Bill which is not even their own. The noble and learned Lord the Lord Chancellor said, towards the end of his speech:
"If the position is left as it is, these companies—and I do not seek to make anything against them because they are wealthy companies, though one might perhaps, take a different view if they were very poor—would he the only people to receive compensation on a footing of 100 per cent."—(Col. 818.)
There are two things I would say about that. First of all, I take the observation that one might take a different view if they were poor. I am not going to discuss morals; I would only point out that we know nothing about the circumstances of the other claimants. If the noble Lord, Lord Wade, was correct in his most interesting speech on the last occasion, there is at least one of these claimants who cannot, by any stretch of the imagination, be described as wealthy. But I say that the precedent our Parliament will be setting is disastrous.
The Amendments, which I support, will prevent immense injury to the reputation of Parliament, to the rule of law, and in the future to the ability of Her Majesty's Government, present and future, to protect British interests threatened in foreign countries. I strongly commend them to your Lordships.
4.30 p.m.
LORD REA: As sponsor of these Amendments, may I say that I support them entirely on the matter of principle, on a non-Party basis, caring nothing whether they benefit or damage the Labour Party, the Conservative Party, the Liberal Party, the Burmah Oil Company, the House of Commons, the House of Lords or anybody else, apart from this country as a whole and its reputation. The broad intention of this Bill—that is, to abolish a Common Law right to compensation from the
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Crown for certain kinds of war damage —has merits which I and, I think, most of your Lordships would in principle gladly accept. But to insinuate a retrospective element contrary to the tradition, practice and honour of the acknowledged procedures which this country has carefully and proudly built up over century after century, to the admiration of the whole world, is to me totally unacceptable.
In this age of emergent nations, on a keen look-out for examples and precepts, it is virtually essential that we in this country, more than in any other country in the world, should uphold the integrity and the sanctity of the ideal of absolute justice, so far as it can be attained. The eyes of the world are upon us, as my noble friend Lord McNair has said, in this very important matter. The acknowledged procedure for settling disputes between citizens and the Crown has taken its proper and traditional course; and if this course be found, in this one instance, to be distasteful to the present Government or to the last Government, then legislation to alter the situation in the future can properly be introduced and, I think, would be welcomed. But in my opinion it is a step towards totalitarianism and to dictatorship, to try to legislate retrospectively in a matter of this sort and to aim at depriving a litigant of the fruits of his litigation which he obtained perfectly properly under the laws of this country as they existed, both when he brought his case and as they still exist up to this afternoon.
If this Bill, with all its retrospective elements, be passed, then logically—and I admit I am giving a very extreme example—there is no impediment to any future or present Government, of any colour, introducing retrospective legislation to, let us say, invalidate all votes cast against the Government at the previous General Election, and so establishing a totalitarian State. I am not suggesting that any British Government would ever do anything of the sort. As my noble friend Lord McNair has pointed out, this Bill is in danger of setting a precedent with possibly quite disastrous effects on the international standards, both of justice and of morality. Two hundred years ago, or even fifty years ago, your Lordships' House had

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to bear some stigma of the self-interest of a non-elected Chamber. We are still a non-elected Chamber, but the atmosphere and outlook of your Lordships' House has completely changed and, so far from being a rubber stamp or a brake on the other place, we now have a solemn duty (which I think is manifest in all quarters of this House) to express and to try to safeguard what we feel to be a true reflection of the will of the people, most of whom are, in my opinion, greatly perturbed at the implications in this Bill as it now stands.
The true position, as I see it, is that the late Conservative Government and the present Labour Government both made a mistake in sponsoring the retrospective elements in this Bill. We all make mistakes, but this is a bad one. But face-saving and amour propre are not sufficient reasons for enacting a thoroughly bad and dangerous piece of legislation, and I ask your Lordships to vote on these Amendments from conscience and not from expediency or from the smaller aspect of a too-narrow Party loyalty. An extremely important principle is at stake, and I most respectfully plead with your Lordships—those who are perhaps uneasy about the Bill, but who are not anxious to go down in the Division List either as diehards or as rebels—at least to abstain from voting against these Amendments, and to let them prevail, as I hope they will.
4.35 p.m.
LORD BROWN: I cannot sit here this afternoon without speaking against this Amendment, because I fear that unless some amateur butts into this discussion we are going to be completely bogged down in these highly legalistic, doctrinaire, arguments which are being bandied across the Floor of this House. Law is for the common man, not for the jurists, and not always for the experts. Its effects are what we are concerned with. I wonder whether those who propose to vote for this Amendment are really prepared to go to the people of this country—
SEVERAL NOBLE LORDS: Hear, hear!
LORD BROWN: Let me finish my statement please; I have not asked the
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complete question. Are they prepared to go to the people of this country, millions of whom have lost limbs and eyes, sons and daughters, and small businesses during the war, and received frugal compensation, and say, "Because of a quirk in the law, we are prepared, on the basis of legalistic arguments, to allot a single company, twenty years after this war has closed, a sum of £50 million, £60 million or £70 million, and this is what we believe to be equity"? Are we prepared to argue that we did this merely because we wanted to uphold the doctrinaire principle that we must not indulge in retrospective legislation?
I have been accused of enough in my time as a member of the Labour Party and as a supporter of certain degrees of nationalisation of being doctrinaire, but I have never been absolute on these points. It shocks me to hear people who are learned in the law supporting this Amendment on the grounds that we must not have retrospective legislation. Let me, as an amateur, make this point to your Lordships. If you believe that all legislation, once laid down, should have its due effect until it is altered, then you can uphold this point of view only on the assumption that you know in advance the effect of that legislation in all the huge and wide variety of cases which may arise. It is nonsense to say that you can always foretell the effect of any legislation, because you never know all the differing circumstances which will arise; and this is a case for occasionally being forced to bring in some degree of retrospective legislation. If ever there was a better case than this one for retrospective legislation, I do not know of it.
I have listened to these arguments about the danger of our national reputation falling. Good heavens! for the last thirty years we have been watching acts of dispropriation going on all round the world. We have made our protests, but the degree of the acts which have been taking place put any act that is envisaged in this Bill completely in the shadow. I take an entirely different point of view about the reaction of the world. I would say that if we eliminate this subsection from this Bill the world will say: "Dear me! here is this doctrinaire country, with its legalistic attitude, prepared to

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give a single company enormous compensation when they know very well that in terms of equity this is not just." I say that we must reject this Amendment in the name of common sense, and stop beating this legal drum about it and getting into a legalistic morass which will cause us to lose sight of the main issues with which we are dealing.
4.40 p.m.
LORD ALDINGTON: The noble Lord, Lord Brown, told us that he was an amateur intervening between the pros. I, too, in this matter am an amateur, but I am bound to say that I wholly and completely disagree with his attitude to the rule of law. I am not a doctrinaire, and I know from the noble Lord's reputation that he is not a doctrinaire. But I am prepared to admit to being a doctrinaire about the rule of law, for that is, I believe, the basis of the society in which we live at home and the basis of the world that we would like to see, where there is peace and where there is sensible international trading. I cannot understand how the noble Lord, with his knowledge of business and training, can really have been prepared to stand up and say to your Lordships that behaviour like that proposed in this Bill can do no harm to our trading interests overseas. Certainly there has been some confiscation and some expropriation of British interests, but there has been far less than there might otherwise have been, because Her Majesty's representatives have been able to say to the friendly Governments who were thinking of doing these things: "This is contrary to the rule of law for which we stand, in which we believe and on which Constitutions which we have given to you have been based "—for many of the countries concerned are ex-dependents of ours. If I may say so with humility, as one other amateur in this debate, I think that the noble Lord has wholly misconceived the situation.
I have admitted to being an amateur but I am not without strong feelings that I myself wish, and I wish to encourage all your Lordships, to vindicate the rule of law by backing these Amendments. Like my noble friend sitting next to me, I have to admit that I was trained as a lawyer, and did, in fact, practise; but my legal career, like his, suffered war damage. But I have also to admit one
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other thing which may strike some sympathy from some of your Lordships, and possibly, at any rate, the noble and learned Lord the Lord Chancellor. I happen to be the grandson of the famous Judge, two of whose judgments were referred to in the Second Reading debate, Lord Atkin, perhaps one of the most famous Common Law lawyers of this century; and I carry with me in my veins at any rate some of the blood that inspired him in his judgments and inspired his dissenting judgment in the case of Liversidge v. Anderson. That may at least persuade your Lordships that my passion for the rule of law is not a synthetic passion invented for to-day's discussion to oppose the present Government.
I should, indeed, have opposed the previous Government, and my noble and learned friend Lord Dilhorne is fully aware of my strong views and opposition to the letter that was sent and to the attitude that he and some of his colleagues had towards this particular problem. I say that because I think there may be an inclination on the part of some of your Lordships, who perhaps do not know my history well enough, to think that this is a synthetic Party political intervention. This is not so. Nor do I think that it is so in the case of my noble friends, certainly not my noble friend Lord Conesford, whose view of these matters is so well known. I would add, too, that this is not the first occasion on which, in one House or the other I have opposed retrospective actions initiated, by my noble and learned friend Lord Dilhorne. There is an earlier pattern in Finance Bill debates which he will remember.
I wish to take up only one point about the legal aspect before coming to the international trading interest aspect of this Bill. The legal, or near-legal, matter that I wish to refer to is the point made about the Indemnity Act, 1920, being a good precedent for this Bill. In passing, I would say that, with my noble friend sitting next to me, I think that precedent here makes the matter worse, not better; the more precedents there are for the breach of the rule of law the worse the effect overseas must become. But the Indemnity Act is not, in my opinion, a good precedent, because the Indemnity Act brought with it a system of compensation. I know that the noble

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and learned Lord the Lord Chancellor and the noble Lord, Lord Shepherd. have said that compensation has been paid to the parties concerned by this Bill, the retrospective parts of this Bill. Frankly, I would say, after studying the papers and talking to the people concerned with what took place in 1947 and 1948, that that is not correct. Sums were paid—that is true; and the payment of those sums would certainly be taken into account, I should have thought, by any court examining the claim of the Burmah Oil or any of those parties. But those sums were not paid as compensation: they were paid for rehabilitation. The noble Lord sighs, but it is very important, because no attempt was made—and the papers show this very clearly—to fix the sum on the basis of compensation. An attempt was made to fix a sum to help in getting the business started again, and the measure of what could be paid was said by Sir Stafford Cripps to be governed by what the country could afford in the times of heavy pressure on our resources which we all remember in 1947 and 1948.
LORD SHEPHERD: May I ask the noble Lord this question? If this sum was paid in rehabilitation, would he not expect that some string would be tied to the manner in which the money was utilised? Would the noble Lord not agree with what I said, both on Second Reading and in Committee this afternoon: that there were no strings; that these companies could use and dispose of those sums as they wished? If they could do that, how can the noble Lord say that it was rehabilitation?
LORD ALDINGTON: I say that it was rehabilitation because it was said to be by the people who gave it. If the noble Lord would kindly look at the document, of which I have seen copies, and have them here—the note of the discussion in the Burmah office between Sir Stafford Cripps and certain representatives of the trading interests, and a further note of the discussion which took place with the Prime Minister at No. 10 Downing Street on June 29, 1948—he will see that the Government's intention then was to provide what they could to help in rehabilitation; and words to that effect
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occur frequently in these documents. The Government were to provide the sum on the basis of what was necessary at that time, rather than on the basis of what had been lost.
I make these points only because the noble Lord, Lord Shepherd, has said to us that we must have regard to the facts. I agree very much with what the noble and learned Lord, Lord McNair, has said to us: that this is not a debate about the Burmah Oil Company's case (I do not know whether it is a good or bad one) but a debate about the rule of law. When the noble Lord tries to argue that there is justification for departing from the rule of law because of some special payments made in previous years 1 think it is as well he should give the full facts and not try to say to your Lordships that payments were made in compensation, because, frankly, that is not so.
If I may pass from that for a moment to the question of the effect upon our international trading position, I admit to your Lordships that, like many others of you, I suppose, I have an interest—indeed, the whole country has an interest, in looking after our international trading position. I agree very much with what the noble and learned Lord, Lord McNair said. The precedents that have been cited have absolutely no impact upon my thinking about how this Bill, if it is left as it stands, would affect our international trading position. They were all domestic matters, none of them concerned and concerned closely with a well-known international trading company, trading in many parts of the world and respected all over the world. And none of those cases, I imagine, would have got into the American law book to which the noble and learned Lord, Lord McNair, referred. The truth is that we do not here in these matters live in a padded cell; what goes on here is heard and seen outside.
Everyone who looks at this case will be aware of the confiscatory nature of the legislation, in that, without any proper compensation, it deprives sufferers from past denial damage of the legal rights which are now known to be theirs; and, second, that there is the arbitrary refusal by the Executive to honour a judicial decision against it. These two

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facts are held up for all the world to copy, if they wish. Noble Lords opposite may not realise how much time those of us who trade all over the world have, unhappily, to spend in trying to protect our business, our property and our rights against Executive and legislative acts of foreign Governments. Of course, we spend a lot of time doing other things too; but we have to spend a great deal of time looking after our interests against those predatory instincts which have been referred to before.
In many of these countries the rule of law is accepted in principle because of the traditions and experience either of British law here or of our colonial Administrations. But this acceptance is not as sturdy a plant as it is here. What do we look to, to defend our position when it is threatened? We look to two arguments, both of persuasive force: we look to the argument of principle about the rule of law, and secondly, we look to the diplomatic support of British missions overseas, which must rest their efforts on basically the same argument of the rule of law. I must say that I have found that support of great weight in the past, and I cannot pay too high a tribute to the work that our Ambassadors and High Commissioners do in that respect. But if this Bill becomes law as it is, including the retrospective elements, it will destroy the planks upon which these arguments rest; it will make the protests of Her Majesty's representatives almost ridiculous, and at the same time it will weaken, or perhaps frustrate, the efforts of the United Nations, the International Monetary Fund and the International Bank to secure world acceptance of the proposition that no property should be taken by any Government without proper compensation. And it will make it easier for any Government to disregard, whether by subsequent legislation or not, any decision in its courts in favour of a private litigant and against themselves.
This is no imaginary danger. In more than one part of the world—your Lordships know this to be true—Governments do nationalise, they do expropriate, they do confiscate, and other Governments threaten to do all these things; and they proffer reasons for refusal to compensation not unlike those put forward by the Government for this Bill. Some of
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them may even proffer reasons not unlike those put forward by the noble Lord, Lord Brown, who I see has not been able to stomach the whole of my speech. We cannot afford to see our overseas investments and trading interests jeopardised in this way. As the Chancellor of the Exchequer has been saying, twice in the last week, we want to earn more, and not less, out of these investments. Nor can the world afford any lowering of the respect for the rule of law. Not for the first time it is to Britain's interest in the world herself to stand firmly to principle, so that others will do so too, and I hope that your Lordships will back all three of these Amendments.
4.56 p.m.
THE EARL OF LYTTON: I listened to the weighty speech of the noble and learned Lord, Lord McNair, who was so persuasive that I have nothing left to say of what I had planned to say when I came into this Chamber. It seems to me that the noble Lord, Lord Shepherd, has not been entirely answered in some of his main points, two of which I should like to take. I think he tried to persuade us that this decision had been a kind of judicial fluke—six to four against, and yet in favour—and that if we were sensible, common-sense folk and looked at it from the point of view of fairness and equity, we should come to the same conclusion as he does.
I do not share his view. I have searched for somebody who might have persuaded me, and I have chosen, because he has chosen him himself, the noble and learned Viscount, Lord Radcliffe, who in the peroration of his summing-up said this:
"I do wish, however, to make it quite plain that my opinion does not amount to saying that it is the law that compensation or indemnity should not be provided for such loss as the appellants suffered. That would misrepresent my position, which is that the Common Law itself never has provided, and does not now provide, any remedy for these actions of the Crown which were admittedly lawful, and therefore there is now law on the matter to which we can give effect. That there is something which may, by a permissible transfer of language, be called a public law which requires the careful attention of the State to damage thus inflicted and calls upon it to make such provision for compensation as the recognised equity in favour of compensation may demand, I would be glad to agree."

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It seems to me that seven out of ten judges said something which, either explicitly or by implication, indicated their support for compensation on the basis of equity. Not one of them was quite so forthright as Lord Radcliffe. This is one of the points, then, which I should like to make: that the witness called by Her Majesty's Government, as far as I read him, is in support of compensation on a basis of equity.
The second point I should like to take, briefly, is a question of law. It seems to me that the noble Lord, Lord Shepherd, assumed a conclusion which was not a conclusion we were arguing about. He seemed to assume that we were talking about a verdict in favour of compensation for war damage. As I read the matter, the whole thing turned on whether it was technically war damage or whether it was not. If it was, I cannot find a single legal person who does not agree that it attracts no compensation. As Lord Radcliffe said, if it is battle damage in the face of the enemy, they had no legal right to stop it, and there is no legal claim to compensation.
But the whole point is that the courts have decided that it is not damage of that kind; that it comes in a different category; and I think that the case as it was judged by the majority received immense strength from the eloquent and definite speech of the noble and gallant Viscount, Lord Slim, on Second Reading, when he said that it was not battle damage, that in fact it was the decision of the Government, a political decision, to apply an economic sanction, and only the timing of it was left to the commander on the spot. It was not a necessary action of war. It may even have been an handicap and an impediment to the withdrawal to have to do this at all. It might not have been so if we had been going in again quickly. It might not have been so if we had given greater weight to the harm it did to the economy of the Burmese people. Had we decided never to fight there at all, we might yet have taken the same decision, a political decision, not a necessary decision for battle. That seems to me the whole difference, and it comes close to the legislation which we had in this country.
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We are asked to take account of the facts. I brought to your Lordships' notice last time the Emergency Powers (Defence) Act, which assumed enormous powers—the taking into possession on behalf of His Majesty of any property. There was a corresponding Act which provided that compensation was payable for all this—never mind whether it was a battle structure, pill box, gun emplacement or an airfield. All these things were taken under the special powers by Statute and were paid for under a compensation Act.
What is comparable by analogy is that if the Burmah Oil Company had been in the Isle of Wight or in the Channel Islands, they would have received compensation under these Statutes in the same way as would other people. The whole point of the arguments we have heard is that this is not war damage. Almost everything the noble Lord, Lord Shepherd, said about war damage one would agree with. War damage, in the technical sense, is not eligible for compensation. But that is not what we are talking, about. The decision is that it was not war damage in the technical sense, but something different. Those are the two points I wish to raise.
5.1 p.m.
LORD ALPORT: I rise to intervene briefly in this discussion simply because I think there may be some danger that an argument which has been wrapped in some of the mysteries of legal argument may not always be clearly understood by people outside who are non-experts. The noble Lord, Lord Shepherd, began his speech by saying that he was going to deal with facts on which public policy must be based. I think we accept that point of view. It is the point of view of successive Governments. Put in a different way, it is an expression of the importance of expediency in the formulation of policies which every Executive face time and time again. It was no doubt the basis that led the previous Administration to agree to send the well-known letter from the junior Treasury solicitor because they thought it represented a reaction expedient in the public interest to a particular situation which they faced.
That is precisely what those of us who oppose this provision of the Bill are going

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to vote about. We are going to vote, we hope and believe without being sententious, on a matter of principle as opposed to a matter of expediency. We believe that public policy should on occasion, and more often than not (I put it no higher than that), be based on principle, particularly where the legal rights of individual citizens are concerned. Therefore, in some ways, at any rate—I speak perhaps personally—on this occasion my own vote in favour of this Amendment will be a protest not only against the policy of Her Majesty's present Government but against the action of Her Majesty's previous Government. Had the previous Government been the Government to-day and had they produced this Bill before your Lordships' House, I hope—I do not put it higher than that—that I should have had the courage to vote against them in exactly the same way.
The second matter is that this is not a question of safeguarding property. The noble Lord, Lord Shepherd, in his opening remarks understandably made great play with the compensation which had already been paid to the companies. He argued, as I understood it, that this meant that they had already received their just dues. It may be he is perfectly right. It may be that when a court came to consider the compensation which it was equitable to pay in these circumstances, it would not only have set off the amount which had already been paid but would have taken the view—a view expressed, I believe, by one of the learned Scottish Judges—that possibly the amount of damage would be calculated as between the destruction of the properties before the Japanese occupation and the destruction of the properties after the Japanese occupation as a result of British air bombardment, and therefore the amount of compensation might be small, or nil.
I do not think—I speak entirely personally on this—that the Burmah Oil Company have a very strong moral case for compensation. But that, as I see it, is not the issue before your Lordships at present. What we are concerned with is a matter of constitutional propriety. We are concerned with the maintenance of a long-established Principle of our Constitution: that the Executive should not attempt to interfere, and certainly should not succeed
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in doing so, directly with a decision of the Judiciary.
I do not want to cover all that ground again but merely want to make one point. My noble friends and the noble Lords on the Liberal Benches have cited the importance of maintaining the integrity of our system because of the reactions otherwise on our commercial interests overseas. This is not, as I said, a question merely of property. The effect of the passing of this Bill in its present form would have repercussions not only on our commercial and industrial interests overseas, but also on the whole corpus of the British tradition of law, as followed in Commonwealth countries and elsewhere.
Your Lordships may remember that quite recently there was a celebrated case in the Supreme Court of Ghana. Three distinguished men were on trial for their lives. So far as I know, those who put them on trial and accused them were satisfied that the law was such-and-such, that the evidence was sufficient, and they assumed therefore that the learned Judges, when the time came, would find them guilty. In the event, the Chief Justice and his learned colleagues acquitted the three individuals. The executive stepped in and dismissed the Chief Justice and his colleagues and—so far as I know I am not certain—with the panoply of Parliamentary sanction, reversed their decision. A second trial took place, the men stood trial for their lives on a second occasion, and were condemned to death.
I do not think that it is wrong to draw an almost exact parallel in principle with what we are being asked to do in this Bill at the present time. What happened, according to reports which appeared in the papers, was that the Commonwealth Secretary, no doubt through the instrument of the British High Commissioner in Accra, made an appeal to the Government of Ghana to commute the death sentences. Many of your Lordships in the past have had the experience of representing to foreign and Commonwealth countries Her Majesty's Government's point of view on various matters. Some of you will know the sense of defeat that such occasions produce in the British representative when the other Government, or the Minister, or Prime Minister, or President, whoever he may he talking to,

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can turn round to him and say, "But your Government has done exactly the same thing", and can quote chapter and verse to prove their case.
I do not think this argument too farfetched. Had those representations been made after the passage of this Bill and had it become law, the case put forward by the British Government for a change of decision by the Ghana Government and for clemency for these three men would have been weakened and possibly ignored by the Ghana Government. I use this merely as an example, but an important one because it is a human example which takes the problem out of the realm of property and legal rights and puts it—as the noble Lord, Lord Brown, has tried to do from his point of view—on a human basis.
LORD BROWN: With respect, I think the noble Lord is using unfair arguments, unless it is true that the noble Lord makes no distinction whatever, in principle, between, on the one hand, law governing property, and, on the other, law governing people, their lives and their freedom.
LORD ALPORT: I do not want to enter into an argument, but the law is the law as administered by the courts and decided by the Judiciary with reference, so far as I know, to Acts of Parliament that may have been passed.
LORD BROWN: You make no distinction?
LORD ALPORT: There is no distinction in the minds of judges, so far as I know, between the necessity for integrity in administering the law in relation to property and the necessity for integrity in administering the law in relation to personal liberty and life. But I am not a judge and I would not claim to be a lawyer, although I was once called to the Bar. I have tried to put the arguments on what I believe to be a basis which is clearly understandable outside your Lordships' House, and I hope that, if there is discussion elsewhere, outside this House, arguments of this kind will also be used. I hope that the problem which we are facing and having to decide on here will not be represented as an obscure constitutional and legal problem, but will be recognised as some
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thing which is in fact reflected in the human rights of people, not only in this country but throughout that part of the world which is governed by the English traditions of law.
5.13 p.m.
VISCOUNT MASSEREENE AND FERRARD: May I point out to the noble Lord, Lord Brown, that what he really wants is one law for the rich and one for the poor? I think that that is a most astounding suggestion. I had not intended to speak on this Amendment, but I would point out that the issue seems to have become rather clouded, because what we are really discussing is the rule of law. The highest Court in the land has given a judgment; Her Majesty's Government do not like the judgment; and therefore, they say, "All right; we will have retrospective legislation, and we will deprive the successful party of the fruits of its litigation". In my opinion, if you have a Government that do that—in fact, I do not call that government at all—you are really getting very near to brigandry. It is the road to dictatorship.
LORD SHEPHERD: Is the noble Viscount suggesting that his own Party was on the road to dictatorship?
VISCOUNT MASSEREENE AND FERRARD: It is true that my own Party sent that letter to the Burmah Oil Company through, I understand, the Attorney-General's office—I think I am right in saying that. But, personally, I do not approve of that letter. As I say, the law is the law, and you ought not to try to frighten somebody from going to the law. I do not object to altering the law, but to alter it retrospectively really horrifies me. After all, if you take the trade union case, the Rookes v. Barnard case, people have said, "Oh, but we thought the law was different; we only want to put the law back as we thought it was". Yet nobody has suggested depriving Mr. Rookes of the damages he has received. As I say, the noble Lord, Lord Brown, wants one law for the rich, and one for the poor.
LORD BROWN: With respect, I said one law governing property and one law governing human life and freedom.
VISCOUNT MASSEREENE AND FERRARD: Do you really mean to tell

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me that, if the Burmah Oil Company's claim for damages had been only, say, £100,000, Her Majesty's Government would have produced this Bill? Of course not. I would remind the Committee what the Bible says:
"For what shall it profit a man, if he shall gain the whole world, and lose his own soul?"
If this matter goes to a vote, I shall vote for the Amendment.
LORD MORTON OF HENRYTON: On the Second Reading of this Bill I made what was, I think, the shortest speech I had ever made in this House, and I shall be almost equally short on this occasion. I think that the retrospective part of this Bill is bad for at least two reasons. First, Clause 1, subsection (2), enables the Crown to stop an action which is against the Crown; secondly, the Bill deprives a litigant who has succeeded against the Crown in this House of a right which he has established. In these two respects at least, I suggest that this Bill strikes a blow at the rule of law and at the independence of the Judges.
LORD CITRINE: Like the noble Lord who last spoke from the Government Benches, I have not had the advantage of any kind of legal training. I might go further and say that I have not had the advantage of anything other than a purely elementary education at my school. I was brought up in the trade union movement, where it is the habit of people to look at the facts and not, perhaps, to be indulgent towards those dexterous phrases which lawyers are so capable of using, either to conceal their thoughts or to express them in language which can create all kinds of subsequent litigation. I listened very carefully to the debate on the last occasion, and I was particularly impressed by the speech of the noble and learned Viscount, Lord Dilhorne. I gathered from what he said that this was inherited legislation—that is, legislation which, had there been no General Election, would in due course have been brought forward by the previous Government.
VISCOUNT DILHORNE: I am sorry if I gave the noble Lord that impression. That is just the one thing I did not say. I said it had been drafted in the time of the late Government, but it had not come before the Government, when
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drafted, for consideration, and no decision had been reached as to its introduction.
LORD CITRINE: I see. So the difference really is that the skilled law officers of the late Government, conversant with the rules of equity, conversant from their political experience with a sense of right and wrong, conversant with the rule of law and with all that is attached to those phrases, thought it was perfectly proper to present a Bill of this character to the Government of the day for approval.
VISCOUNT DILHORNE: I am sorry to have to interrupt the noble Lord again, but of course the Bill was drafted by Parliamentary Counsel on the instructions of the Government.
LORD CITRINE: On the instructions of the Government. Surely, that is the whole heart of the case. Draftsmen would never dream of importing principles into a Bill unless those principles had been clearly expressed in some form, whether by memoranda, by consultation or in some such way. Although I know nothing at all about the methods of government, I am quite sure that that would be the fact. Really, it is a debating point rather than one of substance.
THE EARL OF SWINTON: Not having been in the late Government, I can say that there is all the difference in the world between instructing Parliamentary draftsmen to draft something and taking a Government decision that something ought to be introduced into the House. I think, in fairness, it should be made clear whether the late Government ever, in fact, said that this Bill would be introduced into Parliament or whether they did not. If they did not, then it is merely drafted.
LORD CITRINE: Again I must dissent strongly. I understand that the Parliamentary draftsmen are people of legal training who are employed for their skill at putting into language what other people want them to put into language. Those "other people" are usually either the Government of the day or officers of the Government of the day concerned with that particular section of legislation. So I must persist in my view that this Bill is, in substance, inherited legislation.

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I remember the strong support (in view of what the noble and learned Viscount, Lord Dilhorne has said, I hesitate to say "advocacy") that, to my mind, he gave for the basic principle of this Bill. In the course of that debate, he defended—if that is the right expression—first of all, the basic principle set down in this Bill, that no subject of this country has an inherent right to sue the Crown for damage which has lawfully taken place under the instructions of, or by the act of, the Government in the course of a war. I gather that that was the gist of what he said. If I am wrong—
VISCOUNT DILHORNE: I am sorry to interrupt again; but I would ask the noble Lord to look again at what I said.
LORD CITRINE: I was reading it only five minutes ago.
VISCOUNT DILHORNE: Read it again!
LORD CITRINE: Well, the Committee will recall what I said at the outset about lawyers.
I was wondering, as the debate was going on, whether, if this Bill had been presented under the ægis of a Conservative Government, there would have been quite the same indignation expressed on the Benches opposite. But I must say that I think that the indignation that was expressed on the previous occasion when the matter was debated (and even on the present occasion) was rather synthetic in character. Let us look at what we mean by "the rule of law". The rule of law, in two instances, showed that there was no precedent whatsoever, prior to this case, whereby a subject was thought to have the right to sue the Crown in circumstances of this kind. The noble Viscount, Lord Radcliffe, was cited as saying that there had never been a single case in the history of the law, so far as he knew. So, as far as the accepted law was concerned, until this decision of the House of Lords was made there had never been a case which gave a semblance of right to the individual to sue the Crown in the circumstances we are now debating. This right had been created, and has been created, by Judges—by men who are just as susceptible to human emotions as any of us. I do not elevate people, when they come to the
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Bench, into some kind of angelic conception where sprouting wings are visible when they are dealing with questions, some of which are of a semi-political character.
The noble and learned Lord, the Lord Chancellor, in his subsequent statement said that six appeal judges who had dealt with this case had come to the conclusion—and I hope I am quoting him correctly; but it is in the OFFICIAL REPORT—that the Burmah Oil Company had no case. I suppose that those were men of sound legal training: I suppose their integrity was at least as good as that of the Judges in the House of Lords who dealt with the case. Yet, if a majority of judicial opinion on this case had been taken, we should not have been debating it to-day. We are dealing, so far as I can see, with what is an interpretation put on the law by Judges who were, if we take the whole of the Judges of senior status who dealt with this case, in a minority. In other words, there is no right on the part of the subject to demand compensation. We are not now dealing with the fairness of the matter; we are dealing with the right of the individual to claim from the Crown compensation because of damage which he or she or, in the case of a company, they, suffered. I am not for one moment against people who have suffered damage being given some kind of compensation by the Crown; but that is entirely different from handing over to them the right to make that claim.
Let us look a little further than this case. Can there be any doubt that there were thousands of people who suffered damage during the war and who were only partially compensated? They expected nothing better; they thought it perfectly just that they should receive something. It needed a big company, who come along and make a claim of this kind, to say that that is not fair treatment. Let us look beyond this case and see whether we are in fact inviting companies, if this legislation is not passed, to make claims against the Government. I can see no end to the prospective litigation that would follow if this Bill were not passed. Although I was not present for the whole of the debate, since I had to attend to other business and I may therefore have missed something, I have heard nothing said on this aspect of the Bill: on the aspect of the right

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of the individual. Nobody tried to say that there was such a right. Practically the whole brunt of the discussion and of the arguments brought against the Bill have been brought against the retrospective subsection. Is that not correct?
A NOBLE LORD: That is what we are talking about this afternoon.
LORD CITRINE: I am glad to see a glimmer of agreement in noble Lords opposite. It gives me much encouragement. But the noble and learned Viscount, Lord Dilhorne, gave instances of retrospective legislation, as did the noble and learned Lord, the Lord Chancellor. I should have thought that somebody could have shown us the disastrous consequences that follows on this retrospective legislation. Instead of this, an attempt has been made to awaken our fears, and, through this House, the fears of the public, as to what would befall if retrospective legislation of this kind were passed. But no instance has been given to show that previous retrospective legislation had the disastrous consequences which are now predicted.
I now turn to something which I hesitate to say but which I must say in duty and in honesty to myself: this House is not a reflection of public opinion; it cannot be a reflection of public opinion. It is not an elected House; it is primarily an hereditary House, even to this day. Although noble Lords opposite may vote down this Bill in respect of its retrospective subsection, they will have taken a great responsibility on themselves in so doing. I see the noble Lord the Leader of the Opposition shaking his head. I do not know whether it is to cool himself or to show some sense of dissension from what I am saying.
LORD CARRINGTON: I did not mean to intervene, but I was dissenting. It seems to me that if we are denied the right to pass Amendments for reconsideration by another place, we might as well pack up.
LORD CITRINE: I think it would be an excellent thing for the country if a number of noble Lords did pack up and perhaps make it possible for something in the way of equity of debate and of voting to take place in this House. The noble Lords may troop into the Division
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Lobby, but that will convince nobody of the equity and right of their contentions against this Bill. I will conclude by saying this: sooner or later it may be that a quarrel will take place on some basic principles between this House and another place, and I am perfectly sure where the support of the people will go when that does take place.
5.30 p.m.
LORD FERRIER: I had not intended to intervene until the noble Lord, Lord Citrine, spoke, and I will say only a few words. The noble Lord said there was a synthetic element about the opposition to this Bill and the support for this Amendment on this side of the House. I will go along with the noble Lord, Lord Alport, who said that whatever Government had presented this Bill to this House, he would have voted against it, and so would I. I go further, and point out that I voted against the Second Reading. I say that to show, if I may with your permission, that this is not a synthetic feeling at all on the part of a hereditary Peer but on the part of a Life Peer.
I felt inclined to interrupt the noble Lord, Lord Brown, when he spoke and rather involved us in a discussion about law. This is not a Bill against the Burmah Oil Company; it is a Bill about principles. But, as a Scotsman, I would remind your Lordships that it is a Bill about Scottish law and the Scottish legal approach to principles and parties who want the right to claim. What claim they get, if anything, does not affect the principle and for that reason I should like to say, roundly and loudly, that I propose to support this Amendment.
5.33 p.m.
LORD WADE: I am not unduly concerned as to which Government is responsible for this Bill. I regard it finally as a fight against the Executive, and I do not think it is very helpful to suggest that the supporters of the Amendment are doctrinaire. Some day, if we lose the independence of the Judiciary, it will be too late for anyone to say that those who tried to uphold it were doctrinaire. Moreover, let it be remembered that it is the poor, the widows, the orphans, the individual, fighting against the Executive. It is persons of that kind who are protected by the independence of the

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Judiciary just as much as any powerful company, and we must be thankful for legal aid.
It may be helpful to consider to what extent noble Lords are in agreement. First, many noble Lords would agree that there is a case for amending the law in the future, and in saying that I do not accept the view that there is no doubt as to what the law was. I think there is considerable doubt, but I accept the view that there is a case for altering the law so far as the future is concerned. Secondly, as to the retrospective elements in this Bill, on Second Reading the noble and learned Lord the Lord Chancellor said that the proper course was to raise this by way of Amendment in Committee. I agree. That is precisely what my noble and learned friend Lord McNair has done to-day. So at any rate so far as procedure is concerned we are in agreement.
Thirdly, the noble and learned Lord the Lord Chancellor stated that so far as the general principle is concerned we all agree that retrospective legislation is objectionable. The only question is whether in the particular circumstances of this case we should depart from that general principle. I believe that there are overwhelming reasons for not doing so in this case. There have, of course, been many precedents put forward and I would readily acknowledge, so far as the Second Reading debate is concerned, that the noble and learned Lord the Lord Chancellor and the noble Lord, Lord Shepherd, put up as good a case as it was possible to make. I am bound to say that I admired the skill with which the noble and learned Lord the Lord Chancellor built up this wonderful edifice, but at the same time I must say that I thought the foundations were far from sound. I have examined all the precedents very carefully and I cannot find any that really justify the retrospective provisions of this Bill.
For example, there is the Charitable Trusts (Validation) Act, 1954, but by no stretch of the imagination can that be considered comparable with this Bill. In that case it was felt that the wishes of the testators expressed in good faith would be defeated if the law were not altered, but the Crown did not benefit from the change and this was not a case of action brought against the Crown. Personally, I think the most persuasive argument
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made by the noble and learned Lord the Lord Chancellor and the noble Lord, Lord Shepherd, was the assertion that the claimants in this case had received compensation and all had been treated alike. That was the foundation of the edifice to which I have referred. It was mentioned three times in the speech of the noble and learned Lord the Lord Chancellor, and it was mentioned again to-day by the noble Lord, Lord Shepherd. If it is true it does not necessarily justify retrospective legislation, but at any rate it has some persuasive effect. On the other hand, if it is incorrect then the whole edifice falls to the ground.
If one examines this case one finds that the money directed to be paid for rehabilitation was not compensation. There was no fund to be shared out pro rata among those who had suffered in Burma. I illustrated this point on Second Reading by mentioning the case of one individual who received nothing and is not entitled to receive anything from the rehabilitation fund, but who would receive some payment if he was allowed to bring his case at Common Law. It seems clear from one's observations that this fund which was paying for rehabilitation in Burma is not compensation as we understand it. This is not only my own view; it was expressed quite clearly by the Attorney-General in the Second Reading debate in the other place. Indeed he said that this is
"only on the basis of a contribution towards rehabilitation".
He also said:
"I entirely agree it was not compensation"—
THE LORD CHANCELLOR (LORD GARDINER): He went straight on to say that rehabilitation was a form of compensation.
LORD WADE: I was going to read the remainder of the sentence:
"I entirely agree it was not compensation in the sense of damages for wrongful acts or alternatively compensaton at Common Law."—[OFFICIAL REPORT. Commons. Vol. 705 (No. 49), col. 1207, February 3, 1965.]
I do not think one can regard this as compensation, nor was it paid pro rata among those who suffered.
I do not think I ought to take up your Lordships' time by referring to the Indemnity Act, 1920, because that has

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been referred to before, but before rejecting these Amendments I hope the Government will consider the effects of passing this Bill. One can see only too clearly what might happen in the future if this Bill is passed without Amendment. Some day some unfortunate subject will have a claim against the Government of the day. He may bring an action and he may succeed in the court of first instance, or he may have to fight it out in a higher court, but having succeeded the Government will say, "No; we are not going to stand for that. We are going to introduce retrospective legislation to prevent you from having the benefit of the action you have brought".
Judging by the number of precedents brought forward, the Government have searched the Statute Book to try to find precedents to support what they are doing, but if this Bill is passed I can foresee only too well what will happen in the future: they will not worry about the Charitable Trusts (Validation) Act; they will not even need to refer to the Indemnity Act, 1920, which set up a compensation fund; all they will do is to refer to the War Damage Act, 1965. I believe there are cases when Parliament senses that the Executive are going too far. I believe that the basic principles of our Constitution have been preserved only because Parliament has that sense. I believe that this is such a case, and I hope that the Amendments will be carried.
5.40 p.m.
LORD PARKER OF WADDINGTON: On the Second Reading of this Bill, I ventured to express, as strongly as I could, my views against retrospective legislation. Those views will certainly be no better and more persuasive for being repeated, and therefore, I do not propose to do so. It seems to me that almost everything has now been said, on one side or the other, for or against these provisions. But, at the end of the day, or of this afternoon, the broad facts as we see them are as follows.
First, the provisions are, as the noble and learned Lord the Lord Chancellor said, contrary to the rule of law. Secondly, they are confiscatory, taking away property without compensation. And when I say, "without compensation", I am not dealing with the point as to whether it is compensation or rehabilitation. I am quite prepared to concede that
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something by way of compensation has been paid. But, after all, it is compensation paid by the Government of the day, as judged in its own courts. Certainly in the courts there is a principle that "justice must be seen to be done", and this Bill hardly falls within that principle. Thirdly, it provides for the setting aside or dismissal of proceedings in which a subject has been confirmed by the highest tribunal in his right to claim such damages as he can. Fourthly, and still more amazingly, a court is required to set aside the proceedings on the application of a defendant, who has lost his case and who seeks to avoid the incidence of that loss.
No one can say—and I do not want to put this too high—what effect these provisions will have upon the reputation and standing of this country in the world. Nobody can suggest that they will improve that standing; indeed, in one way they will do infinite damage, which we shall all regret. It so happens that this June we in this country and the people of the United States of America shall be celebrating the 750th anniversary of Magna Charta. Your Lordships' attention has been drawn to the fact that Chapter 40 provides that:
"To no one will we deny or delay right or justice."
In the past, there have been many attempts to contravene that principle. All those we have resisted. Is it really to be said that, in this 750th year, we are to sweep all that aside? I venture to think that your Lordships will give an emphatic, No.
5.44 p.m.
THE LORD CHANCELLOR: It is very nice, is it not, to have an afternoon, or part of an afternoon, when we can all discuss something which is not a question of Party politics? This is a case which six successive Governments have had to consider and in which the Burmah Oil Company have received £4¾ million (whether we choose to call it compensation, or whatever word we like, that is what they have had, for the damage they suffered during the war. Four Conservative and two Labour Governments have had to consider this matter, and they have all come to the same conclusion. I am not in the least advancing that as an

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argument for saying that they were right. The good Englishman will consistently, I hope, be against all Governments. But at least it shows that this is not in any way a Party question.
The Government's case, like the cases of previous Governments on this point, is fairly simple. It consists of three propositions. The first is that retrospective legislation is wrong and contrary to the rule of law. The second proposition is that there may be exceptional circumstances which justify a departure from that rule. And the third proposition is that this is one of those cases.
If I may examine those propositions for a moment, I do not suppose that any noble Lord in any quarter of the Committee differs from the first proposition: that, in general, retrospective legislation is wrong. Little has been heard in the debate of the reason for it. As was pointed out by the noble and learned Viscount, Lord Dilhorne, on Second Reading, the alteration by the Legislature of the judgments of a court is a form of law reform. A great many of the Acts of Parliament which are passed every year have the effect of altering people's legal rights for the future and of modifying decisions which judges have made. Nobody regards that as an attack on the Judiciary. It is for Parliament to decide whether they do or do not agree with the law as laid down by the judges, and to alter it, if they so choose, for the future.
So that retrospective legislation is not objectionable because it is changing the law, or because it is changing somebody's existing legal rights. We have done this two or three times to-day: in relation to licensing in Scotland, and the qualifications for magistrates' clerks. These changes interfere with people's legal rights. That is what Parliament is for, if it does that for the future. What is objectionable, in general, about retrospective legislation (and so far as I know this is the only objection that has ever been given against it), is that as men go about their daily affairs they are entitled to act according to the law as it is. It was, I think, the noble Lord, Lord Wade, who referred to a statement made in Wade and Phillips:
"Retrospective laws, are, however, prima facie of questionable policy and contrary to the general principle that legislation by which
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the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts and ought not to change the character of past transactions carried on upon the faith of the then existing law."
This is why, if ever one is considering retrospective legislation, one looks to see how far the people whose legal rights are being interfered with retrospectively did what they did because they were acting on the faith of the existing law. It is this that is the very backbone of the objection to retrospective legislation. I assume, therefore, that we all agree for that reason, but only for that reason, that retrospective legislation is in general wrong.
As to the second proposition, I am not sure how far all your Lordships agree with it—that is, the proposition that while that is so in general, there are exceptional cases in which retrospective legislation is justifiable and, indeed, is the only equitable thing to do. The noble and learned Lord, Lord McNair, said that we should all agree with that. I am not sure whether we do all agree with that. Some noble Lords, I thought, indicated that they thought that retrospective legislation was always wrong. In the instances in which we have in the past so legislated, whether rightly or wrongly, those laws were almost invariably accompanied by the very objections which the noble and learned Lords, the Lord Chief Justice and Lord Morton of Henryton, gave. Where there has been retrospective legislation it has generally enabled the Crown to stop an existing action and to reverse an existing custom. Obviously, to take the point of the noble and learned Lord, Lord Parker of Waddington, it is retrospective, because that is what we are talking about. They were cases which often left the nation the judge in its own cause as to what the compensation should be, and in some cases involved the dismissal of proceedings in which the subject had succeeded. I can understand the argument—"I am against retrospective legislation in any circumstances whatsoever, and wherever it has been done in the past it ought not to have been done." But if one accepts, as the noble and learned Lord, Lord McNair, does (and he said that we should all agree), that there are circumstances in which it is justifiable then one comes to the Government's third proposition, that this is such a case.

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The general nature of the Government's case is really simple enough—namely, that in 1914 something happened which had never happened before. Before then, wars, in substance, were conflicts between professional armies. But now, for the first time, we had a world war and not only in this country, but in others, nearly every citizen suffered damage. Some, as has been pointed out by the noble Lord, Lord Brown, lost eyes or limbs. Some were rather luckier, and only suffered monetary loss, but some loss. For a man to lose his home from bombs or to lose the little shop which is his means of livelihood is a great loss. But we could not afford to compensate everybody, because the economic condition of the country did not allow of it. So in that war the Government decided what they thought would be fair compensation, and everybody else was deprived of his legal rights.
The Government's case here is that in the last war the position was exactly the same. We were not unsympathetic to these claims. They totalled £165 million in Malaya and £160 million in Burma. And as the noble Lord, Lord Shepherd, has pointed out, in all these cases we paid the European Burma claim, £67 million, of which £60 million was denial damage. These were exactly the same cases as the Burmah Oil Company's. In all these cases we paid approximately the same proportion: in Malaya 8 per cent., in Borneo 6 per cent. and in Burma 7 per cent. And we said, "We are sorry, but we cannot afford any more".
The same thing happened in 1920. The 1920 Act of course goes very much further than this, because the House may remember that that Act provided that:
"No action or other legal proceeding whatsoever, whether civil or criminal, shall be instituted in any court of law for or on account of or in respect of any act, matter or thing done, whether within or without His Majesty's dominions, during the war before the passing of this Act, if done in good faith, and done or purported to be done in the execution of his duty or for the defence of the realm or the public safety, or for the enforcement of discipline, or otherwise in the public interest… and, if any such proceeding has been instituted"—
this is coming to the learned Lord Chief Justice's point—
"whether before or after the passing of this Act, it shall be discharged and made void, subject in the case of a proceeding instituted
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before the twentieth day of July, nineteen hundred and twenty, to such order as to costs as the court or a judge thereof may think fit to make".
It then goes on to provide that nothing in the Act is to stop the Government from suing a citizen.
This came before Parliament, and the circumstances were substantially the same. Sir Ernest Pollock (and I think the noble and learned Lord, Lord McNair, would agree that there was no lawyer of greater integrity) said: "Here is the position. Take shipping. We simply could not afford in the war to give to ship owners whose ships had been requisitioned and sunk and so on, that which would compensate them adequately for their loss. And we said to them: 'This is all we can afford to do'". And the Government agreed, and everybody agreed, that that was the most that we could afford.
Most of them accepted the compensation and said: "Thank you very much. We quite appreciate the position." But one or two "smart Alicks" among the shipowners issued writs and said: "We are going to get ahead of all our competitors. We are going to get more than anybody else. We are going to rely on our legal rights."
This was the situation which faced the country, and Sir Ernest Pollock, on behalf of the Government, said this:
"Shipowners, I think, as a whole, have acted quite patriotically, and have accepted the rates. They have suffered great losses but, broadly speaking, have bent their energies to the common weal. I should be very sorry to make any distinction, or to suggest that that was not true of any class, but I am pointing out the difficulties which particular classes may have had. I think, however, that what this House, and those who have already settled their claims, would deprecate, is that there should be a new and larger measure of compensation in the future for those persons who have not been ready, so far, to accept the compensation which others have accepted, and that those persons who, so to speak, stood out for their rights, should get those rights, while those who were prepared, for the public weal, to take less and make an end of the matter, should be paid less compensation.
"As we stand here to-day there is only this one course that I can see. You must either reopen the cases for all alike"—
that applied here would apply to the whole of the £60 million for Burmah, and also Malaya—
"or you must stand by the principles which have been drafted and put into operation for

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so long a period. To reopen the whole system for those who waited would be to do an injustice to those who settled their claims, and I think I am on firm ground when I say that in fairness to those who, during the five years, made as little difficulty as possible, it is right that we should continue that system."—[OFFICIAL REPORT, Vol. 128, col. 1756; May 3, 1920.]
Then in the course of the debate Sir Frederick Banbury asked whether the Bill would have the effect of overriding one decided case, namely, the Newcastle case, and Sir Ernest Pollock said:
"It would override the decision in the Newcastle case and decisions which depend upon it."
Sir Ernest Pollock later said:
"We cannot put the clock back to the days before the War. It is quite impossible to give everybody their rights, direct and indirect, we must look at the subject as a whole, and at the point of view of the community as a whole."
Then Sir Frederick Banbury said that he disagreed—and this is a point of view which anybody can take on retrospective legislation. But having considered the position which arose when it came to a Division Members who voted against the Bill numbered only 28.
When the Bill came to your Lordships' House, the noble and learned Lord, the Lord Chancellor, Lord Birkenhead, explained the position, and Lord Sumner (and I think the noble Lord, Lord McNair, will agree that there was no more learned noble Lord) said this:
"The responsibility for introducing such a measure as this is undoubtedly great, because it does two things which, I am quite sure, the Government themselves would recognise as being usually objectionable. The first is that it closes the Law Courts to litigants who have the right of entering them. It says in terms—and that is the object of the Bill—that no action or other legal proceeding shall be brought, although the citizen may have been wronged and may have a legal remedy which he is entitled to bring before the Courts by means of an action. It says furthermore—and it has been very candidly explained to us by the noble and learned Lord on the Woolsack—that it proposes to lay down in certain classes of wrongs a rule as to compensation which docks the person entitled of a very considerable proportion of that which he might be entitled to if he were allowed to go to law. I think everyone would agree that any tendency—and there has been such a tendency at times—to withdraw various classes of legally contentious issues from the jurisdiction of His Majesty's Courts is a tendency very much to be deprecated. But this is an exceptional case. It arises out of wholly exceptional circumstances …"
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The circumstances out of which that Act arose were World War I. The circumstances out of which the present claim arises are World War II. We have, perhaps, some disadvantage, in so far as that Act was being discussed only two years after the war had ended. I wonder what view people would have taken if the suggestion that these particular claimants should be paid so much more than anybody else had come on for decision in 1947, when people's recollections as to what they had all suffered were very much clearer.
I have only heard one suggestion as to why the position under the 1920 Act was any different from the position here. It is said that the 1920 Act is different because it provided for compensation. There are two answers to that. The shipowners who held out had not at that date had any compensation, whereas here these claimants have had the £4¾ million, which is the same proportion that all similar claimants have had. Secondly, it is a false point, because your Lordships may remember that I pointed out, in reading Section 1, that it took away all rights of anything in respect of damage to property whether within or without His Majesty's Dominions. The Schedule which did provide for compensation was limited, so far as damage to property was concerned, to property in this country. So that if the point had been the same as in this case, the Burmah Oil Company could have got nothing at all. In every other respect it is entirely comparable.
LORD ALDINGTON: Surely the noble and learned Lord will not mislead the House. So far as I recall, the Act had provision for extending it to places in His Majesty's Dominions outside.
THE LORD CHANCELLOR: The provision for compensation. There was nothing to stop anybody, if he could get the certificate of the Attorney General, from suing somebody outside. But I think the noble Lord will find that the provisions which provide for compensation, so far as property is concerned, were limited to property in this country. Section 2(1)(b) of the Indemnity Act, 1920, says:
"… who has otherwise incurred or sustained any direct loss or damage by reason of interference with his property or business in the United Kingdom…"
LORD ALDINGTON: If the noble and learned Lord looks at Section 7(2), he will see that it says:
"His Majesty in Council may, by order, apply this Act to any part of His Majesty's dominions outside the United Kingdom…"
THE LORD CHANCELLOR: The subject whose rights were being taken away was not, by this Act, given any legal right in respect of any damage suffered outside the United Kingdom. So the legal rights were taken away, and they were not given any legal rights back.
The point in this case, at the end of the day, is really the same: is it right that in the last war, in which we could not possibly afford to compensate everybody to the full, these companies, because they took a 1,000 to 1 chance (which poorer litigants could not have afforded to do, in going to the House of Lords), should receive at the end of the day a different measure of compensation from the others? What are your Lordships going to say when the other claimants, who were in exactly the same position, come along and say: "We understand that the time has expired, but we feel that, as a matter of morality, if the British taxpayers are going to pay the oil companies, they ought to pay us."
We have acted exactly similarly in a great many other cases. I do not want to take up much time with them, but I should like to refer shortly to them, because they illustrate the sort of exceptional circumstances in which retrospective legislation is justifiable. I mentioned on Second Reading the case of the Attorney-General v. Wilts. United Dairies, in 1922. In that case your Lordships' House decided that a licence granted by the Food Controller to the company to sell milk in their district, subject to a levy of 2d. a gallon—because other districts got a subsidy paid for by the levy—was ultra vires. The Government then found that there had been a number of other charges made by Government Departments on the same footing which were also ultra vires, and they introduced the War Charges Validity Bill. This Bill had a curious history, because your Lordships may remember that about that time there were several changes of Government, and whenever this Bill was put forward there was usually a General Election. But each Government in turn was
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going to have retrospective legislation; and they did.
It was argued in another place that this was unconstitutional, because it was retrospective. In another place there were only seven speakers on the Second Reading, and while somebody said, "This is unconstitutional because it is retrospective", there was no Division. Yet that was an Act in extreme terms, because it not only validated very large numbers of charges made by the Food Controller, the Board of Trade, the Ministry of Munitions and the War Office, but it provided that:
"Any sum so charged on any person but not levied or paid before the commencement of this Act may be recovered as a debt due to His Majesty."
The milk company and everybody was held to be entitled to get their money back, and the Food Controller could not recover against it. These proceedings were, in effect, compensation without the authority of Parliament. Accordingly the Act said:
"No proceedings whatsoever shall be instituted by any person in any court of law or before any other tribunal whatsoever for the repayment to him of any sums so levied as aforesaid, or for compensation in respect of the making of any such levy, and if any such proceedings have been instituted before the date of the passing of this Act, they shall be discharged and made void, and any judgment of any court or tribunal obtained after the eighteenth day of December, 1924"—
the year before—
"in any such proceedings shall be void."
That is another case in which, when the Bill came before your Lordships' House on its Second Reading, Lord Banbury of Southam moved an Amendment, "That the Bill be read a second time this day six months." He said:
"I venture to say that this is an extremely bad precedent which we ought not to follow and which we ought not to allow."
The noble Marquess, Lord Salisbury, pointed out that if the Amendment was carried the Bill would only go back to the Commons. The same sort of arguments as were used in another place were advanced here, and ultimately the Amendment was negatived without a Division. This was another case in which the existing rights of the subject were taken away from them. An amount of about £18 million was involved. Nobody's legal rights were in question. It was conceded—it had to be conceded in

343
law—that all these charges made by these different Ministries were invalid, but as a matter of common sense, because they had all resulted from a slip, their legal rights were taken away from them and existing decisions were overruled, and they were prevented from continuing with their actions.
Let me take another class of case, which has already been referred to. In 1940, your Lordships' House decided a case in which a packer who had been employed for fifteen years by some wholesale traders, on terms that he got so much a week and his dinner and tea, valued at 10s., took the view, rightly or wrongly, that this was contrary to the Truck Acts. Being a persistent man, he brought the case up to your Lordships' House, who said that he was right. He recovered £397, which I think represented 10s. a week for the previous fifteen years. This meant that thousands of workmen had legal rights: the court had decided the law, so they were entitled to it as a right. Accordingly, the Government issued a warning. I remember the noble Lord, Lord Conesford, spoke very strongly about the warning given by the Government in this case. I have never understood that. I am not a notorious enthusiast of the last Government, but I never understood this point at all.
I can understand people saying that no Government ought ever to introduce retrospective legislation, but if a Government are right in deciding, as in the Truck Acts case, to introduce retrospective legislation I can imagine nothing more unfair than allowing litigants to go on increasing costs without warning them what they are going to do; and that is why in all these cases you always find the Government giving a warning by saying, "We may be right or wrong, but we are going to introduce retrospective legislation and therefore it is no good complaining to us about anything you spend from now on; we are going to make it retrospective to to-day". Here also was a case in which the same kind of retrospective legislation was brought in, taking away again the legal rights of all these workmen—and I am assuming of course that the law is the same for workmen as it is for oil companies. This was in substance a Parliament of employers taking away legal rights,
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according to what the courts had decided, which these men were all entitled to. In another place he was referred to as the fortunate and persistent Mr. Pratt.
LORD CONESFORD: If the noble and learned Lord will allow me to intervene, I did deal with this in my speech this afternoon. The precedent is one of correcting a slip, where the transaction that gave rise to the case could have been lawfully effected in a slightly different way. Why I say the present claims dealt with in this Bill are on quite a different footing, is that here there are people saying they have claims at Common Law. The Government said they have not, and on that they litigate and go to the highest tribunal. I suggest it is improper to say, "We believe you are entirely wrong but, should the court decide you are right, we will deprive you of your victory by legislation".
THE LORD CHANCELLOR: It has already been said in this debate that legal rights are a form of property and these men have those legal rights. It might have been one thing to alter it for the future, for any further contract of that kind, but that was not done; their existing legal rights were taken away from them.
"In respect of anything done … and any such action or other legal proceedings as aforesaid, whether civil or criminal, instituted before the commencement of this Act shall be discharged and made void"
subject again as to costs. He was referred to as the fortunate and persistent Mr. Pratt, just as I suppose one might refer to the fortunate and persistent oil company. But it was said that some thousands in London alone had these legal rights; some men were entitled in law to between £600 and £700, and many other actions had been started, and the then Government did not hesitate in the case of those legal rights to take them away retrospectively. That was a Government which included Mr. Churchill (as he then was), Mr. Attlee, Mr. Butler, Mr. Bevin, Sir William Jowitt, Lord Simon, Mr. Macmillan. In your Lordships' House the same argument was put. Retrospectively taking away the legal rights of large numbers of employees was, it was said, a monstrous thing to do. But the Second Reading in all only took a very few minutes and again there was no Division, no Committee stage, no debate on

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the Third Reading. It was thought in all the circumstances it was not an unfair thing to take their rights away.
The case of the Charitable Trusts (Validation) Act has been mentioned. There, next of kin had legal rights to money which testators had intended to go to charity, but it did not, and your Lordships' House had held that it was the heirs, the next of kin, who were entitled to the money. I again read the debates both in another place and here, and all were extraordinarily similar to the arguments used here. Some said, "You are taking away their legal rights retrospectively and this is quite wrong". It was said that this was retrospective legislation of the most unusual kind to the prejudice of the persons who in law now have an entitlement; but the Government thought that in the circumstances of the case retrospective legislation depriving people of considerable sums to which they were in law entitled was a fair thing to do. And here again, of course, the Government at that time included most of those to whom I have already referred, including the noble and learned Viscount. Lord Kilmuir (as he then was), Lord Hawke and other Members of this House, and again there was no Division, and although there was a short argument the whole Bill was dealt with in less than an hour.
Then there was the wireless case, which is the last one I think I need mention. I did refer to this before. Your Lordships may remember that what happened was this. It was found that under the provisions of the Post Office Acts fees could be charged for wireless services according to regulations to be made at the consent of the Treasury, and for many years it had never been noticed that, although the fees had been charged, the regulations had never been made. Here again was an act which was retrospective, and again in another place and here some very strong things were said during the course of the debate, because although the noble Lord, Lord Alport, who was then in another place, supported it and said he thought most Members on both sides would support the Bill, others—Mr. Weitzman, he may remember—delivered a very savage attack on the Bill as being retrospective legislation with which they could never agree at all. I appreciate from what
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several noble Lords have said that there is this general feeling against retrospective legislation. Here there was no question of legal rights, because the Government, when it came to the point, threw in their hands and submitted to judgment and said, "All these fees have been illegal; they have been taxation without the authority of Parliament". And again exactly the same warning was issued—quite rightly—warning that it was no good issuing a writ following the successful plaintiffs who got their judgment, because they were going to introduce retrospective legislation to take their legal rights away. I should have thought that to give warning was a perfectly proper thing to do if they were going to introduce retrospective legislation, and so they did.
I can quite understand the argument that this is wrong and one should never take away other people's legal rights retrospectively—because if you do, just think what will happen in Ghana. All these arguments we have heard apply to all these cases. But I do not think that the Indemnity Act 1920, led to international constitutional difficulties. It is true that everybody's right of action was destroyed in all those cases, but I do not know of any ground on which anybody can truthfully say that there were what have been called repercussions from foreign parts. I do not think anybody said, what a shocking thing to happen in Britain!" I can understand that in cases of this sort people might say, "If the Government has messed the thing up and charged these sums without authority because they did not make the regulations, why should not they be the people to suffer? Why should the people entitled to the money suffer? There has been a case; the courts have decided it. We do not want the Executive interfering with what the Judiciary have decided. The court has decided that all these people are entitled to their money back". I am not in the least saying that it is not possible to take that view. And I have observed in most cases there is usually one member or somebody who rather complains.
LORD ALPORT: Would the noble and learned Lord allow me to interrupt? He has quoted a most impressive list of precedents in justification of this act. He has given us the details of them. Are we

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from that to assume that he regards the action of the Government and Parliament on each of these occasions as being justified in the circumstances when the action was taken?
THE LORD CHANCELLOR: I think so. I have considered all this. Take the wireless case. Noble Lords who are against any retrospection really must face the fact that in a case like that there are only two alternatives; either to introduce retrospective legislation back to whatever date of account you are going to do it from, or to employ a vast army of clerks—the amount involved was, I think, £17½ million—to pay back to millions of people £4, £1, £3 or £2. Where they are dead you have to find the executors and see what they are entitled to. Then, when you have done that, you have to levy additional taxation to provide not only for the money you have paid back, but also for the cost of paying it back. And when you have done it, all you have done is to repay their wireless fees to those who used the wireless and were quite happy at the time to pay, and you have put it on the backs of those people who in some cases have not used the wireless, but who were all taxpayers and were the same people. It would not have made sense. I should have thought retrospective action was the only sensible and fair thing.
If one comes again to the facts of this case, as your Lordships know, the position is that the claimant companies have had exactly the same proportion as all others who were similarly situated, it being a war in which we could not possibly afford to compensate everybody 100 per cent. I think it was said in World War I by Sir Ernest Pollock that if all the shipowners had had their deserts it would have cost the country, so far as shipping alone was concerned, another £550 million. No such large figures are involved here. The claimant companies in question here are claiming £31 million, and there is a further £8 million claimed by companies who issued their writ but whose claims have been stayed pending the hearing.
The four claimant companies are the Burmah Oil Company (Burmah Trading), the Burmah Oil Company (Burmah Concessions), the Burmah Oil Company (Overseas), Limited, and the Burmah Oil
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Company (Pipe-lines), Limited. The companies which remain include the Indo-Burmah Petroleum Company, Limited, the Shell Company of Hong Kong, Limited, and the Shell Company of India, Limited; and the total claims come to over £39 million. But that is without interest. They are also claiming interest back to the time when they say it ought to have been paid. They are claiming interest at 5 per cent. If that is at simple interest, it brings the claim to £84 million; if it is at compound interest, it is £124 million.
The question at the end of the day is, having regard to the nature of a world war, having regard to the fact that the war-time Government did their best, in relation to widows' pensions and disablement pensions, war damage insurance and compensation of various kinds, to compensate so many people who suffered damage of one kind or another in the war, is it equitable or just that, taking a 1,000 to 1 chance on a case coming to the House of Lords, and without now paying more compensation to others who suffered in exactly similar circumstances and exactly the same damage, these claimants, and they alone, should be the only people who, throughout the whole of the war, received their war damage 100 per cent.?
It has been the view of each successive Government that that would not be right. It was, of course, originally considered by the post-war Labour Government, when Sir Stafford Cripps expressed that view in a Government in which the noble and learned Lord, Lord Shawcross, was then the learned Attorney General.
LORD SHAWCROSS: Would the noble and learned Lord allow me to intervene? I hope he is not going to refer to the opinion that I and the learned Solicitor General gave at that time. If he is, I should wish to say something to the Committee about it.
THE LORD CHANCELLOR: I was not going to refer to that opinion because I did not think it would be right. But the Government which took the decision was a Government of which the noble and learned Lord was a member. In 1951 the Burmah Oil Company tried again, and Mr. Butler, when Chancellor of the Exchequer, took the same view. In 1955, they tried again, when Mr. Macmillan was Chancellor of the Exchequer, and

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that Government took the same view. It is rather like the persistent and fortunate Mr. Pratt. In the 1957 Government they tried Mr. Selwyn Lloyd, and then in the 1961 Government they tried Mr. Maudling.
I quite agree that because so many Governments took the same view it does not necessarily show that it is right. They have certainly been consistent. But I do suggest that the Government are right in saying that it would be grossly unfair and inequitable to all the others who suffered in the war. After all, all of us, as taxpayers, have already put our hands in our pockets for £4¾ million for this oil company. This we did not grudge, because the war-time Government said that that was the fair amount to pay them. But this Amendment means that people, many of whom suffered damage, whether physical or financial, from the war, are to put their hands in their pockets for what may be £100 million.
The Government are not thinking of themselves in this matter. They are thinking, as Governments do, of what in all the circumstances is the fair thing to do. Therefore, if we are all agreed that while retrospective legislation is in fact
generally wrong and contrary to the rule of law, there are cases in which it is justifiable and is really the only equitable thing to do, I suggest that this case comes clearly within a number of past precedents and, more particularly, what happened in 1920; and that this Government are right in saying that it would be quite wrong, and unfair that taxpayers and others of our citizens, nearly all of whom put up with damage of one kind or another suffered in the war, without, in many cases, getting any compensation, at all, should, so long after the war, again have to put their hands in their pockets. All the others, even in Burma, who suffered £60 million worth of damage, all of which was denial damage, have had only one-seventh compensation, which was all the country should provide, and I suggest that it would be quite wrong that these claimant companies should have any more.
6.33 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 144; Not-Contents, 69.

CONTENTS

Aberdare, L.

Conesford, L.

Henley, L.

Aberdeen and Temair, M.

Congleton, L.

Horsbrugh, Bs.

Adrian, L.

Cornwallis, L.

Howard of Glossop, L.

Ailwyn, L.

Cottesloe, L.

Howe, E.

Airedale, L.

Craigmyle, L.

Hylton, L.

Aldington, L. [Teller.]

Crathorne, L.

Ilford, L.

Alexander of Tunis, E.

Crawshaw, L.

Inglewood, L.

Alport, L.

Croft, L.

Keyes, L.

Amherst, E.

Cullen of Ashbourne, L.

Killearn, L.

Amory, V.

Daventry, V.

Kilmarnock, L.

Ampthill, L.

De La Warr, E.

Kirkwood, L.

Amulree, L.

Devlin, L.

Latymer, L.

Atholl, D.

Digby, L.

Layton, L.

Baden-Powell, L.

Ebbisham, L.

Limerick, E.

Baillieu, L.

Effingham, E.

Lloyd, L.

Barnby, L.

Ellenborough, L.

Long, V.

Barrington, V.

Elliot of Harwood, Bs.

Lucas of Chilworth, L.

Belstead, L.

Emmet of Amberley, Bs.

Lytton, E.

Bledisloe, V.

Falkland, V.

Mabane, L.

Boothby, L.

Falmouth, V.

McCorquodale of Newton, L.

Boston, L.

Ferrier, L.

McNair, L.

Boyd of Merton, V.

Foley, L.

Mancroft, L.

Bridgeman, V.

Forster of Harraby, L.

Massereene and Ferrard, V.

Brocket, L.

Fortescue, E.

Maugham, V.

Burton, L.

Fraser of Lonsdale, L.

Merthyr, L.

Carnock, L.

Furness, V.

Meston, L.

Chandos, V.

Gladwyn, L.

Milne, L.

Chelmer, L.

Godber, L.

Milverton, L.

Clitheroe, L.

Gorell, L.

Molson, L.

Cohen, L.

Grantchester, L.

Monsell, V.

Coleraine, L.

Greenway, L.

Monson, L.

Colgrain, L.

Grenfell, L.

Morton of Henryton, L.

Colville of Culross, V.

Grimston of Westbury, L.

Mottistone, L.

Colyton L.

Hayter, L.

Mountevans, L.

Moynihan, L.

Russell of Liverpool, L.

Swansea, L.

Ogmore, L.

Selkirk, E.

Swaythling, L.

Parker of Waddington, L.

Shawcross, L.

Swinton, E.

Parmoor, L.

Sherfield, L.

Tangley, L

Pearson, L.

Silsoe, L.

Tenby, V.

Poole, L.

Sinclair of Cleeve, L.

Terrington, L.

Rathcavan, L.

Sinha, L.

Teynham, L.

Rea, L.

Slim, V.

Thurlow, L.

Reading, M.

Soulbury, V.

Tweedsmuir, L.

Redesdale, L.

Southborough, L.

Verulam, E

Remnant, L.

Stamp, L.

Wade, L. [Teller.]

Robertson of Oakridge, L.

Strathalmond, L.

Wolverton, L.

Rowallan, L.

Strathclyde, L.

Wrenbury, L.

Runciman of Doxford, V.

Swanborough, Bs.

Yarborough, E.

NOT-CONTENTS

Addison, V.

Eccles, V.

Morris of Kenwood, L.

Arwyn, L.

Erroll of Hale, L.

Morrison, L.

Beswick, L.

Faringdon, L.

Nathan, L.

Blackford, L.

Francis-Williams, L.

Newton, L.

Blyton, L.

Fraser of North Cape, L.

Peddie, L.

Bowden, L.

Gaitskell, Bs.

Phillips, Bs.

Bowles, L. [Teller.]

Gardiner, L. (L. Chancellor.)

Reay, L.

Brecon, L.

Geddes of Epsom, L.

Rhodes, L.

Brockway, L.

Granville-West, L.

Rusholme, L.

Brown, L.

Harvey of Tasburgh, L.

Sainsbury, L.

Carrington, L.

Hawke, L.

St. Aldwyn, E.

Chalfont, L.

Henderson, L.

St. Helens, L.

Champion, L.

Hobson, L. [Teller.]

Sandford, L.

Citrine, L.

Hughes, L.

Segal, L.

Collison, L.

Hurcomb, L.

Shackleton, L.

Colwyn, L.

Iddesleigh, E.

Shannon, E.

Crook, L.

Jessel, L.

Shepherd, L.

Denham, L.

Leatherland, L.

Simonds, V.

Derwent, L.

Lindgren, L.

Snow, L.

Devonshire, D.

Listowel, E.

Sorensen, L.

Dilhorne, V.

Llewelyn-Davies, L.

Stonham, L.

Drumalbyn, L.

Longford, E. (L. Privy Seal.)

Summerskill, Bs.

Dundee, E.

Mitchison, L.

Taylor, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
LORD MCNAIR LORD MCNAIR: I beg to move.
Amendment moved—
Page 1, line 11, leave out ("was or").(Lord McNair.)
LORD McNAIR: I beg to move this Amendment, and I wish to add that, in our opinion, subsection (2) is even more obnoxious than subsection (1).
Amendment moved—
Page 1, line 12, leave out subsection (2).—(Lord McNair.)
Clause 1, as amended, agreed to.
Clause 2 agreed to.
House resumed: Bill reported, with Amendments.

CEREALS MARKETING BILL
6.47 p.m.
Order of the Day for the House to be in Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Champion.)
House in Committee accordingly.
[The LORD MERTHYR in the Chair]
Clauses 1 to 12 agreed to.
Clause 13.—[Orders prescribing rates of levy]:
On Question, Whether Clause 13 shall stand part of the Bill?
EARL FERRERS: There is only one small point with regard to Clause 13 about which I should like to ask the noble Lord, Lord Champion. This clause deals with the question of raising the levy for the purposes of the Cereals

353
Authority's functions. I am not quite certain from the clause whether the levy is to be of a uniform character throughout the whole country, or whether it will vary according to the parts which are described in Clause 24 on page 19, where subsection (6) says that the various parts of the United Kingdom are, first, England and Wales, secondly Scotland and thirdly, Northern Ireland. The question which I should be grateful if the noble Lord would clarify is whether the levy can be different in each of these parts of the United Kingdom, or whether in fact it is uniform throughout the whole area.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION): I am grateful to the noble Earl for raising this point. This doubt is one which I know exists, but I am very happy to clear it up. I indicated in the course of the Second Reading debate that I cannot say what the rates of the levy will be until the Authority make their estimate and submit that estimate to the Ministers, who will then make an order, after the fullest consultation with the appropriate Farmers' Unions. I can also say that, whatever decisions may be taken about the rates of levy and the kinds of cereals to be covered, the Government propose that there should be one single uniform rate of levy throughout the United Kingdom for each kind of cereal involved. This is the basis on which the Bill has been drafted, and we arc satisfied that it is the right basis. The object of the Bill is to improve the marketing of homegrown cereals throughout the United Kingdom. The payments under the Deficiency Payment Scheme from which the levies will be deducted in the ordinary way are made at the same rate throughout the United Kingdom. It is right, therefore, that the levies should also be made at the same rates throughout the country.
I believe that this completely answers the noble Earl's question. It is a point that has raised some little doubt in people's minds, and I am grateful to him for putting this question and so enabling me to deal with the point.
EARL FERRERS: I am grateful to the noble Lord for answering it so clearly. It was a point that was open to doubt; and I am very glad to know that it will
354
in fact be a uniform levy. I am sure that from his point of view and from that of his Department, it will be far simpler to administer as such.
Clause 13 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported without amendment; Report received.

SWEEPSTAKES ON HORSERACES (AUTHORISATION) BILL [H.L.]
6.53 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Jessel.)
House in Committee accordingly.
[The LORD AILWYN in the Chair]
Clause 1 [Promotion of sweepstakes on horseraces]:
LORD AIREDALE LORD AIREDALE moved, in subsection (2), to leave out paragraph (a) and to insert instead:
"(a) that the sweepstake is promoted and conducted by the body nominated for that purpose by the Secretary of State under subsection (5) of this section, or by the person who has been granted the right to do so by the said body;".
The noble Lord said: I hope it is in order to say how glad we are that the noble Lord, Lord Jessel, who is this Bill's pilot, if not jockey, is fully restored to health and strength.
This Amendment—and I think that this one and No. 11 stand or fall together—stems from opinions expressed during our Second Reading debate by noble Lords opposite, who objected to the idea of a national lottery being run in any way for private profit. I must confess I have some sympathy with that point of view. Perhaps it is not altogether a satisfactory arrangement for Parliament to create special opportunity for private interests to make a profit out of gambling, not because gambling is wrong or immoral but because it is unproductive, it does not help the national interest and is not, therefore, something for which Parliament should provide special opportunities for private enterprise.
I have therefore tabled this Amendment, which would at least enable the body nominated by the Home Secretary itself to conduct the lottery. In that way Parliament would have some sort of control over the profits derived from the lottery and over the way those profits were devoted. The kind of body that I envisage as performing this task is something on the lines of the Horserace Totalisator Board—a body of that kind, which could itself run the lottery. I beg to move.
Amendment moved—
Page 1, line 14, leave out paragraph (a) and insert the said new paragraph.—(Lord Airedale.)
LORD JESSEL: First of all, I should like to thank the noble Lord, Lord Airedale, very much for his kind words about me; and I would apologise to the House, and especially to those noble Lords who have put down Amendments, for having had to postpone the Committee stage of this Bill.
I confess that I am not attracted by the suggestion of the noble Lord, Lord Airedale, that the body nominated by the Home Secretary should actually run the sweepstake. My idea was that the nominated body should be a sort of watchdog. If the nominated body is going to run the sweepstake, it will need another dog to watch it—probably the Comptroller General, or somebody like that. I am quite unashamedly in favour of a private body's being allowed to run this sweepstake. I think such a body would have a better organisation, they would have more incentive to sell more tickets and they would be prepared to put down more money to do the thing well. On the other hand, if you allowed the nominated body to do it, it would be done in a very lackadaisical manner, and there would be no incentive to make a great success of it. Therefore I resist this Amendment.
LORD STONHAM: I would join with the noble Lord, Lord Airedale, in congratulating the noble Lord, Lord Jessel, in having come safely through the coughing epidemic which has afflicted our racing stables. Although, of course, we all deplore the reason for the postponement of the Committee stage from last Tuesday, it did give some of us who would otherwise have been sitting here in
356
a thin House the opportunity of hearing the Chancellor of the Exchequer in another place.
I hope that your Lordships, and particularly the noble Lord, Lord Airedale, will not think me discourteous if I do not, on behalf of Her Majesty's Government, speak to his Amendment, but I would respectfully point out to the noble Lord that if it was accepted there would be a need for consequential Amendments to Clause 2. The nominated body would have no power under that clause as it stands at present to make contributions for the racecourse from the receipts of a sweepstake promoted by the nominated body itself, because Clause 2 provides only for such contributions from sums paid to the nominated body by a person granted promotional rights by the nominated body.
I hope, however, it will be helpful to the noble Lord, Lord Jessel, and to the Committee, if, at this early stage, I am allowed to make the Government's attitude to all the Amendments quite clear. The Committee will recall that during Second Reading I stated the Government's fundamental objections to the Bill and urged your Lordships not to give it a Second Reading. That advice was rejected, but the Government's objections remain. During the Second Reading debate the noble Lord, Lord Jessel, following comments on the handsome profit left to the sweepstake promoter under the Bill as presented, said that he was prepared to modify that part of the Bill (although not, apparently, to the extent which the noble Lord, Lord Airedale, asks for), and the noble Lord has now tabled Amendments which, if accepted, would have the effect of limiting the profit to 5 per cent. Your Lordships may be under the impression that it was the size of the profit provided by the Bill for the sweepstake promoter that constituted the core of the Government's objection to the Bill, and that a suitable limitation of the promoter's profits would make the Bill acceptable to the Government. That is not so. As I tried to make clear on Second Reading, the Government objections go much wider and involve fundamental issues of principle which were enunciated by the Royal Commissions of 1932 and 1949—namely, that it is wholly undesirable that the State should either itself directly, or through

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the ægis of a statutory board, be concerned in the provision of facilities for gambling.
Further, and again in accordance with the view of both Royal Commissions, the Government are convinced that it would be wrong for the State to create a private monopoly by restricting the right to promote a large-scale lottery to any one or to any strictly limited number of organisations. In our view, the Bill infringes both principles: it would involve Government sponsorship of gambling facilities. It would confer special favours on horseracing alone, and it would provide a handsome profit for a commercial promoter. It is not irrelevant to remind your Lordships that in so far as the existing law allows private and other small lotteries, it does so subject to the condition that there is no element of private gain. Obviously there is no possibility that the Bill can be amended in such a way as to render it acceptable. The Government will not therefore be a party to the discussions on the Amendments or to any Divisions which might arise from them. Your Lordships will, I know, acquit me of discourtesy if I do not speak again. But I would say that if the noble Lord, Lord Jessel, or the Committee think I might be able to help on a point of information, and I am in a position to obtain that information, I shall be glad to give it.
LORD AIREDALE: I am much obliged to the Minister for giving us Her Majesty's Government's attitude to this Bill. The noble Lord, Lord Jessel, does not favour the Amendment I have moved. I will not press it this evening, particularly because I should like to think about it again in the light of the debate we are going to have on the noble Lord's own Amendment, No. 5, about limitation of the profits that can be made out of the proposed sweepstake. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD BROWN LORD BROWN moved, in subsection (2)(b), to leave out "twenty-five" and insert "thirty-five" [per cent.]. The noble Lord said: I voted against this Bill on Second Reading, and in broad terms I am not with it. I recognise that the noble Lord, Lord Jessel, has sincere and worthy motives in introducing it; but I believe that the award of this monopoly to a
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particular section of the community in this way is bad in principle. However, there must be some possibility of this Bill's becoming law, and it is because of this that I have put down certain Amendments; and with the Committee's permission I should like to speak to all three of the Amendments which I put down as they all concern the same issue.
I should like to clarify one or two points before I proceed. I want to make it clear that when I refer to the "nominated body" I am referring to the body appointed by the Government to put the sweepstake up for auction; when I refer to "the promoters", I am referring to those who run it. I want to draw attention to the way I treat these figures for the sake of simplicity. I want to regard the expenses of the promoting body as being insignificant. They might, I know, amount to £10,000 or £20,000; but in relation to the whole they are insignificant. I want to point out that if, for example, the total sum realised by sale of tickets is £10 million, if we give 50 per cent. of it as prize money we are properly considering a sum of £5 million, because there must always be some return to those who buy tickets in any sweepstakes. So the "bunce", if I may use so crude a term, is £5 million. This is to be split, under the provisions of this Bill, as to medical research, et cetera, £2½ million; as to local amenities, £¼ million, making a total of £2¾ million.
LORD STONHAM: I am sorry to interrupt the noble Lord, I think he is wrong in saying £¼ million. As the Bill stands, the other provision would be £150,000.
LORD BROWN: I am sorry. I do not think it makes any difference to my argument. The balance, of some £2,350,000—I think I am correct in my figures in the light of what the Minister has said —is divided between those who promote this sweepstake and the racing, industry. The exact split of that amount lies in the amount which the promoters have to pay for the right to run the sweepstake. So I end up with these two figures: to charity (I use the term in the broadest sense) there goes £2,650,000, and to the promoters and the racing industry, £2,350,000. It is the balance of these two figures which caused me to put down these Amendments. They are quite wrong. To give a particular body the

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right under an Act of Parliament to sell sweepstake tickets and undoubtedly, however inadvertently, to create the impression that this is largely in the interests of charity or to maintain Aintree, when in fact the proper proceeds, if I may refer to the half that is left after paying the prize money, are divided in this way, would be quite wrong.
Under the Amendments I propose the figures would instead be approximately £4 million to charity and £1 million to the promoters and the racing industry. If the figure realised from the sale of tickets, instead of being £10 million in total, were £20 million, under the Bill as it stands a sum of approximately £5½ million would go to charity and approximately £4¼ million to the promoters and the racing industry. If my Amendments were considered acceptable to the Committee, the figures would instead be approximately £8 million to charity and £2 million to the promoters and the racing industry.
I do not want to keep the Committee too long this evening but may I make this further point? The Committee may object to my grouping together the sums that go, on the one hand, to the promoters and, on the other, to the racing industry. But I think it is difficult to separate these two because they are both concerned in the racing, industry—for it is an industry. I think we are justified in adding them together and comparing the addition of those sums with the sums that go to charity. The balance of the two amounts, as the Bill now stands, is not right. On these grounds rest the Amendments which I have put forward and which I beg to move.
Amendment moved—
Page 1, line 18, leave out ("twenty-five") and insert ("thirty-five") [per cent.].—(Lord Brown.)
LORD JESSEL: Although the noble Lord, Lord Brown, voted against the Second Reading of the Bill, I am nevertheless grateful for his now taking an interest in it and putting down what I may call a very sensible Amendment, although I am not going to agree with it. First, I think he is wrong when he says the expenses of the promoter are going to he insignificant. They are not going to be insignificant at all. Second, the amount—
LORD BROWN: I think I may have used the wrong word. I was referring to the expenses of the nominated body.
LORD JESSEL: The noble Lord said "promoter".
LORD BROWN: I am sorry. I was referring to the expenses of the nominated body.
LORD JESSEL: That I would quite agree with; but this 22½ per cent. which is floating around under my Bill will have to look after racing and the promoter of the sweepstake, and, in my view, as I said on Second Reading, the promoter will have to give a great deal of that 22½ per cent. back in order to get the franchise, and that is the money which will have to go to racing.
We all have our ideas about what should be the proper balance. It is very difficult to get it right, but I am afraid I must stand by what I call my "carve up". The Amendments of the noble Lord, Lord Brown, really do two things; they give a smaller margin to the promoter so that he will have less money to give back to racing when he is competing to obtain the franchise; and the other thing they do is to tip the balance more in favour of the local authorities and against the broader national interest generally. So I am afraid I must resist these Amendments.
LORD BROWN: I beg to move Amendment No. 3. I have already spoken on it, and will not say more.
Amendment moved—
Page 2, line 1, leave out ("two and one half") and insert ("five").—(Lord Brown.)
On Question, Amendment negatived.
LORD BROWN LORD BROWN: I beg to move Amendment No. 4.
Amendment moved—
Page 2, line 2, leave out ("£150,000") and insert ("£.300.000").—(Lord Brown.)
On Question, Amendment negatived.
LORD STONHAM: I have probably misunderstood the position, but may I ask whether Amendment No. 2 was accepted, or not? I was under the impression it was not, yet I thought I heard the noble Deputy Chairman say that the Amendment was carried.
LORD JESSEL: I was under that impression, but of course if that is the case it makes a nonsense. We have negatived Amendments Nos. 3 and 4, and yet Amendment No. 2 was said to be agreed to. Is it possible to put Amendment No. 2 again?
THE DEPUTY CHAIRMAN OF COMMITTEES: My impression is that I put the Question in the ordinary way, and there was no reply from the "Contents", and I therefore said that the Not-Contents had it. However, with the Committee's permission, I will put the Question again.
LORD STONHAM: It was on Amendment No. 2 that my hearing was defective. When the Question was put I did not hear the word "Content" from anybody; I thought I heard a faint "Not-Content" and yet I believe the noble Lord the Deputy Chairman said that the Contents had it.
On Question, Amendments Nos. 2, 3 and 4 negatived.
7.14 p.m.
LORD JESSEL LORD JESSEL moved, in subsection (2), after paragraph (d) to insert:
"( ) that the profits made by the promoter on each sweepstake shall not exceed five per cent. of the whole proceeds of the sweepstake but if a loss has been made on any previous sweepstake the amount of that loss may be carried forward and the whole or any part thereof set off against the profit made on any subsequent sweepstake."
The noble Lord said: At the close of his speech in the Second Reading debate the noble Lord, Lord Stonham, said that Her Majesty's Government had been asked to
"set up machinery empowering the Government to grant, to a private person or persons, what amounts to licence to print money".—[OFFICIAL REPORT, Vol. 264 (No. 51), col. 328, March 16, 1965.]
My reply to that was that competition under open tender to obtain the concession would be so intense that no promoter would make an excessive profit; and just to make sure of this I am now putting it in the Bill.
This Amendment limits the promoter's profit to 5 per cent. of the turnover. It is anticipated that any promoter will make a loss the first year, and probably the second year, so the new subsection will also allow him to carry forward any loss and set it off against the profit allowed him for the subsequent year. But I would
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ask your Lordships to note that he cannot carry anything forward if he makes a profit in the year, even if it is only a small profit, and less than the 5 per cent. allowed. For example, if he makes only 2 per cent. on the year he cannot carry forward the 3 per cent. difference to set off what is allowed in the following year.
LORD JESSEL LORD JESSEL moved to leave out subsection (3) and insert:
"(3) The following provisions shall apply to the last foregoing subsection:—

(a) the whole proceeds of a sweepstake shall be deemed to be the total amount received from the sale of tickets and, if any ticket has been disposed of either without receiving any payment or for a sum which is less than that which it is on sale to the public, it shall be assumed that the full amount has in fact been received;

(b) the profit which under paragraph ( ) of the said subsection it is permissible for the promoter to make shall be calculated as if it were being assessed for income tax under Case 1 of Schedule D;

(c) any profit which may be made by the promoter on a sweepstake in excess of that which is permissible under the said paragraph shall be added to the amount payable under paragraph (b) of the said subsection and treated accordingly."

The noble Lord said: I think it is usual, when selling books of sweepstake tickets, to give the agent one free ticket. If a book of eleven tickets is sold, he gets one free ticket, so if he sells a book of eleven £1 tickets he will send only £10 cash to the promoters. This Amendment, which clarifies Clause 1(3) of the original Bill, lays down that the percentage profit will have to be worked out on a notional figure as if all the tickets had been paid for in cash. This will result in the promoter getting less than would appear at first sight. His percentage on a book of eleven £1 tickets will be based on £11 cash, when in fact only £10 cash will be available on which he can draw his percentage.
With regard to paragraph (b), as I said when speaking earlier in reply to Lord Brown's Amendments, the promoter will have large initial expenses. He will have to provide staff, area offices, printing, advertising and probably a computer, so this Amendment really says that his profit shall be calculated under Case 1 of Schedule D of the Income Tax Act, 1952. This is the standard calculation of tax

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in respect of any trade carried on in the United Kingdom or elsewhere. Paragraph (c) of the Amendment says that any profit which the promoter makes in excess of the 5 per cent. laid down in my previous Amendment shall go to what I call "the good cause", and that will be in addition to the money given under paragraph (b) of Section 2(1), which is the paragraph which says what shall go back to racing. This will be an additional amount. I beg to move.
Amendment moved—
Page 2, line 7, leave out subsection (3) and insert the said new subsection.—(Lord Jessel.)
7.20 p.m.
LORD AIREDALE LORD AIREDALE moved, in subsection 4(a), after "one horserace" to insert "other than a handicap race". The noble Lord said: I developed in the Second Reading debate the argument in support of this Amendment, and for that reason, and also because it is getting rather late, I will re-state it now as shortly as I can. We were told by the noble Lord, Lord Jessel, in the Second Reading debate that this is really a Bill (I think his words were) "to save the Grand National". In many ways, the Grand National is a most remarkable race. It is worth over £20,000 and is by far the richest prize in the whole of steeple-chasing. One would therefore suppose that it would attract the best steeplechasers, but it does not, because the owners of the best steeplechasers are loath to watch them struggling round the Grand National course under such a huge weight that it slows the good horse down to the pace of the slowest horse in the race, which, I understand, is what the handicapper seeks to do, so as to try to produce a dead heat. The fact that the handicapper of the Grand National singularly fails, year after year, to produce anything like that result, does not alter the fact that that is what he is trying to do.
On Second Reading, I quoted the racing correspondent of The Times as saying that this year no top horses were taking part in the Grand National. This seems to me to be very unfortunate. I should have thought that what was needed at Aintree Racecourse, if it is the finest steeplechasing course in the world, as we
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are told it is, is a really valuable race with the best steeplechasers. At present, I believe that the most prized race for the best steeplechasers is the Cheltenham Gold Cup, but that is worth only £8,000 against the more than £20,000 of the Grand National Handicap. This Amendment would enable a valuable non-handicap race to become the subject of the proposed sweepstake.
On Second Reading, the noble Duke, the Duke of Devonshire, who I am rather relieved to see is not in his place this evening, did not, I think, make a speech, but he cross-examined me and elicited from me the information that whereas there is a large field of horses in the Grand National, which makes it a suitable medium for a sweepstake, a championship race has a much smaller field and this makes it not such a satisfactory race on which to base a sweepstake. I see the force of that argument.
Therefore, if this view prevails that a championship race such as I have in mind would not be a suitable medium for the sweepstake, I shall be perfectly willing to withdraw this Amendment. I think it would still be possible, under Clause 2 of the Bill, for the sweepstake to be on the Grand National but for the proceeds to be devoted, not to the Grand National itself, but to providing the prize money for a new championship race. The result of all this would be that the Aintree Racecourse authority would get all sorts of incidental additional revenue—presumably there would be television fees for covering the new championship race, additional gate money from an extra day's racing, additional takings from the Tote and so on. I believe that the Aintree Racecourse authority would easily be able to continue in operation, running the Grand National as it is and also running over the Grand National course this new championship race whose prize money would be provided by the sweepstake. That is what I seek to achieve by means of this Amendment, which I beg to move.
Amendment moved—
Page 2, line 14, after ("horserace") insert ("other than a handicap race").—(Lord Airedale.)
VISCOUNT MASSEREENE AND FERRARD: I cannot agree with the noble Lord. He said that top horses never take part in the Grand National.

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That is not so. The Grand National has several times been won by the horse that has won the Cheltenham Gold Cup, so he is not correct in saying that the Grand National is not a race for champions. It is true that the two champion steeplechasers of this year did not run in the Grand National. I do not know why—there may have been a multitude of reasons. We have to remember that the Gold Cup is over 34¼ miles while the Grand National is over 4½, miles. Perhaps the trainers thought that the horses would not stay the 4½ miles. They are comparatively young horses and perhaps their trainers did not want to risk them over the severer fences.
I think that the noble Lord is wrong in trying to detract from the Grand National. He has to remember that the Grand National is the greatest steeplechase in the world and the greatest racing spectacle. Nobody outside this country has heard of the Cheltenham Gold Cup, but everybody in the world has heard of the Grand National. If we had a non-handicap race instead of the Grand National, possibly only half-a-dozen horses would run and the same horses would win the race three or four years in succession, as has happened in the Cheltenham Gold Cup.
I feel that the noble Lord is getting a little mixed up with fiat racing, where all the most valuable races are non-handicap, because the chief object of flat racing is selection for breeding. The horses are extremely young, so that the classic races are all for three-year olds, carrying the same weight and, to a great extent, of the same sex. The two cannot be compared. Flat racing is more of a science. Steeplechasing is not indulged in to select horses for breeding. Steeplechasers are at least three years older than flat race horses. It would be quite hopeless to have the Grand National as a non-handicap race, because people go to see the Grand National in order to see a spectacle. They will not go to see a race with six or seven horses, possibly the same horses every year. Therefore, I cannot support this Amendment.
LORD JESSEL: The purpose of this Amendment seems to be to turn the Grand National into a championship race at level weights. In regard to that, 1 would echo what the noble Duke, the Duke of Devonshire, said when he intervened
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in the Second Reading debate, that if we do this, it will cease to be the Grand National, which is a race known throughout the world. That is a view which I share. Surely it is the large field and the chance of any horse winning which contributes to the excitement. I am glad to have the support of my noble friend Lord Massereene and Ferrard, who is a racehorse owner. He has rightly pointed out that it just happens that this year the two best steeplechasers were not running in the National. He also pointed out that in the past the Grand National has been won by the winner of the Gold Cup—for example, Golden Miller. So let us remember Golden Miller when we say that the Grand National can never be a championship. I want to preserve the Grand National as it is, and I must resist this Amendment.
LORD AIREDALE: I have been interested in the arguments adduced against the Amendment. I am sorry that the noble Viscount, Lord Massereene and Ferrard, thinks that I was trying to detract from the Grand National. I certainly did not seek to, and I did not think I had given that impression. Then I am told that I am trying to have the Grand National as a non-handicap. When what I said is read in Hansard, after we have had a night's sleep, I think it will be apparent that I was not advancing an argument of that kind. The noble Viscount says that steeplechasing is quite different, and that flat racing is more of a science. I suppose, therefore, that Epsom Downs on Derby Day is a sort of conversazione. I should have thought that the spectacle of both forms of racing is obviously most of the object of the exercise.
I am told by both noble Lords who are against me that the Grand National is indeed a championship race. This is something that I have never been able to understand. If a horse carrying 12 stone 7 lb. is beaten by a neck in the Grand National by a horse carrying 10 stone, which of the two horses is the champion? I should like to pose that question, and perhaps after reflection the noble Viscount may be able to answer it. However, it is getting late, and I do not propose to take the Amendment to a Division. Therefore, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
LORD JESSEL: With your Lordships' permission, Amendments Nos. 8, 9 and 10 can be taken together. They are drafting Amendments and relate to the new subsection (6) which comes later as Amendment No. 13. I beg to move.
Amendment moved—
Page 2, line 30, after first ("body") insert ("(hereinafter in this Act referred to as 'the nominated body')").—(Lord Jessel.)
Amendment moved—
Page 2, line 30, leave out second ("a") and insert ("either an existing").—(Lord Jessel.)
Amendment moved—
Page 2, line 31, leave out from ("statute") to ("who") in line 32 and insert ("or a body incorporated by order under subsection (6) of this section").—(Lord Jessel.)
LORD JESSEL LORD JESSEL moved in subsection (5), after "person" to insert:
"(a) for a term of more than seven or less than five years; and
(b)"
The noble Lord said: The purpose of this Amendment is twofold: we thought it best to put maximum and minimum periods of time for the promoter's franchise to run. As I said previously, it is anticipated that, certainly for the first year and probably for the second year, considerable losses will be suffered. Therefore it is only fair that the promoter should have some security of tenure in order to get back his loss and make a reasonable profit, or, if he sees no future in the business, to back out of it gracefully. On the other hand, if in the last few years it is apparent that the promoter is making a great deal of money, at the end of seven years the Home Secretary can put the sweepstake once again up to public tender, for obviously the competition will be extremely severe in order to get into the business, and tenderers would be competing to see how much of their permitted percentage they could afford to give back. I beg to move.
Amendment moved—
Page 2, line 34, at end insert the said words. —(Lord Jessel.)
LORD AIREDALE: I am wondering what happens supposing the promoter is found not to be very satisfactory in his conducting of the sweepstake. Are we, so to speak, landed with him for not less than five years? Is there not some way of getting rid of him in under five years if he is found not to be doing the job very well?
LORD JESSEL: I think that is a good point. Provided he is doing the job well, I feel that he should have the chance of going five years, in order to recoup possible initial losses. Presumably the authority would take good precautions to see that the promoter was financially sound and a person who was likely to be able to stay the course for five years. However, I see the possibility of even the best regulated promoter going wrong, and I should like to think about it.
LORD JESSEL: This Amendment is introduced as a result of some observations made by the noble and learned Viscount, Lord Dilhorne, on Second Reading in regard to Clause 1(5). The idea behind the Amendment is this. It may be that the Home Secretary will find some suitable body incorporated by Statute already in existence; but if he does not, this Amendment gives him power to set up, by order, a suitable body which will be charged with the right to promote a sweepstake. It gives him the chance of doing it by order, without further legislation, which is, I think, much tidier. I beg to move.
Amendment moved—
Page 2, line 45, at end insert—

("( ) (a) the Secretary of State may by order provide for the constitution of a body to he charged with the duty of granting the right to promote and conduct either or both the sweepstakes which are or may be authorised under this Act and to perform such other functions as arc by this Act assigned to the nominated body;

(b) an Order made under this section shall provide for the constitution of the body and may make such other provision with regard to the body as the Secretary of State thinks proper;

(c) The power of the Secretary of State to make an Order under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(d) The power of the Secretary of State to make an order under this section shall

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include a power, exercisable in the like manner, to vary or revoke such an order.") —(Lord Jessel.)

Clause 1, as amended, agreed to.
Clause 2 agreed to.
Clause 3 [Allocation of proceeds of sweepstake to be devoted to medical research]:
LORD JESSEL: This is a drafting Amendment which follows the new paragraph (3)(c) in Clause 1. I beg to move.
Amendment moved—
Page 3, line 37 after ("Act") insert ("together with any profit made by the promoter which under Section 1(3)(c) of this Act is to be treated as if it were an amount payable under Section 1(2)(b) of this Act").(Lord Jessel.)
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Clause 5 [Return by promoter of authorised sweepstake]:
LORD JESSEL: With your Lordships' permission, I will take Amendments Nos. 15 and 16 together. They are consequential on the limitation of the promoter's profit and the provision for dealing with any surplus. I beg to move.
Amendment moved—
Page 4, line 41, leave out ('and").—(Lord Jessel.)
Amendment moved—
Page 4, line 43, at end insert—
("(e) the amount of any profits made by the promoter on the sweepstake; and
(f) any amount payable by the promoter under Section 1(3)(c) of this Act.").—(Lord Jessel.)
Clause 5, as amended, agreed to.
Remaining clauses agreed to.
House resumed: Bill reported with Amendments.

POST OFFICE CHOICE OF INDUSTRIAL CONSULTANTS
7.40 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE rose to ask Her Majesty's Government whether they will reconsider their decision to appoint an American firm of industrial and management consultants to investigate the affairs of the British Post Office. The noble Lord said: My Lords, in the course of a statement on postal services in another place on Thursday, March 25, the Postmaster General announced that he was going to appoint a firm of American consultants. Perhaps it may be useful to your Lordships if I quote from the Hansard concerned, column 745, where the Postmaster General said:
"The first and most important task is, therefore, to improve the productivity and profitability of the postal services. I have accordingly commissioned a fundamental and far-reaching examination of the problem by Messrs. McKinsey—the eminent management consultants."
So on Thursday of last week I asked the Government a Question about what consultations had taken place and what consideration had been given to British firms. The noble Lord, Lord Hobson, was good enough, in the course of his reply, to make plain that in fact no British firm of consultants had been considered. This statement came to me as a complete surprise, and I am sure it did to your Lordships; and that explains the reason for my tabling the Question for answer to-day.
First of all, as I am sure your Lordships appreciate, there are many British firms which are eminently suitable to undertake work of this sort. One firm has no fewer than 400 qualified persons able to carry out work of this sort. Furthermore, British firms have carried out work for clients of international repute, of international status, who have affiliated companies in many parts of the world. They have carried out full and thorough-going surveys and reviews of manufacturing organisations, of commercial undertakings, banks and other such bodies, whose activities are every whit as complicated and involved as those of the British Post Office. Furthermore, one firm of British industrial consultants has been commissioned by the Swiss Post Office—itself a very efficient undertaking

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—to carry out a review of its postal services, and has been rewarded by a statement made by the Swiss authorities that they were very pleased with the work. The Swiss Post Office said that the work had been most satisfactorily carried out.
Quite apart from the question of the suitability of British firms (which I believe to be clearly and absolutely established), there is the question of the damaging effect overseas. We are a great exporting nation of goods and services, and we are also, of course, a great importing nation. I am not one of those narrow-minded individuals who would urge Her Majesty's Government to pursue a policy of self-sufficiency: only to employ British and never to employ people from abroad; never to import what might be made, at higher cost, in this country. But here is a case where our firms have an international reputation in this field and are every whit as good as their American counterparts; firms which may, in many cases, be proved better, and certainly cheaper. Yet they were not even considered by a member of the new Labour Government when he was casting around for somebody to help him in his work. I should not have minded if British firms, having been considered, had been found to lack the necessary qualifications, in which case it would be only right to employ an American firm, a German firm or even, if appropriate, a Japanese firm. But in this case no consideration at all was given to the employment of British firms, thereby rather indicating that the British Government did not think that British firms were suitable or up to the job.
Your Lordships have only to consider for a moment what a damaging blow this is to British firms in attempting to negotiate overseas industrial consultancy work in competition with their American rivals. Not only the firm of McKinseys (who I am sure will play the game honourably) but other American firms, will be able to say, "Don't employ a British firm, because the British Government will not employ them. The British Post Office, that unique British institution, under a Labour Government had to go to America for assistance". So, far from aiding the export drive in
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goods and services, the Postmaster General, by his action, has dealt a very real and damaging blow to the export of a very important and valuable British service.
During the period of question and answer last Thursday, there was a certain amount of question and answer regarding the method of selection. If I may paraphrase, briefly, what the noble Lord said in reply to several questions, the impression was given that it was "not the done thing" to go out to competitive tender, so to speak—that in a field such as this, a professional field, one asked a single individual concern, secured their consent, and went right ahead. Since last Thursday I have been making some inquiries, and I find that that is by no means the practice. In fact, a number of British local authorities (who I am glad to say are increasingly making use of this valuable and developing service of British management consultants) are going so much the opposite way that they are inviting as many as eight or ten firms to put in programmes of work for a single project. That, perhaps, is too many, and can lead to wasteful duplication of effort on the part of management consultants themselves. A better method might be to employ two or three in any given case.
The point I wish to make this evening is that it is certainly not within ethical practice (if one likes to say that of this particular profession) that they do not compete with each other in submitting outline programmes of work, detailed estimated costs of programmes, and so on. Therefore, it can be no defence on the part of Her Majesty's Government to say that it is not the correct practice to seek alternative programmes of work from other firms—certainly not in a case such as this, where it is American firms versus British firms. There is no doubt at all in my mind—and I hope in the minds of other noble Lords this evening—that in this case the Postmaster General should certainly have given full consideration to British firms and given them a full opportunity to submit programmes of work.
The Postmaster General, whom we know to be a very tender flower, had he not felt like approaching individual firms, could, I am quite certain, have obtained

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full assistance from the Management Consultants' Association, which is the Association of the leading British firms in this field, who could have given him help and advice as to whom he should approach, or whether possibly some joint effort by two or three of the leading British firms might not have been practicable. Then it would be no defence for the Government to say that British firms were so full up with work that they could not have embarked upon this important assignment without delay. I have been checking up on this aspect and while I am glad to say that British consultant firms are active and busy in this particular field, they have, nevertheless, if I may use an industrial expression, spare capacity available; and, in any case, in such an important assignment as this they would immediately have made available all the resources necessary to carry out this important work.
The next point I wish to make is this. I am rather disturbed at the secret way in which the decision of the Postmaster General was arrived at. One would expect that within the Department there would have been full consultation, but I have been informed that a crucial meeting was held between the Postmaster General and the representative of McKinsey's at which no officials at all were present. I think that in a matter of this sort the Postmaster General was very ill-advised to hold a meeting of this sort, and I should like to know what took place at this meeting and why he chose to see this individual privately. It is interesting to note that the noble Lord, Lord Hobson, when he was answering one of the Questions dealing with this matter said:
"one has to assume … that the factors … which led up to the Postmaster General making the decision were borne in mind not only by him but also, of course, by the experts within the Department who would presumably be present to advise him when the decision was made."—[OFFICIAL REPORT, Vol. 265 (No. 63), col. 176, April 8, 1965.]
I know from my own experience in answering supplementary questions that it is very easy to let slip a word, an adverb or an adjective, which does not quite convey the sense of what one intended to say, but I am very struck by that word "presumably". Were the experts within the Department present when the crucial decision was made, or were they not? That is a point on
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which I am sure noble Lords would be glad to be enlightened.
On a matter of this sort, when so many members of Her Majesty's Government have expressed the need for Britain to cut down on imports and not buy abroad what we can make or do for ourselves, I should be very interested to know whether this decision was made by the Minister alone or whether the matter went to the Cabinet. Was it a decision of the Government as a whole, sitting as a Cabinet, or just a quickly-thought-up decision by the Minister designed to get something flashy out in time for his unpalatable announcement about the raising of the postal charges? It would be interesting to know whether any Cabinet Minister knew about this step until he read it in Hansard.
Then, since we are all having to watch dollar expenditure—indeed, all expenture across the exchanges—it is relevant to bear in mind the cost of employing American consultants. It is well known that American consultants' charges are very much higher than those of British firms. I should be grateful if the noble Lord would tell me how much, in total, this assignment is going to cost, and whether it is an open-ended commitment or for a limited and definite sum in return for a definite amount of work carried out. I ask this because it is notorious that some American firms (and here I am not making any allegation against McKinseys), when they have once got their foot in the door, go on, year after year, piling up charges deemed to be necessary as a result of investigations. It is said that American firms start invoicing you as soon as you make the first telephone call. I think it is deplorable that the British taxpayer should be liable for this very heavy expenditure across the exchanges when cheaper and equally good, if not better, services could have been made available by British firms if they had been given an opportunity to make proposals.
I now want to put to your Lordships reasons why, quite apart from what I have said already, I think that a decision to employ any American firm for this particular work was an unsuitable choice. First of all, one must remember that American citizens—and, of course, McKinseys will be employing Americans specially brought over for the purpose, since they have only a very small staff

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in this country—are accustomed to, and accept, a very inefficient postal service. I am talking of the postal service, which is the subject of investigation, not the telephone service which is not the subject of the investigation. They are accustomed to a very inefficient service and one that is quite different from ours.
First of all, they accept delays in transmission and delivery of mail which would not be tolerated in this country. It is not unusual for a letter to take five days to cross New York, whereas we take it for granted that a letter posted in the late afternoon or evening one day will be delivered first post anywhere in Great Britain the next day. I was particularly delighted to notice a day or two ago that when I posted a package in Kensington at mid-day on Friday to Cheshire I received by the first post on Monday a letter of appreciation of the package. That shows the high standard we are accustomed to in this country. This particular movement of the package sent North, and the reply sent South, occurred almost entirely over the week-end when most people enjoy the benefits of a five-day week. This is a sort of service unthinkable in the United States and not used.
I always think that one reason why their telephone service has to be so good is because the postal services are so bad. Yet these are people who will come along and presume to tell us how the British Post Office should be run. They are bound to suggest as one economy a very much lower standard, the standard of the United States, a standard which they will say is quite good enough for the great industrial country of the United States and therefore ought to be good enough for us. The sort of suggestion I can almost hear them making will be, "One delivery is quite enough, and not on Saturday"; and "Do you mean to say that you send postal vans all the way up country roads to deliver letters to isolated farmsteads? Make them come down to the main road and have a mailbox on the mainroad, as we do". We are going to have to pay hard-earned dollars for this sort of advice.
Then I noticed, in the course of the debate in another place on the postal services an interesting indication of the sort of problems which McKinseys are
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to be employed to solve. In the course of his speech the Postmaster General posed some questions which I should like to read to your Lordships as illustrating the sort of problems which he has in mind. He said:
"What for instance, is the real cost of a first-class letter as compared with a printed paper package? What is the real cost of a postcard which goes cheaper but gets first-class treatment? In fact, there is very little cost indeed. Does weight really matter as compared with the size of the envelope and speed with which it is required to move?"
And here is an interesting point:
"How many people really want a fast service, and how many people would be happy to pay a little less for something which was a little slower? "—[OFFICIAL REPORT (Commons) Vol. 709 (No. 88), col. 1422, March 30, 1965.]
Do we really need a lot of Americans to come and ask this sort of question? We are perfectly able to find out these answers for ourselves.
The Minister went on to say:
"I tell the House frankly that we do not yet know the answers to these questions, but we mean to find out. This is the reason why we have commissioned Messrs. McKinsey to undertake the Survey for us".
If ever there was a set of questions which could be answered by British firms these are the very questions. We certainly do not need an American firm, however eminent, to do work which is essentially British in character and which we ought to carry out for ourselves. Moverover, Americans are accustomed to different methods within the American Post Office from those to which we are accustomed. They accept a degree of political interference in the affairs of the Post Office at local levels. Staffing matters, and so on, are handled very often by politicians in the states, and in the counties and in the townships. They take that for granted. They have to unlearn all they have grown up with before they can begin to study what is our practice and why we do it our way.
Furthermore, when they come to look at our postal service, if they do, they will be in complete ignorance of the many services in connection with the Welfare State provided by the Post Office—for example, payment of pensions; payment of sickness benefit; payment of family allowances and the like—because these things are unknown in the United States.

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They will have to learn it all. I daresay they will learn exactly how we do it. But they will have to learn all this at the expense of the British taxpayer before they can begin to start constructive work on the problems which they unearth.
I have already mentioned that I believe that the employment of an American firm will be costly compared with using the services which any one of a number of reputable and highly experienced British firms could have rendered. As I come to the close of my remarks, I would say that Her Majesty's Government are not afraid of cancellation charges. They have shouldered an immense and unnecessary burden of cancellation charges over the TSR 2. If a definite commitment has been entered into—1 should be grateful to learn from the noble Lord if a definite commitment has been entered into—then I would urge Her Majesty's Government to cancel it and to pay the cancellation charges, if any are payable; to award the investigation to a British firm, or to a consortium of British firms, and thus live up to what they are always preaching—namely, that we should employ British brains and British resources whenever we can, as undoubtedly, in this case, we not only can, but should.
8.2 p.m.
LORD MORRIS OF KENWOOD: My Lords, I am pleased that the noble Lord opposite has raised this Question, since I myself had intended to table exactly the same Question. He has rather stolen my thunder and what I had to say, but he has, I think, expressed well the feeling of dissatisfaction which must be felt on both sides of this House over what seems to me to be a most arbitrary decision. This decision seems to me to be quite contrary to the basic principles of selection. As is the case with the noble Lord opposite, I also have had conversations with the Management Consultants Association. The noble Lord quite rightly says that none of the major consultants, or even minor consultants for that matter, were even considered at all when this matter arose. I have spoken to one particular consultant, and he has expressed righteous anger that the Postmaster General should have made this decision and indeed have gone to an American firm. He knows this firm well,
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and in his opinion—which may not have been altogether unbiased, but I believe it to have been so—McKinseys are not in any way suited for this particular job.
One point that the noble Lord did not mention was the fact that on two occasions the Post Office has used the services of British consultants and has found these services to be most satisfactory. In the light of that, I think it is even more extraordinary that the Postmaster General should have made this decision. Our management consultants bring valuable and much needed currency from abroad. I, too, shudder to think what must be the feelings of firms, particularly in America, when they consider the requirements of management consultants, if the British Government cannot, or does not, see fit to employ their own firms when they need work of this nature to be carried out. I earnestly hope that Her Majesty's Government will reconsider their decision in this matter.
8.6 p.m.
EARL FERRERS: My Lords, I think that the Question which my noble friend Lord Erroll of Hale has asked this evening is most pertinent and is going to take a great deal of answering, even with the eloquence of the noble Lord, Lord Hobson. I would say at the outset that I have no objection whatever to the Postmaster General's deciding to engage some efficiency experts to try to make the Post Office more efficient and more economic to run. One of the advantages or (shall we say?) one of the consequences of a change in Government is that we have fresh people with fresh ideas, and we tend to get a few "new brooms" who wish to make themselves active. I feel that this is in fact all to the good, and I would not deny for one moment the Postmaster General's desire to make the Post Office more efficient. But if he wishes to do this, why does he choose an American firm?
I hope that the noble Lord opposite will be much more specific than he was the other day when he answered the Starred Question of my noble friend Lord Erroll of Hale, I believe last Thursday, because vague generalities such as, "They were considered to be the most suitable for the job" really are not in the slightest convincing. There must have been some prime reason why

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this firm, of all British and American firms, were chosen to perform this task, when no other firm was even consulted. Clearly, there was some good reason for this, and I hope that the noble Lord will say precisely what it is. If the firm of McKinseys are so special, what are the peculiarities that distinguish them from all the others? Are they cheaper? Indeed, we do not really know this, because apparently no other firm was asked to tender. Are they more able? If so, on what basis are they judged? As my noble friend said, a British firm were considered sufficiently able to advise the Swiss Post Office, which after all is one of the most efficient in Europe. Why, then, are their qualities apparently so insufficient as to make them unsuitable for advising the British Post Office? These, I believe, are questions which require an answer.
Many British consultants export their services to other countries. Some even give up to 20 per cent. of their effort to assisting firms abroad and to exporting their services, and it is not altogether difficult to imagine the damage done to their efforts when Her Majesty's Government deliberately insinuate that their services are not sufficiently good for them to be enlisted in advising a British Government Department. This is the more particularly unfair when in fact they were never given the opportunity or invited to tender. I do not, of course, say that a British firm should be employed in all cases; but I do feel that it is quite inexcusable for a British firm not even to be given the chance of being considered. Unless the noble Lord comes out with some most astonishing and unexpected reasons, one can only come to the conclusion that Her Majesty's Government have once again fallen victim to the high-pressure sales technique of American firms.
I cannot help thinking that it is tragic to see contract after contract, whether it is for the reorganisation of the Post Office or for the purchasing of aircraft, going abroad to other countries—these contracts not being given by private industry but given by the British Government. I wonder, indeed, when Her Majesty's Government will realise that one of the prime qualities of the American business man is his high-pressure sales technique.
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This contract seems to me to smell strongly of high-pressure salesmanship.
I therefore hope that the noble Lord will answer one or two specific questions which I should like to ask him. At what date was agreement given to McKinseys for their services to be used in the Post Office? What is the cost to Her Majesty's Government of their services? How long will their employment last? Was this agreement given as a result of a lunch to which the Postmaster General was invited and at which none of his officials were present? If so, I can only say that it would certainly justify the McKinsey's expense account. And what are the unique qualities possessed by McKinsey for this work which are absent from British firms? Precisely what are the reasons which determined the Postmaster General not even to give consideration to a British firm? Finally, I would ask the noble Lord, Lord Hobson, whether he will give an undertaking that his right honourable friend will consider again this decision to eliminate from tendering—that is the point, not the giving of the contract to the Americans—a British firm, which was clearly a grave error of judgment and of prudence.
LORD AIREDALE: My Lords, I have listened with the greatest interest to the three speeches, and all I would say is this. The United States of America abounds in admirable institutions of all kinds, but when it comes to Post Office efficiency I should have thought that in that matter Her Majesty's Government could have said to their American friends:
"Cast out first the beam out of thine own eye, and then shalt thou see clearly to pull out the mote that is in thy brother's eye."
8.11 p.m.
LORD HOBSON: My Lords, may I say, first of all, that the noble Lord, Lord Erroll of Hale, was quite right to raise this matter. I am very pleased to face him in order to answer his Question. We met many years ago, and I suppose that neither of us thought that we should ever meet again, first in the other place, and now in the House of Lords. The noble Lord complained, or rather made certain minor criticisms, about my replies last week. I thought that the replies which I gave last Thursday to the Question were rather long. I was

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brought up in the school which was taught that the Answer to a Parliamentary Question should be brief and to the point, and should add nothing to the information already known! If your Lordships read the replies which I gave, you will see that I have fallen into the pleasant habit of your Lordships' House whereby we almost debate Questions. I thought that I was most forthcoming on this matter.
The point I want to deal with (and there is a point of principle involved) is that here we are discussing a nationalised industry—to my mind the only complete nationalised industry, in so far as complete public accountability is concerned. We are raising a question of an intimate contract between a firm of consultants and the Post Office. We can even raise the question of a postman being 6d. short in his pay—that would be perfectly in order; whereas we know that, so far as the other nationalised industries are concerned, we are limited as to the occasions and the extent to which matters can be raised and debated. It is of great importance that we should take advantage of the fact that the Post Office, which is the oldest nationalised undertaking, is in a position to answer questions of detail. The matters raised this evening are questions of detail, particularly when they are thought of in the context of the £1 million contracts which the Post Office is engaged in every year.
I want to make one or two points perfectly clear. The Postmaster General, in arriving at this decision, has certainly not gone outside his legal power. He was perfectly entitled, as one who holds an office under the Crown to make this decision. It was an administrative action. There was absolutely no need to get any law passed to enable him to do it. He did not have to come to Parliament, by way of regulation, and ask for permission to do it. This was day-to-day management, in the full sense of the term, and he arrived at the decision.
Before I come to answer specific questions raised by the noble Lord, Lord Erroll of Hale, and the noble Earl, Lord Ferrers, I want to say straight away that my right honourable friend is not prepared to appoint another firm in place of McKinseys. That is his decision. The
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firm has already begun work. The selection of this firm implies no criticism of British firms of consultants. Over the last ten years the Post Office has used British consultants. Five at the present time are undertaking assignments. However, in this case my right honourable friend felt there was a need for an entirely fresh and fundamental look, the size and complexity of the Post Office being what it is. McKinseys is a firm of international repute and experience and with the resources capable of grappling with an organisation of the magnitude and complexity of the Post Office. Their operations are world-wide. They have offices in six countries, their London office being their second largest. Some of their partners are United Kingdom citizens, and most of the personnel in their London office are also United Kingdom citizens. For the Post Office assignment they will be using a combination of United Kingdom staff and staff imported from their other offices.
Over the last six years they have carried out studies of the overall organisation and management methods of many large British firms. I do not propose to gave the names of those firms. I am quite prepared to put it in the form of a letter, but I do not think that on an occasion of this sort I should be called upon to advertise McKinseys by giving the list of firms for which they have carried out management consultancy. Nevertheless, they are important firms which can be classed under the generic term of "blue chip" organisations. There can be no doubt that McKinseys already enjoy a very strong reputation in the field of management. My right honourable friend was not content to be guided by reputation alone. He has discussed the assignment with two of the principals of the company, who have also had many talks with top officials of the Post Office. These meetings not only enabled McKinseys to form a very good picture of the nature of the task they were undertaking but also confirmed the appropriateness of their selection.
There have been suggestions that the Post Office should have gone out to tender for this contract. I need hardly say that it is not possible to draw up specifications for this type of work except in the broadest terms. The specification emerges from detailed discussion between

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client and consultant. As I have said, the assessment of how far the consultants will be able satisfactorily to conclude their study must be the decision of my right honourable friend, based on his own judgment supported by that of his officials. In short, I would assure your Lordships that my right honourable friend chose this firm because he considered that they were particularly suitable for the task. The Post Office is always eager to use the talents of the home industry. In the last ten years the Post Office has given several assignments to firms in the United Kingdom, and their services will undoubtedly be required in the future. That, briefly, is the statement for the defence on behalf of my right honourable friend the Postmaster General.
I have been asked some specific questions and I want to come straight to them, though some may have been answered by the statement. The main question which was asked was in relation to cost. My right honourable friend takes the view that he does not think it proper to disclose fees paid for professional services of this nature. We cannot state the cost at the present moment, but it would be perfectly appropriate for Parliament to know the final payment that will be made. How would Parliament be able to find out? Well, first of all there is the Comptroller and Auditor General; secondly, the Public Accounts Committee; and, thirdly, there is the Estimates Committee—and I have experience of this, having been Chairman in the past—in which I can imagine questions being put on these matters. The cost to the Post Office of this firm of McKinsey, can be ascertained after payment has been made. That is precisely because of the fundamental safeguards that exist, particularly in dealing with Government affairs and, in this case, with a nationalised industry.
There was the question of whether the Cabinet were consulted. Here, again, I do not propose to make a statement on Cabinet conclusions. The noble Lord, Lord Erroll of Hale, has been a member of the Cabinet, has been a member of the Government, and I am a member of the Government. The fact of the matter is that we all know very well, without asking about Cabinet conclusions, that you cannot really make decisions without
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being in a position to carry your colleagues with you. I should have thought that that was a reasonable and fair answer to the question that has been asked.
The other question is: How long will they take? I cannot give the answer about how long they will take; I have no experience of these people. It is true that I was at the Post Office for over five years. I had a very happy time, indeed, and we did not have quite so many squalls; we did not have to combat inflation such as we have to do at the present moment. We never had them in the time of my right honourable friend Wilfrid Paling and my right honourable friend Ness Edwards. How long the job will take, I do not know.
I enjoyed the flight of fancy of the noble Lord—and, of course, paradoxically, it was true—in regard to the comparison between the United States Post Office and our own. Far be it from me to do anything to jeopardise the Atlantic Alliance, but I know as well as he does that our Post Office compared to theirs is far more efficient. We all know that. But I should respectfully suggest that it is hardly on the sort of ideas that the noble Lord has in mind that McKinsey would be asked to inquire. This I should have thought was far more of an internal character than an outside one. I think I have answered the questions of the noble Lord, Lord Erroll of Hale. I do not want to miss any. I made fairly copious notes, but if I have missed any I shall be only too happy, either by way of ordinary answer in your Lordships' House or by writing to the noble Lord or by speaking to him, to give him further information. I now come to the noble Earl, Lord Ferrers—
LORD AIREDALE: My Lords, if the noble Lord is moving on, may I ask this question on this matter of time and how long it will take? Surely some programme has been drawn up. Surely there is some interim operation which is going to take some agreed time. Surely some time factor has been decided upon.
LORD HOBSON: That is quite true; I am sure there is. But I was asked whether I know, and I do not know; I have not been able to find out. I have been perfectly honest and straightforward.
LORD ERROLL OF HALE: Does the Postmaster General know?
LORD HOBSON: If the noble Lord cares to put that question down, I shall be only too happy to answer. But I have been asked specifically to give a direct answer. There is no equivocation, no dubiety. As a matter of fact, I have been saved. The information has just come. It certainly was not available a little while ago when the noble Lord was speaking. But there, again, we have an example of the efficiency of a nationalised industry who, presumably, can use the nationalised telephones and even have a clerk standing by and able to get this information for your Lordships. The figure is nine to ten months. That, presumably, is the period of gestation, my Lords.
I now come to the noble Earl, Lord Ferrers. He really did dot the i's and cross the t's of the noble Lord, Lord Erroll of Hale. I was glad he did so, because I have always had a high opinion of the noble Lord, Lord Erroll of Hale. Then—and I think he may regret having said it; I do not know what he based his statement on—he gave some account of a lunch. Reasonably the Postmaster General was present and there was a hint, a sous entendre—I suppose we have to get into the delicate meaning—that a representative of McKinsey was present. Let us make the full assumption that they were all there —the managing director, the chairman, the lot. No one is going to tell me that
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my right honourable friend would succumb to that sort of thing—I have known him long enough—and I am sure that no member of Her Majesty's Government would. I feel that in the morning, when the noble Earl comes to read what he said, he will regret making that mistake. I am absolutely sure that my right honourable friend the Postmaster General arrived at this decision convinced that he had chosen the firm most suitable to perform the task, and I am sure that that was the only consideration he had in mind.
My Lords, I have endeavoured to answer the questions raised, and if the noble Lords opposite are dissatisfied, then that is life, that is the political fight, and, indeed, it is one of the joys of a democratic society. But, to finish more seriously, if there is any information that noble Lords would care to ask for, it will be my earnest endeavour as a servant of this House to give the information that is sought.

POOLE CORPORATION BILL [H.L.]
Reported, with Amendments.

INDUSTRIAL AND PROVIDENT SOCIETIES BILL [H.L.]
Returned from the Commons, agreed to.
House adjourned at twenty-six minutes past eight o'clock.