Sitting of 3 August 1965

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LONDON TRANSPORT BILL
  Lords Amendments considered and agreed to.

  MANCHESTER CORPORATION BILL
  Standing Order 208 (Notice of consideration of Lords Amendments) suspended; Lords Amendments to be considered forthwith.—[The Chairman of Ways and Means.]
  Lords Amendments considered accordingly and agreed to.

  COVENT GARDEN MARKET BILL
  Ordered,
  That the Promoters of the Covent Garden Market Bill shall have leave to suspend Proceedings thereon in order to proceed with the Bill, if they think fit, in the next Session of Parliament, provided that the Agents for the Bill give notice to the Clerks in the Private Bill Office not later than the day before the close of the present Session of their intention to suspend further Proceedings and that all fees due on the Bill up to that date be paid.
  Ordered,
  That on the fifth day on which the House sits in the next Session the Bill shall be presented to the House.
  Ordered,
  That there shall be deposited with the Bill a Declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill presented to this House in the present Session.
  Ordered,
  That the Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first and second time (and shall be
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  recorded in the Journal of this House as having been so read) and shall be committed to the Chairman of Ways and Means, who shall make only such Amendments thereto as have been made by the Committee in the present Session, and shall report the Bill, as amended, to the House, forthwith, and the Bill, so amended, shall be ordered to lie upon the Table.
  Ordered,
  That no further Fees shall be charged in respect of any Proceedings on the Bill in respect of which Fees have already been incurred during the present Session.
  Ordered,
  That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]
  To be communicated to the Lords.

STANDING ORDERS (PRIVATE BUSINESS)
The Chairman of Ways and Means (Dr. Horace King): I beg to move,
That the Amendments to Standing Orders relating to Private Business hereinafter stated in Schedule (A), and that the new Standing Order hereinafter stated in Schedule (B) be made.
Schedule (A)—Amendments to Standing Orders
Standing Order 4A, line 37, leave out "the London County Council".
Standing Order 27, line 60, at end insert "and at the Ministry of Land and Natural Resources".
Standing Order 37, line 14, at end add "and at the Ministry of Land and Natural Resources".
Standing Order 39, line 10, after "insurance", insert "the Ministry of Land and Natural Resources".
Line 48, at end insert—
"(10) of every bill extending to Wales, at the Welsh Office, Parliament Street".
Standing Order 46, line 4, after "Government", insert "or Ministry of Land and Natural Resources".
Standing Order 111, line 9, leave out "five" and insert "six".
Line 11, leave out "three" and insert "four".
Standing Order 132, line 14, leave out "three" and insert "four".
Standing Order 223, line 5, leave out "London County".
Line 6, leave out "the consolidated loans fund" and insert "the General Fund".
Standing Order 242, line 5, leave out paragraph (2) and insert—
"(2)—If no such memorial is deposited, but the Chairmen

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(a) are not satisfied that a special procedure petition should be certified as proper to be received, or, if it is presented as a petition for amendment, are not satisfied that it is such a petition; or

(b) are of opinion that a special procedure petition contains matters on which they should make a special report under Standing Order 241A (Special report by Chairmen),

the Chairman shall give notice in the Private Bill office of the time and place at which the Chairmen will further consider the petition."
Table of Fees, page 100, line 3, leave out "5 - 13 - 6" and insert "6 - 10 - 6";
Line 5, leave out "6 - 14 - 6" and insert "7 - 14 - 6";
Line 7, leave out "1 - 9" and insert "2 - 3";
Line 8, leave out "2 - 9" and insert "3 - 2".

Schedule (B)—New Standing Order

Special report by Chairmen.

"241A (1) Where the Chairmen certify that a special procedure

petition is proper to be received as a petition for amendment but are of opinion that any amendment asked for would, if made, alter the scope of the special procedure order or affect the interests of persons other than the petitioner, they may make a special report to that effect.
(2) A special report made under this Order shall be laid before both Houses and shall stand referred to the Joint Committee on the petition.
(3) A special report made under this Order may, without binding the Joint Committee, express the Chairmen's opinion on the extent to which effect should be given to any amendment to which the report refers and the steps that should be taken to bring that amendment to the notice of persons likely to be affected thereby".
The Amendments which I am asking the House to agree to fall into three categories: Amendments of a drafting nature Amendments relating to procedure of the Committee on Unopposed Bills and that under the Special Procedure Act of 1945, and Amendments to the Table of Fees.
The drafting Amendments are the most numerous: they relate to the deposit of documents with Government Departments, and further Amendments consequential on the passing of the London Government Act, 1963.
The Amendments to Standing Orders 111 and 132 are those which deal with the Unopposed Committee. At present the Committee consists of five members
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which number includes myself and the Deputy-Chairman. The quorum is three. The House will, I am sure, understand how difficult it is for both the Chairman and the Deputy-Chairman to attend these meetings together. For many years it has, in fact, been the practice for the Deputy-Chairman to take the Chair of the Committee. It is usual for several Bills to be considered at each meeting and it is not always easy to keep the quorum in attendance. My hon. Friend the Deputy-Chairman and I would therefore be grateful if the House would see fit to increase the membership of the Committee from five to six. The Quorum will remain the same.
The Special Procedure Amendments are the Amendment to Standing Order 242 and the new Standing Order 241A. Section 9 of the 1945 Act provides for the making of Standing Orders by both Houses for regulating the procedure under the Act. It is the duty of the Chairmen under Section 3 to take into consideration all Petitions presented against a Special Procedure Order. The new Standing Order is to enable the Chairmen to make Special Reports to the House whenever in their opinion a Petition prays for relief which would be outside the scope of the Order. The Amendment to Standing Order 242 is consequential. I understand that exactly similar Amendments are to be moved in another place.
The Amendments to the Table of Fees provide for an increase in the fees payable to the Official Shorthand Writer for attendance and transcriptions. These fees were last revised in 1960. The revised scale has been approved by the Treasury, and here again I understand that similar Amendments are to be moved in another place.
Mr. Graham Page: May I ask the right hon. Gentleman the Chairman of Ways and Means one question arising out of the new Standing Order 241A? If the Joint Committee wishes to give effect to Amendments which alter the scope of the Special Procedure Order or affect the interests of persons other than the Petitioner, is it intended that the Joint Committee should delay a Report to the House until it is satisfied that notice has been given to persons affected, or is it intended that the Joint Committee should amend the Order so as to include an

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obligation upon the Minister to give notice to the persons affected before he determines the date on which the Order should come into operation? In short, how will the House be assured that the requirements as to notice of the persons affected by a proposed Amendment have been or will be carried out?
The Chairman of Ways and Means: I have discussed this fully with the hon. Gentleman. May I just summarise and say that the Joint Committee will have the Chairman's Report before it, and it will certainly deal with the question of notices before reporting the Special Procedure Order to the House.
Question put and agreed to.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Coinage (Decimalisation)
    Sir G. de Freitasasked the Chancellor of the Exchequer whether, in view of the Government's desire to encourage decimalisation, he will mint more florins and cease to mint half-crowns.
    The Financial Secretary to the Treasury (Mr. Niall MacDermot): The recent announcement of my right hon. Friend, the President of the Board of Trade, referred only to the metric system, and not to decimalisation, which is still under consideration. Meanwhile, the Mint will continue to meet the demand for half-crowns as well as for florins.
    Sir G. de Freitas: May I remind the Financial Secretary that, as long ago as 1849, when the florin was introduced, it was said to be a first-step in decimalisation, and was actually described officially as one-tenth of a £? Will he not try to see if we can have some progress on this matter, now that yet another Commonwealth country has gone decimal? Does he recall what Mr. Gladstone said on this in 1854?
    Mr. MacDermot: As we are having exercises in history, may I remind my hon. Friend that in 1849 minting of half-crowns ceased with the introduction of the florin? The demand for half-crowns continued to prove so great that minting was resumed in 1874. The two coins at
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    the moment are about equally popular. If a decision in favour of decimalisation is taken, the matter will have to be reconsidered, and no doubt the florin would then replace the half-crown.

    Income Tax (Police Officers' Allowances)
    Mr. Boxasked the Chancellor of the Exchequer what would be the cost of exempting from Income Tax refreshment and subsistence allowances paid to members of a police force in respect of overtime duty at their usual police station.
    Mr. MacDermot: I am afraid that sufficient information on which to base an estimate is not available.
    Mr. Box: Regardless of the amount involved, may I ask whether the Financial Secretary is aware that until recently these trifling sums have been treated as free of tax? If he is going to alter that situation and make them liable to tax in the future, will he be consistent and consider the position on such things as concessionary coal to area chairmen and entertainment allowances to leaders of the nationalised industries as well?
    Mr. MacDermot: The position is that some local authorities have all along, quite properly, been making deductions for tax. Others have not, and I think that what has given rise to the hon. Gentleman's Question is that the proper practice is now being applied uniformly. One has to compare the position of these payments in favour of police officers with any other form of remuneration which is paid to people who spend money on a meal during the course of their employment. One cannot make out a case for special treatment for police officers in this respect.
    Mr. William Clark: Would not the Financial Secretary agree that this problem could be overcome, because in industry one can have luncheon vouchers which are exempt from taxation? Surely, so far as refreshment for the police force is concerned, could not the problem be overcome by an issue of luncheon vouchers, for spending in canteens?
    Mr. MacDermot: That is a matter for the local authorities to consider. The luncheon voucher system was introduced, as the hon. Gentleman knows, during the

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    war as a sort of supplement to, and in some cases a replacement of, the meals provided by employers in canteens.

    Local Authorities (Loans)
    Mr. William Hamiltonasked the Chancellor of the Exchequer if he is yet in a position to make a statement on his Budget proposal to allow local authorities in the less prosperous areas to secure better access to finance from the Public Works Loan Board.
    Mr. MacDermot: As I announced on 19th July, local authorities in Scotland, Wales and the Northern and North-West Regions of England will be able to get 40 per cent. of their longer-term borrowing from the Public Works Loan Board this year.
    Mr. Hamilton: Could my hon. and learned Friend give an assurance that that still applies, notwithstanding the announcement of the Chancellor last week?
    Mr. MacDermot: Yes, that still applies.
    Dame Irene Ward: Is the hon. and learned Gentleman aware that that statement, as it stands, is not in conformity with what the Chancellor of the Exchequer promised for special areas, with which I am concerned? Is he further aware that there has been a reduction in the amount promised by the Chancellor of the Exchequer? Will the Chancellor take the opportunity in his next Budget to ensure that the special areas get the full amount promised to them? It is very awkward to have a promise made to the special areas which is not fulfilled.
    Mr. MacDermot: The hon. Lady is insatiable for budgets. We argued this matter when debating the Public Works Loans Bill. I cannot accept what the hon. Lady said. My right hon. Friend made it quite clear in his original statement that he was allowing only £40 million for this purpose and that, as a result of that, the percentage rate of access that followed must depend upon the definition of the areas.
    Dame Irene Ward: The right hon. Gentleman could not calculate.
    Mr. Peter Walker: Will the Financial Secretary now explain why the Chancellor said in his statement that some local authorities were going to get up to 50 per cent., whereas the position is that there is not one local authority in this country which will be able to obtain 50 per cent.?
    Mr. MacDermot: I have explained the matter very fully, and I would refer the hon. Gentleman to what I said during the debate on the Public Works Loans Bill.

    Savings
    Mr. Grantasked the Chancellor of the Exchequer what steps he is taking to improve the general level of savings in the country.
    The Chancellor of the Exchequer (Mr. James Callaghan): The general level of savings remains high. I am always considering new measures to increase it, and for this reason I announced a new type of Post Office investment account with a higher rate of interest in my Budget statement.
    Mr. Grant: Was not that a rather complacent reply? Is the Chancellor aware that in the figures published yesterday, National Savings showed a net deficit over the period this year equivalent to that of last year, of about £85 million? When this is taken with the falling-off of private investment, referred to by the Leader of the Opposition yesterday, and dodged by the Chancellor, is not this an indication of a total loss of confidence in the Government's financial policy, and is not the best way to restore that confidence for the Government to resign?
    Mr. Callaghan: I am sure that that will make a good speech in the constituencies, but I am dealing with the Question on the Order Paper. The general level of savings in the country remains high. Because of competition from other forms of savings, the level of National Savings has, unfortunately, not proved to be as high as I would certainly like.
    Dame Irene Ward: Why?
    Mr. Callaghan: Because the rates of interest being offered by other institutions are higher. That is the reason. I repeat my statement, that the general level remains high.
    Mr. Barnett: Despite the party political points made by the hon. Gentleman opposite, would not my right hon. Friend agree that the increase in the level of National Savings is of urgent and vital importance, and would he consider appointing a super-salesman to sell savings throughout the country?
    Mr. Callaghan: I was very glad indeed to ask and to have Sir Miles Thomas accept my invitation to be Chairman of the National Savings Committee. I know of few salesmen who are better than he at this particular job.
    Mr. William Clark: The Chancellor is surely being less than fair to my hon. Friend the Member for Harrow, Central (Mr. Grant), who asked this Question. This is not a constituency point at all. It is a matter of national importance. Would the right hon. Gentleman now explain why today he says that there are so many competing markets for savings? How many new ones are there which were not available last year? Why is it that building society savings, unit trust savings, National Savings and investment trust savings, are all down? Surely, as my hon. Friend says, there is a lack of confidence in the Government, because people are inclined to wonder if it is worth saving money?
    Mr. Speaker: Order. The question of whether or no there is a lack of confidence in the Government must be a question of opinion and for that reason it is out of order. It was in the original supplementary question, and in the hon. Gentleman's supplementary question now. Let us get on.
    Mr. Callaghan: The proportion of personal disposable income—which is the phrase used—saved is 7·9 per cent. in the first quarter of 1965. If the hon. Gentleman would stop making party points and help savings we would all get on a lot better.
    Mr. Speaker: Order. There is quite a lot of noise going on which is quite irrelevant. I hope that it will not continue.
    Mr. Grant: In view of the totally unsatisfactory nature of the Chancellor's reply, I beg to give notice that I propose to raise the matter on another occasion.

    Public Service Pensions
    Mr. Bryant Godman Irvineasked the Chancellor of the Exchequer to what extent the purchasing power of public service pensions has declined since September, 1964.
    Mr. MacDermot: By about 4½ per cent.
    Mr. Irvine: Is the hon. and learned Gentleman aware that on 11th September, 1964, the Prime Minister gave a pledge that the Service pensioners and public service pensioners would not have the full purchasing power of their pensions eroded as a result of Government action? Is the further aware that that pledge had a great effect on a great many pensioners when they cast their votes in the last election? Is it not time that the hon. and learned Gentleman gave an indication when he will do something to redeem that pledge?
    Mr. MacDermot: I must invite the hon. Gentleman to await the Queen's Speech at the opening of the next Session of Parliament.
    Mr. Ridsdale: Is the Financial Secretary aware that public service pensioners would feel a lot more patient in waiting for the Government to do something if the Government showed a little more fairness in dealing with the increase in wages?
    Mr. MacDermot: I would point out that pensioners had to wait for a longer period between the last two pensions (Increase) Acts of the previous Government.
    Mr. Evelyn King: Is the hon. and learned Gentleman aware that an abnormally high proportion of the public service pensioners live in Weymouth and along the south coast of England? Is he further aware that, as the Allen Report showed, these are the areas where rates are also abnormally high? If he cannot fulfil one pledge, will he fulfil the other?
    Mr. Bryant Godman Irvineasked the Chancellor of the Exchequer if he will now make a statement about public service pensioners.
    Mr. Hugh Jenkinsasked the Chancellor of the Exchequer by what date he

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    expects the review of public service pensions to be completed.
    Mr. MacDermot: While I cannot anticipate the contents of the Queen's Speech today, the Government are giving active and sympathetic consideration to these problems.
    Mr. Irvine: Is not the Financial Secretary aware that there is a Motion on the Order Paper, which has more signatures to it than any other Motion, which urges immediate action on this matter? Is the hon. and learned Gentleman satisfied to allow us to go away for the Recess without making a further and better statement?
    Mr. MacDermot: As I have already indicated, I do not propose to make any further statement in anticipation of the Queen's Speech.
    Mr. Ennals: While recognising the inadequacy of the provision made by the previous Government, may I ask my hon. and learned Friend to recognise that there is genuine hardship among many of these public service pensioners? Will he give serious consideration in the review to accepting the principle of parity of entitlement of these people even though it is recognised that it cannot be given full application immediately?
    Mr. MacDermot: We certainly are taking into consideration sympathetically all aspects of this problem in the review which has been referred to in many Questions of this kind. As my hon. Friend will know, we made it clear before the election that there could be no question of parity being implemented in full at once. It would be quite impossible for financial considerations in the early stages of this Government.
    Mr. Goodhew: Is the Financial Secretary aware that having said that he must not anticipate the Queen's Speech, he is talking nonsense, because we have it on the authority of his right hon. Friend the Secretary of State for Education and Science that there is no need to take any notice of what is in the Queen's Speech and that the fact that something is included in the Queen's Speech does not necessarily mean that it will be done during the Session?

    Income Tax (Self-Employed Persons)
    Mrs. Shirley Williamsasked the Chancellor of the Exchequer how many taxpayers employed through labour-only sub-contractors in the engineering and building industries are listed as self-employed; and what is the estimated loss to the revenue arising from these taxpayers being listed as self-employed and not as employed persons.
    Mr. MacDermot: I regret that the information is not available. I would add that a new procedure has been introduced to facilitate the taxation of the self-employed in these cases.
    Mrs. Williams: I very much welcome my hon. and learned Friend's statement. I am sure that he is aware that this is an attempt to increase the revenue and not to spend it. Is he aware that there is a great increase in the number of self-employed persons in jobs otherwise identical with those of employed persons and that they are, therefore, able to claim expenses under the self-employed system which causes some resentment among those who rate purely as employed persons?
    Mr. MacDermot: Yes, we are aware of this fact. The Public Accounts Committee, in its 1961–62 Report, drew attention to the difficulties which the Inland Revenue was having in following up itinerant sub-contractors. It is for this reason that the new procedures have been introduced.
    Mr. Evelyn King: Is the hon and learned Gentleman aware that the productivity of self-employed persons is usually much higher than that of wage earners?
    Mr. MacDermot: I do not think that that necessarily follows.

    Shipyards (United States Navy Orders)
    Mr. Wingfield Digbyasked the Chancellor of the Exchequer what discussions he had on his recent visit to Washington with the United States Government regarding its policy of placing orders for United States Navy ships in British yards; and what is the policy of Her Majesty's Government in this regard.
    Mr. Callaghan: These confidential talks were covered by the joint communiqué issued in Washington on 30th June. As for the second part, I would refer the hon. Member to the reply given by my right hon. Friend the Secretary of State for Defence on 21st July.
    Mr. Digby: Would not the right hon. Gentleman agree that these orders would be of the greatest importance to our shipbuilding industry and to the balance of payments? Can we be assured that this matter is being pursued? Could the right hon. Gentleman say, if these orders come along, how they will be placed? Will individual firms have to go to America, or will the orders be placed with the Shipbuilding Conference?
    Mr. Callaghan: I cannot answer the last part of the supplementary question because there are some earlier questions of principle, mostly on the American side, which still have to be resolved and there are certain difficulties in the way. But, of course, these orders would be of very great help to our balance of payments.
    Mr. Emrys Hughes: Will the Chancellor of the Exchequer keep in mind that one of the troubles in the shipyards on the Clyde is the shortage of skilled labour and that if deliveries cannot be made promptly orders will go to Japan? Will he keep a very careful eye on the position before trying to get orders which would add to the difficulties?
    Mr. Callaghan: Yes. Nobody wants to see the industry too tightly stretched. That is why it is important that there should be a redeployment of labour into those industries where we can get most export orders.
    Mr. Onslow: Is the right hon. Gentleman aware that a factor which might influence the placing of these orders would be an anticipation that sterling might be devalued and that payment, therefore, might be correspondingly cheaper? Even at the risk of losing these orders, would he give a categorical assurance that devaluation is not contemplated by the Government?
    Mr. Callaghan: That does not arise out of the Question which I have been asked. I must say to the hon. Gentleman that I deplore that kind of propaganda which is getting much too widespread on the benches opposite.

    Exchange Control Regulations (Foreign Companies)
    Mr. Barnettasked the Chancellor of the Exchequer if he will consult other Governments with a view to preventing evasion of exchange control regulations by foreign companies.
    Mr. MacDermot: There is a constant review of the exchange control regulations to prevent evasion, and I do not think that a new approach to foreign Governments is necessary at this stage.
    Mr. Barnett: Would my hon. and learned Friend agree that the circular which I sent him from a Danish firm represents an incitement to illegal evasion of exchange control, particularly the method of sending false invoices representing art text books, for example? Can my right hon. Friend tell us whether he has any evidence as to how widespread or otherwise this practice might be or what action he is taking to stop it?
    Mr. MacDermot: I am grateful to my hon. Friend for having drawn my attention to the circular. I am not anxious to publicise the action which we are taking to deal with it. I have no information to indicate that this practice is widespread.

    Dollar Securities
    Captain W. Elliotasked the Chancellor of the Exchequer what proportion of the British Government-owned United States securities has been liquefied since 1st January, 1965.
    Mr. Boxasked the Chancellor of the Exchequer whether there has been any material change in the value of dollar securities held by the Treasury, through the Exchange Equalisation Account, since the end of April, 1965.
    Mr. Callaghan: None of the portfolio of dollar securities has so far been transferred to the reserves. Well over half has been made liquid and is ready in the form of short-term dollar securities for immediate use if need be. The monthly announcement of reserve movements will indicate if the portfolio has been drawn on. The extent to which this has been done will be shown in the regular quarterly balance of payments tables.
    Captain Elliot: When the Socialist locusts have eaten these reserves, which reserves have they earmarked to eat next?
    Mr. Callaghan: Yesterday I invited the Opposition, when I told them what I proposed to do, to indicate whether they supported this proposal, which was initiated by the former Chancellor of the Exchequer. I am bound to say that the level of patriotism among hon. Members opposite gets lower and lower as the Session wears on, and I hope that some member of the Opposition Front Bench will get up and say something a little patriotic for a change.
    Mr. Peter Walker rose—
    Mr. Box: Is the Chancellor of the Exchequer aware that many people in this country are of the opinion that he is very complacent about this matter? Is he further aware that he seems far too willing to accept the liquidation of the dollar portfolio? Will he instead take a more optimistic view and tell us what he will do about building up or restoring the dollar portfolio if and when the time comes?
    Mr. Callaghan: Yesterday's debate showed that it is the Government's policy—and I believe that it is one which can be achieved—to secure a balance in our payments by the end of 1966 without an undue repression of the economy. I thought that this was agreed on both sides of the House. That is the best way in which we can ensure that our reserves are maintained at a satisfactory level.
    Mr. Peter Walker rose—
    Mr. Shinwell: Does not my right hon. Friend realise that the one or two questions which have been addressed to him by hon. Members opposite are intended to denigrate, not the Goevrnment, but the country?
    Mr. Callaghan: Whether they are intended to do one or the other is for anyone to judge. I will only say this: people who speak lightly in these terms do not know what they could be unleashing if certain circumstances were to eventuate. It behoves all of us—I do not exclude myself from this—to be extremely careful in what we say about these matters: it could have widespread international repercussions which could affect the trading
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    and financial relationships of the whole world.
    Mr. Peter Walker: Is the right hon. Gentleman aware that there is the strongest resentment on this side of the House at the attitude he has taken on this subject? Is he also aware that ever since he has been Chancellor of the Exchequer every measure which he has taken to support and defend sterling has been defended from this side of the House? My right hon. Friend the Leader of the Opposition and many other Opposition Front Bench speakers have constantly supported him in his claim that there is no need for the devaluation of sterling. Comments of this sort come very ill from the right hon. Gentleman, who on three occasions has caused a crisis in sterling by his own irresponsible remarks.
    Mr. Callaghan: The hon. Gentleman went to Germany recently. He asked me beforehand whether he could make a statement in support of the need to preserve the value of sterling. I am grateful to him for his help, as I have always been. But I hope that he will rebuke his hon. Friends who are making, both in the House and outside, irresponsible statements which can be calculated only to weaken our position.

    Creation of Reserve Assets (Report)
    Mrs. Shirley Williamsasked the Chancellor of the Exchequer whether the Ossola Report of the Study Group on the Creation of Reserve Assets is to be published; and when it will be published.
    Mr. Callaghan: Yes, Sir, on 10th August next.
    Mrs. Williams: In welcoming that reply, may I express the hope that this Report will enable hon. Members opposite to become rather better informed about the dangers of talking down sterling and of the acute dangers to the very fragile state of the world monetary system of any dangers to our currency?
    Mr. Callaghan: The Ossola Report includes a technical analysis of the possibilities that exist for improving world liquidity. I agree with my hon. Friend that in present circumstances it is extremely important that everyone should do all within his power to ensure that the world monetary system is not made

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    more fragile but is put on a more permanent and lasting basis.
    Mr. Bruce-Gardyne: As this Report was ready about three months ago and has already been largely published in the Press, can the Chancellor tell us why it could not have been published earlier than this?
    Mr. Callaghan: Because it is a Report to which the assent of all member countries must be given before it can be published and, therefore, the pace must be that of the slowest. It cannot be published before the last of the member countries gives agreement.
    Mr. Lipton: To establish who are the patriots and who are not, will my right hon. Friend consider letting us have more details of our gold and dollar reserves and, in particular, who was responsible for the movement up and down in the gold and dollar reserves during the past month to which the figures relate?
    Mr. Hogg: Does not the Chancellor agree that every time he asserts that patriotism is the monopoly of one side of the House, he undermines confidence in the country as a whole?
    Mr. Callaghan: The right hon. and learned Gentleman's vehemence is at direct variance with his accuracy. I did not assert that and I do not assert it. It is within my experience, as I have said, that many hon. Members opposite have done their best to support the endeavour in which we are all engaged; but I am entitled to point out that there are hon. Members opposite who do the reverse. In present circumstances, this is not helpful either to the country or to sterling.

    United States Controlled Companies (Funds)
    Mr. Wingfield Digbyasked the Chancellor of the Exchequer what evidence he has of abnormal remission or repatriation of funds to America by United States controlled companies operating here; and if he will make a statement.
    Mr. Callaghan: Direct investment in the United Kingdom, most of which comes from the United States, was £13
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    million in the first quarter of this year, compared with an average quarterly rate of £45 million in 1964, excluding oil. This reduction was largely in reinvested earnings. Preliminary evidence suggests that remittances have returned to a more normal level in the second quarter.
    Mr. Digby: Is not this a serious matter? Is it not a matter in which, although, as one must recognise, the Americans have their own difficulties, the Government should make representations to the United States Government because they are giving us no help whatever?
    Mr. Callaghan: The hon. Member may assume that there are continual conversations about this matter. This is one of the difficulties which arises when countries that are in deficit, especially those which are reserve currency countries, are pressed to solve their balance of payments problems. My right hon. Friend the First Secretary wrote a letter to the chairmen of companies in this country asking them to remit from abroad earnings which they had there. This is one of the vicious circles from which the world must escape within the next few years if we are to ensure that world trade and the world monetary system continue to support the needs of the people of the world.

    Teachers' Salaries
    Mr. Grantasked the Chancellor of the Exchequer what would be the cost in a full year of transferring the payment of teachers' salaries to the Exchequer.
    Mr. MacDermot: That part of the cost of teachers' salaries and superannuation which is not already borne by the Exchequer now amounts to about £230 million in a full year.
    Mr. Grant: In thanking the Financial Secretary for that figure, which is a considerable sum, may I ask whether he does not agree that the transfer of part, perhaps, of this figure to the Exchequer would be a way of bringing to the ratepayers the early relief that the Government promised during the last election?
    Mr. MacDermot: As my right hon. Friend the Minister of Housing and Local Government said in the Supply Committee debate on 5th May, the Government intend to make changes in the

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    system of local government finance but they will be more radical than the simple transfer of this part of the cost of teachers' salaries to the Exchequer. I must ask the hon. Member to await the Government's proposals on this matter.
    Mr. William Hamilton: Can my hon. and learned Friend give an estimate of what the complete transfer of this burden would represent in terms of increases in Income Tax? Would it not be a sound idea to offset this by taking back the £83 million Surtax concession which the previous Government gave to those who were earning over £5,000 a year?
    Mr. MacDermot: The total cost would be the figure which I have given—£230 million—because the rest is being borne by the Exchequer through the medium of the various systems of grants.
    Mr. Boyd-Carpenter: Arising from the hon. and learned Gentleman's reply to my hon. Friend and his quotation from the Minister of Housing and Local Government, is it not a fact that the Labour Party manifesto, apart from promising general changes in organisation, promised early relief to ratepayers? When are we to see this?
    Mr. MacDermot: The right hon. Gentleman must await the proposals.

    Overseas Sterling Area Countries (Reserves)
    Mr. Shepherdasked the Chancellor of the Exchequer what was liability incurred by the United Kingdom as sterling area bankers for the rest of the sterling area in the years 1960 to 1964, making allowances for gold sold to the United Kingdom for sterling during the same period; and what estimate he has made of the gold and dollar liability in the same period in respect of the United Kingdom's trade with Canada.
    Mr. Callaghan: The reserves of overseas sterling area countries deposited with the United Kingdom—that is, our net sterling liability to them—rose by around £100 million in this period. With permission, I will circulate figures for the individual years in the OFFICIAL REPORT. Canada does not bank her reserves with this country.
    Following are the figures:

    BALANCES OF OVERSEAS STERLING COUNTRIES

    End-year

    £ million

    Overseas sterling holdings (net)

    1959

    2,704

    fall of £29 million

    1960

    2,478

    1961

    2,631

    1962

    2,675

    External liabilities and claims in sterling (net)

    1962

    2,298

    rise of £130 million

    1963

    2,469

    1964

    2,428

    Foreign Currencies (Forward Dealings)
    Mr. Shepherdasked the Chancellor of the Exchequer what estimate he has made of the extent to which forward dealings in foreign currencies by United Kingdom importers and exporters contributed to the financial crisis of last autumn.
    Mr. Callaghan: The effect of such dealings cannot be estimated precisely, but is thought to have been small.

    Corporation Tax
    Mr. Barnettasked the Chancellor of the Exchequer if he will give an estimate of the number of limited companies which he anticipates will not pay Corporation Tax; and, assuming a rate of 40 per cent., how many he estimates will pay less than £1,000 in the first year.
    Mr. MacDermot: In round numbers, of the 480,000 limited companies on the Board of Trade register, 150,000 will, it is estimated, pay no Corporation Tax and a further 250,000 would be unlikely to be liable for more than £1,000 for the first full year if the rate were fixed at 40 per cent.
    Mr. Barnett: Would not my hon. and learned Friend agree that this is an indication of the exaggeration made by Conservative spokesmen throughout the course of the Finance Bill? Would he not agree that this indicates that the Corporation Tax gives every possible tax incentive to far and away the majority of companies, particularly those which plough back their profits for further growth?
    Mr. MacDermot: Yes, I fully agree. The figure of 150,000 companies which are unlikely to pay tax not only includes the many companies which either have ceased to carry on business or have not yet started to do so, but also companies whose profits before depreciation are less than the capital allowances that are due.

    Victims of Nazi Persecution (Remittances)
    Sir J. Fosterasked the Chancellor of the Exchequer whether he will take steps to make remittances to residents in the United Kingdom in respect of restitution and indemnification resulting from Nazi persecution eligible for sale through the investment currency market.
    Sir B. Jannerasked the Chancellor of the Exchequer whether he will reintroduce the dollar premium for restitution and compensation payments to victims of Nazi persecution, in view of the fact that these payments do not represent newly-acquired assets but the replacement of spoliated objects and should be treated in the same way as funds accruing from the sale of investments to which, according to the Exchange Control Regulation of 4th May, 1965, the dollar premium is applicable.
    Mr. MacDermot: No, Sir.
    Sir J. Foster: Does the hon. and learned Gentleman realise that these unfortunate people who have been severely persecuted and have suffered grave injury to their health are really receiving money in compensation for their investments? Does he realise the existence of the anomaly that if they had received shares instead of money they could sell the shares on the investment currency market? Will the hon. and learned Gentleman reconsider the position?
    Mr. MacDermot: As the hon. and learned Member knows, if they sold their shares on the investment currency market they would still be subject to the measures introduced by my right hon. Friend the Chancellor. The hon. and learned Gentleman also knows, I think, that my right hon. Friend gave sympathetic consideration to representations which were made on this subject but that he did not feel that there was any way in which he could single out this class for special treatment compared with all the other categories of receipts which were formerly saleable as investment currency and which are now subject to the new procedure.
    Mr. Sydney Silverman: Does my hon. and learned Friend bear in mind that there is wide and considerable support for this proposal in many circles which have
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    nothing whatever to do with party affiliations or anything of that kind, and does he also remember that this matter has been canvassed year after year for many years during the days when we sat on the benches opposite and that many influential members of the Labour Party supported it? Having regard to the natural justice of the case, would he not consider the matter again?
    Mr. MacDermot: Yes, as I have indicated, we accept that there is widespread sympathy for these claimants, but I would point out that the fact is that they have up to now been in a better position, for example, than British claimants against the Egyptian Government who have never been able to sell their compensation as investment currency. So far as I know, this has not given rise to any complaints.

    Development Areas (Public Investment)
    Mr. McMasterasked the Chancellor of the Exchequer what plans exist to promote an increase during the current financial year in the Government's spending on public investment in development areas in Great Britain and Northern Ireland, in an effort to stimulate employment in these districts.
    Mr. MacDermot: I would refer the hon. Member to the reply my right hon. Friend gave yesterday to the hon. and gallant Member for Down, South (Captain Orr).
    Mr. McMaster: Is the hon. and learned Gentleman aware of the severe deflationary effect of three Budgets coupled with high interest rates which have forced many firms in Northern Ireland into bankruptcy, including one old foundry which employed several hundred men in my own constituency? Does he realise that positive steps must be taken urgently—not just the negative ones mentioned yesterday—to assist Northern Ireland and other marginal areas to offset the effects of these severe measures?
    Mr. MacDermot: Detailed questions relating to investment in Northern Ireland should be addressed to the Northern Ireland Government, but, as the hon. Member is aware, there are very considerable measures which we have introduced, and continued from the previous Government, which do assist investment in Northern Ireland.
    Mr. Edward M. Taylor: Has the hon. and learned Gentleman heard that his right hon. Friend the Secretary of State for Scotland has cut Glasgow's education capital projects next year from £15 million to £4 million, and is he further aware that essential community centre work has now been stopped completely? How does this square with the statement that development areas would be excluded from these cuts?
    Mr. MacDermot: I am afraid that I cannot answer that question without notice. It is a quite separate question.
    Mr. McMaster: In view of the unsatisfactory nature of the Answer, I shall raise the matter again.

    Land, Scotland (Ownership)
    Mr. Rankinasked the Chancellor of the Exchequer if he will seek to prepare a return for Scotland showing the name and address of every owner of 500 acres and upwards in extent, outside the municipal boundaries of burghs containing more than 40,000 inhabitants, with the estimated acreage and annual value of the lands and heritages of individual owners, and a similar return for municipal burghs containing more than 40,000 inhabitants.
    Mr. MacDermot: No, Sir. I am afraid we could not undertake this work.
    Mr. Rankin: Is my hon. and learned Friend not aware that this job was undertaken in 1873 when neither the equipment nor the personnel at the Treasury was as good as it is today? Why is it that he is denying the basic right of the Scottish people to know who owns their native land and how much of it? Does he not realise that a quantitative survey of Scottish land and its uses cannot be undertaken till the hidden hands which control it today are revealed? Will not he aid in that work?
    Mr. MacDermot: It may be that in 1873 Government valuers were not as preoccupied as they are today, but I must point out to my hon. Friend that we cannot do as he suggests for the reasons that it would cost too much, that we have not got the staff to spare to do the work, and that it is doubtful whether it would serve any practical purpose.
    Mr. Manuel: Would my hon. and learned Friend consider that the possible cost of collating this information may not be as much as he assumes? Would he not think that each county council has in its valuation returns the information sought by my hon. Friend and that, therefore, it is a matter of collecting it from the various local authorities to get the total figures for Scotland?
    Mr. MacDermot: I am afraid that I am not familiar with Scottish law in these matters, but if it is the same as our law I think the rating registers would be open to inspection.
    Mr. Emrys Hughes: Would not the whole of this problem of expense be solved and a practical solution produced by publishing photographs of the land owners?

  DEFENCE
  Mr. Hamlingasked the Prime Minister what discussions he plans to have on defence questions with Heads of foreign Governments during the Summer Recess.
  The Prime Minister (Mr. Harold Wilson): I have no present plans for such discussions.
  Mr. Hamling: While expressing the hope that my right hon. Friend will have a pleasant and peaceful holiday, may I ask him to bear in mind that we on these benches would be most agreeable to discussions with the heads of foreign Governments which might facilitate cuts in the defence expenditure of this country and so redound to the benefit of our balance of payments problem?
  The Prime Minister: As my hon. Friend knows, the first task in this matter is to complete our own defence review, which, as I have already said on previous occasions, is very much related to the economic burden of defence and to the cost of expenditure in both the budgetary sense and in terms of foreign exchange. This has to come before we have any discussions with overseas Governments.
  Mr. Heath: Would the right hon. Gentleman answer this question? As he has accepted from his own Parliamentary party a resolution calling for drastic cuts

  1265
  in arms expenditure much earlier than at present proposed, does this mean that the Chancellor's announcement of last Tuesday of a £400 million reduction by 1969–70 and a £100 million reduction next year is still to be carried out, or are greater reductions now to be carried out as a result of that resolution last night? Will the Prime Minister give us a straight answer to that question?
  The Prime Minister: Yes, certainly, and I hope the right hon. Gentleman will give straight answers to the questions I put to him last night and last Thursday. [HON. MEMBERS: "Answer the Question."] So far as the question is concerned I shall be very happy to send the right hon. Gentleman a copy of the resolution. I have it here.
  Hon. Members: Answer the question.
  Mr. David Griffiths: Do not get so touchy.
  The Prime Minister: I will answer the question, but I should like to be heard. I will send the right hon. Gentleman a copy of this statement. I hope he could associate himself with it. With regard to the defence review, we have decided that the defence review must be contained within the total of £2,000 million at 1964 prices. That review is continuing, depending on what commitments are involved and what decision the Government take on those commitments. If we can get below that £2,000 million we shall certainly do so.
  Mr. Heath: I must press the Prime Minister hard on this. Is the Chancellor's firm announcement of a reduction of £400 million to be adhered to or not, or are the Prime Minister and his colleagues now committed to greater reductions than £400 million as a result of this resolution? May I ask the Prime Minister if he is aware that whenever he asks a question at a reasonable hour instead of in the tricky way he did last night he will then get a straight answer?
  The Prime Minister: I put many questions at 5 o'clock last Thursday afternoon and have not had an answer yet, and if I could have reached that question earlier last night I had another half dozen questions to put to the right hon. Gentleman. He knows why I did not. Now with regard to the question he has put—I was
  1266
  replying to his peroration and now I will reply to his question—my right hon. Friend's statement last week, in which he said that we shall adhere to this cut of £400 million, as I have already said this afternoon, will be adhered to, because it means a £2,000 million programme at 1964 prices. That will certainly be adhered to. I must say that we took over a very extravagant programme from right hon. Gentlemen opposite, but if, without giving up essential commitments, we can get it below £2,000 million—it is impossible at this stage to say whether it is possible or not—we will go below it.

  MINISTRY OF LABOUR
  Mr. Hamlingasked the Prime Minister whether, in view of the increasing importance of the allocation of manpower and industrial training in the British economy, and the declining significance of strikes, he will re-designate the Ministry of Labour, and call it the Ministry of Manpower and Training.
  The Prime Minister: No, Sir, though I agree that the names of Government Departments should be reviewed from time to time in the light of changes in their functions.
  Mr. Hamling: Would not the Prime Minister agree that under this Government the functions of this Ministry have been made much more progressive than they were under the last Government?
  The Prime Minister: I think that in the concluding months of the late Government a great drive started in the matter of training and of retraining, and this is continuing and being developed. I was hoping to say something about that as well last night. One of the other essential jobs of the Ministry—and I am not sure how one recognises it in the title—is to deal with certain of the matters to which I referred last night in connection with reducing the impediment to production by getting rid of restrictive practices within industry.
  Mr. Godber: As the Question refers to the significance of strikes, may I ask the Prime Minister whether he can confirm that although the number of official strikes may have fallen, there has been a disturbing increase in the number of unofficial strikes this year? Will he say what

  1267
  steps the Government propose in regard to restoring a greater degree of authority to trade union leaders generally?
  The Prime Minister: We must get this in perspective. I think that the right hon. Gentleman said this last year. In terms of international comparisons, our strike record is much better than that of most other countries. On the other hand—and I have said this many times, both in Opposition and in Government—I agree that we cannot afford a single unofficial strike, and we must do our best to avoid official strikes as well. Certainly some of these have been disturbing, and, while quite small in the number of man days lost, have had a disproportionate effect in terms of total production. We would do everything in our power to strengthen the hands of the official leadership to prevent these unofficial strikes, and this is one of the issues that will no doubt be considered by the Royal Commission.
  Mr. Chataway: On the subject of industrial training, to which the Question refers, may I ask the Prime Minister whether he is aware that the stop on the building of technical colleges, which has just been announced, has dealt a very serious blow to industrial training and to the expansion of the technical colleges which has gathered pace since 1957? Before changing the name of any Ministry or creating any new ones, will he give some priority to industrial training instead of talking about it?
  The Prime Minister: I do not propose to change any names, as I said in my original Answer. The point raised by the hon. Gentleman is not, in any case, a matter within the field of the Ministry of Labour. As the hon. Gentleman knows, it is within the field of the Ministry of Education. As I explained last week, and as my right hon. Friend explained, the total build-up of public works contracts and building contracts, as a result of the programme which has been getting under way for the last year or two is such that far too many contracts have been started and not enough finished. Just as in 1953 Mr. Macmillan had to hold back all building to get the housing, we feel that we shall get more and quicker results within all these fields by this temporary suspension of contracts.

  PARLIAMENTARY OMBUDSMAN
  Mr. Martenasked the Prime Minister if he will now make a statement about Her Majesty's Government's proposals for a Parliamentary Ombudsman.
  The Prime Minister: I would refer the hon. Gentleman to my speech on 29th July.
  Mr. Marten: As the Prime Minister said in that speech that the Bill for this Parliamentary Commissioner was about ready, will he answer the Question and give the House some idea of what these proposals are?
  The Prime Minister: I also said in that speech that we should be publishing a White Paper first in the next few weeks, and I suggest the hon. Gentleman awaits that. I think that the whole House will welcome the terms of the White Paper, not least in its relation to the position of Members of Parliament.
  Sir F. Bennett: Can the Prime Minister at least confirm or deny that he is saving the post for the First Secretary?

  NUCLEAR TESTS
  Mr. A. Hendersonasked the Prime Minister what reports he has received from his Scientific Advisory Committee about the need for on-site inspections for the purpose of verifying underground nuclear explosions; and whether he will make a statement.
  The Prime Minister: If, as I assume my hon. and learned Friend is referring to the Advisory Panel on Disarmament its deliberations and reports are confidential.
  Mr. Henderson: Would not my right hon. Friend agree that the number of underground explosions which cannot be nationally verified is so small as to justify the risk of entering into a comprehensive test ban agreement excluding on-site inspections, more especially if the agreement contains a renunciation clause? Can the Prime Minister say whether such an approach is being taken at the Geneva Conference?
  The Prime Minister: While it is true that the techniques for verifying these matters without on-site inspections have improved, it is not the case where I think

  1269
  we can take a risk on this matter, not at this stage. What we have suggested, as indeed both sides said in the House during the recent foreign affairs debate, is that, as both Governments have pressed for for a year or two now, there should be a meeting between Western and Soviet scientists to examine Soviet claims that this can be properly identified from a distance. This is one of the points that we have already started to press at Geneva. I am sorry that I cannot yet publish the speech of my noble Friend at Geneva. As soon as it is declassified, as soon as it is no longer confidential, it may be useful for the House to be able to see it.
  Mr. Lubbock: Is the Prime Minister aware that there have been a number of Questions on this subject, both in the previous Parliament and in this one, and that all we have ever been told is that a certain amount of risk exists in small nuclear explosions which might not be detected? Will he consider publishing a White Paper setting out what these risks are, and why an explosion with a yield of less than 5 kilotons would be militarily significant at all?
  The Prime Minister: It might easily be because the purpose of the test ban agreement, even though it was limited, was to stop the nuclear arms race. The arms race depends more than anything on one side fearing that the other side will get ahead. As long as it is possible to have tests of this kind, even quite small in terms of total yield, but possibly significant in terms of technological advance, one side will fear that the other is getting ahead and will tend to intensify the arms race. As techniques improve, we look forward to a situation when this can be done without on-site inspection, but our advice is that we have not got there yet.
  Mr. Paget: In view of the size and complexity of the whole nuclear set-up of the major Powers, may I ask my right hon. Friend whether he is really suggesting that the balance of power could be shifted by small underground tests?
  The Prime Minister: Not the balance of power, I think, because everyone recognises that there is a very real balance of power between the two major nuclear countries. On the other hand, I think that both nuclear countries, and
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  indeed the whole world, want an assurance that the nuclear arms race will come to an end. We have had many other proposals in that field, and we must recognise that the possibility of technical advance, if that is the right word, and technological developments, could set up a big and important competitive reaction; first within these small developments, and then perhaps spreading more widely.
  Mr. Hogg: Is it not a fact that the Soviet authorities have so far declined a meeting between Russian and Western scientists, and has the right hon. Gentleman so far been able to ascertain what reasons they have for this failure to accept our proposals?
  The Prime Minister: I have not. I think that the position is still as it was when the right hon. and learned Gentleman was last concerned with it. The Soviet authorities have declined this meeting and so far they have not been willing either to respond to the suggestion that I have made on a number of occasions that if they think it is possible to know when these things are going on we should have a specially staged arrangement under which one would take place at a specified time under a neutral umpire to see whether the Russians could spot the time and place when it occurred.

  EUROPEAN ECONOMIC COMMUNITY
  Mr. Eldon Griffithsasked the Prime Minister whether, in view of recent developments in the Common Market, he will now reconsider his policy on British membership.
  The Prime Minister: I cannot see that the present difficulties within the Community in any way affect the position about British membership.
  Mr. Griffiths: I am glad to be able to ask this Question, because the other day when the Minister of State at the Foreign Office appeared to move his party's programme on this a little further towards the Common Market the Chairman of the Parliamentary Labour Party rebuked him. [HON. MEMBERS: "Question."] May I therefore ask the Prime Minister first, whether the celebrated five conditions are still in force, and if not, which ones have been dropped? Secondly,

  1271
  will he say straight out whether, if the conditions are favourable, it is his policy for this country to join an expanded European community?
  The Prime Minister: In the first place, the Question relates to recent developments in the Common Market. I thought that Front Bench speakers on both sides had made it very clear in the recent foreign affairs debate that it would be very wrong for Britain to intervene in the recent developments, or to start basing new changes or tacks of policy on what has been happening in this very difficult situation, which we all want to see resolved by our European friends.
  Secondly, as for the five conditions, I have repeatedly made it clear that those five conditions measure the requirements that we have for joining the Common Market. I have said—and my hon. Friend said the other day—that certain of those conditions are less applicable, in terms of urgency, than they were—particularly, for example, the one relating to E.F.T.A. At that time there were real fears that Britain might join without securing safeguards for the other E.F.T.A. countries, especially the neutrals. There has now been a complete change of attitude concerning the position of the neutrals, and to that extent that condition is not as important as it was.
  As for the third part of the supplementary question, our position always has been that we are prepared, willing and ready to join the Common Market if—but only if—conditions are realised which will satisfy essential British interests—I cannot spell out what they are—and particularly our right to go on trading with Commonwealth countries. Those are the tests.
  Mr. Shinwell: Will my right hon. Friend exercise the utmost caution and prudence before entering into negotiations with the countries of the Six, recalling the horrible example of the Leader of the Opposition?
  The Prime Minister: We have always made it clear that we are prepared to enter into negotiations—there is no possibility or question of this in present circumstances—if essential conditions can be realised. One of those relates to
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  Commonwealth trade. So long as the present agriculture policy of the Common Market countries remains unchanged I do not think that it will be possible for us to join without its having a most serious and damaging effect on Commonwealth imports into this country, and upon our balance of payments.
  Sir D. Walker-Smith: I fully agree with the Prime Minister's prefatory remarks about not using this occasion in any sense to make capital, and I fully endorse what he said as to the hope of a successful issue from the difficulties of the Common Market countries, but will he consider the possibility of publishing, as a White Paper, the Government's assessment of the effect of the Treaty of Rome on our institutions, in the context of sovereignty and jurisdiction, so that informed discussions could take place as to what possible modifications of the Treaty of Rome could help to enable Britain to play a part in a wider although less rigidly institutionalised European association?
  The Prime Minister: I thought that in the long debates we had—many of them extremely constructive—during the period of the negotiations there was the fullest understanding of what the Treaty of Rome meant. The right hon. and learned Member himself wrote quite a lot on it, with a high degree of authority. There were many discussions on this. I do not think there was much disagreement between any of us, whatever our viewpoint may have been, about the effects of the Treaty of Rome. What is perhaps more relevant is that some of the discussions related not to what was in the Treaty of Rome but what was outside it—partly agricultural policy and partly the question of whether, by signing the Treaty of Rome as an economic organisation, we might be committing ourselves to a full supra-national position in Europe in relation to defence and foreign policy. Certainly my predecessor as Labour leader and I, and all of us on this side, felt that this country would not agree to handing over control of defence and foreign policy to any supra-national organisation. The Treaty of Rome was a different matter, presenting fewer difficulties than those of agricultural policy and the problem of supra-nationality.
  Several Hon. Members rose—
  Mr. Speaker: Order. We cannot debate these wide topics in supplementary questions.

BUSINESS OF THE HOUSE
Mr. Edward Heath: May I ask the Leader of the House to state the business of the House for the first week after the Recess?
The Lord President of the Council (Mr. Herbert Bowden): Yes, Sir. It is proposed that the House should resume after the Summer Adjournment on Tuesday, 26th October, when the business will be as follows:
TUESDAY, 26TH OCTOBER—Debate on Northern Ireland, until 7 p.m.
Afterwards, the remaining stages of the Patents (Employees' Inventions) Bill [Lords].
Second Reading of the Matrimonial Causes Bill [Lords] and of the Superannuation Bill [Lords], which are consolidation Measures.
WEDNESDAY, 27TH OCTOBER—Debate will take place on the Reports of the Select Committee on Procedure, when the House will be invited to approve changes in our practice and Standing Orders.
THURSDAY, 28TH OCTOBER—Lords Amendments to the Murder (Abolition of Death Penalty) Bill.
FRIDAY, 29TH OCTOBER—Remaining stages of the Matrimonial Causes Bill [Lords] and of the Superannuation Bill [Lords], which are consolidation Measures.
Motion on the Greenwich Hospital and Travers' Foundation.
MONDAY, 1ST NOVEMBER—The proposed business will be: Lords Amendments to the Rent Bill.
Other business for the spill-over includes a debate on Welsh Affairs, and a debate on the Report of the Select Committee on the Palace of Westminster.
It may be convenient for me to add that Prorogation is expected to take place during the week beginning Monday, 1st November, and the openinig of the new Session on Tuesday, 9th November.
I would remind the House that power already exists for Mr. Speaker, upon
1274
representations being made by the Government, to call the House together at an earlier date if such a course should be necessary in the public interest.
Mr. Heath: Will the right hon. Gentleman bear in mind that we shall not hesitate to ask the Government to recall the House if we think it right to do so because of the economic situation with which we are faced?
Mr. Bowden, Yes, Sir. This is usual. Representations from the official Opposition or from Members of the House will be received by the Government, who will approach Mr. Speaker in the normal way.
Mr. Woodburn: In the proposals for procedure, is my right hon. Friend considering the question of televising the House, with a view of letting the public see how some hon. Members behave in it at certain times of the night?
Mr. Bowden: My right hon. Friend will be aware that the question of televising Parliament is before the Select Committee on Publications and Debates at present.
Mr. Selwyn Lloyd: Following upon that supplementary question, and relating to the business announced for Wednesday, 27th October, the right hon. Gentleman said that the House would be invited to approve changes in our practice and Standing Orders. What notice will we receive of those changes? What time will we have to consider them before the debate?
Mr. Bowden: We have already had three Reports from the Select Committee on Procedure, and I have been pressed for a debate on those Reports for a number of weeks. We shall have discussions through the usual channels, and the decisions to implement any of the recommendations contained in any of the three Reports will arise from the Reports.
Mr. Lubbock: Is the right hon. Gentleman aware that my right hon. Friends are extremely worried about the delay in passing the Rent Bill, and that we think that this should have been done before we rose for the Summer Recess? Can the right hon. Gentleman ask his right hon. Friend the Minister of Housing and Local Government to make a statement before we rise, saying what his plans are for the appointment of rent assessment

1275
committees and rent officers, and to what extent this can be done before the Bill is on the Statute Book?
Mr. Bowden: The hon. Member will be aware that the Bill is still before another place. On his second point, I will certainly consult my right hon. Friend.
Mr. Orme: Can my right hon. Friend tell the House exactly what business we shall be allowed to discuss on Northern Ireland, and whether it will be possible to discuss the electoral malpractices that take place in the Six Counties?
Mr. Bowden: I am not yet sure of the form of the debate, but a day is usually given in a Session for a debate on Northern Ireland. We have had one half day, and this is the second half. I think that anything that can be raised in connection with Northern Ireland will be in order.
Sir Harmar Nicholls: From his special position as Leader of the House, can the right hon. Gentleman tell us what are the chances of this Parliament being dissolved while we are in recess?
Mr. Bowden: Not without notice.
Mr. Snow: With reference to my right hon. Friend's comment on the debate on procedure, will he confirm that should the Select Committee by any chance publish another report during the Recess it will be in order for that new report also to be debated?
Mr. Bowden: I hope so. I hope that this will be a fairly wide debate. It is a whole day's debate. The Government will bring forward certain recommendations, for the approval of the House. I have it very much in mind that some of them might be left to a free vote of the House. On the other hand, the Government must reserve their position, as some of them will be definitely Government recommendations.
Mr. Gower: Can the right hon. Gentleman imagine the outcry there would have been from hon. Members on his own side who represent Welsh constituencies had a Conservative Government relegated Welsh business to the very "fag-end" of a Session, offering either a half day before the Recess or this little bit after the Recess?
Mr. Bowden: If the hon. Member will charge his memory, he will find that the Welsh debate has always taken place in the last week or so before the end of the Session. That is where it is now.
Mr. Richard: Is my right hon. Friend aware that a large section of the general public consider that the House is being brought into great disrepute by the sight of sick and ailing Members of Parliament being wheeled out of taxi-cabs and into the precincts of the Palace of Westminster? Would he confirm that, in the debate on procedure on Wednesday, 27th October, we will not be inhibited from discussing the possibility of proxy voting for medical reasons?
Mr. Bowden: I have already said that this will be a wide debate. I think that I am right in saying that this subject is at the moment before the Select Committee on Procedure. Whether it will report on it in time is not a matter for me.
Mr. Kershaw: Is the right hon. Gentleman aware that the kite flown by the Minister of State for Foreign Affairs yesterday was a good one, although the position has been obscured again by the Prime Minister this afternoon? Will he not be too afraid of the right hon. Member for Easington (Mr. Shinwell) and give the House an opportunity fairly soon to discuss what is the position of the Labour Party vis-à-vis Europe, which is now very much in doubt
Mr. Bowden: I do not think that it is very clear what is the attitude on the Opposition side of the House towards Europe either, with the honourable exception of the Liberal Party. There might be an opportunity to discuss Europe, but I cannot promise it for the spill-over.
Mr. William Hamilton: With regard to the debate on procedure, on Wednesday, 27th October, does my right hon. Friend think it satisfactory that the Government should present the House with what amounts to a fait accompli before they have heard what hon. Members on both sides of the House have to say on the Reports from the Select Committee? Would it not be better for the Government to listen and then to act in view of what hon. Members have said?

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On the business on the Monday after we come back—the Rent Bill—in view of the fact that the Bill has been delayed from getting on to the Statute Book for three months by the House of Lords, will he not consider at a future date an emergency debate on how to deal with this wretched place along the corridor, to prevent this kind of thing happening?
Mr. Bowden: My hon. Friend's second point is a constitutional point, which would hardly arise on procedure. At some point, no doubt, an hon. Member might select this matter for discussion in private Member's time, but my right hon. Friend the Prime Minister has made it absolutely clear that he expects no change whatsoever in the constitutional position vis-à-vis the House of Lords without a mandate from the electorate. This has been said a number of times. This is not the last procedural debate which we shall have. No doubt there will be other occasions when things may arise from the first debate that ought to be taken into consideration, but we have had three Reports for some weeks from the Select Committee and perhaps we ought to implement some of its recommendations.
Mr. Gibson-Watt: Is the right hon. Gentleman aware that the answer he gave to my hon. Friend the Member for Barry (Mr. Gower) is not exactly correct and that, in over the 17 years during which we have had Welsh debates since 1944, only on three occasions has it been necessary to put it into the left-over? Will he assure us that we can have a fell day's debate on Welsh affairs on the day which is chosen?
Mr. Bowden: The hon. Member himself is not quite correct. What I said was that the Welsh debate has usually taken place during the two or three weeks before the end of the Session. When the Session has ended in July, and there has been no spill-over, he would be accurate in saying that the debate has taken place then. In this case, there is a spill-over and the debate will take place in October.
Mr. Popplewell: Will my right hon. Friend ensure that when we are discussing the Report from the Select Committee on Procedure the debate will also embrace previous recommendations of the Committee, in particular, that dealing with
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the question of the publication of Select Committee Reports, particularly those of the Select Committee on the Nationalised Industries?
Mr. Bowden: Yes, Sir, that would be quite in order on the general debate.
Mr. Heath: May I ask the Leader of the House whether, when we are invited to approve changes in practice and Standing Orders, these will be put down in the form of formal amendments to Standing Orders or in a general Motion, setting out what is proposed? If so, how much notice of this will the House be given? It appears that there will only be 24 hours' notice, if that. Is it not unwise and unfair to the House to ask us to make these amendments and changes in procedure at such short notice?
Mr. Bowden: I do not expect that the recommendations arising from the three Reports of the Select Committee on Procedure will be very highly controversial: they have been approved almost unanimously by that Committee. We can have discussions through the usual channels on these points, which, perhaps, we ought to do. There is no intention on the part of the Government to endeavour to force through in the spill-over recommendations which have not been considered by the Select Committee on Procedure.
Several Hon. Members rose—
Mr. Speaker: We must go on now.

THE QUEEN'S AWARD TO INDUSTRY
The Prime Minister (Mr. Harold Wilson): With permission, Mr. Speaker, I wish to make a statement.
The House will recall that on 4th February I announced the setting up of a Committee, under the chairmanship of His Royal Highness the Prince Philip, Duke of Edinburgh, to work out a scheme for making Awards by Her Majesty the Queen to industrial units for outstanding achievement in increasing exports or in technological innovation. The Committee's Report will be published and copies available in the Vote Office this afternoon.
The Committee's recommendations are accepted by the Government in full. I would like on behalf of the Government,

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and I am sure of the whole House, to thank His Royal Highness and the members of his Committee for undertaking this task and for their admirable Report.
The Award is to be known as "The Queen's Award to Industry", and Her Majesty has graciously consented to the Awards being announced each year on her birthday. The first Awards will, therefore, be announced on 21st April, 1966. The Committee recommends that there should be a single Award to mark industrial efficiency within the fields of export and technological achievement.
The criteria for the Award are listed in the Report. Any branch of industry, including agriculture and horticulture, will be entitled to apply. The Award is to be represented by an emblem which holders will be entitled to display in a wide variety of ways.
I shall be responsible for advising Her Majesty on Awards. In this, as the Report recommends, I shall be assisted by a small Committee composed of members from both within and outside the Government service which will draw upon advice from outside its membership as necessary.
The purpose of this new scheme is twofold: to reward and to stimulate. I hope that the Award will encourage industry in its efforts to achieve the improvements in exports and the technological advance on which our national future so much depends.
Mr. Heath: May I ask the Prime Minister to accept that we should like to associate ourselves with his thanks to His Royal Highness and the members of the Committee for the work which they have done in producing their Report?
Will this award include those who are not directly concerned in what we normally define as industry, but are concerned with exports, with agencies which are engaged in obtaining exports and with those who are financing exports? Will it be available not only in this country, but to those in any part of the world? We hope that this award will help to stimulate further activity in exports.
The Prime Minister: I thank the right hon. Gentleman for what he said. His first question raises what must have been the most difficult problem for the Com-
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mittee, the exact scope and coverage. They recommended, and the Government accept, that it should not apply to invisible exports, that it should apply to the activities of manufacturing and other firms who manufacture and sell the goods they make. So far as technological advance is concerned, this could apply to firms who do a good job in the home market, for example, in eliminating imports by competitively producing goods at home.
Paragraph (2) of the Report makes it clear, as he will see, that it applies only to British industrial units, which means British-registered companies resident in the United Kingdom.
The right hon. Gentleman associated himself, as, I am sure, the whole House will do, with the hope that this award will stimulate many who are capable of doing a good job in exports but who are not now doing it. Because it is unusual to have a group award, it will also enable everyone who has played his part in a particular export achievement, or has a good record in exports, to be able to have a physical symbol of what he has done for Britain.
Mr. Maxwell: Is my right hon. Friend aware that in industry both management and workers will be gratified and enthused by this announcement by the Government? Is he aware that business, and exporters in particular, will be delighted in that it will be confirmation that the Government are really doing something about stimulating exports instead of, like right hon. and hon. Gentlemen of the former Administration, just talking about it and saying what a great deal of fun it was? Is my right hon. Friend further aware that this announcement will give the greatest satisfaction to people throughout the country and that it is bound to stimulate exports?
The Prime Minister: I think that this is useful, just as the creation of a new citation in the Birthday and Honours List for services to exports is useful for encouraging exports. But I would not put it very much higher than that. I think that it is valuable as a recognition; but we all recognise that far more needs to be done in the matter of export efforts.
If I had had the opportunity last night, and if I had thought that hon. Members opposite were interested, I intended to

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refer—perhaps they are now—to the fact that we are at present extremely hard at work trying to find—and right hon. Gentlemen opposite know the difficulties—new incentives within the field of exports and of technological modernisation. This is not easy, but we certainly intend to be able to introduce these more financial incentives which I think are essential. What has been announced this afternoon is more limited but, I believe, valuable.
Mr. George Y. Mackie: Is the Prime Minister aware that the last part of his answer to his hon. Friend the Member for Buckingham (Mr. Maxwell) is perhaps more relevant to the problem than the ancillary award? Is he aware that it is considered in a great many quarters that although the export rebate is valuable for established industry, it is not sufficient to entice new exporters into the business? Will he now get down to evolving awards in the way of profits which may even be unfair but which will make it clear—
Mr. Speaker: Order. The institution of awards in the Prime Minister's statement will not justify a discussion of export policy. We must be sensible about this.
Mr. George Y. Mackie: On a point of order. The Prime Minister referred to export awards in another field, through profits. Surely I am entitled to ask him about this?
Mr. Speaker: I want to stop this discussion, because we have what I think is called a long day's night before us, and a good deal of business before we get there. I rather hope that at this stage we might deal with the statement on the basis of the institution of this award. I should have intervened earlier—I concede that to the hon. Member—but my anxiety was mounting as we went along.
Mr. Peter Emery: Would the Prime Minister tell the House whether the emblem and this award may be used in a commercial way by the firms who gain it? Is it envisaged that they will be able to use it in further business? Will the firms which have this award be able to use it for business purposes?
The Prime Minister: Yes. In addition to having a flag which will be flown above the factory, and to the award itself, which I think hon. Members will feel is a rather beautiful creation, and to lapel
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buttons and other things for those who have contributed to exports, it is certainly intended that the firm's notepaper may carry the emblem of the Queen's Award, which may be used in any letters which the firm sends overseas or anywhere else. It will also be possible to stencil the design of the award on crates containing exports from these firms.
Mr. Snow: Is the Prime Minister aware that one of the characteristics of the past 10 or 15 years has been the inability of Governments to harness or bring within the export drive the very valuable activities of small businesses and even one-man businesses? Will he confirm that this very valuable potential export element will be recognised?
The Prime Minister: Yes, Sir, very much so. As is stated in the Report, it is the intention not only that awards should be given to the very top exporters—those who do most in physical volume—but, also, that awards should be given to those, however small, who show the greatest improvement in their export effort, who have broken into a new and difficult market, and to small firms, even one-man firms, who have distinguished themselves in technological advance.

MINISTRY OF OVERSEAS DEVELOPMENT (WHITE PAPER)
The Minister of Overseas Development (Mrs. Barbara Castle): With permission, Mr. Speaker, I wish to make a statement.
I informed the House on 20th July that I intended to lay before it a White Paper on the work of my Department. This is available in the Vote Office today.
This is not a moment at which it would be right to announce plans for a significant increase in the aid programme. At a time when we are taking steps to restrain public expenditure and when we must have particular regard to our balance of payments there are limits to the amount of aid we can provide. This makes it all the more important to ensure that our aid is well managed and provided in the most effective forms.
The White Paper is designed to inform the House how I intend to achieve this. Our purpose is to help the poorer countries to tackle the problems of development and indebtedness. These problems

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have, if anything, become more acute in recent years. The commitment to give aid for overseas development is, therefore, a long-term one.
The White Paper starts with a discussion of the motive and objectives of our aid policy, followed by an analysis of the economic progress of the developing nations. This makes no attempt to minimise the grave tasks facing these countries, to which I have referred, nor does it underestimate what has been achieved in recent years through their own efforts in co-operation with the industrial countries and international agencies. I trust that this analysis will lead us to the conclusion that we must not shrink from accepting our share of responsibility.
In Chapter VII of the White Paper I have indicated the main guide lines which we propose to adopt in our future aid policies. In Chapter VIII our new policy on interest-free loans is explained. In Chapters XI to XIII I have dealt in some detail with technical assistance, to which I attach special importance.
Since the formation of the Ministry we have systematically reviewed our operations in technical assistance, and as a result I have some important new initiatives to announce. These relate, in particular, to the recruitment of British men and women for key positions overseas and to high-level training in this country of specialists in development and administration. I will not lengthen this statement by going into detail.
Mr. Speaker, I conclude as I began, by pointing out that we are publishing this White Paper at a time when we ourselves are experiencing serious financial difficulties and are taking important measures to correct them. I am sure that the House will agree that, however much these difficulties must limit what we can do at the moment, our preoccupation with them should not allow us to forget our responsibilities in overseas aid, which forms an increasingly important element in international relations today.
Mr. Sandys: I sympathise with the hon. Lady in her having to make a statement when there is really nothing to tell the House May I ask her three questions? I have had only a few moments to look at the White Paper and I cannot
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find these figures. First, can she tell us how the rate of disbursements this year compares with the rate last year?
Secondly, does the Minister realise that, even if she is able to maintain the volume of Government aid at approximately the same figure as last year, the total of British economic assistance to underdeveloped countries is bound to fall far below the 1 per cent. which was agreed generally at the U.N.C.T.A.D. conference as a result of the Government's deliberate decision to discourage private investment overseas?
Thirdly, is it not a fact that the new Ministry has merely increased overhead costs without increasing aid? Is it not clear that the hon. Lady and her Department have proved to be nothing but a costly piece of political window-dressing?
Mrs. Castle: The right hon. Gentleman can keep his sympathy for himself; I have certainly no need of it. When he has read the White Paper he will find that there is contained in it details of important policy changes and advances in this field which are quite remarkable and outstanding for a period of nine months' economic difficulty in this country. Particularly in the field of technical assistance, we have achieved in nine months what the Secretary for the Department of Technical Co-operation in the previous Government was unable to achieve ever since its formation in 1961.
Disbursements for this year, of course, are not in the White Paper for the simple reason that they are not complete for the year, but I anticipate that they will be higher than in last year's out-turn. As the right hon. Member knows, we are running above the 1 per cent. calculated by U.N.C.T.A.D., which includes private investment and there is no reason to expect that we shall fall below that target at any time.
Mr. Grimond: Paragraph 22 of the White Paper stresses the shortage of professional and technical personnel in the poorer countries. How does the right hon. Lady reconcile this with the Government's latest policy announcement, which is to allow such personnel to come into this country without impediment while gravely decreasing the number of unskilled personnel who could come here from the poorer countries of

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the Commonwealth? Has this policy been agreed with the poorer countries of the Commonwealth? Have they accepted this decision to encourage these professional people while putting a severe limitation on the number of unskilled persons who may come here?
Mrs. Castle: Neither my Department nor the Government have done anything to encourage the inflow of this personnel; they have been coming for years. Many have come for a form of post-graduate training and advanced experience and have then returned to their own countries. No representations have been made to my Department on that point.
Some unskilled persons will be coming in. In the White Paper we have set out the action we are taking to improve training facilities in this country. In particular, we are really tackling the problem of industrial training for many people who have come over here sometimes for technical training and then have not been able to get the practical experience in industry necessary to complete their course. In conjunction with the Industrial Training Councils we are tackling this problem for the first time.
Mr. F. Noel-Baker: Is my right hon. Friend aware that those of us who have followed the work of her Department since it was set up warmly welcome the scale of progress today and the plans for the future? Is it the intention to set up a careers service, associated with her Ministry generally? Is it accurate to say that there is to be no cut in overseas aid despite the economic difficulties at home?
Mrs. Castle: The levels of aid expenditure will be contained in the national plan. That is why they are not in the White Paper, but I repeat that I anticipate that disbursements this year will be to a marked degree higher than last year.
We are proposing to establish a careers service in my Ministry for a corps of specialists in the direct employment of the Ministry who normally will be on loan overseas. We are also setting up an Overseas Service Pensions Fund to provide pension rights for persons serving in jobs overseas for which such provision is not at present made. These provide improved elements which have been missing in security of employment which we must
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offer if we are to recruit the people needed for these highly skilled jobs overseas.
Sir Rolf Dudley Williams: In reply to my right hon. Friend the Member for Streatham (Mr. Sandys) the right hon. Lady said that expenditure this year would be higher than last year. Has this extraordinary state of affairs been agreed by the Chancellor of the Exchequer, in view of the difficult balance of payments position?
Mrs. Castle: Anyone who knows anything about overseas development knows that aid programmes are continuing programmes which cannot be turned on and off like a tap. They are commitments which we make over varying periods to countries which have to make development plans. We would produce world chaos if we were tempted to go back on the series of solemn commitments made as part of Britain's long-term programme of aid.
Mr. Dalyell: What has my right hon. Friend done to ease the transferability between the corps of specialists and schools and universities?
Mrs. Castle: The corps of specialists will be on our payroll and part of our staff and they will be loaned overseas for whatever professional jobs they are required to do. If, in relation to universities, my hon. Friend is referring to those overseas, we have extended the Overseas Service Aid Scheme to enable us to cover universities in particular as well as Government services.
Mr. Fisher: I suppose that we should be grateful that in overseas aid, unlike everything else, there is not to be an actual cut. May I ask the right hon. Lady whether her goal still remains 2 per cent. of the national income, as she pressed on us in February, 1964? Can she tell us why her Department has been upgraded to Cabinet rank when apparently she has no more aid to disburse than my right hon. Friend the Member for Mitcham (Mr. R. Carr) had?
Mrs. Castle: I am absolutely confident that if the previous Administration had got back into power, and inherited the economic difficulties we had to face, aid would have been savagely cut.
Several Hon. Members rose—
Mr. Speaker: Order. We must get on.

SITTINGS OF THE HOUSE
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 (SUMMER)
Motion made, and Question proposed,
That this House, at its rising on Thursday, do adjourn till Tuesday, 26th October.—[Mr. Bowden.]
4.8 p.m.
Mr. Raymond Gower: Most of us would like to agree immediately to this proposal by the Leader of the House. Few Parliaments in recent years have better earned a respite from their labours, but, at the same time, there is some anxiety that we should make this decision when there is widespread anxiety in the country about the sort of management and leadership that we are enjoying.
Sir Douglas Glover: Enjoying?
Mr. Gower: My hon. Friend doubts that. It may be convenient to ask a few questions.
Sir D. Glover: I wonder whether we are enjoying or enduring it?
Mr. Gower: I will substitute the word "enduring".
I want to ask some questions of the Leader of the House, because he will realise that there are people outside who feel that the direction of our affairs is not as certain or definite as it should be. This is particularly so in the financial and economic direction of our affairs. If calculations by right hon. Gentlemen opposite prove as incorrect and inaccurate during the next few weeks as they did a few weeks ago, will the Leader of the House give us an assurance that he will not hesitate to recall the House during the Recess, if necessary, or even during the early part of the Recess? If, contrary to the forecasts we have heard, there should appear to be a need to reassess our financial position, would the right hon. Gentleman give an assurance that the House would be given an early opportunity to do that, and long before the date which has been fixed for our return in October?
There are other points on which I want specific answers from the Leader of the House. Those of us who represent ports—constituencies which contain docks—are not at all satisfied. We are to have no guide at all about the response of the

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Government to the latest Report of the National Ports Council. This is a Report of tremendous magnitude and importance and could mean a great deal of hardship for certain areas, particularly like the Bristol Channel ports area in South Wales.
I remind the Leader of the House of the anxiety which prevails in Cardiff and in Barry, my constituency, where there is a widespread feeling that the Ports Council is wrong in its assessment of the future and of the best course for us to pursue. I should like an assurance from the House on this important subject before we assent to the Motion.
There is a good deal of concern in areas of South Wales about the nature of the proposed leasehold legislation which was promised long before the last General Election, but which has not made its appearance during this last year and about whose appearance we are beginning to have doubts. We in the South Wales constituencies are concerned that if such legislation is introduced it shall embrace houses owned by local authorities. I should be out of order if I went into this matter in greater detail, but I hope that the Leader of the House will be able to say a few words on this important topic.
There is also the question of the development districts—the development areas in South Wales, and, as has been mentioned by my hon. Friends at Question Time, in Ulster, Scotland and doubtless in the North-East, too. There is deep anxiety that the Government have not reconciled their development district policy with the latest steps which the Chancellor of the Exchequer has announced to deal with the needs of the economy at large. It seems to some of us who represent these sensitive areas in various parts of the United Kingdom that before we adjourn for the Recess we should have a more forthcoming statement, or some guidance from Ministers, or an assurance that they will not hesitate to take instant action to meet the needs of those areas if such a need be established during the Recess.
I know, as you Mr. Speaker pointed out to us a few moments ago, that the House has a very long programme of business to get through today. I will, therefore, limit my remarks to these few
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points, to which I hope the Leader of the House will be able to respond.
4.14 p.m.
Mr. Arthur Lewis: I am surprised that the hon. Member for Barry (Mr. Gower) did not point out that all the subjects which he has raised could have been raised by the official Opposition on a Supply day. The reason I oppose the Motion is that I want to get some information from the Leader of the House about a grave matter which is not yet settled. I refer to the Rent Bill. This was in the Government's election manifesto. It was declared during the election that the Government intended to introduce this Measure. I pay full tribute to them for the excellent work that they have done.
What I am rather annoyed about is that a non-elected, non-democratic, body should have the temerity to "turf out", or at any rate to postpone, this Measure by making Amendments to it towards the fag end of the Session, thus delaying a progressive piece of legislation which the Government intended to bring in. I do not see why we should adjourn until this has been dealt with completely. It is possible for us to sit on for an extra day to do so. I do not see why we need leave it like this.
During the past few weeks we were kept up night after night because of the Government bringing in a Measure which was not in their legislative programme, or in their manifesto. I shall not go into details, except to say that, unfortunately, the Government—not supported by me on this occasion—were able to suggest an increase in salary for the noble Lord, Viscount Dilhorne. This was brought in and discussed. The House of Commons increased the noble Lord's salary so that he can oppose the democratic will of the elected Parliament, the Commons assembled.
Sir D. Glover: The hon. Gentleman himself did not oppose that Measure.
Mr. Lewis: Yes, I did.
Sir D. Glover: The hon. Gentleman did not vote against it.
Mr. Lewis: I will not go into details, but I opposed it. The hon. Gentleman

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did not support me and I could not get enough Tellers. [HON. MEMBERS: "Oh."] I opposed that Measure from beginning to end, both on Second Reading and in Committee. I think that the Rent Bill is far more important than the Bill to increase the salaries of judges. Even now it is possible for the Government to ask the other place, "What right have you as a non-democratic, non-elected body to hold up legislation which the House of Commons has passed, which the country has voted in favour of, and which the overwhelming majority of the people support, including the constituents of hon. Members opposite?"
Mr. Mark Carlisle: It is wrong to say that the Rent Bill is being held up only by the other place. Is the hon. Gentleman aware that, although this Session started last October, the Rent Bill did not leave this House until 6th July and that on Third Reading on 5th July the Government themselves undertook to table various Amendments in another place?
Mr. Lewis: I agree that the Opposition violently opposed the Rent Bill and delayed it in Committee. I accept that they put up a consistent opposition to the Bill. As they are friends of the landlords, I would expect them to do that. I accept that the Bill arrived late in the House of Lords. That still does not alter the fact that a non-elected, non-democratic body—the House of Lords—brought in Amendments which were in direct opposition to the wishes of the House of Commons and of the electorate who voted in support of the Measure. I think that the Leader of the House could, even at this stage, bring these Amendments on to the Floor of the House of Commons, so that we can, in Parliamentary language, disagree with the Lords in the said Amendments.
I am sure that would be the wish of all my hon. Friends. I hope that it would be the wish of the Liberal Party. It certainly would not be the wish of the Tory Party, but we do not want the Tories to be here to vote for this. Let them go off on their holidays. Let us put this through. Let us say, as we would, that we refuse to accept these Amendments. Let these Amendments go back to the Lords, and let the democratic will of the people be heard on this issue.
4.18 p.m.
Sir Rolf Dudley Williams: It is always stimulating to listen to the hon. Member for West Ham, North (Mr. Arthur Lewis). He did not answer the point made by my hon. Friend the Member for Runcorn (Mr. Carlisle), namely, that it was the Government who tabled the Amendments in the House of Lords and who made use of the other place to get their Bill straight. Nothing would have been easier than to have kept the Bill here much longer. That would have delayed the Government's business still further. The Government could not have complained if we had had to sit on through the whole of August instead of being able to get away on Thursday.
When I came to the House today I expected, after having talked to some of my hon. Friends last night, that we should be able to get away for two or three weeks and that the House would re-assemble. This seemed to me to be a reasonable proposition. After all, during the Session we have just had to endure—I cannot say "enjoy"—the legislative programme has been grossly overloaded by the Government.
For the first two or three months of the Session the Government had no legislation at all. We heard stories during the General Election that they were ready to sweep into action, but when they became Her Majesty's Government they did not have the legislation ready to present to the House. So we wasted the first three months of this Session.
Since then, Parliament has been completely jammed up with business. So heavy has been the programme that many hon. Members have not been able to pay sufficient attention to the legislative programme to enable them to understand it. I will not talk about the deplorable record of the Government in connection with the Murder (Abolition of Death Penalty) Bill. That was a complete mess-up. Even now, after several months' struggle, we have not got the Bill back to this House from the other place.
There are other grave reasons why the House should not rise from Thursday till 26th October. There are very grave matters confronting the nation. I know that provision is made for the recall of Parliament, subject to advice which may be tendered to you, Mr. Speaker, by

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Her Majesty's Ministers, and I am sure they will pay attention to any supplications which are made by the Opposition. But I repeat there are grave issues confronting the House.
There is the question of the defence of sterling, in which we hope we shall be successful. If sterling has to be devalued, the repercussions thoroughout our economy and throughout the whole world will be grave. I do not think that anyone on this side of the House can hope for anything but success for the Chancellor of the Exchequer in his struggle. However, it is essential that Parliament should be assembled to show to the world that we on the Opposition benches are right behind the Government on this important issue. We should not absent ourselves from Westminster for three months and enjoy ourselves jaunting round the world, or wherever hon. Members who support the Government wish to go. We should be here supporting the Government, ensuring that this important factor is properly discussed in the House and that it is made clear to the world that we are not going to give way where sterling is concerned.
We know that it would be convenient for the Government to be able to deal with this matter away from Westminster. We know that the Cabinet is split on the issue. We know that one section of the Cabinet wants to follow a restrictionist policy and that there is another section of the Cabinet, led by that redoubtable right hon. Member the First Secretary, who want to pursue an expansionist rôle. These matters should be discussed in the House of Commons and not in some committee in Downing Street. They should be discussed here; people should come out into the open and say what they intend to do on this important issue.
Also, during the long period when we shall be loafing about in the country we should discuss certain aspects of our trading policy. We might have discussed East-West trade, in which case we could have got some valuable information from the hon. Member for West Ham, North, who is an expert on this subject. We should discuss trade with the Commonwealth, trade with the European Economic Community, and so on.
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There is another issue which is very attractive to many hon. Members opposite, and that is the war in Vietnam. I cannot see in the Chamber this afternoon the hon. Member who has been so critical of the Government on this issue. He certainly was not here last night. I should have thought that while this grave war was raging in South-East Asia it would have been desirable for the House of Commons at least to be in attendance occasionally and not be dismissed till 26th October. This is another reason why we should not have this protracted holiday. I should have thought that something like the end of August would be a much more convenient time for us to return.
There are other grave matters confronting the country and which are seriously worrying to the people. One is the rise in the cost of living. An enormous increase has taken place in the period since the Government were returned. Running at the rate of 6·6 per cent., it is well over twice the rate at which it was running when my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) was Prime Minister. While we were in power it was something like 2½ per cent. and now it is 6·6 per cent. This is a grave matter which is worrying the people and it is our duty to be here to combat it.
My bet is this. The Government have deliberately chosen this date so far ahead as 26th October because they know that they cannot surmount the problems which are confronting them. They also know that they are divided in their inner counsels. It is my belief that if this House rises on Thursday it will not meet again in this Parliament.
4.25 p.m.
Mr. Marcus Lipton: The speech that we have just heard from the hon. Member for Exeter (Sir Rolf Dudley Williams) is really an argument for having a much longer Recess than that which is mentioned in the Motion. If that is the kind of contribution that he intends to make to our Parliamentary proceedings, Parliament should adjourn for a much longer period.
Of course, this Motion provides additional opportunity for hon. Members opposite to give vent to a large amount of synthetic indignation—[Interruption.] I repeat, synthetic indignation, and if hon.

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Members opposite will allow me to develop my argument, they will see what it is leading to.
Only one issue of any importance has been raised in the course of this debate, and that was the point raised by my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis). Let me put this to the Leader of the House. Many of us represent constituencies in which the electors regard the Rent Bill as one of the most important issues raised this Session. Housing still remains a vital and burning issue among many hundreds of thousands, if not millions, of people. It is most deplorable that, whatever may be the reason, the Rent Bill is not on the Statute Book before we adjourn for the Summer Recess.
I hope that I have the support of hon. Members opposite in suggesting that we should defer for just one or two days our departure for the Summer Recess. We do not need to postpone it for a week. One or two days are sufficient for disposing of the wrecking Amendments which have been made in another place, and for enabling this House to get the Rent Bill on the Statute Book before we go on our holidays.
I am glad to see that the hon. Member for Exeter seems to be nodding approval. If his nod means that he is prepared to stay for another day or two to enable the Rent Bill to be placed on the Statute Book before we go away for our summer holidays, I hope that will make a suitable impression on the Leader of the House. The passing of the Rent Bill is now, whatever may be the reason, being deferred for something like three months. For another three months the hopes, wishes and desires of thousands of tenants are to be frustrated. There is a genuine case for postponing the beginning of the Recess, even if it means that the other place has got to sit for another day so that the Royal Assent is given to the Rent Bill.
If only because of this one vitally important issue, the House should sit another day or two to enable the Rent Bill to be placed on the Statute Book before we disappear for our summer holidays.
Sir Rolf Dudley Williams: I absolutely endorse the hon. Gentleman's appeal. I fully support it.
Mr. Lipton: The hon. Gentleman's support makes me feel a little doubtful about my argument. Nevertheless, I welcome his support. Now that we apparently have all-party support for getting the Rent Bill on the Statute Book before we rise for the Summer Recess, I hope that the Leader of the House will make the appropriate gesture.
4.30 p.m.
Sir Harry Legge-Bourke: In my recollection of over 20 years in this House I do not think that I have ever felt that we were going away for the Summer Recess when we had less justification for doing so. Judging by the Chancellor's remarks this afternoon, in reply to my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot), and in the light of the state of the gold reserves as indicated on the tape this afternoon, all of us ought to be acutely aware of the fact that one of the most difficult things which the Government have to do over the period during which we are now proposing to go into recess is to sustain the confidence of the world in this country's currency.
It is a great pity that on an occasion such as this the Prime Minister, or the Chancellor of the Exchequer, has not stayed to hear the debate. The Chancellor is quite right when he says that it behoves us all to be very careful indeed about what we say in public about the state of the nation's finances. I am sure that this goes for both sides of the House.
Yesterday, when the Conservative Party was electing its new Leader, one of the most remarkable statements made at that meeting was made by Mrs. Charles Doughty, wife of my hon. and learned Friend the Member for Surrey, East (Mr. Doughty), who, speaking on behalf of Conservative women, pledged the party to support my right hon. Friend the Member for Bexley (Mr. Heath), whose appointment we so much welcome, even if he was prepared to support the Government in some unpleasant measures which might become necessary. It was an unusual and a brave statement to make and it behoves us all to be ready to support the Government if we on this side of the House believe that the measures, stern though they may be, are absolutely necessary.

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But in going away for this Recess what indication have we been given of what the Government intend to do to hold the position? This is perhaps the most serious doubt that must be in our minds as we go away for the Recess at the end of this week. It would be a good idea if the Leader of the House were to consult the Chancellor of the Exchequer and ask him whether there is any means whereby hon. Members on both sides of the House may be better informed than perhaps hitherto they have been ever able to be informed on the state of the nation's finances as the weeks go by.
If we are to make responsible statements in the country to our constituents it is important that we should be as well-informed as possible. One of our great difficulties as back benchers has been to know the full measure of the Government's mind and knowledge on this vital matter. It is no great credit to the present Administration that we should be going away in this grievous state. I believe that what has been going wrong, and what I hope the Government are taking steps to put right, is the total fallacy of believing that we can divorce the internal economy from the external economy. These two are so closely related that the longer we overspend in our own internal economy on what may be desirable, but, nevertheless, cannot be afforded if the priorities are right, the more certain it will be that our external position will become more and more difficult.
I ask the Leader of the House that in the intervening months—and it may be only weeks—before we next meet, the Government will give some undertaking that they will cut the internal economy according to the cloth available, as well as the external economy. When one hears the right hon. Lady the Minister of Overseas Development making the sort of statement she made this afternoon introducing, naturally, very desirable measures dealing with overseas aid, and the statement is made as though in defiance of the things which the Chancellor of the Exchequer has been saying, I hope that it is not unfair to say that one has doubts about the Government's resolution in these matters. I hope that the Leader of the House will give us an undertaking that the Chancellor will see whether there are any new
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ways of informing hon. Members while we are away, as we have never been informed before, about the state of the nation's economy.
Secondly, I ask for another assurance. The Prime Minister, in answer to my right hon. Friend the Leader of the Opposition, today reiterated the Government's determination to keep defence expenditure within £2,000 million. There is a wealth of matter which we ought to debate before these kinds of decisions are taken, as it were, off the cuff like this. The Government have announced what can easily prove to be a catastrophic decision over the Territorial Army. Grave doubts have been caused in the minds of those who, over the years, have tried, mostly voluntarily, to put the defence of this country as top priority in their lives.
It is unforgiveable that we should go away for the Recess with only the hope of a White Paper when we come back to reassure us on these matters. I do not know whether the Leader of the House realises that at present something like one-third of those going through the Staff College go into the administration of the Territorial Army and about one-half of the staff through-put from the Royal Artillery go to help maintain that Territorial Army. What effect will the Government's decision have on the Staff College training which would be necessary in the event of a national emergency in the future? These are uncertainties left in our minds and, what is worse, in the minds of those most directly affected.
Rarely have ducks and drakes been played with the defences and finances of the nation in the manner such as we have witnessed over the last nine months. Before we go away we must have this assurance that no irrevocable decision about the structure of our Armed Forces, be they Reserves, or Navy, Army and R.A.F. Regulars, will be taken while we are away. There must be no irrevocable decision about the formation and general structure of the Regular and Reserve forces. We must have that assurance and I hope that the Leader of the House will be prepared to give it.
I do not remember having to express such strictures on a Government before going away for the Recess on any previous occasion. The temperature in which we have been living in this place over

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the last few months is one for which we would welcome a contrast, nevertheless if the Government at any time feel that they cannot give the undertakings, which I hope they will now give in answer to my points, for the whole period of the anticipated Recess, I hope that they will recall the House at once and have these matters debated without delay. They are vital matters affecting the health and wealth of this country and the preservation of peace and our ability to keep it.
I ask the right hon. Gentleman to give the closest attention to the points which I have raised and to make sure that he and his colleagues will consult together to see that we are given real assurances.
4.29 p.m.
Sir Stephen McAdden: While I agree with my hon. and gallant Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) that it is important that we should have these assurances, which I hope will be within the ability of the Leader of the House to give, nevertheless that does not detract in any way from my desire to support the Motion, which I do for a number of reasons.
First, I am getting a little "fed up" with the elaborate charade which goes on every time this Motion is proposed, with hon. Members who have already fixed their holidays making speeches postulating their desire to remain here longer and longer when they know that if their wish were granted it would upset all the arrangements they have already made with the transport office downstairs. It is because I object to this charade that I support the Motion. In my view, the House needs a period of recess in order to deal with certain important matters.
The hon. Member for West Ham, North (Mr. Arthur Lewis) has rightly said that he is worried about one aspect of legislation, the Rent Bill, and he wishes the House not to go into recess until that has been settled. But this is not the only problem. There are people who are worried about rates as well, for example. There must be a period of reflection for the Government to make up their minds how far they can go on the question of assistance to ratepayers and how far they cannot.
Mr. Eric Lubbock: There is this difference between the problem of rates and the problem of rents. In the one case, we have a Bill which has gone through all its stages except that we need half a day to deal with the Lords Amendments. In the case of rates, we start from scratch.
Sir S. McAdden: I agree, but no one must run away with the idea that the only people affected in this sort of way are those who live in rented houses. In his own constituency, the hon. Member for Orpington (Mr. Lubbock) has many people, retired people particularly, living on fixed incomes who are seriously affected by the Government's failure to deal with the problem of rates.
It is desirable that these matters be dealt with so that more of our citizens can have a fair crack of the whip at the right time. The Government should have a period of reflection in which to make up their minds on whether they intend to go on with the ideas which they advocated before the last election, or whether, in the sobering light of their experience, they want to think about something else.
Moreover, it is important that the Recess should continue until the date suggested by the Leader of the House so that the Labour Party may hold its conference and thrash out anew what its policies are to be. The decisions taken previously have now, in large measure, been overthrown, and it is right that right hon. and hon. Members opposite should be able to have some contact with the rank and file of the party so as to determine what proposals they wish to bring back to Parliament towards the end of October.
I add this further reason, a reason which, Mr. Deputy-Speaker, may find a sympathetic response in your heart. I am anxious that the House should go into recess because I consider that some of our procedure in Parliament has not added much to its dignity. Perhaps we have had a long and exhausting Session, with a long and complex Finance Bill which has kept hon. Members up all night.
I sincerely support you, Mr. Deputy-Speaker, in all you have sought to do to try to bring a better sense of toleration and understanding between hon. Members on both sides in the conduct

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of their debates. In our opening Prayer which is said each day, if I remember aright, we are exhorted to have true love and Christian charity one toward another, but one rarely sees much of this in our debates in the House.
This may be due to the fact that we have had such an arduous Session, and I hope that, if the Motion is passed, we shall learn in the intervening period to conduct ourselves in more seemly fashion and to listen to an opponent's view, respecting him for his sincerity and not always believing that sincerity is the monopoly of any one party.
Sir D. Glover: The last time I heard my hon. Friend having a row, it was with one of his own colleagues, not with an hon. Member on the other side.
Sir S. McAdden: My hon. Friend does me an injustice. I am sure that Mr. Deputy-Speaker would confirm what I say, were he permitted to do so, when I reply that I have never had a row with anyone in the House. I have urged a point of view or one of my hon. Friends who, in my view, was falling short of his duties, and I have sought to bring him up to a better standard of performance. This is what I am seeking to do now in addressing myself to all hon. Members on this occasion.
I urge the hope that we may have a better understanding and better standard of conduct in our affairs when we return than we have had in the past.
4.45 p.m.
Mr. Eric Lubbock: The hon. Member for the Isle of Ely (Sir H. Legge-Bourke) said that he had never before had to deliver such strictures on the Government on the occasion of one of these Motions. This is not entirely surprising, as we have had a Conservative Government for the past 13 years, and I do not imagine that the hon. Gentleman would have put into words many of the views which he has expressed today even if he had thought them at the time of previous economic crises under a Conservative Government.
In the few years I have been in the House, I have heard many such speeches. Since the change of Government, they have come from Conservatives instead of from Socialists. They do not impress me very much. I agree with the hon. Mem-
1302
ber for Southend, East (Sir S. McAdden) that we are a little hypocritical, because we have already made our holiday arrangements and we intend to honour them, going away in the certain knowledge that the Leader of the House will refuse to accept any of the points put to him this afternoon. Nevertheless, I support what has been said on the subject of the Rent Bill by the hon. Members for West Ham, North (Mr. Arthur Lewis) and for Brixton (Mr. Lipton).
The Rent Bill is in a quite different category from all the other reasons which have been advanced for rejecting the Motion. I am glad to see the Joint Parliamentary Secretary to the Ministry of Housing and Local Government present, because I am sure that he will agree with one point which I shall make. Apart from the Murder (Abolition of Death Penalty) Bill, the Rent Bill is the only outstanding Bill which has been through all its stages in this House and in another place, having only to come back here for us to disagree with the Amendments put in by another place. There is this difference between the two Bills, that we are giving effect to the Murder (Abolition of Death Penalty) Bill although it is not yet on the Statute Book. No person will, in fact, suffer the penalty of hanging irrespective of the fact the Bill will not be through all its stages until we return in October. For this further reason, the Rent Bill is in a special category, being different from all the other matters which have been mentioned.
I do not agree with everything said by the hon. Member for West Ham, North about their Lordships' action on the Rent Bill. It is true that they have put in Amendments and the hon. Member for Exeter (Sir Rolf Dudley Williams) is wrong in thinking that these Amendments were put in by the Government. For example, the reduction of rateable value limits was inserted by the Opposition, not by the Government. However, I notice that, in spite of his unexpected support of the case advanced by the hon. Member for Brixton, the hon. Member for Exeter did not feel strongly enough on the matter to remain in the Chamber to hear what the Leader of the House had to say about it.
I should be delighted to postpone my holiday if the Leader of the House would agree to give one extra day for this

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purpose. I shall not by hypocritical and say that I would cancel my holiday altogether. I fully intend to go through with it. But I am sure that many hon. Members on both sides would be perfectly willing to sacrifice one day—that is all I am demanding—to see the Bill through all its stages. The Leader of the House has power to do this. As is said in "Iolanthe",
"You shall sit, if he sees reason,
Through the grouse and salmon season".
All we ask is one day, so that we can complete the procedure on the Rent Bill.
I come now to the reason which I said would receive the support of the Joint Parliamentary Secretary. Unless we complete all the stages of the Bill, the Minister will not have power to set up the rent assessment committees provided for under the Bill, and clerks of county councils will not be able to appoint the rent officers who will have the important function of arbitration before differences between landlord and tenant even have to go to the rent assessment committee and who will be charged with the duty of maintaining the register of fair rents.
Mr. Arthur Lewis: Is it not a fact that in the hon. Gentleman's constituency, as in mine, many tenants and landlords have said, over the past two months or so, that they would not take action because they were expecting the passage of the Bill by August and they would resolve their questions when the Act came along? I have advised many of my constituents to wait pending the passage of the Bill. But now they will have to wait six or nine months all told before settlements can be reached.
Mr. Lubbock: That is quite right. This is why I hope that the Conservative Opposition will support what I say. In Committee, they complained of the long delay there would be under the procedure laid down before fair rents were fixed. Now there will be a further lapse of three or four months before we can even establish the machinery under the terms of the Bill.
This is a very serious matter for both landlords and tenants. It is serious for tenants because they do not know exactly where they stand. The hon. Member for West Ham, North has said that he is advising his constituents to wait until the Bill reaches the Statute Book, and then
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they can go, with their landlords, to the rent officer, and he will arbitrate between them and decide what is a fair rent, and following that they can appeal to the rent assessment committee if no satisfaction has been achieved.
On the other hand, there is the landlord with controlled properties whose rent cannot be revised until the rent officer has dealt with all properties which were decontrolled under the 1957 Act. That is a point about which many hon. Gentlemen on this side of the House feel very strongly. They say it is grossly unfair that a landlord who has let his house at a controlled rent for many years should have to wait a further period before there can be any prospect of revision in spite of the fact that the Conservative Party was not committed to any further measures of decontrol had it taken office last October.
For all those reasons, I appeal to the Leader of the House to treat the Rent Bill as quite different in character from anything else which has been advanced to him as a reason for not accepting the Motion. I do not mind about all the rest. I agree that there is machinery for the House to be recalled if any urgent financial crisis happens during the Recess. That does not worry me at all. I am sure that that is well taken care of. But the needs of my constituents, whether landlords or tenants, which are to be satisfied by this most important Bill will be neglected by the Government unless they give us the half day for which I ask.
4.52 p.m.
Colonel Sir Tufton Beamish: There are two matters which should be explained to us before we agree to adjourn for the Summer Recess. One has been referred to, and one has not. First, I should like the Leader of the House to tell us something about the state of the negotiations between the Labour Party and the Liberal Party to form a pact. If a pact is formed, it will alter—
Mr. Deputy-Speaker (Dr. Horace King): Order. This is a very interesting question, but I do not think that it bears on the Motion before the House.
Sir T. Beamish: I am very sorry, Mr. Deputy-Speaker, if I was out of order, but what I was about to say was that if a pact is agreed to and signed—we understand that it has been discussed—it will

1305
alter the whole course of events in this country, and if it were to happen during the Recess, it would be a matter of very great moment indeed. I do not wish to refer to it at any great length.
Mr. Deputy-Speaker: The hon. and gallant Gentleman cannot debate the reasons for the Adjournment or postponement of the Adjournment on an hypothesis.
Sir T. Beamish: In that case, Mr. Deputy-Speaker, I pass to my second point.
Mr. Arthur Lewis: Will the hon. and gallant Gentleman give way?
Sir T. Beamish: I prefer not to. If I was out of order, I guess that the interruption may be out of order as well.
Mr. Arthur Lewis: Wait and see.
Sir T. Beamish: The second point has been touched upon briefly by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), but I want to approach it in a slightly different way. This is also a very important matter. It arises out of two events which occurred yesterday. I am glad to see the right hon. Member for Easington (Mr. Shinwell) in his place, as I had not warned him that I intended to refer to him personally. However, he is very much personally involved.
Mr. E. Shinwell: I am sorry to interrupt the hon. and gallant Gentleman, but I must leave at five o'clock because I have a very important meeting to attend.
Sir T. Beamish: I can easily say everything I wish to say in two or three minutes.
The Leader of the House must give us an explanation of the significance and strength of the Socialist Party caucus and its influence on Government policy. The Leader of the Opposition put a Question to the Prime Minister about this today and had an extremely unsatisfactory Answer. We know that the Socialist Party caucus met yesterday and passed what all the newspapers report was a motion which apparently was not debated at great length and not voted upon, asking for "drastic" cuts to be made in the defence programme.
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We cannot possibly adjourn unless we know what this meant. We have already had the announcement of very severe cuts, which are disturbing to many of us. We have had the announcement about the Territorial Army. If further drastic cuts are to be made and new plans cast during the Recess, we are entitled to know what those plans are.
There is a Motion on the Order Paper, signed by 67 hon. Members opposite, all of whom belong to the Left wing of the Labour Party—the dominating Left wing of the Labour Party caucus—demanding cuts of £200 million a year in the defence budget, colossal cuts which would have a profound effect on the ability of this country to carry out its international obligations and make the maximum possible contribution to the maintenance of an honourable peace in the world, two things which are a paramount duty of any Government and any party in this country. This meeting of the private party caucus upstairs was the first example of the influence on the Government of the party caucus.
But there was another example yesterday, when the right hon. Member for Easington jumped to his feet during Questions and gave a proper "ticking off" to the Minister of State for Foreign Affairs for giving a perfectly innocuous and sensible reply to a supplementary question about the Common Market, towards which the Government's policy is in a state of total confusion hidden behind a smokescreen of double talk.
Twice in one day we had the party caucus at work trying to influence Government foreign policy and Government defence policy. I do not think it would be right for us to adjourn for the Summer Recess until we know positively and precisely who is running this country. Is it the Socialist party caucus dominated by the Left wing, bearing in mind that the Socialist Party in Britain is the only Socialist Party in the free world which still contains a Marxist wing? Is this country being run by a party caucus under the domination of the extreme Left wing, or by the Government? I want to know before we adjourn for the Recess.
4.57 p.m.
Mr. William Yates: First—[HON. MEMBERS: "Oh."] I shall certainly say quite a lot—I should have

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thought that after President Johnson's speech, which was broadcast throughout the United States and has underlined that the United States feels that manpower will be essential if the Korean conflict—[HON. MEMBERS: "Which conflict?"]—the Vietnam conflict develops, as it might well do, into a sort of Korea issue—[Interruption.] The right hon. Member for Easington (Mr. E. Shinwell), who in 1951 was Minister of Defence—[Interruption.] The right hon. Gentleman was Minister of Defence at that time surely.
Mr. Shinwell: Mr. Deputy-Speaker, this is the third occasion on which I have been involved in a controversy. I plead not guilty.
Mr. Yates: I do not mind whether the right hon. Gentleman was Minister of Defence or not at the time.
One of the underlying problems which beset this country at the time of Korea was manpower. I am absolutely astounded that the Government should announce to the world that they are about to cut our national reserves of the Territorial Army by half. It was a most inept announcement.
Mr. Deputy-Speaker: Order. I am not questioning the rightness or wrongness of what the hon. Gentleman says, but he must link it with the question of whether we adjourn to a certain date.
Mr. Yates: I am sorry, Mr. Deputy-Speaker.
If the Leader of the House cannot answer the very important speech made by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), I must vote against the Motion. I had hoped to be able to support the Motion on this occasion. The situation and the announcement concerning our national reserves made at this time must cause every hon. Member concern. I forgot to declare an interest in this matter. I am an officer serving in the Territorial Army. I think that I moved a Motion in this House congratulating the Territorial Army in 1957.
It must be wrong at a critical time in international affairs, and especially in view of the difficulties in the Far East, suddenly to announce that the Government propose to cut our entire reserve
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forces by half and cut the national defence Estimates by millions of pounds. I hope that the Leader of the House will do all he can to make up for the extraordinary announcements that we have had, one made by the Minister of State for Defence for the Army and one emanating from the Parliamentary Labour Party.
5.0 p.m.
Mr. Mark Carlisle: I, too, will be brief because I am anxious to get on with the next business. I suggest that the Leader of the House cannot let go unanswered the remarks of the hon. Member for West Ham, North (Mr. Arthur Lewis) about the reason why we should take the further stages of the Rent Bill before the Recess. I hope that the right hon. Gentleman will refute the arguments adduced by his hon. Friend as being the reasons why the Bill has not been passed by now.
The hon. Member for West Ham, North said, first, that the delay had been due to the deliberate determination of the Lords to take up time over this issue. When, in an intervention, I pointed out that the Bill did not leave this House until 6th July—and I see that it did not begin its Committee stage in the Lords until 22nd July—he then said that it was the fault of the Opposition. The right hon. Gentleman should make it clear that the Minister of Housing and Local Government, during the Committee stage of that Bill—and the hon. Member for West Ham, North did not serve on that Committee, although I did—said on numerous occasions that he was not suggesting that any undue time was being taken by the Opposition over the discussion of the Bill.
Mr. Arthur Lewis: If the hon. Gentleman will read the report of what I said in the OFFICIAL REPORT tomorrow he will see that I did not refer to delays on the part of the Opposition. I said that the Opposition, as I naturally expected, had defended the interests of the landlords.
Mr. Carlisle: I withdraw what I said if I have wrongly interpreted the hon. Gentleman's words. I understood him to say that the Opposition opposed—
Mr. Arthur Lewis: Yes. I said "opposed".
Mr. Carlisle: —the Measure and I further understood that his intention was to

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say that the Opposition had deliberately discussed at length the Bill and that that had delayed its passage. As I was saying, the Minister of Housing and Local Government went out of his way on several occasions in Committee to make it clear that there had not been any undue time taken by the Opposition over the Bill. Indeed, he agreed that it was a serious matter which required urgent and careful consideration Clause by Clause.
I hope, therefore, that the Leader of the House will make it clear—while I agree with the hon. Member for Orpington (Mr. Lubbock) that it is unfortunate that the Bill has not reached the Statute Book before the Recess—that the blame for any delay must rest with the Government for not having brought the Measure forward with the priority which they had originally undertaken to give it and that it is not the fault of the Opposition in regard to the conduct of my hon. Friends during our consideration of the Bill.
5.3 p.m.
Mr. E. Shinwell: I have just discovered that the meeting at which I was expected to be present, and to which I referred a few moments ago in an intervention, has been postponed. [HON. MEMBERS: "Hear, hear."] I assure hon. Gentlemen opposite that it is a most important meeting and that the discussion that will take place there will do the Opposition no good at all; at least, that is my intention.
I was interested in what the hon. and gallant Member for Lewes (Sir T. Beamish) alleged about pressure being brought to bear on the Government as a result of a private meeting of the Parliamentary Labour Party. I assure him that no pressure has been exerted by the Parliamentary Labour Party and that it would be improper for any outside organisation—that is, any organisation outside the Government—to bring pressure to bear on the Government to seek to determine Government policy. If that was the hon. and gallant Gentleman's allegation, I assure him that there is no substance in it at all.
Sir T. Beamish: I was not suggesting that it was wrong to bring pressure to bear on the Government. Indeed, that is the way democracy works. However, I did say it was wrong for the Govern-
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ment to be influenced by pressure which was contrary to the national interest.
Mr. Shinwell: I assure the hon. and gallant Gentleman that no such thing arises. I have known him for a long time and have regarded him as a person of considerable intellectual stature. I am surprised that he allows himself to misunderstand the situation and misrepresent what has happened as a result of his own imaginings.
I reiterate my assurance that no pressure of any kind is being brought to bear on the Government to influence Government policy in the sphere of defence. There has been none at all. The position is quite clear. It is clear to me and to my hon. Friends and I shall endeavour to make it equally clear to hon. Gentlemen opposite.
Sir Rolf Dudley Williams: I am interested to hear that no pressure has been brought to bear on the Government. Would the right hon. Gentleman now say that the Parliamentary Labour Party is wholeheartedly behind the Government's defence policy and has not asked and is not asking for any reduction in defence expenditure?
Mr. Shinwell: The Parliamentary Labour Party is loyal to the Government, to all that the Government are doing and to every aspect of Government policy. Indeed, if there were any lack of loyalty on the part of the Parliamentary Labour Party I am sure that we, the members of that party, would be capable of correcting it. I assure hon. Gentlemen opposite that what I say is the position. I appreciate that they are worried about our situation, although they must agree that they have plenty to worry about themselves. I will leave the matter there.
Several Hon. Members rose—
Mr. Shinwell: I would like to pass to my next point and I hope that I will not have any further interruptions, because I dislike having the thread of my discourse interrupted; it disturbs me very much.
There is another matter which needs to be cleared up. The Government have decided to take measures to reduce military expenditure. No one can object to that, not even hon. Gentleman opposite. [HON. MEMBERS: "Oh."] Let me put it this way. Hon. Gentlemen opposite

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must be anxious to reduce military expenditure—[HON. MEMBERS: "No."]—within the context of the security which must be assured to this country. [HON. MEMBERS: "Hear, hear."] I am pleased that we can agree on that, because that is precisely the position which has been stated and restated by the Government and by the Labour Party when we were in Opposition. We have repeated it time and again.
There is really no difference of opinion on this issue. The Government have stated their policy in relation to the possibility of reducing military expenditure. This is desirable in the context of the national economy and having due regard to the security which is essential if we are to meet our obligations. That is the position. The Parliamentary Labour Party met and the newspapers have revealed in reports certain aspects of that meeting.
To make a slight digression, how the Lobby correspondents get their information, I would like to know. Perhaps one of these days inquiries will be instituted to ascertain how they obtain their information about the proceedings at private meetings.
Mr. Deputy-Speaker: Order. I think that the right hon. Gentleman has pursued that digression long enough.
Mr. Shinwell: I would be delighted to pursue it further, Mr. Deputy-Speaker, but I always seek to obey the rules of order. Perhaps I may be allowed to pursue it slightly further, but from a different point of view. The Government have decided on their policy. That is supported by the Parliamentary Labour Party and hon. Gentlemen opposite—
Sir D. Glover: On a point of order. I am sure that the whole House is interested to learn how the Parliamentary Labour Party works, but has this any bearing on the Motion? What has it to do with whether or not we should adjourn on Thursday?
Mr. Deputy-Speaker: I hope that the hon. Member for Ormskirk (Sir D. Glover) will not try to instruct the Chair on the rules of order. This matter was raised by one of his hon. Friends as a reason why the House should not adjourn until the date suggested in the
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Motion. The right hon. Member for Easington (Mr. Shinwell) is answering that.
Mr. Shinwell: I have no desire to pursue the matter too far, Mr. Deputy-Speaker, and I have dealt with it because the hon. and gallant Member for Lewes seemed to have a grievance. I am trying to eliminate that grievance and it seems that the point needs some clarification. I have, therefore, ventured to point out that there is no difference of opinion among the members of the Parliamentary Labour Party, whether they are regarded as being on the right of the party, in the centre or what is called the Left wing. There is no difference of opinion, having regard to the state of the national economy and the need for us to meet our obligations about the desirability of reducing military expenditure.
The Parliamentary Labour Party has presented its point of view, and the Government, naturally, will consider it, just as hon. Members on the other side present their point of view to their own leaders, presumably. It is within the discretion of the leaders of a party whether they accept the view of the back benchers on their side. That is the position. There is nothing new, unusual or uncommon about it. There is no innovation.
The hon. Member for The Wrekin (Mr. William Yates) is extremely concerned about the possibility—I will not say "the probability"—of a 50 per cent. cut in the Territorial and Auxiliary forces. It is not our intention, nor is it the Government's intention to cut them by half; the intention is to make them much more effective. I understand the Territorial and Auxiliary position as well as any hon. Member on the other side. I was at the War Office way back in 1929, and from 1947 to 1950 I was Minister of Defence, so I know something about it.
We have always had difficulty about our reserve forces, and in recent years even more so. If our reserve forces are to be of any value in times of crisis in order to maintain peace in the areas with which we are concerned, they must be made effective as a defence force, and they are not at present. In times of great emergency and crisis, men are called up as a result of conscription.
Mr. Deputy-Speaker: Order. The right hon. Gentleman is now pursuing the

1313
merits of the proposal dealing with the Territorial Army. He must not do that.
Mr. Shinwell: It is about time hon. Members on the other side understood something about the situation, instead of belly-aching about it from time to time.
Mr. Deputy-Speaker: I am not questioning any of the arguments that the right hon. Gentleman is using, or their importance, but they must be linked to whether or not we should adjourn.
Mr. Shinwell: I will come to the point that really matters. I understand that hon. Members on the other side want to continue discussions and hear more about Government policy. For example, the Chief Whip of the Liberal Party wants more information about rents, and wants the Rent Bill to be proceeded with. That is what the argument is about—that we should not adjourn; that we should go on. I am perfectly happy about that, because I am not going on holiday yet. I am quite prepared for the House to meet for another two weeks, or even until I go on holiday at the beginning of September. If hon. Members opposite are willing to sacrifice going to the grouse moors and the other places they frequent when on holiday, we are willing to accommodate them. But let them be quite frank about it. What is it that they want?
Sir Rolf Dudley Williams: To come back on 21st August.
Mr. Shinwell: The hon. Member for Exeter (Sir Rolf Dudley Williams) is the last person in the world whom we want to see back at any time. I say that with the utmost friendliness, meaning no offence whatsoever. He and I are on the best of terms, so long as he behaves himself.
Therefore, I say to hon. Members opposite, do not play these tricks. I have been 40 years and more in the House. I know that you really want to adjourn. Is not that true? Of course, you do. You deserve to adjourn, because we have given you a rough time.
Mr. Deputy-Speaker: Order. The Chair is willing to tolerate a great deal, but the right hon. Gentleman has accused the Chair of a lot of things in the last thirty seconds.
Mr. Shinwell: Mr. Deputy-Speaker, you know that I did not mean you, naturally. All that I require to say to hon. Members opposite is, give it up and go on holiday.
Mr. William Yates: I put to you a sensible suggestion, which you knew very well, as a former Minister of Defence.
Mr. Deputy-Speaker: Order. It is a bad thing for the House if hon. Members address each other, rather than speak through the Chair.
Mr. William Yates: With your leave, Mr. Deputy-Speaker, I think that the right hon. Member for Easington (Mr. Shin-well) was endeavouring to answer one of the reasons why I did not wish the House to adojurn, namely, that concerning the Territorial Army. The right hon. Gentleman was Minister of Defence in 1950.
Mr. Deputy-Speaker: Order. The hon. Member does not understand the point of order. If he addresses the right hon. Member, he must do so through the Chair.
Mr. William Yates: I am now addressing the right hon. Member for Easington. I did not mean to refer to you, Mr. Deputy-Speaker. What I was endeavouring to get from the right hon. Member was this one fact. Surely he must know that during the Korean troubles he wanted manpower. I am objecting to the adjournment of the House because it is suggested that the manpower of the Territorial Army should be reduced. I agree with him about efficiency.
Mr. Shinwell: We cannot pursue this. Perhaps the hon. Member will have a talk with me before the Recess, when I will tell him all about what happened during the Korean trouble—how we alerted a brigade for Korea, and even a Commonwealth brigade. I was as much responsible for that as anyone else. But the hon. Member does not know anything about it.
I was just beginning to get warmed up, and now it appears that I have to cease. But I am not responsible for this series of exchanges. I accidentally came into the Chamber, and I was no sooner here than I was attacked, bitterly assailed, by the hon. and gallant Member for Lewes. I am bound to respond, otherwise hon.

1315
Members may imagine that I am weakening, and that I can never allow.
5.18 p.m.
Mr. Godfrey Lagden: I cannot possibly support the Motion for this long adjournment. We should consider this a little more seriously than we have been doing, having listened to the music-hall act from the right hon. Member for Easington (Mr. Shinwell). He is very good at it, and he amuses us, but the time comes when we must consider these matters in a more serious light.
As elected Members of the House, we never tire of saying that the employer and the employee should work a lot harder and should not be away from their work for too long, for the reason that production will cease. At the same time, we ourselves think that three months is quite an adequate time for us to be away from the House. I have always disagreed, and thought it too long, and on this particular occasion it is far too long, because many of the things which have been mentioned today are perfectly true.
We could have a crisis at very short notice and, with the Prime Minister and other Members of his Cabinet in the Scilly Isles, and the hon. Member for Brixton (Mr. Lipton) possibly wanting to converse with them, we should be more accessible to the House. After all, the House is the place where policy decisions have to be made, and we know how difficult it is, when hon. Members have gone to the four corners of the earth as they do during Recess time, to get back again in a hurry. There is always a tremendous temptation for Ministers wishfully to think that the crisis is not here and put off the recalling of Parliament until the last possible moment, sometimes with bad effect.
I urge the House to think very seriously—if not on this occasion, for other occasions—whether we do not, whilst urging other people to get off their backsides and work harder, rather ourselves retire to the sun for far too long a period.
5.19 p.m.
Sir Douglas Glover: I support the Motion before the House, because
1316
I agree with my hon. Friend the Member for Southend, East (Sir S. McAdden), that there is a good deal of humbug talked about the adjournment of the House, particularly for the Summer Recess, although I must say that I do so this year with far more reluctance than I have done for a great many years in the past, and not purely and simply because we are the Opposition party.
We are living in dangerous times. There are many problems on the financial front with which the Government are grappling, and we are running into a period of the year when the crisis might come. It is not quite the same when Parliament reassembles for three or four days for debate; we do not have the discussions, we do not have the atmosphere that exists when Parliament is in uninterrupted Session. It is, therefore, perhaps unfortunate that this year we are to adjourn until 26th October.
It is also unfortunate that Parliament is about to go into recess when we have just recently had statements about the defence structure and the drive to cut defence expenditure. I hope that the Lord President of the Council will give us an assurance that no irrevocable step about the Territorial Army or about cuts in defence expenditure will take place before the House has had a proper opportunity for debate.
In the context of the proposed Summer Recess the problem of the Territorial Army is not urgent at the moment, because the Secretary of State for Defence has told us that the proposed changes will certainly not come into operation until 1967. That means, to my mind, that we could stop those changes, if the weight of the argument was powerful enough, by having a debate as soon as possible in the next Session, and perhaps even in this present Session.
It is, perhaps, the final criticism of the Government that we shall start the Summer Recess on a Thursday, when we could easily have continued to the Friday, or even to the Monday or Tuesday of the following week. It is a criticism of their efficiency that a Bill on which they have placed the greatest weight—the Rent Bill—will not have reached the Statute Book by the time we rise. Here is muddle and confusion. This Measure was one which the party opposite said it must have in

1317
this Session—priority No. 1, as it were. Now it is not finished, and not finished for lack of about one day—
Mr. Arthur Lewis: They got the Judges Remuneration Bill all right.
Sir D. Glover: The hon. Member had to get back to that Bill.
I was not on the Committee on the Rent Bill, so I cannot speak with authority about it, but I know that it contains provisions that both sides of the House are very anxious to see begin to operate, and the present proposal will cause much more delay in getting the machinery working once the Bill is enacted.
It is a final criticism of the way in which the Leader of the House has managed the business of the House, and of how the Government have managed their own business, that we should now be debating the Adjournment for the Summer Recess with what is perhaps the most important part of the present legislation still in a locker and not yet allowed to be put into operation.
5.23 p.m.
The Lord President of the Council (Mr. Herbert Bowden): It might be convenient to the House if, at this stage, I were to reply to some of the reasons given by those right hon. and hon. Gentlemen for the House not adjourning for the Summer Recess, and to those given by the one or two hon. Members who feel that perhaps we should adjourn. I will deal, first, with two or three main points, and I start with the serious contribution made by the hon. Member for the Isle of Ely (Sir H. Legge-Bourke).
I am sure that what the hon. Member said commends itself to all of us, because, wherever we may sit, we are all concerned with the country's economic situation and with the importance of protecting sterling. I am not sure that by continuing the Session, and continuing economic debates, with some of the speeches we get, we should achieve any contribution to that situation. But I agree that it is important that, if the Government feel that they should recall the House at any time because of the economic situation, they should do so without waiting unnecessarily; and, on the other hand, that the official Opposition—or, in fact, any hon. Members
1318
who make representations in this direction to the Government—should be heard and their recommendations considered before Mr. Speaker is asked to recall the House.
The position of sterling has been debated only very recently. My right hon. Friend the Chancellor of the Exchequer made a serious statement last week, and I am sure that the House would now prefer to wait and see what happens as a result, bearing in mind that all the time it is the desire of the whole House to help in the economic situation and to protect sterling, and not unnecessarily to exacerbate the position by saying things inside this House, and outside it, that can be harmful.
The second main point related to the Rent Bill. There seems to be some confusion in the minds of hon. and right hon. Gentlemen. The hon. Member for Ormskirk (Sir D. Glover) spoke of muddle and confusion, and said that the Bill was only one day short of completion. The hon. Member for Orpington (Mr. Lubbock) asked for an additional half day to deal with the Lords Amendments. In fact, by the time we rise on Thursday, the other place will not have completed the Report stage—or it may have done so, it depends on how it gets on—so it will have to return to take the Third Reading in the first week of the spill-over. That is why I have announced consideration of the Lords Amendments for the Monday of the following week.
It has been suggested that there was delay on the part of the Government in introducing the Rent Bill. It is true that it was not introduced as quickly as the Government woud have wished, but it was a difficult Measure to draft. Anyone who has been in Government knows perfectly well that drafting Bills is very different from setting out policy. That is a position that every new Government have to face. They can, on occasion, take on some hangovers from previous legislation—we have done that to some extent, as every new Government will—but new legislation has to be discussed, policy decided, and Bills drafted.
There was no delay at all. Once the Bill was drafted and had been presented to the House—and I would be the last to suggest that the Bill has been held up at any stage in its passage through the House. It went to the House of Lords

1319
a relatively short while ago. Their Lordships' procedures are completely different from ours. It is true to say that they do not debate legislation at the same sort of length as we do—though they go into a great deal of detail—but their procedures require longer gaps between the various stages. It is not for us to suggest to them they should change those procedures unless we are prepared to face some constitutional changes which are not at the moment under consideration.
The Bill has gone ahead as quickly as possible. I am sure that my right hon. Friend the Minister of Housing will be as disappointed as any one else that he has not got the Royal Assent by the end of July or early August, but the Lords Amendments will come to us after the Summer Recess, and will be dealt with as expeditiously as possible then—
Mr. Lubbock: If members of another place have not completed this work by the time we rise, why not make them come back as well?
Mr. Bowden: They are, in fact, coming back at the same lime as the House of Commons—on 26th October. They will take the Third Reading of the Rent Bill, with other legislation, in their first week.
The third major point referred to defence and the Territorial forces. I agree with the House that any cut in defence expenditure needs to be looked at very carefully. My right hon. Friend the Secretary of State for Defence has stated on a number of occasions that, when the defence review is completed, a White Paper will be presented to the House, and we shall have a debate. No changes whatsoever in our defence needs are likely to take place during the Summer Recess—
Mr. Norman Cole: I just want to check one point. The right hon. Gentleman said, I am sure that it was a slip of the tongue, that the Rent Bill would have the Royal Assent by the end of July or early in August. He must have meant October.
Mr. Bowden: I said that my right hon. Friend the Minister of Housing would have liked to have had the Royal Assent by the end of July or early August, but that he is now likely to get it by the time the House gets up at the end of October.
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The hon. Member for Hornchurch (Mr. Lagden) referred to the long adjournment as a "holiday" of three months. I do not quite like the idea of referring to the Summer Recess as a "holiday". Every right hon. and hon. Member knows that this is not so. A Member's work is not only in this Chamber or in the Palace of Westminster. If he is doing his job he should do work in his constituency as well. If he is like me, he will have a great deal of reading to catch up with. He should take part in our economic and export drive and visit factories and workshops to see what can be done there.
The suggestion that, because the House is in recess, the Government are going away to the Isles of Scilly for three months may be a nice thought, but it is not likely to happen. Activity will be going on in all Government Departments and offices, not only by civil servants but by Ministers, after a short break.
Mr. Lagden: I am sure that the right hon. Gentleman is not so naïve as to think that his hon. Friends spend the whole of the Recess working in the desirable manner he mentions. I agree that many of us go abroad in an endeavour to help exports, but he must know in his heart that many hon. Members spend a lot of the Recess on pure holiday.
Mr. Bowden: This is a matter for individual Members. If an individual hon. Member wishes to spend the whole of the Recess on holiday then that is a matter for him but if his constituency is anything like mine it will take notice of the fact. [HON. MEMBERS: "Hear, hear."] It is not often that I get cheers from right hon. and hon. Members opposite. I thank them very much.
The hon. Member for Southend, East (Sir S. McAdden), in an excellent contribution and a very honest one, referred to what he regarded as a charade at the end of the Session before we rise for the Recess. Perhaps he is to some extent right. All of us, if we inquire into our innermost hearts, will admit that. There are occasions when I have gone into the Lobby against a Motion for a Summer Recess hoping and praying that I would be defeated. We have all been in that position. The hon. Gentleman said that the House has not added to its dignity by behaving in this way. I am not so sure.

1321
This is one of the occasions when speeches are made concerning why the House should not rise but I am sure that every hon. Member really wishes it to rise.
The hon. Member for Barry (Mr. Gower) asked about the report of the National Ports Council. I cannot give him any detailed information now but I admit with him that there are extreme differences of opinion and no decision is likely to be taken until the House resumes. He also asked about the proposed White Paper on leasehold enfranchisement. I cannot give him the date of that but I think and hope that it will be out before the end of the Recess, with, of course, a debate when we return and, if necessary, any legislation.
The hon. Member for Exeter (Sir Rolf Dudley Williams) was concerned—although I do not quite see how it was in order—about the activities of Government back benchers. He referred to the fact that meetings take place in another place and have their effect upon the Government. The hon. and gallant Member for Lewes also raised this point. I am not sure what the hon. and gallant Gentleman meant when he referred to the "Socialist party caucus", unless it is a sort of Labour Party equivalent of the Conservative 1922 Committee.
The two hon. Gentlemen know, as everyone knows, that it is healthy in a democracy, where there are political parties, that those parties should express their views. It becomes unhealthy if the Government of the day, although they are entitled to listen to points from their own party, act in accordance with views which they do not feel are in the interests of the country. It is the duty of a Government to govern and this Government will do just that.
The hon. Member for Exeter suggested that we should continue to sit to deal with the cost of living. We debated the subject last week and there have been an additional 32 Supply days during the year on which many of these matters could be raised. I do not quite like the way he referred to hon. Members "flaunting themselves" around the world and "loafing" about the country. If my experience is anything to go by, next week I hope to be tied up on the Exeter by-pass for a few hours; but perhaps
1322
that subject is more correctly raised in the debate to follow.
Finally, I remind the House of the figures of previous Recesses. Unless we are recalled—and I hope that economic circumstances or the situation in Vietnam will not make it necessary, for no one would want such circumstances—we shall have 82 clear days during this Recess. Last year's Summer Recess was 79 days, but then we had the General Election and, therefore, it was curtailed by three. The year before, the Recess was 100 days, but on that occasion we had an additional 18 days because the then Prime Minister could not sit in this House and we had to wait until he could.
Under the terms of this Motion, the House will return on 26th October unless, at the request of the Government to Mr. Speaker—taking into account, of course, any representations by the Opposition—it should be recalled earlier. I suggest that the House should now come to a decision. I am sure all of us share the hope that we do not have to come back for either of the reasons I have mentioned.
5.38 p.m.
Mr. Selwyn Lloyd: I have been at the receiving end of debates on similar Motions and I therefore have some sympathy with the Leader of the House. He has spoken to us today with his usual courtesy and moderation. The hon. Member for West Ham, North (Mr. A. Lewis) talked about "synthetic indignation" on these occasions. I think that we had 13 years of synthetic indignation from the benches opposite. Today, however, our indignation is not altogether synthetic.
I agree with the criticisms of the conduct of business and of the overloaded programme and the fact that some of the Government's measures were ill thought out. There has been a good deal of talk about the Rent Bill but, as the right hon. Gentleman pointed out, the Report stage is going on in another place and indeed it is not quite certain, I believe, that the Government have had their last thoughts about the Bill. This is not the fault of the Opposition and it is reasonable that the Bill should be properly considered in another place.
Some of my hon. Friends have raised serious problems, for instance, about the

1323
future of the Territorial Army and the economic situation. They were right to ventilate them but we have now had certain assurances from the right hon. Gentleman. He has told us of the power to seek the recall of Parliament and has said that the Government will listen seriously to representations by the Opposition on these matters. I think that he deals straightly with the House and I accept his assurances.
In spite of what was said about the figures, I think that the Adjournment is rather a long one, but we in the Opposition welcome the opportunity to point out throughout the length and breadth of the land the manifold deficiencies of the Government. If my hon. Friend the Member for Exeter (Sir Rolf Dudley Williams) thinks that he will be allowed to loaf about, I shall do my best to see that he plays his part.
Finally, of course, we recognise how much the tired, dispirited, ill-tempered and nervy supporters of the Government need a good long holiday. I ask the House to acquiesce, albeit with reservations, to the Motion.
Question put and agreed to.
Resolved,
That this House, at its rising on Thursday, do adjourn till Tuesday, 26th October.

CLEAN AIR (FURTHER PROVISIONS)
5.40 p.m.
Mr. Robert Edwards: I beg to move,
That leave be given to bring in a Bill to give further powers to local authorities to take action against the pollution of the air.
The genesis of this Motion had its origin in my constituency about five years ago when the Minister of Housing and Local Government, against the wishes of the local authority, granted permission to a large industrial undertaking to extend its production. As a consequence, the air in a vast area of my constituency has been polluted and hundreds of good people have an unremitting struggle to keep dust, filth and smoke out of their homes. Their lives are becoming a nightmare. When the wind is in a certain direction, the local school has to close
1324
its windows and the children have to be brought in from the playground. We have lost control of our environment, and when man loses control of his environment he becomes a slave. It is time that we gave local authorities power to prevent a situation like this from developing in other parts of the country.
Far be it from me in this short speech to denigrate the value of the Clean Air Act, but in the 2,000 smokeless areas throughout the country hundreds of tons of coal are sold against the very principles for which the Clean Air Act was passed. Hundreds of tons of bitumous coal are being sold in smokeless areas and, although local authorities have power to prosecute householders, they have no power to act against coal merchants.
Apart from the areas covered by smokeless zones, great industrial centres are having to face an increasing problem of air pollution. Local authorities do not have adequate power to deal with the problem. We take great pains to guarantee that our water supplies are clean and pure and we must make the same efforts to see that the air we breathe, air which we consume much more continuously to live than we consume drinking water, is pure and clean.
The pollution of our air is committed by man and man cannot easily remove himself from the areas which he pollutes. He has to work, live, sleep and play often enough in the areas where his industrial activities pollute the atmosphere. At least we ought to be able in this century to get rid of sources of air pollution and prevent new sources from arising. We ought to be able to amend our legislation in such a way that we can reduce this hazard which puts hundreds of people into hospital beds, which makes the lives of hundreds of thousands of people a misery from bronchitis and other chest diseases, and which sends many citizens to a premature grave.
For that and many other reasons which hon. Members will know from their own experience, I hope that the House will give me permission to bring in a modest Bill to amend existing legislation so as to give local authorities more power to guarantee the health of the people whom they represent.
Question put and agreed to.
Bill ordered to be brought in by Mr. Robert Edwards, Mr. Frank Allaun, Mr. Ioan L. Evans, Mr. Owen, Mr. Rhodes, Mr. A. Henderson, and Mr. Bradley.

CLEAN AIR (FURTHER PROVISIONS)
  CLEAN AIR (FURTHER PROVISIONS)
  Bill to give further powers to local authorities to take action against the pollution of the air, presented accordingly and read the First time; to be read a Second time upon Friday 29th October and to be printed. [Bill 207.]
ORDERS OF THE DAY

  CONSOLIDATED FUND (APPROPRIATION) BILL
  Considered in Committee; reported, without Amendment.
  Motion made, and Question proposed, That the Bill be now read the Third time.

  ROADS
  5.48 p.m.
  Mr. J. Enoch Powell: The right hon. Gentleman the Minister of Transport is no doubt perfectly well aware—I dare say that he is now painfully aware—of what are the Government's commitments and his own personal commitments in relation to the road programme. These commitments were not undertaken or expressed by him in the early days of the present Administration when in the first fine careless rapture so many things were done and said which right hon. Gentlemen opposite shortly afterwards regretted. These commitments were made by him solemnly and deliberately as recently as last March when the Government were in a position to be fully seized of the economic situation and when they had thoroughly considered their spending programme and the Chancellor of the Exchequer had drawn up his estimates for the coming year. They therefore rest fairly and squarely with the Government.
  Perhaps I might remind the right hon. Gentleman of the terms in which he affirmed those commitments.
  "… we are determined not to cut the road programme …"—[OFFICIAL REPORT. 3rd March, 1965; Vol. 707, c. 1311.]
  he said. This was referring to the road programme which he had inherited from the outgoing Administration. Again, in reply to me on 10th March in this House, he said:
  "I have maintained all along that we will adhere to the programme which we inherited …"—[OFFICIAL REPORT, 10th March, 1965; Vol. 708, c. 391.]
  He confirmed on this occasion that the undertaking referred to the programme not merely in monetary but in real terms. It is therefore perfectly clear that the Government, deliberately, with their eyes

  1327
  open, and after due consideration, reaffirmed and undertook as their commitment the five-year road programme which was left by the outgoing Administration.
  The purpose of this debate is to examine the effect upon that commitment of the statement which the Chancellor of the Exchequer made to this House a week ago. It was a statement which clearly took many of his colleagues, including the right hon. Gentleman the Minister of Transport, by surprise, a statement which evidently they are still trying to interpret. Our object this afternoon is to try to carry this process a little further, since this is a matter not of private concern to the occupants of the Treasury Bench but something of interest and importance to every section in the country.
  Might I remind the House of the relevant passage in the statement of the Chancellor of the Exchequer? He was referring to home expenditure and to the Government's intention to slow down the rate of expenditure on capital projects. He said:
  "Housing, schools and hospitals will be contained within their existing programmes."
  He explained yesterday that he means that the level of expenditure, in the next year at any rate, will not exceed the level of expenditure in the current year. Then he continued:
  "For other non-industrial capital projects for which contracts have not yet been signed, the starting dates will be postponed for six months."—[OFFICIAL REPORT, 27th July, 1965; Vol. 717, c. 228.]
  Subsequently he indicated exemptions which would apply to that last statement.
  I do not think it has been denied in any quarter that the road programme falls within the definition of "non-industrial capital projects" in the context of that sentence. There also apply to the road-building programme the exemptions which the Chancellor mentioned in respect of development districts and areas of high unemployment and access to the docks. We have therefore to examine what will be the effect on the road programme of the Chancellor's statement.
  Before we do that we have to understand the conflict which immediately arose between the understanding of the Minister of Transport of what his right hon. Friend's policy was and the plain
  1328
  and evident meaning of the Chancellor's words. It may well be that the Minister of Transport, when he was replying to me in the House on the following day, had in his mind not the statement which the Chancellor of the Exchequer had actually made but some earlier draft of it, some earlier stage in negotiations which might have taken place between him and his right hon. Friend. Indeed, it is difficult to account in any other way for the extraordinary statements which the Minister of Transport made last Wednesday.
  He paraphrased for instance, his right hon. Friend's reference to ports in this way:
  "My right hon. Friend in his statement yesterday picked up capital projects in the ports, … as being projects which would be given preferential treatment in the allocation of resources in the six months' period to which he said his statement applied."—[OFFICIAL REPORT, 28th July, 1965; Vol. 717, c. 443.]
  You may search the Chancellor's statement from beginning to end, Mr. Speaker, but you will find in it no indication that his statement applied to a six months' period. A six months' period would make nonsense of most of the elements of the Chancellor's statement. Such a period was clearly not in his mind in the preceding sentence about housing, schools and hospitals, nor does any reference occur in the sentence in question to a six months' period to which his statement applied. Then again the right hon. Gentleman said that in view of the Chancellor's statement:
  . . it will be necessary for me to review those projects which would have started within the next six months."
  Again he said:
  "We have undertaken … to do a holding operation on some projects which would have gone ahead in the next six months."—[OFFICIAL REPORT, 28th July, 1965; Vol. 717, cols. 444 and 446.]
  Where the words "six months" occur in the Chancellor's statement, they occur in an entirely different context. In the statement it is the period for which the starting dates on projects, contracts for which have not yet been let, are to be postponed. All the Chancellor's statement says is that when one comes to a starting date that starting date is going to be pushed six months forward. He gives no indication how long this part of his new policy is going to remain in force any more than how long any other part of that policy is to remain in force.

  1329
  There was, therefore, a fundamental and important contradiction between the interpretation which the right hon. Gentleman was giving on the day after the Chancellor's statement and the statement of the Chancellor. At that time the right hon. Gentleman was under the impression that his right hon. Friend's statement related to a period of six months and that projects which were going to start in that period would be reviewed with a view to their postponement. The right hon. Gentleman has since had a few days to consider the matter, maybe to discuss it with his right hon. Friend, and for consultations to have taken place between the Departments.
  What he said over the weekend, when he opened the Newcastle-under-Lyme bypass might perhaps be regarded as ambiguous, or as representing a shift back towards the natural interpretation of the Chancellor's statement. He said this:
  "How does this affect the road programme? It means that the letting of road contracts will be postponed for six months along with other capital projects."
  Those words, in themselves, might perhaps be reconciled with the plain meaning of the Chancellor's statement. What are really remarkable are a pair of replies to Written Questions which I put down to the right hon. Gentleman for answer on Friday, and which the Minister answered yesterday. As these are the most recent attempts by the right hon. Gentleman at an interpretation of the Government's policy in relation to the road programme, I do not apologise for bringing them before the House in detail.
  I asked the right hon. Gentleman whether he could give me—
  "the total value of road schemes to be commenced in the present and each of the next two years, the starting dates of which will be postponed by six months".
  This was his reply:
  "I cannot indicate the value of road schemes which will be affected by the postponement until I have reviewed the schemes due to start over the next few months for which contracts have not yet been signed and decided which shall be postponed and for how long."
  The right hon. Gentleman is to review the schemes due to start over "the next few months"—the word "six" has dropped out altogether—and he is to decide which shall be postponed. Also, he
  1330
  is to decide for how long they will be postponed. There is nothing there about six months.
  The Minister repeated this in his other Answer to me when he said that
  "… the postponement of some schemes which would otherwise have started in the next few months is bound to have some effect on relative priorities."—[OFFICIAL REPORT, 2nd August, 1965; Vol. 717, cc. 251–2.]
  The first thing which the House needs to have made absolutely clear is which intention represents the Government's policy on the road programme. Is their policy that which was stated by the Chancellor of the Exchequer—that until further notice, where contracts have not been entered into, all starting dates are pushed forward six months except in the types of case specifically mentioned in the statement? Alternatively, is it the policy implicit in the Minister's Answers to me, that they will take the schemes which would have started "in the next few months"—whatever that may mean—and that they will postpone some of those schemes for an unspecified period? There is so sharp a difference between these two statements and the matter is so important that the House is entitled to have it resolved clearly and definitely.
  But that is only the beginning of the matter. When the Minister has at last told us the outcome of his discussions and those of his Department with the Treasury to find out what the Chancellor of the Exchequer meant and how they can persuade him to modify what he meant, we want to know, broadly, what the effect will be on the road programme "as settled for the next five years"—words which the right hon. Gentleman has used within the last week. It is no use the right hon. Gentleman saying, "But you must wait until I have reviewed the specific schemes one by one. Until then, I can give no indication of what this might mean". I appreciate that it may be too soon for the right hon. Gentleman in individual cases, especially where the starting date is not imminent, to intimate precisely whether they fall within the exemptions and how those exemptions will apply. But it is absurd for him to say that the general magnitude of the retrenchment of his programme which the Chancellor's statement implies cannot be indicated to the House and to the country.

  1331
  Let me put it to the Minister in this way. We know, broadly, that the capital value of the motorway and trunk road schemes which would be started during the next six months—I am generously taking the right hon. Gentleman's own basis for the purpose—would be approximately £50 million, and that the capital value to be met from the Exchequer on the classified road schemes would be £25 million—£75 million in all. To those falls to be added the local authority component of that expenditure on the classified roads and the expenditure on minor works and maintenance. Some or all of this, under the terms of the Chancellor's statement, is presumably also to be postponed.
  Therefore, we arrive at a very broad figure of about £100 million worth of work, which is within the ambit of the Chancellor's policy even on the narrowest interpretation which has been given to it by the right hon. Gentleman. There was no need for the Joint Parliamentary Secretary to be so surprised or so scoffing when last week I referred to a £100 million cut in the road programme.
  I appreciate that the exemptions have to be removed from the global total which I have endeavoured broadly to estimate—the schemes in development districts and in areas of high unemployment, and those which can be brought within the description of access to the docks. We should like to know the estimate of the value of the exemptions so that we can ascertain, broadly speaking, what is the total value of the schemes which fall to be postponed even on the narrowest interpretation which the Minister has given. Until the right hon. Gentleman can give us some more detail, this I would assess at £75 million at least if not more.
  However, whether that estimate be right or not, some estimate of this figure must be given to the House this evening; for if the Minister has no idea whether the figure is £25 million, £50 million or £75 million, then neither has the Chancellor of the Exchequer, and from that it would follow that the Chancellor of the Exchequer was deceiving the House, the country and, indeed, the world by purporting to bring forward measures of retrenchment without having the slightest notion of the magnitudes involved or the degree to which demand upon the resources of the
  1332
  economy would be reduced by them. This is the second thing which we want from the Minister. We want a definite statement—it need not be precise—of his and the Government's estimate of the block value of the elements in the road programme which are being postponed.
  The third thing, based on that, which we wish to know, is the effect that this postponement will have on the road programme to which the Labour Party and, above all, the right hon. Gentleman personally are committed. There are two possibilities. The right hon. Gentleman can say, "It will not affect the road programme because it will all be put back again before the end of the period to which that programme related. This is simply a concertina. The concertina is closed at one point in the five years only to be opened at another point." Alternatively, the meaning may be that the postponed work remains postponed throughout the five years' programme and that an amount of construction valued at, say, at least £75 million, is pushed out at the far end of the five-year programme.
  In common parlance, that would be a cut. If we delay doing work, then we have cut down the work in the period to which the proposed projects related. If schemes which would have been undertaken and completed during the five-year programme still remain uncompleted, to be done after the end of those five years, that is a cut in the five-year programme and is a breach of the commitment which the Government and the Minister undertook.
  Therefore, I ask the Minister to say, first, whether this is what will happen. Are these deferments to be carried throughout the five-year programme? If so, and if this £75 million worth, or whatever it may be, of work is not to be added back in subsequent years of the programme, the programme has been cut by approximately half of one year of that programme.
  If, on the other hand, the right hon. Gentleman says, "It will be added back. We shall catch up on it. The programme will be carried through. There will be deferment at this stage but acceleration subsequently", I ask him and I ask the House to contemplate what an absurd operation this is. Economically it is absolutely ludicrous.

  1333
  There may be some argument, although few people, I think, would readily assent to it, for deploying on other purposes part of the resources of manpower and capital which would otherwise be applied to the road programme. It may be wrongheaded but, at least, it would be intelligent. That is the first of the two alternatives, one of which the right hon. Gentleman must embrace. The other, however, implies that machinery and men are temporarily withdrawn from the road programme only to be drawn back into it again a short time afterwards and a demand created for more still to catch up with the deferred burden of work.
  What possible sense can there be, from an economic viewpoint or from any other point of view, in rendering machinery and men temporarily idle, not so that they may be absorbed into other branches of the economy, but in order that they may be brought back after a while on to the very projects from which they have been laid off? It could, I suppose, be argued that such a measure was conceivably justified in the height of a crisis if it produced an immediate effect. If the Chancellor's difficulties in face of the current sterling crisis were to be dramatically eased by doing so absurd a thing as this, one might accept that as an argument. We all know, however, that that will not be the effect of these postponements upon Government expenditure.
  Listen to what the right hon. Gentleman said at Stoke-on-Trent on Saturday:
  "The road programme is not coming to a halt. Far from it. There is a great deal of work in hand. In fact, most of the programme this year and next is devoted towards financing current work and will not be affected."
  Therefore, most of the expenditure in the current year and the next financial year will be unaffected by these postponements. The effect of these postponements will be out beyond those two years, at a time when the economic circumstances may be quite different, when the relative level of demand in the economy and the position of sterling will, we hope, be totally different from what it is today. That is when these measures will have their impact. That is when we are to have a surplus of machinery and men, not to be diverted to other branches of the economy, but to be stood off for a time
  1334
  so that they can presently be brought back on to the very same road programme to do the very same projects.
  We want to know tonight from the Minister whether that is what will happen, or whether this is a cut in the road programme, because projects which would otherwise have fallen within the five-year programme are to be pushed out beyond, deferred and, in effect, cut out of the programme.
  In other circumstances, one might feel sorry for the right hon. Gentleman. He was advised by the Chancellor of the Exchequer not in the second half of October last but after six months of discussion, cogitation and negotiation "Go ahead. You can give a firm pledge. You can commit yourself now to maintaining and carrying out the road programme of the preceding Government the programme which is 'settled for the next five years'."
  Now, because of something which his right hon. Friend the Chancellor did almost behind his back, the same right hon. Gentleman has to come before the House and admit either that the programme as a whole will be substantially cut or that he will handle it in a manner which is utterly unintelligible, either politically, socially or economically. In other circumstances, I say, one would feel sorry for the right hon. Gentleman, but these emotions are overlaid by one's sense of the irritation, the frustration and the very real loss which these measures will involve for the industry concerned as well as for the public at large.
  The industry concerned, the productivity of which has been rapidly increasing on account of the large capital investment which has taken place in the road build-in industry under the influence of the programme in recent years, will be dislocated by what has been so thoughtlessly decided and announced. The lives of the people concerned with that industry from top to bottom will be dislocated. The expectations of the people for whom the road programme was devised, and the prospects of the economy which to no small extent depend upon it, will be seriously prejudiced. These are the things that matter. These are the answers that we require from the right hon. Gentleman and these are the charges that he has to answer.
  6.18 p.m.
  The Minister of Transport (Mr. Tom Fraser): We have just listened to a most extraordinary speech by the right hon. Member for Wolverhampton, South-West (Mr. Powell). In the last few minutes, he nearly got round to telling us whether the Opposition at this time thought that public expenditure should be cut, but he did not quite get there. His right hon. Friend the former Leader of the Opposition has been stumping the country saying that the Conservatives would cut public expenditure and would reduce taxation; and the right hon. Member for Wolverhampton, South-West has made not a few speeches himself around the country in which he has given the clear impression that that is what he wishes to be done.
  Today, however, he has contented himself with making a few quotations and asking a few questions without discharging the responsibility, which clearly rests upon him as the spokesman for transport for Her Majesty's Opposition, to say whether, notwithstanding the economic situation, his party would in any way interfere with the road programme that lies before us.
  The right hon. Gentleman quoted me, as he did on Wednesday last, on what I said in March this year, when I said that we were determined not to cut the road programme. On Wednesday, the right hon. Gentleman thought that the statement of my right hon. Friend the Chancellor of the previous day was the signal for my resignation. Today, he has gone as far as to recognise the possibility that the postponement of a few starts from this year into the early months of next year would not necessarily make it impossible to complete the road programme for the next five years, but he has said that of course it would be totally absurd to hope to catch up.
  At last the right hon. Gentleman has become a convert to planning. He wondered last Wednesday and he wondered in his speech today whether—he not only wondered but asserted that—I was taken completely by surprise by what the Chancellor said last Tuesday. I think that, with all the Press and radio reports about Ministers meeting and having met, most intelligent people would have had the impression that these
  1336
  were the matters we were discussing, and that we did not meet to play tiddlywinks; so I should have thought there was some reasonable assumption that I was aware of what the Chancellor was saying. The right hon. Gentleman became a little confused in his thinking as he went on with his speech today, since having started on the assumption that I was taken by surprise by my right hon. Friend, he proceeded to say that my answers on Wednesday were probably due to the fact that I had in mind an earlier draft of the statement—that same statement, the making of which he claimed took me completely unawares. He really must make up his mind on which leg he is standing.
  Let me mention one other absurdity in the right hon. Gentleman's speech this afternoon. He has made it quite clear that he thought it would be perfectly all right if this debate were to take place and if I were to make my speech at the end. None the less he was himself making a speech which put a clear obligation on me to get up at this Box to say where I stood immediately he sat down, and he had invited me not to do it but to sit here while other hon. Members repeated the questions and could ask when I was going to get up and make my position clear.
  Mr. Powell: There is no truth whatsoever in what the right hon. Gentleman has just said.
  Mr. Fraser: If there is no truth in what I have just said I have to tell the right hon. Gentleman that I have to choose between himself and his hon. Friend sitting beside him, the hon. Member for Glasgow, Hillhead (Mr. Galbraith).
  Mr. T. G. D. Galbraith,: This is absolutely monstrous.
  Mr. Fraser: It is indeed.
  Mr. Galbraith: Never in the 17 years I have been in this House have I heard mention in this Chamber of discussions which took place behind the Chair. The right hon. Gentleman should be utterly ashamed of himself.
  Mr. Fraser: The hon. Gentleman now is objecting to my telling the truth, because he himself has referred to the discussions which took place behind the Speaker's

  1337
  Chair. All I have said is that the right hon. Gentleman was making a speech which made it obligatory on me to get up and answer straight away and at the same time he had informed his hon. Friend that he did not wish me to make a speech just now but at the end of the debate. Well, the House will have to choose between the right hon. Gentleman and the hon. Gentleman as to who is telling the truth.
  I would have thought it necessary for me today to tell the House how I am proceeding with the management of the road programme in the light of the statement made by my right hon. Friend last Tuesday, and I should like, too, that the House should get this matter into perspective. One almost got the impression when the right hon. Gentleman was speaking just now that we had stopped the contracts, that we had taken men off the job or were about to take men off the job of building the roads in this country.
  Let us see what the position is. Last year, when the right hon. Gentleman's right hon. Friends were responsible for the Government, there was committed about £180 million worth of work, and in the course of last year, 1964–65, £142 million was spent—by the central Government and by local government combined—on new construction and major improvements. This year, 1965–66, we have planned commitments, quite apart from any postponements which may arise from what my right hon. Friend said last week, of well over £210 million.
  Sir Harmar Nicholls: Which year?
  Mr. Fraser: The financial year 1965–66, the Estimates period.
  The estimated expenditure, apart from any savings there might be from postponements, is £162 million, a £20 million increase. Let me make clear to the House at once that the savings which I would make this year if I did not have any more starts at all for the remainder of this financial year would be infinitesimal. I doubt whether I would save very much more than £2 million if I did not start any roads at all between now and April of next year. I think this has got to be said because this happens to be the position; this happens to be the fact. That is why I said I want the
  1338
  House to get this matter into perspective. Next year, 1966–67, planned commitments are of some £250 million worth of work.
  So one can see how this road programme is building up all the time, but the right hon. Gentleman towards the end of his speech gave the impression that we were going along on a steady level and would not get any more and would lose men and would not get them back to make up lost ground. I just mention those figures to show the way in which this programme is rising all the time.
  At this moment of time the total value of work in hand is about £300 million. That is not being stopped. That is going on. For goodness' sake, hon. Members in the House and others outside who are interested in this matter really ought to get this thing into perspective. It was made clear in my right hon. Friend's statement last Tuesday and I made it clear on Wednesday of last week that we were not postponing everything.
  The right hon. Gentleman was near enough to being right in his calculation of the total value of contracts which would have been let in the next six months if there were no postponements—that is to say, about £50 million worth on motorways and trunk roads. The classified road programme would have been about £35 million in total, of which the central Government would have met about £25 million and local government £10 million. That is £85 million altogether. The right hon. Gentleman said £100 million. I am not going to quarrel about the difference in the figures in this respect.
  As I made clear, there will not be a six months' deferment of all the road schemes, and, of course, I am reviewing, and reviewing urgently, all the schemes which are about to start in the next six months, to decide which will have to be postponed and which will go on. The right hon. Gentleman asked me if this would carry over the whole of the next five years. It seems to me that it would be totally absurd for any Minister or any Government to say they would go on postponing starts for six months over a period of four or five years. The House will realise that one must have a starting date before one can postpone it. I do

  1339
  not believe that even a Conservative Minister would suggest giving starting dates only to postpone them for six months. So the starting dates we are to postpone for six months are starting dates we had in mind; and we of course had starting dates in mind for the next six months. So that in the review which I am undertaking at the present time I start off with the assumption, which is shared by my right hon. Friend the Chancellor of the Exchequer, that about half the total will require to go on as planned.
  Mr. Geoffrey Wilson rose—
  Mr. Fraser: I shall not give way. I am trying to explain to the House what is taking place. Contracts for about £50 million worth of motorways and trunk roads were planned, and I am saying that it was made clear last week that this was not a total ban; that there were exceptions. About half the total will go on as planned. If any hon. Member has not understood that and wants to interrupt me, it means that I have not made the position clear, even though I thought that I could not be any clearer than I was in saying that about half the total would go on as planned, and about half would be deferred for six months.
  Perhaps I might tell the House the kind of projects that will continue. Schemes in development districts and areas of high unemployment will be continued. This will allow schemes like the Durham Motorway to proceed without any delay. Schemes which affect access to the docks or which directly help industry and the export drive will also continue. This will allow a scheme like the A.13 Beckton diversion to go ahead whenever we are ready, and that will be within the next six months. Contracts which extend or complete projects already started, where some work has already been carried out, or is in progress and which would be frustrated by postponement will go on. This will allow quite extensive work to proceed on two contracts for the extension of the M.1 and M.18 right up to the Doncaster Bypass and enable us to get full value out of the M.1 and the improvement to the A.1, carrying traffic into industrial Yorkshire and thus to the North-East.
  1340
  Those are some examples of works which will be continued. They can only be examples, and there will be others. The review has not been completed. The right hon. Gentleman was good enough to acknowledge that one has to consider these schemes with the greatest care, because we want to ensure that those schemes which are given priority by not being postponed are those of the greatest economic value to the country. We have to ensure that the schemes which go on are those which will make the greatest contribution to the economic well-being of our nation, and we shall be asking local authorities as a matter of urgency to carry out a comparable review so that we can decide which classified schemes should be deferred and which should go on.
  Sir Harmar Nicholls: Is not the right hon. Gentleman making a virtue out of a necessity? The list of work which he has said will go on includes work which he could not stop without having to pay considerable compensation. The whole point of the virtuous carrying on is really something that he cannot avoid.
  Mr. Fraser: The hon. Gentleman is wrong. Contracts for these schemes are not let at all. One does not pay compensation until one has entered into a contract with somebody. There are no contracts for these schemes, and I am not making a virtue out of necessity. I am saying that we have not signed contracts for these schemes, but that we shall do so and go ahead with them during the next six months notwithstanding the statement made last week. Indeed, what we propose is in line with my right hon. Friend's statement, because his was a statement of policy calculated to aid the economic well-being of the country, and this programme will do just that.
  Mr. William Baxter: My right hon. Friend is no doubt aware—indeed he has said so—that we must have some degree of planning in respect of contracts for civil engineering and public works. He will know that in many areas of high unemployment, such as Stirlingshire and Dunbartonshire, it is impossible to get road works completed in housing scheme areas and in new towns, not because of a lack of contractors, but because of a lack of civil engineers to plan the roads, sewers, and so on.

  1341
  This must be a question of priorities, and I think that the Government have taken the proper steps to give priority to those projects which are most necessary.
  Mr. Fraser: I am obliged to my hon. Friend, because people sometimes assume that we have an abundance of labour of all kinds, including professional skilled staff to get on with the job. That is not so, and we have to mobilise and organise to the best effect the resources that are available to us.
  I still believe that the five-year programme can be carried out, and I am proceeding on that assumption. In the course of the past week many hon. Members have approached me, and some have written to me, to ask about their individual schemes, and I have no doubt that during this debate hon. Members on both sides of the House will want to know whether the schemes in which they are particularly interested will be postponed or be given the go-ahead. I do not want to add to the list. I gave only one example in each category of schemes that would go ahead without delay. I shall not be able to publish a list or to satisfy immediately the understandable and reasonable curiosity of hon. Members who want further information about various schemes in which they are interested. I beg them to exercise a little patience, and I assure the House that as and when I reach my decision—and I shall be guided only by a consideration of the national well-being—I shall authorise the go-ahead at once, within the period for which I am holding things up, of those schemes which are of the greatest importance to the nation as a whole.
  I am sure that the right hon. Gentleman wants me to say what is going to happen to those schemes which would have gone on in the next six months had there not been this postponement, and whether it will affect the schemes which would have been started in the ensuing six months. It is obvious that I am not going to determine starting dates in the ensuing six months just to postpone them further. In planning the future I am going to have regard to the fact that there are certain schemes—about £25 million worth of trunk roads and motorways—which I am not going to start within the next six months but which will start in
  1342
  the ensuing six months, and I shall have this in mind when I determine starting dates for the other schemes.
  I hope that in due course I shall be able to increase the volume of work that will be done. After all, my right hon. Friend made his statement because of the balance of payments difficulties, and because we were not getting the up-thrust in the economy on which the whole of the road programme is based. If we do not do better in the coming years than we have done in the immediately preceding ones, we shall not complete the programme. If we do not get a far better growth in the economy in the next four or five years than we had in the last four or five years, we shall not complete the programme, but I am optimistic that we shall do better than the previous Administration did.
  Mr. Geoffrey Wilson: Is the right hon. Gentleman saying that there are no schemes at present in contemplation, or which were in contemplation before the Chancellor's statement, with starting dates next January? If there are such schemes, what will happen to them? Will those which would have started in September, October or November, start in January, and will those that were due to start in January start later, or what will happen? Is there to be a postponement of the later ones?
  Mr. Fraser: I thought that the hon. Gentleman was a little confused a short time ago, but I did not think that he was quite so confused as not to understand that next January comes within the six-months' period. It is—and February as well.
  I have just explained that beyond that period I am obviously going to phase in the £25 millon worth of postponed jobs for which I have responsibility, together with other delayed work, but I will not give a starting date for further work merely in order to postpone it for six months. I am hoping that beyond that period the economy will so improve that we shall be able gradually to increase the programme once again, so that by 1969–70 we shall be able to complete the five-year road programme which is ahead of us.
  I should also make clear that the proposition was made many times by my predecessor that we would have 1,000

  1343
  miles of motorway completed by the early 1970s. On many occasions in the past nine months I have been asked whether this was possible, and on many occasions the assumption has been made that I could not possibly adhere to the programme of completions laid down by my predecessor. But I have always expressed the hope that I would be able to maintain it and complete 1,000 miles of motorway by the early 1970s. The statement made by my right hon. Friend last week does not shake my belief that this can be done.
  I also believe that the Midland links, about which much has been said recently, need not be delayed beyond the period 1970–71, which was the forecast for the completion of the Midland links before my right hon. Friend made his speech last week. The right hon. Gentleman said that this would have a disastrous effect upon the civil engineering industry. I do not think that this is so. He went on to talk about the productivity of this industry rapidly increasing. As in other parts of the economy, it is important that the nation should get the best possible value for the money it spends or invests in roads—money which is invested in and spent by the civil engineering industry.
  In this connection I would mention the fact that the Government have set up an economic development committee—a "little Neddy" as it is sometimes called—for civil engineering in general, under the Chairmanship of Sir Jock Campbell. That economic development committee decided at its first meeting to form a working party on roads, to examine costs, efficiency, and productivity. This was because there was some disquiet that productivity is not rising as it might in this industry.
  When road construction prices rise by 9 per cent. in two years, as they did between 1962 and 1964, it is obviously necessary for all those concerned to take a hard look at the situation, to see what difficulties face the industry and to formulate proposals for any changes which will enable the industry to make its full contribution to the nation's economic objectives. The House may reflect on the fact that a few minutes ago I stated that we have £300 million worth of work going on at present. The House will see
  1344
  how important it is for the nation that we should be sure that we are getting value for the money that we put into this part of the economy.
  The members of the little Neddy's road contstruction working party are now being appointed. The chairman is an independent member of the economic development committee itself. He is Mr. J. A. Lofthouse, a director of the Nobel Division of I.C.I. The working party's terms of reference will ensure a close and wide-ranging scrutiny of trends in costs, prices, and productivity, and of what could and should be done to ensure full efficiency. The terms of reference are:
  "1. To examine the economic performance of the road construction sector of the civil engineering industry, especially in relation to costs and productivity; to consider ways of improving its efficiency and performance.
  2. In particular:—

  (a) to examine trends of road construction costs and prices and the reasons for them,

  (b) to consider methods of measuring productivity in road construction, to select the most appropriate and to examine the trends in productivity,

  (c) to consider action to increase productivity and reduce costs.

  3. To submit reports and recommendations on these matters to the Economic Development Committee for the Civil Engineering Industry as appropriate and to draw the attention of the Economic Development Committee to the possible relevance of their work to other sectors."
  This economic development committee having been set up for the civil engineering industry so recently, and it having so quickly got down to the appointment of a working party to look into road construction costs, it is evident that there are many people who know what it is about, who are in this industry, and who are not happy with the situation. That deals with the proposition that this is one of the most efficient industries, with a high and rising productivity, which will suffer a severe setback because of the proposals which have just been made.
  Mr. John Biffen: The Minister has mentioned the economic development committee for the construction industry. When the national plan is published, will the section of that national plan which refers to the construction industries take into account the changes in the pace of the road construction programme which will follow from the Chancellor's statement of last Tuesday?
  Mr. Fraser: Yes—the national plan when published will certainly take account of the Chancellor's statement of last Tuesday. But the national plan will none the less be a plan for four-five years ahead, and will not be a panic document drawn up, in the circumstances of economic stress, on the assumption that we shall continue with a balance of payments deficit of between £400 million and £800 million a year; it will be drawn up on the assumption that we shall be able to get out of these difficulties and begin building up some balance of payments credits in place of the deficits that we have been accumulating over the years.
  The House listened with great interest to the right hon. Member for Wolverhampton, South-West initiating the debate. He was very careful not to make it clear whether or not he thought that the measures introduced last week by my right hon. Friend were justified. We all know what the right hon. Gentleman did, back in 1957. He resigned from another Administration because public expenditure was being maintained at too high a level. But in the book—and one understands that he has authorised every word of it—"A Nation not Afraid"—
  Mr. Galbraith: Did the right hon. Gentleman buy it himself?
  Mr. Fraser: No—I got it from the Library. I am sorry if the right hon. Gentleman is a little disappointed about that, but I am sure that he will not have to go hungry because I have not dipped into my pocket to buy a copy. On page 117, quoting his remarks made in February of this year he says:
  "The projection of public spending for the next four years which was undertaken by the late Government at the end of 1963 showed that on policies then in force it was expected to continue to rise at the rate of just over 4 per cent. a year at constant prices."
  He then goes on to say:
  "But no prudent person commits himself to future expenditure on the mere unsupported assumption that his income is going to rise faster than it has ever done before; nor does any prudent nation. The only sane course is to wait and see how our income rises and plan our public expenditure in the light of realised possibilities, not wish-fulfilment prophecies."
  That may be very sound, but it is hardly consistent with what the right hon. Gentleman said today—if he said anything at all, which is not certain. This chapter ends with these words:
  1346
  "So let us make this our resolve: we will not be tempted, or frightened, or cajoled into turning aside from our plain duty and common sense necessity: so to control and limit and guide our public expenditure that it no longer entails upon this country the recurrent menace of inflationary crises.…"
  Where do the Opposition stand now?
  They bequeathed to me a road programme which is increasing at the rate of between 14 and 15 per cent. each year. They kidded themselves that they could get a 4 per cent. growth rate in the economy each year, out of which this was to be financed. They never got the 4 per cent. growth rate in the economy and they were roundly condemned by the right hon. Gentleman for launching this programme at all. He very nearly got round to telling us this afternoon that, despite the fact that we have not achieved the growth rate in the economy, we should continue with the programme, but he did not go quite as far as that. His hon. Friends behind him will know that he came right to the brink but he did not cross. He did not quite say that. The right hon. Gentleman asked a few questions and told us absolutely nothing about where Her Majesty's Opposition stand on the difficult troubles which afflict the nation.
  6.52 p.m.
  Mr. James Dance: Many millions of people outside the House and many hon. Members, certainly on this side, were extremely concerned about the Chancellor's statement about cutting back and I entirely agree with my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) that we are entitled to ask and to be told by the Minister what, if any, delays are proposed in major road construction. I want to confine myself to what is so aptly named by the Automobile Association the "missing link". This is a conglomeration of roads joining the M.1 with the M.6 and the M.5. Here, far from a cutting back, there should be an acceleration because of the appalling delays caused in this area.
  There is no point in building first-class motorways if we then have this missing link with these great delays. I know these roads well and I realise the frustration which they cause to motorists. If anybody asked me "Which is the best way to get from the M.1 to the M.6?", I am afraid that I should have to say, "I do

  1347
  not know. There is no best way: there are only bad ways." That is perfectly true. To be fair to the Minister and to my right hon. Friend the Member for Wallasey (Mr. Marples), whom he succeeded, there are some very good stretches on this length of road, which stretches 57 miles, from the M.1 to the M.6. About half of this is made up of good roads, dual carriageways, and one can get a move on. But the real critical part is 24 miles long. It is interesting to note that 10 of these miles are two-lane, yet this is the main junction. Fourteen miles are three-lane, which we know can be extremely dangerous, and there are two very short stretches of dual carriageway.
  The danger of these roads must be apparent when one considers that, at both ends, there are magnificent motorways. This ghastly, congested stretch in the middle, with the resultant frustration to motorists is, I am certain, the cause of many accidents. It can take as long to travel these 24 miles as the whole of the rest of the two motorways combined. Already the volume of traffic on these roads is 50 per cent. higher than the planned capacity for a three-lane road. If we assume that the increase in traffic in this part of the world will be about 12 per cent. per annum, the increase in volume by 1970 will be twice the maximum laid down by the Ministry of Transport for a three-lane road.
  Let us not forget that 10 miles are two-lane and carry four times as much traffic as that laid down for a two-lane road. By 1970, when, we are told, we shall get these improvements, the volume of traffic will be 24,000 vehicles per 16-hour day and these will have to be crammed into the two-lane stretches which were designed to carry only 6,000 vehicles in the 16-hour day. Hon. Members can see what the congestion will be like by then. It is bad enough now: it is appalling. The critical area is from Coleshill to the Gailey roundabout, and any of us who have to use that road realise how appallingly bad it is.
  I have some photographs which show how serious this congestion is. If the Minister has no copies, I shall be delighted to lend them to him. I should like to quote from some of the captions on the back of these photographs, because I feel that they are extremely
  1348
  relevant to the congestion and the danger caused by these bad stretches of road. One reads:
  "A traffic build-up as far as the eye can see on the A.446 just north of Coleshill. Hold-ups such as this have a serious economic effect because of the incalculable loss of man hours and delays in the delivery of goods, much of it for export."
  Another reads:
  "The potentially dangerous situation on the A.5 at Fazeley where the road is so narrow that a parked vehicle, even though it is partly on the pavement, causes other traffic to pull out on to the 'wrong' side of the road. Drivers' vision in both directions is obscured."
  A third reads:
  "An accident on the A.5 near its junction with the A.38 which, because of the narrowness of the road, closed both carriageways for half an hour. Statistics show that motorways are three times as safe as 'old roads'."
  So we have photographic proof of how bad these roads are.
  I know that there is a plan ahead for a new motorway, but I want to stress to the Minister that that will come in the early 1970s. That is not good enough. Something must be done now, immediately, to ease this appalling congestion. Not only does this cause frustrations for motorists and make it difficult to achieve road safety and eliminate the hazards but results in appalling delay to commercial vehicles serving this highly industrialised area, thus slowing down delivery from the manufacturer to the consumer. We must not forget that these roads are the lifeline between the North-West and the South, serving many ports at both ends.
  I know that, in the past, land acquisition has been one of the hold-ups in building these motorways. I do not believe that land acquisition is going on speedily enough. I should like the Joint Parliamentary Secretary to tell us clearly what is the situation over land acquisition. I am a director of Birmingham Race-course and, until recently, racing was going on there. The course is now being compulsorily purchased by Birmingham City Corporation and we knew that part of the M.1 was destined to go over our land. I know of no negotiations at all with the Birmingham Race-course. A friend of mine has some land in that part of the world. Although he has been told that the motorway will go over his land, no negotiations at all have taken place on the subject. That is not good enough.

  1349
  Moreover, it would greatly speed up the compulsory acquisition of this land if realistic compensation were offered. I am certain that some of the valuers are going round offering a cockshy sort of price which is completely unfair, and I am certain that many delays are caused by people rightly saying, "No, I shall fight this because I should have fair compensation." If fair compensation were offered in the first place the acquisition could be speeded up.
  I turn to the question of the proper signposting of roads to these motorways. It is very easy to get completely lost. Because of this I tabled a Question to the Minister on 26th July. I asked the Minister of Transport
  "whether he will take steps to improve the signposting of roads leading to motorways to ensure that repeater directions are erected at all junctions or roundabouts on the approaches to motorways".
  The Minister gave me a good reply:
  "The first section of the Traffic Signs Manual, published last December, dealt comprehensively with the use of all directional signs. It stressed the need for local highway authorities to ensure that all routes leading to motorways are well signed."—[OFFICIAL REPORT, 26th July, 1965; Vol. 716, c. 31.]
  This Manual came out in December. I have been along these roads since then, and I can assure the Minister that they are not adequately signposted. I know these roads fairly well, but I have been misled by these signs. For example, I find a very good motorway sign telling me which way to go, and then I suddenly come to a very complicated junction with no indication of the way to the motorway. Not long ago when on my way to Cheshire I found myself chasing my own tail round Cannock Chase. The present situation is not good enough, and I hope that the Minister will emphasise to local authorities the great need to improve these signs.
  I hope that the Minister is taking note of these points. It is vitally important to this great industrial part of England that he should not just carry on with the road programme as planned but should immediately accelerate it in order that this congestion should be ended and in order that traffic may be speeded at this peat junction between the North-West and the South. He must see that we get the full value which we ought to get from our first-class motorways. There is no doubt about it; the M.1, the M.5
  1350
  and the M.6 are first-class roads. But there is an appalling congestion in the area which I have mentioned which is causing all the delay. I hope that we shall have a positive assurance from the Minister that the importance of an immediate improvement here is understood and that action will be taken with no further delay.
  7.5 p.m.
  Mr. Peter Doig: I welcome the debate on roads today because the subject has received far too little attention over the years. First, we should realise that the roads carry far more people today than do any other means of transport. Even if we eliminate private cars and consider only public transport, we find that three people travel on public transport on the roads for every one on the railways. We should clearly understand that this is the major form of transport for the people of this country, and therefore it deserves much more attention than it has been given.
  We have a great deal of congestion on certain roads, and this congestion in my opinion is due to two factors. The first factor never seems to receive any publicity, and it is the planning Acts. The planning Acts divided our cities into residential areas and industrial and commercial areas. In other words, they separated people from their jobs by considerable distances and compelled them to travel these considerable distances, which most of them had not done before, in order to get to their places of employment. This is a factor which could be remedied, because there is no reason why we should not provide for the planning Acts to take care of it. When we designate a new area we should provide a number of adult workers in the area equal to the accommodation to house them within the area.
  If we do this it will have two effects. First, many people will live and work in the same area and therefore will not need to clutter up the roads at peak hours. This is at the root of the traffic congestion, for 75 per cent. of the traffic at peak hours consists of car commuters travelling to and from their places of employment.
  Secondly, if we accept this policy we shall find that even if they do not live in the area of work, public transport will

  1351
  be helped. If there are 12,000 jobs in an area and accommodation for 12,000 people in that area, then even if none of the 12,000 work there and all of the 12,000 travel out to work, there will be 12,000 others travelling into the area at the same time, and public transport will be carrying full loads both ways. At present buses and trains travel full on their way to the places of employment in the morning and are empty when they go back to the outskirts and the reverse happens at night. In other words, they are running one way empty all the time, which is a waste of public transport and leads to an increase in the cost for people using public transport to travel to and from their work. This problem merits more attention than it has received so far.
  The second cause of congestion, which gets all the publicity, is the increase in the number of vehicles. In 1964—one year alone—there were 923,000 new vehicles. We have 12 million vehicles on the roads. When we consider the congestion which results and the efforts being made to combat it, we realise that it merits far more attention than it has received.
  What are the solutions tried so far? One is traffic engineering—tinkering with the problem, because that is all it is. We have one-way streets, which are an absolute nightmare to anyone travelling in the large cities. These one-way streets enable vehicles to travel faster, but they make people travel greater distances to get from A to B because they have to follow the one-way street system, so that although they travel faster it often takes them longer to get to their destination. This is certainly the case in Glasgow, where a one-way street system was instituted. After it had been in operation for some time, who complained about it? The people who were running the Glasgow Corporation transport service complained about it. They admitted that the vehicles were travelling faster, but pointed out that because they were travelling more miles they could not carry the same number of passengers, so that the system defeated its purpose.
  The former Minister of Transport introduced what he called the "tidal flow" method of regulating traffic. Under that system streets were made one-way
  1352
  only in the mornings and one-way only, but in the other direction, later in the day or at night. This system proved a nightmare to strangers visiting cities, so much so that the idea appears to have been dropped. I certainly hope it has.
  Then we had the introduction of parking meters, tolls on bridges and other forms of rationing. I say "rationing" because that is what parking meters represent. They do not provide more parking places. They merely stop people from parking—that is, unless they can afford the charges. Parking meters merely ration parking space by the purse or by the size of one's bank account. I have always understood that rationing by the purse was condemned in this country.
  Mr. Peter Bessell rose—
  Mr. Doig: I will not give way. The hon. Gentleman will, I hope, have an opportunity to speak later. Parking meters serve no useful purpose. A working man who can save enough money to buy a family car is limited in its use while the wealthy man who can afford to feed parking meters can park his car more or less wherever he likes.
  The latest suggestion is that people should be charged for driving their cars into city centres. With suggestions like that coming forward there is no telling where we will end up. I could not possibly support such a charging system, particularly when I realise that there is only one solution to the congestion problem. The answer is to spend far more money on building new roads.
  In the span of my lifetime the mileage of roads in this country has increased from 175,000 to 199,000, a comparatively small increase in 50 years. Meanwhile, the number of vehicles during that time has increased from 192,000 to 12,369,000. This shows that the rate of road building has not kept pace with the increased number of vehicles. Has a lack of money prevented sufficient new roads from being built? I will seek to show that there has been no lack of money. The Royal Commission on Transport stated in its Final Report in 1930:
  "We recommend that … in future one-third of the cost of the highways should fall on the ratepayer and that two-thirds should be borne by the motorists."
  That Report recommended that the motorist should pay two-thirds of the

  1353
  cost of road construction. In 1932 the Salter Report stated:
  "We consider that the total contribution payable by all classes of mechanically propelled vehicles, whether in the form of licence duty of petrol duty, should be equal to the current expenditure on the roads".
  The 1930 Report suggested that the motorist should pay two-thirds of the cost while the Salter Report recommended that the motorist should pay the whole cost. What, in fact, is the position? Last year we spent £316 million on the roads, and I admit that that was a £5 million increase from Scotland's point of view. The figure of £316 million should be considered in the light of the revenue collected from the fuel tax and vehicle licence duty. Those taxes were instituted for the sole purpose of providing adequate roads. I have excluded Purchase Tax on vehicles.
  The Exchequer raised £747 million on the fuel tax and vehicle licence duty, which proves that the motorist is not only paying for the total cost of all road work—but the Government and local authority share—but, in addition, is paying more than the same amount again to relieve the general taxpayer. This is sheer barefaced robbery. Not only that, it is financial stupidity because the cost of congestion has been reliably estimated at more than £500 million a year. In other words, buses must travel through cities at between 9 m.p.h. and 10 m.p.h. when they could easily travel at twice that speed. We can see why higher fares are constantly being sought.
  Companies running fleets of vans find that they need twice the number of vans to do their deliveries because their vehicles can travel at only about 10 m.p.h. through cities. I have some experience of this. I was concerned with a fleet of bread vans. Simply because of the lack of adequate roads firms must run twice the number of vehicles they would otherwise need if we had proper roads—and this congestion is costing the nation £500 million a year.
  What about the cost of accidents? It has been estimated that last year accidents cost the nation about £257 million. By cheeseparing on expenditure on roads—apart from not using the money the Government collect from motorists—it is costing us more in terms of accidents and congestion than we are saving by not
  1354
  spending this money on new roads. I hope that my right bon. Friend the Minister of Transport will examine these facts.
  Even more important than the cost of accidents is the number of people who are killed and seriously injured on our roads. Hon. Members of all parties get worked up, and rightly so, because a war is going on in Vietnam. They should realise that a war is going on right outside our own front door. Every day 1,000 people are either injured or killed on Britain's roads. Last year 7,820 people were killed and 377,679 were injured. War is taking place every day on our roads, yet we do not agitate sufficiently to bring it to an end. Every so often—at Easter and Christmas, for example—special appeals are made to prevent accidents. Unfortunately, these have little or no effect and something much more drastic needs to be done.
  How are we to make our roads safe? I suggest that the first thing to be done is to separate pedestrians from vehicles. The Buchanan Report suggested a way to do this, but the cost would be so great that no Government would dare to go in for such a scheme. We must, therefore, find another way. Strangely enough, there is another way. Certain cities already erect wire netting barriers at the edge of pavements to prevent pedestrians from getting in the way of traffic.
  Outside the House of Commons we have an ideal subway for pedestrians. Despite this, we also have a fleet of policemen standing on the pedestrian crossing regularly stopping all the traffic to allow people to walk across the road. The answer is to prevent people from walking across this road and a barrier should be erected to prevent them from doing so. This could be done on a large scale in many cities and the cost to local authorities would not be great. I hope that my right hon. Friend will encourage local authorities to go in for this type of pavement barrier on a large scale.
  The next answer is to separate the two different flows of traffic—that is, north bound from south bound and west bound from east bound. We already do this to a certain extent on motorways and dual carriageways. Considering the number of vehicles which use these major roads, the accident rate is quite small, comparing

  1355
  dual carriageways with single carriageways and motorways with dual carriageways.
  I have sought to show that these problems are capable of being solved if we are prepared to go to the trouble of solving them. The solution is available if we are prepared to use it. I do not say that one can eliminate every accident but one can reduce them very substantially, and it is something that merits definite attention.
  I will make one further point while on the subject of motorways. When the previous Government decided to start the motorway programme they were given advice by the Institute of Surveyors and Engineers that they ought to illuminate motorways all the way along. It was going to increase the capital cost by exactly 1 per cent.; that was the cost of illuminating our motorways. How often do we read of accidents on motorways where 20 vehicles in succession run into each other? It is quite understandable. The braking power of the average car travelling at 50 m.p.h. is such that a driver can only just see far enough by his headlights to pull up in time. If he goes at more than 50 m.p.h. it is utterly impossible for him to pull up and avoid hitting a stationary object. In other words, when the previous Government cheesepared that 1 per cent. to avoid the illumination of our motorways, they committed one of the worst acts of folly that they could have done.
  Let me come now to actual routes. One of the complaints that we have in the east of Scotland is that there is one city on the west coast and there are three cities on the east coast. Because of two natural barriers, namely, the River Forth and the River Tay, the bulk of the traffic went up by the west coast road, and still does. Then they built a road bridge over the Forth, and they are now building one over the Tay which will soon be finished. We find that there is no longer any natural barrier to traffic flowing the shortest way up to the east coast. Not only would that be cheaper for traffic going up to the cities on the east coast but it would also relieve the terrific congestion on the stretch round Carlisle and Penrith, because in the meantime the traffic goes up the east coast as far as Scotch Corner, cuts across to join the already congested west coast traffic, goes
  1356
  up north to Cumbernauld and then comes back to the east coast.
  What stops that? It is the fact that we have not a decent road between Scotch Corner and Edinburgh. That is the whole cause of the trouble. Where should we plan the motorway? Obviously the right place is that which provides the shortest route. People talk about spending money on the A1 by Berwick, but I suggest that would be a sheer waste of money, because there is a much shorter route by the A68 which only requires improving in two short stretches and is a road which would be used extensively. When we go further up, we find that in the County of Fife there is no decent connecting road between the two road bridges, and, what is worse, no plans for one. That is not the fault of this Government, because they did not make the plans. The motorway programme and all the road programmes were laid down by the last Government and, in spite of having it drawn to their attention time and time again, they refused to make provision for a decent road to connect up the two road bridges. It has to come at some time. The point is that if they do not do it now they are liable to squander money by putting the road in the wrong place, because, in addition to spending money to increase our roads, they have also to put them in places where they will be used.
  In order to provide a decent network of roads, what we require is not the haphazard way in which we have wasted money in the past. We have a number of firms which are capable of building good roads, and from time to time we give contracts to them. Between contracts we leave them with nothing, so that their equipment and staff are being under-utilised. What we ought to do is have a Government Roads Department, give it the best equipment we can and a permanent staff, and let it start building new roads. Then, as we can afford it, and as revenue increases—it is increasing all the time because of the extra vehicles on our roads—we can increase the staff and equipment of the Department and step up the road programme, at the same time getting full value for our money.
  7.26 p.m.
  Mr. David Webster: As an emigré east coast Scot,

  1357
  I very much sympathise with what the hon. Member for Dundee, West (Mr. Doig) had to say about a link across the Kingdom of Fife. I am sorry that he called it a county. It would be very appropriate if there were a direct route from the Forth Bridge to the Tay Bridge, and I wish him great success in trying to persuade his right hon. Friend to build a road across the Kingdom of Fife between the two bridges.
  May I come to a slightly more central theme than the Kingdom of Fife? I refer to the anxiety of many of my right hon. and hon. Friends on this side about the starting date of the cuts in the road programme announced by the Chancellor of the Exchequer last Tuesday, though not specifically as road programme cuts. Will it be postponed during the next six months only, or is there going to be a continuous slowing down of the whole programme every six months, or possibly a slight telescoping of the process? If that is to happen and we have a continuous cutting back by six months, it will mean an average reduction at the present time of £75 million on each year's programme.
  We have heard from the Minister about the £75 million that is in the pipeline at present or in the "about to be let" pipeline. Let us say that the whole pipeline of motorways and trunk roads is £208 million projected at the present time, that the Ministry grant for classified roads is £71 million, and that Ministry loans for classified roads is £5·7 million. According to my mathematics, that is about £285 million. Of that, £75 million is in the category of "about to be let", for which tenders have been or are about to be submitted but for which no contracts have been signed. Of that, £50 million is for motorways and trunk roads, and £25 million is for the other categories which I have described.
  As I understand it from the Minister, in the projected six months, half of that is going to be cut. In the other half, as one of the priorities, there is the access to the docks. We often hear from the Government about the priorities that they propose to bring forward. Can the Minister say that there will be any acceleration? I was very interested to hear him talking about the Beckton project, because I travelled down the M.1
  1358
  recently along the lorry route, though not quite as far as Beckton gasworks, and there are difficulties as one passes through Barnet and Friern Barnet through to the East End of London. In view of that, I hope that there is something which can be done to accelerate the programme.
  Before I get on to details and suggestions, some of which may not be too costly, may I say that it rams home again that, whenever there is a balance of payments problem, the curtailing of capital projects does not assist us. In my opinion, it is not relevant to it, because it is a revenue problem. What we want to do is deal with the revenue aspect and cream off the spending capacity, so preventing inflation. The Minister, of his own volition, said that in the first six months tranche, if I may be forgiven the use of that word, there will be only a £2 million saving, and that will not make any difference in the immediate strains that we see ahead of us in the next few months on the balance of payments problem.
  I know that the Minister is a "bonnie fechter", as they say in Scotland, so I hope that he will have another shot at his right hon. Friend the Chancellor of the Exchequer so that the situation may be changed in accordance with the original pledges the Minister gave to the House on 3rd and 10th March. He did not answer me when I asked then whether he would resign his position, but made some categorical statements—a rather over-used expression in this Government—that the programme would not only not be cut in financial terms but in real terms as well.
  As I understand it, the programme is now to be cut by £37½ million during the next six months, but, of the immediate saving, only £2 million is relevant to the balance of payments problem. I therefore ask him to have another go at the Chancellor of the Exchequer, and let us all hope that when the House meets again he will be able to tell us that he has succeeded in making reason prevail, because I think that this is one part of the capital projects programme that should have priority over others.
  I have had the privilege of studying access to the London docks and to the Europort in Rotterdam. We also have our own problems at the port of Bristol, where we have a link down to the end of

  1359
  the Ross Spur. I do not blame the present Minister here, but I hope that if he can give a priority to the docks he will provide a quick link-up of the A.38 to Bristol, down to Portbury, and then to what is horribly called the "Filton bypass substitute"—the most terrible abortion of a name that I know of in the whole motorway scheme. I hope that he will be able to say that this will have priority, in view of the fact that the Ports Council has this week stated that, having help up the Portbury project, it will allow Bristol to spend its own £27 million to modernise and improve Port-bury, which is one of the finest docks in the country.
  Our whole docks system was built in the railway age, practically before the invention of the internal combustion engine. I have been round many of our docks—in my business capacity I have had to survey the whole of the London docks in connection with a gas pipe-line project round them—and, without trying to be anti-railway minded, I suggest that it would not be very expensive to use a certain amount of the railway siding capacity to provide road marshalling sheds within the docks.
  One of the things that impressed me was the number of dock workers' cars there were about. We are delighted to know that in the last 13 "wasted" years more and more dock workers can use their own cars to go to work, but it would be good if some of the surplus rail track capacity could be used to provide parking space for the dockers' cars. These would not be particularly expensive projects. They would, indeed, represent a very considerable saving of existing road space, and today, when the export drive is practically sacrosanct—but not very successful—we should remember that 80 per cent. of export goods and 83 per cent. of all goods go by road. I realise that only a week has passed since the Chancellor of the Exchequer made his statement, but can the Minister of Transport tell us what priorities he will give to our exports by pressing on with the road link and give us some encouragement in this respect?
  These are revealing figures, but one gains the impression that the Chancellor of the Exchequer, not only in this context but in many other contexts, is working on a capital-project basis which, on
  1360
  the admission of the right hon. Gentleman this afternoon, will save only about £2 million in a short time, and as it is the short time with which we are mainly worried—this is relevant to the whole problem.
  This aspect of public expenditure is being cut by, say, £37 million this year, and by, say, £80 million next year—because that was a bigger programme, and as each part of the programme will continue to be cut I shall stick to this figure until the Minister gives us a firm one. What will be the programme in 1966 and 1967? The House wants to know the answer, and the construction industry wants to know the answer.
  These matters are very relevant, particularly when one remembers that in the last two Budgets the motorist has had to pay an increased hydrocarbon oil duty estimated for 1964–65 at £32 million and in the full year at £93 million, and an increased Excise Duty of £48½ million estimated for 1965–66, and £54½ million for the full year. That is an increase of revenue of about £150 million from the motor user—and every one of us is a motor user now, because 80 per cent. of our goods travel by road by the free choice of industry, whether it is nationalised or free enterprise industry. In return for this considerable increase in revenue we have a cut in capital expenditure.
  At the same time, public authority lending has already gone beyond half of its annual tranche. In this connection, I shall keep away from the railways, but we know that the gas industry has had its borrowing powers increased, without further reference to the House being required, from £650 million to £900 million over the next five years, and to £1,200 million by 1970, if the Minister thinks fit, by affirmative Order. We have this tremendous extension of expenditure in the nationalised industries, but where there is private choice we have a reduction in capital investment.
  What saving will there be in these six months? We are told that it will be £2 million, but the lack of continuity—
  Mr. Tom Fraser: I said that if I did not start any of these projects at all I would save only about £2 million in the current financial year; but if we had about 50 per cent. of them going ahead the saving

  1361
  would be only about £1 million. But the hon. Member will appreciate that it is not just a matter of saving finance in the present financial year but of saving resources. If we had put all this additional load on to the civil and construction engineering industries we would have needed to employ a good many more people than there are about. They are not available for this work. As I made clear, we require a quite considerable redeployment of labour in favour of the industries that manufacture for the export trade.
  Mr. Webster: I am very interested in the Minister's statement, and should like to study it at greater length. He has said, in effect, that the relevant saving is only half of what I assumed him to say it was at the beginning. He has also said that there will be a releasing of capital equipment—and I should like to know what it was to have been used for—and also a releasing of personnel. These starts are contracts that have not yet been signed but, as I see it, if the Minister were to sign one today, the first payment would not be for six weeks and the first actual work would commence in about a fortnight's time, and would not be very labour intensive.
  The pinch will come later in the year. This will not necessarily bring the Minister and the Chancellor a spring double, but the winter double of rising prices and increasing unemployment. These things are the consequences not of this Minister's act but of the Chancellor's act. I foresee this as this summer turns to winter, and as the winter itself progresses. I am grateful to the right hon. Gentleman for his courtesy in making this point; it is very helpful and interesting to me.
  I wonder how much increased efficiency there will be in any industry when a road suddenly stops short in the middle of a field or in an industry affected by a six month deferment. One of the major problems of the construction industry is non-continuity of work—and that is something of which I was critical in the days of the Conservative Government as well.
  I do not blame the Minister for the decision announced by the Chancellor of the Exchequer—I am sure that he fought
  1362
  against it—but it has aggravated the problem. No doubt it was a Cabinet decision. I noticed that, on the day after the Chancellor's statement, two Questions stood on the Order Paper in the name of the hon. Member for St. Helens (Mr. Spriggs), who I know was unwell but who was in the House that day. For some odd reason those Questions were not asked. The questions asked the Minister, in effect, whether he would refuse to authorise the building of roads when there was a rail link along a parallel or similar line.
  I wonder whether I do not see the sinister hand of the N.U.R. in that. I recall also the statement made on 8th July, 1964, by the present Minister of Labour. He said:
  "Any sensible transport man who will relieve himself of doctrine must in these circumstances ask this question. If we are to pour £100 million, to start with, into the creation of fast-moving liner trains,"—
  we have not yet got agreement from the unions on them—
  "the modernisation of track and the dieselisation of the engines, is it really necessary that at the same time road haulage interests should require vast capital expenditure to be laid out for great new motorways to carry freight traffic which I thought we had assumed was best handled, in the national interest, by the railways."—[OFFICIAL REPORT, 8th July. 1964; Vol. 698, c. 430]
  I have looked carefully at the election address of the Minister of Transport and I have seen no reference to increased expenditure on the roads. I also looked carefully at the election address of the Joint Parliamentary Secretary and I saw no reference there to great expenditure for a general expansion of our transport system. The right hon. Member for Vauxhall (Mr. Strauss) was fairly vigorous in his statement that we should have an increase in our roads programme but he is not the Minister of Transport. All these things are, to me, indicative factors and I regret and deplore the holding back of this one part of our public expenditure which would have so obviously improved our competitiveness and our chance at exporting in the world.
  7.45 p.m.
  Mr. William Baxter: I listened with great interest to the speech of the hon. Member for Weston-super-Mare (Mr. Webster), and one thing that struck me forcibly was

  1363
  the question of how, not being a constituent either of the Ministry of Transport or of the Joint Parliamentary Secretary, he was able to get their election addresses.
  Mr. Webster: The hon. Gentleman can have mine at the next election.
  Mr. Baxter: I wonder whether it will be worth reading. However, the hon. Gentleman must have thought that the election addresses of the Minister and of the Joint Parliamentary Secretary were worth reading and must have gone to a great deal of trouble to get them. That apart, he, like most hon. Members, is most anxious in his feelings about the need to improve our roads. It has been rightly said that our roads are the lifelines of industry. There can be no dubiety about that.
  Everyone agrees that it is desirable that we should produce a bigger and better road programme, for many reasons. But the fact is that we are faced with great financial difficulties and, we must connect these up with the road programme and in view of my right hon. Friend's statement about the savings he intends to make of its curtailment, we must have regard to the position that presents itself to the Minister.
  If he persists with an augmented road programme, and puts out more contracts and if, perchance, it is within the ability of the civil engineering industry or even within the capacity of the public works contractors to go on with more work, what would he be doing? If he could get the labour he would be able to get on with more roads—but he would take labour away from other industries and that is what we want to obviate since we wish to put labour into the exporting industries and not use it so much for our internal economy.
  Importation of materials is necessary for the road programme and these must be paid for if we are to be looked upon as reasonable and decent customers. The last Government spent more than they earned. We propose to earn more than we spend. That is the object of our exercise. I think that the speakers on the Opposition Front Bench would agree that it is a reasonable method in carrying out the affairs of the nation not to spend more than we earn.
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  We have also to import many pieces of machinery and equipment for our mechanical engineering industry to be used on our road schemes. This again goes against our balance of payments. Such things as bulldozers and other road-making equipment constitute a fair proportion of our trading deficit with America.
  Mr. Norman Cole: But the hon. Gentleman will also agree that once machines have been imported, it is in the interests of everyone that they should be used to the maximum.
  Mr. Baxter: I thank the hon. Gentleman. He has said it better than I could. I was coming to that point. I shall do my best later in my speech to elaborate on the question of the use of machines in this country which are lying idle from time to time because there is no work for them to do.
  Now my right hon. Friend has a glorious opportunity to balance out our programme for the future, to plan ahead. He has to have regard to many factors in doing so and roads are only one. This is because civil engineers are used in more types of contracting than for roads—for instance, in sewage purification schemes. We all agree that our rivers should be as pure as possible and have subscribed to the river purification Measures passed through this House. Such schemes necessitate the use of a number of civil engineers, however. We also talk about the need for bridges—and civil engineers are required for them. The right hon. Member for Wolverhampton, South-West (Mr. Powell) rightly drew attention to the great need for improving port facilities. But this requires not only contractors but civil engineers.
  To illustrate my point, less than two years ago I had occasion to ask some large civil engineering contractors to give me a quotation for certain roads, sewers, etc., in a new town where we were building 700 houses. I found that this contract would be about £350,000, but I had great difficulty getting civil engineering contractors to quote for the work. The reason is that one cannot do more than one is able. This factor is reflected in the nation's internal economy, for it means that tenders to local authorities

  1365
  are often boosted above normal costs because there is plenty of work available, and it also means that the scarcity of labour results in even the contractor being held to ransom and forced to entice labour from other contract work nearby.
  It behoves my right hon. Friend to take this opportunity to do what the right hon. Member for Wolverhampton, South-West seems to frown upon—to plan for the future in such matters as the work of civil engineers and public works contractor. If he does that, he will do a good job for the nation. While we might express impatience at the moment, in the long run we would get as much if not more from public works contracting, such as the building of roads, bridges and port improvements, than we would by offering more work than could be done.
  The hon. Member for Bedfordshire, South (Mr. Cole) stressed the need for public works contractors or local authorities to use the machinery which had already been bought. It is a crime against the nation that these large and important pieces of machinery should be left lying idle if the contractor cannot use them. The question is how to make the best use of them. They can be used only if the contractor has work to do. It is as simple as that.
  However, we have now reached a stage when it is desirable to have a new method of scheduling contracts so that the machinery of any contractor can be used to the full on a properly worked out schedule of rates for all kinds of public works contracting. If we did that, we could rope in every contractor who had machinery available so that he could work in the best interests of himself and his company, but also of the nation as a whole. If we directed some of the undoubted ability of Members on both sides of the House to producing new methods of contracting and scheduling, we would be moving in the right direction.
  There is another matter which requires some consideration and which my right hon. Friend would be well advised to look into as quickly as possible. While there is a pause in certain contracts, there should be no pause in the negotiations for the purchase of land necessary for future work. One of the stumbling
  1366
  blocks in planning a good road programme is the undoubtedly difficulty of getting the land early. I do not argue about whether the valuers, who are generally reasonable and decent people, give too small—or to high—a value to land; that is a matter for another debate. However, by Act of Parliament or some other means greater power and more flexibility should be given to local authorities and Government Departments so that they can purchase the land necessary for the well-being of the community.
  Because it is so necessary, my right hon. Friend ought to try to get extraordinary powers, if need be, for the purchase of land so that the great schemes can be planned with more continuity than has been the case hitherto. The crux of my argument is that there will never be that continuity which the interests of the nation require unless there is a better and more up-to-date contractual system than has ever been devised in this country.
  7.55 p.m.
  Mr. Norman Cole: The debate becomes more and more curious. Following on the statement of his right hon. Friend the Chancellor of the Exchequer, the right hon. Gentleman the Minister of Transport has made it clear that this £75 million six-months' stop is necessary because the economy is becoming overheated. What we could not get from him was whether it had any bearing on our export position. Then I listened to the hon. Member for West Stirlingshire (Mr. W. Baxter) with great care. He made it appear that we did not have the wherewithal, land, machinery and labour to cope with this kind of road programme and that the stop would have occurred irrespective of the export-import position. That is one alibi and no doubt we shall hear others before the debate concludes.
  I should like to return to the interesting remark of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) about the timing and the effect of this £75 million six-months' stop. The Minister made it clear that the effect of any cuts he made this financial year would be infinitesimal. He went on to elaborate that and said that they would be about £2 million. For these

  1367
  purposes of timing, therefore, we can ignore them.
  That takes us to 6th April, 1966, when, presumably, the six-months' stop will begin to have effect. In other words, some contracts will not be signed. I would be willing to bet a lot of money that those contracts which will be signed and for which starting dates will have been fixed will be the exceptions mentioned by the Chancellor and that they will be put into effect for work in the first six months of the fiscal year 1966–67. Therefore, taking it all together, it seems a fairly safe estimate that this £75 million stop will not have any effect until the fall of next year, so that when my right hon. Friend said that these cuts would not be effective until about two years from now he was not far from the detailed truth. My guess is that, allowing for the usual exigencies and finishing off what is in the pipeline, perhaps £300 million worth of work, the cuts will not have any effect at all until January, 1967, if then.
  I am fully aware that the Chancellor of the Exchequer said that these cuts were to deal with the export-import deficit of 1966. The Government are showing a dismal lack of faith in the country's future prosperity if they are contemplating that we shall still be in this position at the end of next year. It may be that they are being safe and sure economists, but the people will not like contemplating this dismal prospect. If in August, 1965, the Government are already making these cuts, heaven knows what we shall be having this time next year if the position has not improved—and under the present Government it will not have improved.
  What is the cut of £75 million about? It has a sort of psychological impact on the country as a whole. Financially, it will have no measurable effect on our export position. That brings me to my next point. What we cannot afford to stop, cut or delay at the moment is anything to do with our export position. In this both sides of the House are of the same opinion, and it is the view of every sane person in this Kingdom. What are the exceptions to this £75 million stop? One of the exceptions, in which all of us are particularly interested, is anything to do with access to docks. Any-
  1368
  thing in this connection will be allowed to go on. Where does access to docks start? Is it the little streets around the docks of the Port of London? Is it those in the corresponding places in Birmingham, Liverpool and Southampton?
  I can tell the right hon. Gentleman the Minister of Transport that the view of industry is that access to docks starts when the goods leave the factory. In other words, it is not enough to have a fast motorway for three-quarters of the way and then to have goods held up at the other end. Similarly it is not enough for access to be very quick and facile at the other end if the goods take all the time in the world to get there. It is a continuous movement, from the factory gates to the dock and then on to the ship which is needed. This is what everything should be aimed at.
  I hope that the Parliamentary Secretary, who I assume is to reply to this debate, will ask his right hon. Friend to direct his attention, when authorising starts under this aspect of access to docks, to looking backwards to the origin of manufacture, to the factories. If I may add, in parenthesis, this is something to which I do not think we in this country have paid enough attention in the past. We have had very fine origins and destination surveys, but it seems that if one wants to deal with this export position, which has plagued all Governments to my personal knowledge for years, then we ought to have an origin and destination survey which starts right back from the source of manufacture, following the goods through to their points of outlet. Then we shall begin to get somewhere so far as our delivery dates, access and costs are concerned.
  One firm alone has calculated that with the motorways we have they can save something like 5 per cent. of their transport costs. That is one firm out of several hundred big organisations. Heaven knows how much we could save in relation to our competitive export figures if only we could have the proper motorways. We need this thousand miles of motorway by 1970, or before, to give quick access to our manufacturing areas, to the heavy engineering industries, to get our motor cars from the point of manufacture to the docks and from there speedily out of the country. This would create a metamorphosis in the prosperity

  1369
  of our country. It would mean that our goods would be more competitive, because I am certain that our people can produce them as cheaply as any other country. What bogs us down is that we are still in the horse and carriage age as far as roads in this country are concerned.
  As my hon. Friend the Member for Weston-super-Mare (Mr. Webster) has said, 83 per cent. of the material which passes through the docks is taken there by road. If anything is to be a priority surely it ought to be that which comes from the factory, to the docks and then to the export customer. This seems to be axiomatic and I am surprised that we have taken so long to get round to it. In some respects we have probably got the best roads in the world. The trouble is that our roads do not always go from the right place to the right place. They do not necessarily go from the factory to the docks, and they do not always go very quickly to the centres of consumption. It has been calculated that by not having such roads something like £700 million a year is lost.
  I hope, all politics apart, that this £75 million stoppage on roads will not damage the export position. I do not think it will affect us for the next few months, for the next 12 months. I hope that it will not affect us at all. Let us have our roads leading straight from the place of manufacture to the place where they can have a speedy egress from this country and then we shall cut our costs and improve our exports.
  8.5 p.m.
  Mr. Peter Bessell: I think that everyone on both sides of the House welcomes an opportunity to debate something which we all regard as a vital subject. I am particularly gratified that time has been found at the end of this Session to discuss the whole problem of roads, and road construction, and the effect upon the economy of any cuts in the present programme. I am glad of this because my party has, over the last few months, tabled some five or six early day Motions, calling for a debate on this subject. We have tabled a number of Questions to the Minister in which we have expressed, not only our concern, but I believe, the concern of a majority of people over a matter which, as I have said, is vital to the health of
  1370
  the economy and to the growth of the nation's prosperity.
  In the present year there are something like 12½ million vehicles on Britain's roads. It is computed that by 1975 this will have increased to 20 million. The roads carrying these vehicles are totally inadequate. It is not remarkable in my view, that throughout the whole of this debate there has been no mention, from the Government benches, of 13 wasted years by the previous Administrations in respect of road construction. If they had referred to 13 wasted years they would, in honesty, have had to refer to 20 wasted years, because the years before the Conservative Party took office were equally wasted so far as road improvements were concerned.
  Mr. Geoffrey Wilson: I must object to the use of the words "equally wasted." When the Conservative Government came into office £6 million a year was being spent on roads. Now the expenditure is over £180 million. There is no doubt at all that we spent much more on roads than the previous Administration.
  Mr. Bessell: The hon. Member for Truro (Mr. Geoffrey Wilson) has anticipated me. I accept what he says, but I think that he would be the first to accept that in the conditions of the post-war years, between 1945 and 1951, it was extremely difficult for the then Government to find any money for capital expenditure of this kind. Whilst I do not consider that they did anything like enough, and whilst I am prepared to admit that there was an improvement in subsequent years, I do not believe that this subject has been tackled seriously by any political party, including my own, at any time in the last 50 years.
  It is true to say that the last time the problems of road construction were seriously tackled in this country was in the days of the Caesars, and that the Romans had a far better idea of the economic effect of good roads than any Governments of this country has had at any time since. I recognise that the right hon. Gentleman the Minister of Transport is in very real difficulties. However much he might wish to expand his present programme, he is faced with the problem that this country is in greater financial difficulty than it has been for many years.

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  This is a problem which will not be overcome quickly. It is not a problem which can be cast aside. It is useless for us to demand further expenditure, or increased expenditure, in a situation which is, in itself, impossible to overcome until we have put right the problems of the balance of payments, and our sterling and dollar reserves. I recognise this, but I also think it is true that the only way in which we can hope to overcome this problem is by, as we all agree, increasing the amount of our exports.
  In the last nine months, however much heat may have been generated by hon. Members on both sides of the House on other matters, there has been one subject on which hon. and right hon. Members have been in complete agreement, namely, that the priority confronting the nation today is to find the means of increasing our exports, earning more money and spending less. If this is true, one of the keys to our export drive is to ensure that we produce goods at prices which are competitive with those of goods produced by other nations. If we cannot sell in a competitive world goods of at least equal quality, preferably at lower prices, our chances of long terms success are remote.
  One of the things keeping the cost of British goods high and preventing us from competing favourably with our overseas competitors is the fact that our prices are all too often higher than they should be because of the cost of transporting the completed goods from the place of manufacture to the place from which they are exported. It was said a few moments ago, rightly, that the place of exit for the export of British goods is the factory gate. I welcome the fact that the Government have recognised the priority which must be attached to the improvement of our docks. But the improvement of our docks by itself will achieve nothing unless the access to the docks is at least of an equal standard. It is this which is causing so much concern in relation to the statement made last week by the Chancellor of the Exchequer.
  We have heard that 80 per cent. of our export goods are transported by road from the place of manufacture to the place of exit. I think that that point was made by the hon. Member for Weston-
  1372
  super-Mare. He also made the point that 83 per cent. of the goods which we consume at home are transported by road. As long as our roads are antiquated, and as long as the road system is totally inadequate, not only will the cost of our export goods be at an unrealistic level, but the cost of living at home will be kept at an unnecessarily high level. The goods which we consume are also governed in price, to a large extent, by the cost of transporting them.
  It has been computed that throughout industry no less than 8 per cent. of the total final cost of manufactured goods is absorbed in transport costs. This is a matter which must not only be taken seriously but overcome. Therefore, it is essential that we should regard this as a matter demanding the prior attention of the Government. Certainly it is impossible to accept that we can have a cut in the proposed expenditure this year, next year, or the year after, or indeed at any other time, in order to resolve the financial difficulties of the country.
  If we cut down now on the cost of our road programme in order to save money and to assist in maintaining our precarious financial position, instead of assisting our export drive, we shall hinder it and, consequently, we shall not achieve the objective on which the Chancellor of the Exchequer has said he has set his sights. If we believe that exports are the key, it follows that we must spend money on providing the means of conveying those exports to the place of exit. There can be no begging this question or compromise on it. It must be faced and it must have priority.
  It has been said this afternoon that by putting a six months stop on certain parts of the road programme the saving could be £45 million, £75 million, £85 million, or £100 million. All these figures have been quoted. The hon. Member for Truro asked the Minister to give way at a point when I must confess, like the hon. Gentleman, I was completely confused. I am still confused. I still do not know whether there will be a saving of £45 million or a temporary saving of £100 million. However, whatever the figure, I am certain that the saving will be completely false, because the delay involved will result in a much greater loss to the economy than if the money is spent.

  1373
  The right hon. Member for Wolverhampton, South-West (Mr. Powell) made a valid point, namely, that by holding up the programme now we will create a situation in which the people who are employed on road construction will simply be asked to stand off for a time so that a temporary savings may be made and will then have to resume work at a later date and, presumably, have to do a great deal more in a very much shorter time if we are to have 1,000 miles of motorway within the next ten years or by the early 1970s. I believe, with the right hon. Gentleman, that this cannot be done. I do not think that it is possible to say to the construction industry, "You can pause for six months and then start again." No business can be run on these lines. The inevitable effect will be not a delay of six months but a very much longer delay because people in that industry must take jobs in other industries if they are to maintain their employment or the Government have to go on spending in accordance with their original programme.
  Whether contracts are let or not, certain definite programming must have taken place within these industries. They must have certain plans. They must have an idea of the kind of programmes which they will be required to carry out. Are they to be asked to postpone them for six months and then start again? I do not think that this is either practical or sensible in the present circumstances. If the country cannot afford the money necessary to maintain and even increase our present programme of road construction, whether it be motorways or classified roads, it is far less able to afford any delays or stoppages in the present programme. It is out of the question for us to contemplate this happening and it is something which must be reconsidered by the Government.
  In May, 1963, as is well known, 93 miles of motorway were completed in this country. In 1964, 16½ miles were completed. It is expected that this year about 75½ miles will be constructed. But only a few minutes ago the Minister assured the House that he had every hope that 1,000 miles of motorway would be completed by the early 1970s. This means, in effect, that the present programme must be doubled over the next five or six years and that we have to
  1374
  build at the rate of about 200 miles per year. If there is a stoppage or any delay in the present programme, it is impossible to contemplate the programme being completed within the time which the Minister has said again today he anticipates will prove to be realistic.
  I have always maintained that in the present economic situation the Government should not turn their backs on the possibility, however distasteful it may be, of building at least some motorways in the same way as they are already building bridges—by means of public loans. If this were done, if a small toll were charged and if an undertaking were given that the roads would be free of all charges the moment the capital cost and the interest had been amortised, this would be acceptable to the vast majority of people if it meant increasing the present motorway programme and that we had a network of roads which would enable people to move between various areas quickly and efficiently. We know that this is distasteful. I do not like the idea any more than, I imagine, the majority of people would like it. The fact remains, however, that in the present financial position we cannot afford not to have the roads, and yet the Government are in the position that they cannot afford to build as many motorways as they would wish.
  We have, therefore, to come back to this alternative. If it were tried, we have at least the certainty that nobody would be compelled to pay a toll to use a motorway. People could always use the alternative route. I am, however, sure that the experience of countries which have built roads by this means, which have been prepared to float public loans and to charge a small toll for the use of motorways, would be repeated here and that the cost would quickly be amortised. The vast majority of road users would be happy to pay the toll because of the speed with which they could get from one place to another, the saving in time and fuel and the saving of wear and tear on vehicles.
  As soon as the country's financial position has been stabilised, the motorist has a right to expect that a greater share of his contribution to the Exchequer should be spent upon road construction. In 1964, the motorist contributed almost £780 million to the Exchequer. In return, there was an expenditure on the

  1375
  roads of £316 million, of which only £181 million was direct Government spending on major road improvements and new roads. This is not sufficient, and the motorist has legitimate cause for complaint.
  There is one other point which should be mentioned. The First Secretary has put before the House and before the country plans for regional development which have been welcomed in many quarters. We may have doubts about the efficacy of the methods by which the regional development should be carried out, but at least we are grateful that the Government have recognised the urgent necessity of ensuring that the underdeveloped regions of the country shall be given the opportunity to share some of the prosperity which is being enjoyed in the over-populated areas of the South-East, the Midlands and the North.
  Those plans for regional development, however, are no more than pipe dreams until we have road communications between the main centres of population and the areas which have been neglected for so many years. It is no use talking about taking light industry into the County of Cornwall, developing the resources of the Highlands of Scotland or doing something about the problems of unemployment in Mid-Wales unless we have the road communications to those areas that will attract the industrialist, the tourist and the people who could bring money to those areas and improve the economy, provide employment and give a decent standard of living to the people who have suffered too long and who have been neglected for too many years.
  I should like next to say a word about road safety. It was well said by the hon. Member for Dundee, West (Mr. Doig) from the Government benches that one of the keys to the problem of road accidents is the construction of better roads. There is no doubt that this has been proved by the fact that wherever we have dual carriageways or motorways, the accident rate falls. This, however, is something which should be considered, not only by the Minister of Transport, but also by his right hon. Friend the Chancellor of the Exchequer when contemplating a delay in expenditure on the road-building programme.
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  In 1963, 6,922 people were killed on our roads and, as another hon. Member has said, the figure in 1964 became 7,820. What the figure will be for this year we do not know, but the indications are that it will be higher. The number of people injured each year on our roads has reacher a fantastic height. Each year, over one-third of a million people are either killed or injured on the roads. We cannot afford to say that we can reduce or delay expenditure upon roads when this means not only harming the economy in the long term, but failing to provide the kind of conditions that would help to reduce this appalling and tragic accident rate.
  One point to which, I hope, the Minister will pay special attention is the question of expenditure upon roads to replace railway lines which are closed under the Beeching Plan. In connection with a number of closures, assurances were given that the railway lines would not be closed unless there was an improvement in the alternative road communications. I do not lay the blame for this at the door of the present Minister of Transport, but I have an example in my constituency of the closure, under an Order made by the Minister's predecessor, of a line connecting the seaside town of Fowey with the main line. A matter of £68,000 is desperately needed to effect essential road improvements on the only connecting road, which is a Ministry of Transport Class B road. In parts, the maximum width of 12 ft. and the maximum visibility 20 yds. It is incredible that an authorisation should have been made to close a passenger service, and thereby put 80,000 more people on to that stretch of road, before the road improvement had been carried out.
  I beg the Joint Parliamentary Secretary, when he replies to the debate, to assure the House that he will not authorise any further closures of passenger services unless he is satisfied beyond all doubt that money is available to improve the connecting roads, so that the risk of congestion, delay and, above all, serious accident is eliminated as far as it is within his power to eliminate it. I hope that this is a matter on which we can tonight expect a reasonable assurance.
  To summarise quickly, I ask the Joint Parliamentary Secretary to answer these specific points—
  Mr. Jeremy Thorpe: I am listening with great interest to what my hon. Friend is saying about railway closures. Is he aware that in one case where a railway line is to be closed the Minister has taken the view that a bus service can be provided as a suitable alternative, but that it is only because local people have got out their foot rule and measured the size of the bus that it has been learnt that the village in question cannot, after all, be served by this alternative service because the bus cannot get under the existing bridges? Therefore, the so-called alternative services in many cases are not services at all.
  Mr. Bessell: I am very much obliged to my hon. Friend. I do not know of the case which he has mentioned, but it is an illustration, in my view, of the fact that the Minster is all too often ill-informed about the roads upon which these alternative bus services are expected to travel, and I do not believe for one moment that the Joint Parliamentary Secretary, who shakes his head, would have authorised the closure of, for example, the Fowey-Lostwithiel passenger service if he had travelled the road on which the buses are expected to travel, a road, which, as I have said, at one point is 12 ft. wide with 20 yards visibility—at certain corners—on which double-decker buses are travelling. It is in fact a two-way road. In those circumstances I do not believe the Minister should authorise a closure. I hope that far greater care will be taken in future to see that a proper survey is made of roads before the alternative bus services are authorised to take the place of rail services.
  So, in conclusion, I would ask him to direct his attention to a few specific points which I believe are of paramount interest. First, I would ask the Joint Parliamentary Secretary to ask his right hon. Friend the Minister to make representations to the Chancellor of the Exchequer to reconsider any question of a stop on the road construction programme. It is a totally inadequate programme as it stands, and it cannot possibly be allowed to be delayed for six months without the gravest effect upon our economy in the long-term. Secondly, I would ask him if he would at least undertake to examine in the light of the experience of many other countries, including Italy and the United States and certain parts of the
  1378
  Commonwealth, the question of motorways built by means of public loans to increase the present building programme without any direct expense to the Exchequer. I would ask him also to look again at the question of rail closures and to assure the House that no further passenger service closures will be authorised unless he is satisfied that the money is available to carry out any necessary and essential improvements to the roads which will be required to carry the bus services which will replace the rail services.
  These are, I believe, minimum requirements, which can be reasonably put to the Minister in the present state of the nation's economy. If we had the money to spend, if we had the labour force available, if we were able to undertake the kind of road construction programme which is necessary in the long-term not only for the safety of the motorists or the safety of the pedestrians but for the improvement of the national economy nobody would be more thankful than I to have the opportunity to put many more suggestions to the Minister tonight.
  I know the problem with which he is confronted, and I recognise, too, that his predecessors were also faced with a serious economic problem throughout the 13 years of their administration. Whatever may be said on either side of this House in order to score party political points, the plain truth of the matter is that ours is a country which has faced many difficulties over the last 20 years, most of them not of our making, but arising from circumstances beyond our control. It is true that many things could have been done to improve the economy of the nation. One of the things which could have been done, I am sure, was to have given far greater attention to providing this country with a vast network of roads not only for the sake of our exports, not only for the sake of convenience of the travelling public, but also for the sake of our regions, which have been so long neglected and which could have been developed so that the high standard of living could have been enjoyed by the people generally throughout the length and breadth of the land, instead of merely by those in certain fortunate areas which have had advantages far greater than those enjoyed elsewhere.

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  But it is not too late. This matter can still be given priority. It may be that now the money cannot come from Exchequer funds, but there are other methods available to the Government, and the Government will be doing less than their duty if they do not consider and examine these proposals, even if, at the end, they conclude that they are not able to accept them in toto.
  8.35 p.m.
  Mr. Clifford Kenyon: The hon. Gentleman the Member for Bodmin (Mr. Bessell) has given us a most interesting speech and a very mixed one. He has patted the Government of the past 13 years and also the present one, and at the same time he has kicked them in the pants. He has told us we must not increase the charges upon our exports, and yet he advocates a toll on the roads which the lorries carrying export goods will have to use. How he is to put further charges upon exports and sell them cheaper, he just has not explained.
  Mr. Bessell: It is most kind of the hon. Gentleman to give way, particularly so early in his speech, but I think he will agree that if we can go from point A to point B in half the time the amount of the small toll will be more than compensated for by the saving of the delay in travelling on the existing roads, and the effect will be the same as that in other countries: it will be found to reduce the costs of export goods, and not to increase them as the hon. Gentleman suggests.
  Mr. Kenyon: A very hypothetical answer.
  Hon. Members: No.
  Mr. Kenyon: Oh, yes.
  Mr. Thorpe: This was not Socialist theory.
  Mr. Kenyon: It would be effective if the motorway ran from the place where the goods are made by the manufacturer right through to the docks, but that is not the case in this country. Where the delays take place in the traffic in this country is in the towns; it is when we reach the town. We do not drive motorways through towns.
  Mr. Thorpe: We can bypass them.
  Mr. Kenyon: We do not bypass the docks.
  Mr. Thorpe: They are not there.
  Mr. Kenyon: I am afraid that our Liberals are once again in the realm of fantasy. They are putting these things forward but they are absolutely impracticable.
  I travel on the M.1 twice a week. Having come down from Crick to the end of the motorway, I then have to travel through London, and it takes me longer to get through London than it does to do the first part of the journey. What we need are wider roads in the towns, to take us straight through to the docks. It is not possible to impose tolls on roads in towns.
  Mr. Thorpe: I agree.
  Mr. Kenyon: The hon. Gentleman agrees with me now. Hon. Gentlemen on the Liberal bench have come to follow our way of thinking.
  The arguments put forward by the hon. Member for Bodmin are in many ways so contradictory and hypothetical as to be utterly impracticable, as is so much of the Liberal programme. I cannot agree with this idea of a toll and charging the motorist more. Let us consider what he has to pay now. First, he has to pay Purchase Tax. Secondly, there is a heavy tax on his fuel.
  Mr. Bessell: Who increased it?
  Mr. Kenyon: I think that it was the late Sir Winston Churchill who started that, but it has been increased by every Government since. It is now proposed that the motorist should pay a toll for using the roads. [Interruption.]
  Mr. Doig: On a point of order, Mr. Deputy-Speaker. Is it in order for three Members from the benches opposite to continue to interrupt from a sedentary position?
  Mr. Deputy-Speaker (Sir Samuel Storey): It is not in order, and I was about to ask the hon. Members to remain silent.
  Mr. Kenyon: It merely goes to show that it takes three Liberals to keep down one Labour Member.
  If we are to get the full benefit of the motorways, it is necessary first to deal

  1381
  with the narrow roads in the towns leading to the docks. This is one of the most important road construction programmes to be undertaken today, and it will prove more costly than building motorways, because of the cost of land in the towns. Nevertheless, this problem must be dealt with, and I think that this section of road construction should be dealt with in preference to building motorways. At the moment, once a motorway carrying three lanes of traffic reaches a town, those three lanes have to be channelled into one, and it is here that we lose the benefit of these fast roads. This is where the fault lies, and it must be remedied.
  I do not want to deal with transport and with roads in the way that others have done. I want to deal with them from the point of view of the construction of the motorways, and especially the M.1. This motorway has been open for six years—since 1959. I do not know how much the repairs to it have cost, but it must be a terrific sum, and it must be out of all reason. It may be that this was our first long motorway, but there was something wrong with its construction.
  The situation on this motorway is pathetic. I have travelled on it since it was opened, and even now—I think that the Minister and his advisers should travel on it; I do not know whether they do or not—traffic is held up for unbelievably long periods. At the moment repairs are being carried out to two lanes of many miles of this motorway, with the result that all traffic has to be diverted into one lane. On a Friday about a month ago I was delayed for an hour and a half. There must have been about 1,000 vehicles waiting to enter one lane, and when there was an accident in that lane the situation became chaotic. When repairs are necessary, some means should be found of diverting traffic so that it does not get held up in this way.
  I came over it on Sunday afternoon last. Repairs are being carried out, but the new construction is faulty. It is possible to tell this when one's motor car runs over it. The darned thing is waving now. Some Ministry engineers ought to go there to look at it. Especially are the hard shoulders faulty. New hard shoulders have been laid down, but pools of water collect along their whole length.
  1382
  That shows that they are faulty. I used to be a member of a highways committee which dealt with main roads. If one of our contractors had left roads in that state we would have sacked him on the spot. It is disgraceful. There are gratings, and between one grating and another there are half a dozen pools of water. That shows, first, that the water is not running away and, secondly, that the surface is uneven.
  The main roadway is the same. The joints are bad. Where one section of tarmac poins another there is a bump which can be felt as a motor car goes over them. Nothing spoils a road more than the jolting of heavy lorries over these tarmac joints. The whole situation should be investigated.
  It is pathetic to think that the construction was not good in the first place, but it is even more pathetic to realise that the present repairs are not good. Something should be done about it. Unless something is done this road will prove to be more costly in the future than it has been in the past. It has never been finished. Now—six years after the road was declared finished—drains are being put in on the hard shoulders which should have been put in in the first construction. It is an absolute disgrace, and whoever is responsible should be brought to boot. Someone should be there watching to see that the repairs are being done properly. I have wanted to get that off my chest for a long time, because I have to use that road twice a week and I am just fed up.
  As everybody is now doing in connection with the economic situation, I have been thinking to myself of the many things which could be done. Whenever a Chancellor puts on the brake every Ministry thinks that the programmes of other Ministries ought to be cut, but the Chancellor must be fair and cut the lot. We know that he has only postponed it, but we have to suffer for the time being. But, at a time like this, it is more than ever essential that we should see that the money which is spent is properly spent—not wasted—on good construction. We are paying for good construction: let us have it. I am certain that, if the Ministry will take action and be on the spot to see what these contractors are doing, they will see that this road is put into a proper state of repair when it is

  1383
  finished. At present, things on the M.1, on both sections, are absolutely chaotic.
  8.51 p.m.
  Mr. Geoffrey Wilson: I shall be very brief. I will not follow the hon. Member for Chorley (Mr. Kenyon) into his strictures on the M1, except to say that it was the first of the British motorways and it suffers from having been the first. It is certainly a better motorway than many of the German autobahns and most of the other motorways in Europe. There is no doubt about that. It is a double three-line highway, with "cat's eyes" marking each lane. The hard shoulders are of a different colour from the motorway itself. There is a very clear distinctive line between the hard shoulder and the motorway and the verges of the centre reservation are well marked.
  Many motorways in Europe are not like that. We might consider the Austrian motorways, the Belgian ones or the Dutch—though some of the new Dutch ones are good—or some of the older German autobahns. It is a great deal better than many others—
  Mr. Kenyon: The fact that roads in Germany or Austria are bad is no reason that we should have a bad one too.
  Mr. Wilson: The M.1 is not a bad one, but we will not continue that argument.
  I wanted to speak because, when I interjected in the Minister's speech earlier on, he accused me of being confused. I still am confused as to exactly what is the point of this policy, what its objective is. He said that I was confused because I referred to January next year as the sixth month from now. Perhaps I misunderstood, but if this delay means until not the end of January but the end of February or some way into March, it makes the policy even more difficult to follow. We all know that the road programme, to begin with, is a rolling programme, but apparently the finishing date of the five-year period of the programme is intended to be the same, although there is a six months delay.
  My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) asked whether this would be a "concertina" effect and if more work would be crowded into a shorter period. I am not clear whether that is happening. It seems that it must be so, because the
  1384
  work which is not started during the six months must start some time if we are to finish it within the five years. Apparently, it is not a deferment of the whole programme for six months, but a deferment of the starting date of those within the six months, which will have to be crowded in some other time.
  As an hon. Gentleman opposite pointed out, one of the difficulties in road building is not lack of money but a lack of skilled operatives to carry out the construction. That has always been so. Engineers were mentioned, but one of the limiting factors is carpenters. If much concreting is being done—this has been found in the past—there is a shortage of carpenters to do the shuttering for the concreting in the bridges and culverts. This has caused delay on some road construction.
  If we are suddenly, at some time, to have a great increase in the number of works to be carried out—the programme which was devised by the last Government in any case contemplated an increase in the actual number of works being carried out—and that is still to be done within the five years, I do not see how it will work.
  What is the object? The Minister talked about a saving of £1 million, which seemed to be quite a small saving for the trouble which is to be caused. As the hon. Member for Bodmin (Mr. Bessell) pointed out, the need for more roads is caused by the vast increase in the number of private cars. That is continuing. Apparently we are still encouraging the further production of motor cars, the curve of production will continue to rise and there will be a vast increase in the number of private cars on the road. That is the principal reason for the congestion.
  At the same time, the main means of carriage of goods has shifted from railways to lorries although the number of lorries has not increased as much as one would think; their size and weight have increased, but there has been a comparatively small increase in numbers in recent years.
  I am puzzled by the fact that the railways, I gather, are to have no cuts on the ground that they are industrial, whereas the roads are to suffer cuts because, apparently they are not industrial; yet the roads are carrying more

  1385
  goods than are the railways and are the principal form of industrial carriage. Why should there be a cut in the road programme when there is no cut in the railway programme, despite the fact that the roads are carrying a bigger quantity of goods traffic than are the railways? I do not advocate a cut in the railway programme; as an ex-railwayman I should be sorry to see that happen. But I do not understand the distinction.
  The Minister chided my right hon. Friend by saying that he had given no indication of the Opposition's policy. How could he indicate what we think about the Government's policy when we are not sure what it is or what it is trying to do? We are justified in asking many questions, and certainly I am still somewhat mystified about the answers to those questions.
  8.58 p.m.
  Sir John Fletcher-Cooke: I make no apology for not following those hon. Members who have dealt with the wider aspects of this problem and, in particular, with the implications of the Chancellor's statement, because the situation to which I wish to refer was unsatisfactory long before the Chancellor's recent statement and, indeed, long before the present Minister took over his responsibilities, although that will not prevent me from pressing him for some indication of what he proposes to do about remedying the situation.
  I want to talk, in particular, about the unsatisfactory road improvement position in the County of Hampshire and to base my argument on the fact that, despite the increase of population in Hampshire, the county has for many years received a smaller annual increase than the percentage national increase in the expenditure on roads. Perhaps I could give a few facts in support of this contention. In the first place, Hampshire's claim for a larger allocation of Ministry of Transport funds is based on these facts: first, for several years, despite a rapidly increasing population, the percentage increase in the grant for trunk and county roads in Hampshire has been substantially less than the percentage increase in the national expenditure on roads. For example, between 1958 and 1962 the increase in expendi
  1386
  ture on roads in England and Wales was 89 per cent. and the increase in Hampshire was only 31 per cent. The result has been that there is a large backlog of improvement schemes which must be carried out, at the same time as a number of new schemes which have been piling up since 1958. In other words, Hampshire has not had its fair share of that part of the national cake which has been devoted to road improvements.
  My second argument carries this thought a stage further. While I contend that Hampshire has fallen behind, I suggest that if road improvements are to keep pace with population and traffic growth Hampshire should now be receiving Ministry of Transport funds at a rate not just equal to but substantially in excess of the national percentage increase of expenditure on roads.
  There are many reasons which I could adduce in support of this contention. For example, since 1958 the population of Hampshire has increased by nearly 17 per cent. as against an increase in England and Wales of just over 5 per cent. Indeed, many of the proposals which were made in 1958 were based on estimates of population to be achieved by 1971, but in many areas these 1971 figures have already been achieved now, in 1965.
  In addition to the growth of population, there has been a considerable increase in the number of people in industrial employment. For example, between 1959 and 1964 the increase in the number of persons in industrial employment in Hampshire was 14 per cent., compared with an average increase in Great Britain of about 4 per cent. The Hampshire County rate is about three and a half times greater than the national average.
  In terms of housebuilding, between 1957–58 and 1963–64 the number of houses completed in Hampshire rose by 45 per cent., compared with an average rise for England and Wales of about 6 per cent. In other words, the rate of housebuilding in Hampshire has increased by about seven and a half times the national rate. The combined effect of all these increases and developments means, of course, increased traffic and, therefore, grossly overloaded highways.

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  On this aspect, I again draw the Minister's attention to the situation in Hampshire. While the proportion of trunk roads over the whole country carrying more than the Ministry of Transport's designed capacity has fallen from 48 per cent. in 1954 to 46 per cent. in 1960—and these are the latest figures I have been able to obtain—64 per cent. of Hampshire's trunk roads were overloaded in 1954 and it is estimated that this figure will have increased to no less than 91 per cent. by 1968 unless something radical is done.
  So far I have spoken generally about the county's problems as a whole. I now come to my third point, which is a matter of particular concern to Southampton, because it relates to the proposed developments in the docks there. Reference has been made to the Interim Report of the National Ports Council in which it is proposed that new berths shall be built in Southampton Docks.
  I would like to quote one passage in the Report in which it is quite clearly assumed by the National Ports Council that there will be a requirement for improved road communications with the Midlands and that the Government will meet that requirement. Talking generally about the desirability of using Southampton, which has many natural advantages, the Report goes on to point out that at the moment the immediate surroundings provide no "base load" for cargo exports. On page 46 it says:
  "This must limit the attractiveness of Southampton compared with other ports. Moreover, there are also some geographical drawbacks. Southampton is rather distant from the areas which are generally regarded as producing important quantities of export goods."
  It goes on later to say:
  "On the other hand the effect of the additional mileage is difficult to express in cost terms, and in general greater distances are likely to have a somewhat diminishing importance as roads and railways are improved."
  It is obvious that, if money is to be spent on the improvement of the docks in Southampton, it must, as I think the hon. Member for Bodmin (Mr. Bessell) pointed out, be accompanied by a proper expenditure on the communications which will bring the cargo to the new docks for export. There is the further point that if the traffic which is at the moment generated in the Midlands can be brought
  1388
  into Southampton—and even the existing docks are fully capable of carrying a great deal more than they do—it will relieve the traffic congestion in and around the London conurbation and the congestion which we are led to believe exists in the London docks.
  It is a measure of the possible increase in cargo traffic through Southampton that, leaving aside the question of all petroleum traffic, the freight, both imports and exports, passing through Southampton at the present time amounts to about 1¼ million tons per annum; but the full plans of the British Docks Board contemplate an expansion of dock facilities which will lead ultimately to the handling of nearly four times that amount—some 4½ million tons. It would obviously be imprudent to spend the amounts of money which are contemplated on these docks expansions unless this is accompanied by a considerable improvement in road communications.
  There is one other point that I would mention to complete the picture in terms of the problems facing the county of Hampshire, but I do not propose to go into this in any detail because there are others of my hon. Friends on this side who can deal with these particular difficulties. However, I would stress that not only have we now the additional problem of communications raised by the improved docks but we also have the town development schemes at Andover and Basingstoke where, as the House will be aware, the Hampshire County Council is responsible for the provision of major road improvements needed to serve those towns. I will leave it to my hon. Friends who represent those areas to explain some of the difficulties with which the county council is faced at the present time.
  May I end by making one or two general observations on the position as I have outlined it and, in particular, ask the Minister if he would consider the one or two points that I shall put to him. In the first place, from the picture as I have outlined it, this highly unsatisfactory situation goes back, as I have said, to a time preceding the responsibility of the present Minister for these matters—there are many people in Hampshire who believe that this imbalance in that area should have been remedied under the previous Administration—but the fact

  1389
  remains that the present Government are now in a position to provide the remedy. They are the Government, and they have power to do something. I urge the Minister to consider the points I shall put to him.
  I am by no means clear, and many hon. Members on both sides—and certainly on this side—are not wholly clear as to the implications of the Chancellor's statement on the development of the road programme. Irrespective of that, I am pressing, not so much for expenditure on particular roads but rather that the county of Hampshire should receive an appropriate share of whatever money can be devoted to major road improvements. Hitherto—and I suggest that the facts and figures I have quoted support me in saying this—that has not been the case.
  In particular, I hope that the Minister will now be able to reconsider the position he took up not very long ago on the provision of improved communications with, and access to, the docks. On 4th December last, more than six months before the Report of the National Ports Council, I asked the Minister a Question about access roads to Southampton Docks. His reply, which did not appear to indicate any realisation of the seriousness of the existing position, was not well received in Hampshire.
  More recently, in a Ministry letter dated 14th July to the Clerk to the Hampshire County Council—
  Notice taken that 40 Members were not present;
  House counted, and, 40 Members being present—
  Sir J. Fletcher-Cooke: I was saying that the Minister's reply to my Question did not show any great awareness of the need for improving communications to the docks; and, more recently, from a letter dated 14th July to the Clerk of the Hampshire County Council, it would seem that the Minister still has no plans for the urgent improvement of these road communications to the docks—soon, one hopes, to be expanded if the recommendations in the National Ports Council's Report are accepted. It is true that in that letter the Ministry referred to the Havant By-pass and the Kingsworthy link on the A.34, but neither of those improvements makes a substantial con-
  1390
  tribution to this problem of rapid, safe and easy communication with the industrial areas in the Midlands.
  The second point on which I would be grateful if the Parliamentary Secretary would give me information relates to the South Coast trunk road. I hope that the Joint Parliamentary Secretary will be able to amplify the reply given to a Question I put to the Minister on 23rd February about the South Coast trunk road. The Minister said that he hoped to publish a draft Order for the line of this road later this year. I hope that the hon. Gentleman will be able to give an indication of when the Order will be published and, in particular, I hope that the implications of the Chancellor's statement will not result in any delay as regards this road. There is considerable pressure both in Southampton and in surrounding areas that we should get this matter settled, since, as a result of uncertainty, many decisions by both public and private authorities cannot be taken until it is known what line the road is to take and when it is to be started.
  The Minister indicated today that he could not answer, even if I pressed him, about particular roads in terms of whether or not the Chancellor's statement means that they will be omitted from the road programme, and I therefore do not wish to press him. I merely want to make the point that Hampshire has had a raw deal hitherto having regard to the facts and figures I have given. I trust that, when the present "stop" becomes "go" again, the Ministry will be able to redress the balance and, indeed, bring the grants more into relationship with the growth of population and of industry. If the Joint Parliamentary Secretary could indicate the present position as regards improved communications to the docks and the South Coast road I would be most grateful.
  9.18 p.m.
  Mr. Cyril Bence: I would not have taken part had not the hon. Member for Bodmin (Mr. Bessell) and the hon. Member for Truro (Mr. Geoffrey Wilson) mentioned the European programme. That reminded me of the Scottish programme over the last 14 years. We have always understood that road work employment is

  1391
  the sort of employment where men undertake a job on a certain section of road, stay there two or three months and then move to another part of the country.
  I went to live in Glasgow in 1951. I had not been there long when they started on the A.74. They have not finished yet. That is 14 years of the Conservative Government's road programme. It is perpetual employment. I am certain that young children aged 14 believe that some of the men never did anything else except work on the A.74. No one has the faintest idea of when it will be finished.
  This spectacular 14 years of double-track road gets one to Carlisle half an hour earlier than it used to take. But it now takes three-quarters of an hour longer to get out. Outside Carlisle, Westmorland has built a double track road to Penrith. One gets there 15 minutes earlier than one used to but three-quarters of an hour more to get out.
  This is the great Marples road programme—the spectacular road programme with more and more traffic on double-track roads and more and more traffic bundled into bottlenecks in our towns. Then hon. Members quote the European programme to us.
  In fact, France has only built two motorways, neither of them from one industrial town to another and neither to a port. One motorway goes from the N7 north of Fréjus to Nice—a holiday resort where people from this country have been spending luxurious holidays on expenses and which, following my right hon. Friend the Chancellor of the Exchequer's measures, will do less business than before.
  The French have bypassed their industrial towns while we have built spectacular motorways and piled the motorists into the towns. We have done nothing about bypassing the towns for 14 years. I know that bypassing towns is less spectacular than wonderful motorways, but all over France it is possible to travel thousands of miles without going through industrial towns because they can be bypassed and consequently there are no traffic jams.
  Mr. Geoffrey Wilson: Has the hon. Gentleman been to Preston?
  Mr. Bence: Yes, I have been to Preston many times. The bypassing of Preston and the Lancashire Industrial belt has been the one case of bypassing in the last few years. But in the country generally we have paid less attention to bypassing industrial towns and to getting traffic moving round them, through them and out of them than has been the case in Italy, France and Germany.
  Mr. Michael Jopling: Is the hon. Gentleman aware of what happened on the A.1, the Great North Road, under the previous Government? Is he aware that Stevenage, Alconbury, Stamford, Grantham, Newark, Retford, Doncaster, Wetherby, Boroughbridge, Leeming, Catterick and Darlington were all bypassed by the Tory Government?
  Mr. Bence: I am very grateful to the hon. Gentleman. He has mentioned the one exception. We are spending money on cutting a six track road of motorway standard from Scotch Corner to outside Darlington which bypasses the little towns, but apart from that the Doncaster bypass is the only bit of motorway on that road. The Stevenage bypass is not classified as a motorway. Generally speaking, the road is double-tracked to bypass towns.
  But there has been no attempt to bypass Birmingham which has been left to the last. A motorway is being cut from north of Wolverhampton and it is now possible to get to Wolverhampton to Penrith much quicker than from Gailey, just north of Wolverhampton, to Bromsgrove. There is still all the traffic from Stourbridge and all the old Midlands industrial towns. If the previous Government had built bypasses first, we would have been quite content with the A.34 and there would not have been jams on the A.34, but between Gailey and Bromsgrove there is now one long traffic jam. This is because of the failure to do first things first as in France, Germany and Belgium.
  Sir Rolf Dudley Williams: To build a bypass without a motorway does not always work. No doubt the hon. Gentleman has heard of the Exeter bypass.
  Mr. Bence: The Exeter bypass was built years ago and was quite inefficient when it was built. By the standards of that time it was not satisfactory. It is

  1393
  a link for the surburban areas of Exeter, for the conurbation, and not a bypass in any sense. It helps the traffic on the A.38 a little, but not much. I have been jammed on that road many times, as most of us have.
  There has been much criticism of my right hon. Friend for the cuts in the road programme, but anyone who has served on the Estimates Committee, as I have, knows how costs of road programmes has risen. I remember one case which came before the Estimates Committee a couple of years ago when the original figure was £1¼ million and within less than two years it had reached £4¼ million, not because more roads had been built, but because costs had risen, and one of the principal reasons was the price of land.
  We had a case on A.18, between Glasgow and Stirling, where a man who owned a plot of land which stuck out into the road held up negotiations for months. After two years the land was acquired from him. I believe that many taxpayers would be prepared to hang on a little bit to see if the racket in land prices can be stopped and so prevent this continual exploitation by those who own land in what they think may be the direction of a road. The right hon. Gentleman the Member for Wolverhampton, South-West, would agree with this. I do not say he would do it if he were Minister of Transport—but I am sure that his advice to every holder of land would be "if there is any prospect of a road coming this way and your land is standing at £150 an acre, you hang on for six months and it will be £10,000 an acre".
  This may be a wind that might blow an awful lot of good, because we hope to have some control of the price of land within the next two years. Perhaps then my right hon. Friend will be able to get on with his roads at less cost than his predecessors, because he will not have to pay the high prices which his predecessors had to pay. My right hon. Friend the Minister of Transport took over the job at the end of a general election fought in the way the Conservative Party have always fought them—expansionist before the election and contractionist after. They have done this in every field.
  Mr. Speaker: Order. The Question is, That the Bill be now read the Third time. I think that the hon. Gentleman departs from it.
  Mr. Bence: I was just making a point. We are discussing road construction in this country. This is the subject down for debate under the Consolidated Bill, and I thought I was quite in order in making a comparison—
  Mr. Speaker: Let me explain. The hon. Gentleman will be in order in discussing the conduct of any person who was the recipient of one of the grants under this appropriation. The gentlemen then being referred to were not. That is the point.
  Mr. Bence: Of course, it is debatable whether some of those people receive funds as a result of road construction. I would make my own interpretation and suggest that some of the greatest beneficiaries of road construction are the people who own land where the roads might go. I do not say they are the only beneficiaries, but I seriously suggest they are, in great measure, substantial beneficiaries, especially in relation to the land over Beattock. I do not know what they got for it, but it was pretty poor land.
  One of the things which I would like to mention in connection with our road programmes are the lay-bys on our trunk roads. I am not being facetious. I think that this is very serious. The situation in many of our lay-bys in the summertime has become almost intolerable. We have to face the fact that the motor industry is here to stay, at least we hope it is. It is a prosperous and successful industry. The method of transport in future, as far as we can see, will be by the internal combustion engine, whether we like it or not. Anyone who tries to frustrate or inhibit the use of the internal combustion engine, in my view, is frustrating progress. This is the mode of transport for as far ahead as we can see and our roads are going to have to take more and more cars. Lay-bys are essential. It is very dangerous, with the speed of modern cars, to pull a car up on a roadside in the flow of traffic. Lay-bys are being provided, but I serious suggest that we must, in providing these lay-bys, provide toilet facilities. It is absolutely essential that we do this. One can have families pulling into lay-bys where there

  1395
  are perhaps half a dozen lorries and four or five motor cars. Some of them are there for hours, and I hope that my right hon. Friend can start, some time in the near future when we have cleared up a little of the mess left behind by the Administration, to do something about this situation and make it one of his priorities.
  The other matter I want to raise, and I have raised it several times in the House over the last six years, is the provision of red triangles on our roads when cars are forced to stop as a result of an accident. I have motored a good deal in Italy, France, Switzerland and Germany over the last ten years, and this red triangle is very successful. People laugh. They believe that some Europeans cannot think of anything good, but the red triangle used by the Italians which people can hire at the frontier and put down behind their car if they have a puncture is a very useful innovation. It can be lit by batteries so that at nighttime and during fog it can be seen. I am absolutely certain that if these triangles were introduced here the motorist would buy them. I think it is possible to buy them already at 26s. or 30s. It is possible to hire them in Italy for 29s. and to get one's money back when one leaves Italy. Some of the pile-ups which occur involving stationary cars would not happen if this triangle were in use. I urge that its introduction be considered. I have tabled Questions about this matter.
  Finally, I deal with the five-year programme. I should be shocked if any Minister or any Government gave a firm assurance to the people of this country that over a period of five years public money would be committed firmly in one direction or another. We have failed for five years to earn our way in the world. We have not been earning our living since 1958. This was brought out in a report last October to the Minister of Power. We have been in a serious situation for a long time. Governments and perhaps a lot of our people have failed to realise that we are not living in the world of the 19th century. Earning our living is a very difficult proposition in a highly competitive world, but this we must do. Those who organise business, who work in industry and those of us who work here have to devote all our efforts to earning a living. Unless
  1396
  we earn our living, we cannot have first-class roads, schools or hospitals.
  My right hon. Friend the Minister has probably inherited the stickiest stick of all. The stick has been clobbered up with glamour and publicity by his predecessor. He has gone into a house the previous owner of which believed in gaudy decorations and he does not. He is a utilitarian—at least I hope so. I trust that he will pay more attention to the basic needs of our country rather than indulge in the spectacular behaviour of his predecessor.
  I should have thought that the right hon. Member for Wolverhampton, South-West would agree that for a long time we have been too fond of committing money and internal resources in this, that or the other direction. For six months this year the Conservative Party in opposition has been demanding expenditure in all directions. It has demanded reliefs in the tax bill and proposed Amendments galore to give taxation reliefs totalling £640 million. It wants the road programme to be expanded and the country's defences to be expanded. It wants more money to be spent in every respect. This cannot be done. It does a disservice to the people of this country to "kid" them that it can be done because I do not believe that it can be done.
  Mr. William Yates: It was in the Labour Party's manifesto.
  Mr. Bence: I have never said that it could be done in my life. I have worked in industry all my life, and I know how difficult it is to manufacture for export. One right hon. Gentleman opposite has said that exporting is fun. He has never had a go at it. Anybody who has had anything to do with it knows darned well that it is not fun. It is hard and competitive work. My right hon. Friend and the Chancellor of the Exchequer are quite right not to fall for this request to commit themselves to a specific expenditure over five years. If we can delay the acquisition of land and the placing of contracts for 12 months, there may be some legislation controlling land prices which may save the taxpayer hundreds of millions of £s over the next five years.
  9.35 p.m.
  Mr. Mark Carlisle: The hon. Member for Dunbartonshire, East (Mr. Bence) was hardly fair concerning

  1397
  the bypassing of towns. Whilst I certainly accept that a great deal still needs to be done, had the hon. Member decided to come down by the West Coast rather than the line to the east by which my hon. Friend the Member for Westmorland (Mr. Jopling) took him, he would find if he came off the M.6 at Newcastle rather than going to the end of the M.6 that in recent years Newcastle, Lichfield and Rugeley have all been bypassed, as have numerous other places in the Midlands. I agree, however, that a great deal still needs to be done.
  I wish to speak particularly about a road which is in desperate need of replacement. First, however, I should like to make a general remark upon the Minister's speech. I do not believe that the hon. Member for Dunbartonshire, East was in the Chamber when his right hon. Friend spoke.
  Mr. Bence indicated assent.
  Mr. Carlisle: I am surprised to have that indication from the hon. Member. Had he been here, he would have heard that although his right hon. Friend referred in one breath to having taken over a highly swollen programme, in the next breath he said that he hoped to carry it out within the five years.
  Mr. Bence: I was in the House when my right hon. Friend opened the debate. During my right hon. Friend's speech I was called out to the telephone, but I came back afterwards.
  Mr. Carlisle: I did not mean any discourtesy to the hon. Member when I said that I was not sure whether he was present. I merely wondered whether he had missed part of the Minister's speech.
  Like my hon. Friend the Member for Truro (Mr. Geoffrey Wilson) and the hon. Member for Bodmin (Mr. Bessell), I am considerably confused by one or two of the things that the Minister said. He told us how he would carry out his part of the Chancellor's plan, and yet in the same breath he announced with pride that even with no further starts for new roads this year, his expenditure would be only £2 million less than was intended and that in the coming year his expenditure would be considerably greater than it is now. I wonder with what pleasure those words
  1398
  will be read by the Chancellor in the morning.
  I hope that the Minister is right and that he will be able to carry out his five-year programme. I hope that, as he says, he will be enabled to have still further growth in the road programme, because, like the hon. Member for Bodmin and others who have spoken from this side, modern fast means of communication between the towns and the ports are vital if we are to remain industrially efficient.
  The road to which I particularly wish to refer is, I believe, well known to the Minister and to his Joint Parliamentary Secretary and it has been known to the Ministry for many years. There is an urgent need for an East-West Cheshire motorway linking North Wales with Manchester and taking the place of the existing A.56 from Chester to Manchester. The particular part of that road with which I am concerned is the part which goes through the constituency which I represent and particularly through the villages of Helsby and Frodsham. It is the most overcrowded road in the whole of the north-west of England. For many years, pressure has been put upon the Ministry by the county council and by others to start building the motorway or, at the very least, a bypass for Helsby and Frodsham. At last, in August last year, the then Minister announced this project as one of the new trunk road projects to be added to the programme for which plans would be prepared.
  That was on 11th August last year, and one is, with respect, driven to the conclusion—certainly this is the impression which is given to the residents in that area, and one which I am sure the Joint Parliamentary Secretary will be able to deal with this evening—that nothing appears to have been done from that time. No definite, firm decision has been taken as to the year in which the building of this bypass is likely to start. No publication of the provisional line of this proposed bypass has yet been made, although on 17th March this year, in answer to myself, the Minister said that he had received in February a report from Cheshire County Council on the alignment of this road, and he has repeated again by means of a Written Answer today, the fact that he is still not in a position to announce the publication of

  1399
  this provisional line and he still hopes to do it before the end of the year.
  With great respect to the Minister, I do not believe, and many people in the North do not believe, that over the years, the Ministry has recognised the need and importance of this road. There is obviously grave danger, because of the Chancellor's statement, that, no firm decision about this road having been taken, it will be delayed still further. I hope it will not. I sincerely hope that the Joint Parliamentary Secretary may be able to give that assurance tonight, although the Minister has said that he is not able to say what will be the effect on this road of the Chancellor's statement.
  I appreciate that the hour is getting late but I would briefly give the Minister the details of the present position about the road. Traffic conditions on a stretch of road can only be described as appalling. If by chance the Minister thinks that that may be an exaggeration I would tell him that those words which I used—it can only be described as appalling—are not my words; they are the words recently used by an inspector of the Ministry of Housing and Local Government in a report on a planning application concerning that road. It is merely a two-lane road which, in that part, through Helsby, is going through a narrow village, with a cliff—a cutting, really—on one side, through a shopping area.
  It is the type of road which, I understand, according to the Ministry, is recommended as having a capacity of 6,000 passenger car units per 16-hour day. The last count the Ministry did on that road in 1962 showed that in fact it was carrying 13,590 vehicles in a 16-hour day and some 27,000 passenger car units. That is something like four times the Ministry's recommended capacity for that road, but that is still three years out of date.
  As I think the Minister is aware—I believe the facts are in the files of his Ministry—since that occasion two voluntary censuses on a direct, similar basis to that of the Ministry of Transport census have been carried out on the identical day of two immediately following years. The Minister's latest figures are for a Friday in July, 1962.
  A similar census was done on a Friday in 1964; a similar one was done a fort-
  1400
  night ago, on 16th July this year. It discloses that whereas, as I say, in 1962 there were 13,590 vehicles going through Helsby and Frodsham, on an equivalent day in 1964 the figure has grown to 16,917 for Helsby, and, slightly farther up the road, in Frodsham, to 20,854, with an equivalent capacity of 31,105 passenger car units, and, as I said, on Friday a fortnight ago the number of passenger car units—I cannot give the figure in vehicles—going through Frodsham was 36,214 during a 16-hour day. That means that over the period of one year alone the rate of growth of vehicles has been about 7.5 per cent., and in passenger-carrying units it has risen by 9·4 per cent. This road is now carrying, not as it was at the time of the last Ministry census about four times the recommended maximum capacity, but six times as much.
  It is not merely commuter traffic, although one accepts that there are many commuters living near that road and using it to drive to work, with all the frustration that that involves—sitting in a motor car in queues, going to work in the morning and coming back in the evening, and so on. It is not only holiday traffic, although a good deal of holiday traffic going to North Wales uses that road, as many hon. Members know. It is used to a tremendous extent by industrial vehicles. It is an important vital link in the Merseyside area. It carries a great deal of the traffic going to I.C.I. in Runcorn, and in particular to the Stanlow refinery nearby. At the moment nearly 40 per cent. of the vehicles using that road are heavy vehicles, and more than 11 per cent. are oil tankers. It carries an appreciably greater volume of traffic than roads which the Ministry has put higher in the order of those to be bypassed.
  In recent years the congestion on this road has been made far worse by various factors, such as the industrial growth that is occurring on Merseyside, the opening of the Runcorn-Widnes bridge, the closing of the Mersey Tunnel to tankers, and so on. The Ministry must realise that the position is going to get worse, and I ask the Parliamentary Secretary to consider this when he replies to the debate. Runcorn has been designated as a new town. It was said that one of the advantages of Runcorn as a new town

  1401
  was its easy means of communication for industry. Those easy means of communication will not exist until the East Cheshire motorway is built.
  I have specifically limited my comments to this road rather than taking up time by repeating the general remarks that have been made by hon. Members on both sides of the House, and I conclude by telling the hon. Gentleman that when a road is as congested, as overburdened, and as overcrowded as is the A.56 through Cheshire, it not only causes tremendous frustration, annoyance, and anger to the people who use it regularly, but it puts a great many people in danger of life and limb. As the Minister knows, this stretch of road is bounded by a large grammar school for girls and a grammar school for boys. The children have to cross the road each day and the accident figures which the Minister gave a few months ago are far higher than the national average. Such conditions also waste endless hours of important time spent driving heavy lorries carrying petroleum and other goods for the chemical industry. This road is also used to a considerable extent to transport goods to Liverpool and to Birkenhead for export.
  It is absolute folly. It is cutting off one's nose to spite one's face if, faced with the desire to increase exports, as a kind of retrenchment at home we cut down all our capital expenditure on roads such as this motorway and other roads in the Merseyside area. I hope that the Parliamentary Secretary will be able to say that because of the representations that he has received from many sources in the area, not only in my division but in surrounding divisions, the priority to be given to this road will be reconsidered.
  I accept the argument that has been put to me in letters that I have received from the Ministry, that much preparatory work needs to be done in respect of the acquisition of land, and that there must be a realignment of Runcorn New Town and a public inquiry, but the Ministry could, at the earliest possible moment, announce a centre line for the road so that the necessary preparatory work could be started and an undertaking could be given that the moment the preparatory work had been completed the building of the road would be commenced
  1402
  immediately, as I know is the anxious desire of the Cheshire County Council and many other people.
  9.51 p.m.
  Rear-Admiral Morgan Giles: This evening we are discussing a nation-wide problem, but I want to mention briefly certain aspects which affect Hampshire. It is no coincidence that two hon. Members this evening have wished to speak particularly of the problems of Hampshire. This fact reinforces a great deal of what my hon. Friend the Member for Southampton, Test (Sir J. Fletcher-Cooke) has said, and which I wish to emphasise.
  Many roads in the Hampshire County Council area are in constituencies other than mine; my excuse for referring to them this evening is that, perhaps thanks to the Romans, all roads in Hampshire lead to Winchester.
  Sir Douglas Glover: That is a pity.
  Read-Admiral Morgan Giles: It is a pity. Hampshire's road problems are particularly pressing for a number of reasons which have been outlined by my hon. Friend the Member for Southampton, Test and which I need not repeat. In consequence, my remarks will be very much shorter. He pointed out the vast increase in population which is in train, the vast industrial expansion and the severe backlog which has prevailed in road building in Hampshire in recent years.
  We must not be myopic about this and imagine that our own little street is full of puddles and potholes while people in the rest of the country are zooming about on six-lane highways, but Hampshire's percentage increase in grants for road construction has been appreciably lower than the national average since 1958. Disregarding the past and looking to the future, it is fair to say that Hampshire is blessed with a particularly efficient and forward-looking county council, in respect both of its elected members and its officials. The council is particularly concerned with two developments in the near future which will call for a really drastic increase in road construction.
  The first is the South-East Study, with its masisve forecast of transfers of population and industry, the building of new

  1403
  towns, and so on, and the second is the recently published proposals for the development of Southampton Docks. The subject of these docks has been well covered by my hon. Friend the Member for Southampton, Test, but there are two small points which I want to add to those which he has raised.
  The first concerns the importance of exports, which has been referred to by every hon. Member who has spoken in the debate. The essential point about the ports on the South Coast is the importance of our exports to Europe. A vast percentage of our potential export market lies in Europe, within not more than a couple of hundred miles from the British coast.
  The second point affecting Southampton, as well as the big increase in cargo handling which is visualised—a really massive factor, which should be emphasised—is the passenger traffic. There is, year by year, an enormous increase in holiday traffic to the Continent, from all over England, seeking the Englishman's great deprivation, namely, the sun. There are already three Thoresen ferries running to France and their services will, I understand, soon be increased to go direct to Spain. One can ask, what is the purpose of the greater prosperity, the higher earnings, the increased leisure and all the social advantages gained during the last 13 years if we cannot easily travel to the sun?
  Despite his somewhat provocative speech this evening, I have some sympathy with the Minister in his predicament. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) was correct in saying that everyone who spoke tonight would be asking for more roads, and everyone would have some little axe to grind, as we must all admit. However, on the other side, the Chancellor is saying, in effect, "No more roads".
  To help him in his predicament, I should like to urge one or two concrete proposals on the Minister in his review of this situation. First, would he concentrate on the really large motorway schemes, the radial highways leading out of London to regional areas, including areas with ports? The London to Southampton M.3 motorway is an example. This is of particular importance because, if we fall behind in these vast
  1404
  schemes, it will be increasingly difficult to catch up when better times come again.
  Next, would the Minister consider a completely separate allocation of funds for town road schemes? Thirdly, would he pick out certain small, cheap link schemes such as have been mentioned by many hon. Members this evening, some of which will pay a dividend out of all proportion to the capital involved? In this extraordinarily complicated pattern, there are certain little "log jams" which, if cleared, would lead to an altogether disproportionate increase in the efficiency of the road system.
  One axe I want to grind on this subject is the matter of the Kingsworthy link. My hon. Friend the Member for Test referred to this link and this was the only point of disagreement which I had with him. I think that he is quite wrong to discount the importance of the Kingsworthy link, which happens to be in my constituency. I can assure him and the Minister that two and a half miles of road would fill what is, in effect, the only gap in a major road running from Southampton right back to the industrial heart of the Midlands.
  If the Minister can succeed in these limited objectives which I have outlined to him, at least Englishmen will no longer need to travel as G. K. Chesterton did:
  "That night we went to Bannockburn by way of Beachy Head."
  10.0 p.m.
  Mr. T. G. D. Galbraith: The outstanding feature of the debate has been the general concern which has been shown about the future prospects of the road programme. The Government's decision to cut the road programme, coming as it did from a party which is supposed to stand for expansion, has been a great shock to many people in the country.
  I cannot, however, say that I personally am altogether surprised, because I can remember this time last year when we were debating transport and the right hon. Member for Vauxhall (Mr. Strauss), speaking with all the authority of a shadow Minister, excused his own party's miserable performance when they were previously in office on the ground that "our resources were overstrained" as if an over-strained economy were an act of

  1405
  God like bad weather and not the direct result of Government incompetence and bad management. That is what happened last time. It was the roads which suffered.
  When the present Minister spoke in Question Time last week he said,
  "We are in a period of great economic stress."—[OFFICIAL REPORT, 28th July, 1965; Vol. 717, c. 446.]
  No blame for this apparently attaches to the Government; it is just one of those things which happen. And what do they do in these circumstances? The same as they did last time—they take it out of the roads and cut down on the great modernising programme under which a Conservative Government had raised the amount of money spent on the roads from 3 per cent. of the total public service investment to a rate in excess of 14 per cent.—a rate which the Minister and his Government had accepted for themselves.
  It is quite incredible that the Government are imposing this cut in the light of the criticisms of inadequacy which they always directed against the level of Conservative investment.
  "Building new roads on a wholly inadequate scale."—[OFFICIAL REPORT, 8th July, 1964; Vol. 698. c. 520.]
  That was how the right hon. Member for Vauxhall described the achievement of the Conservative Government this time last year. We know that the Labour Party always say one thing and afterwards act entirely differently.
  Apparently they also act secretly, for when the Minister was asked at Question Time last week, not for details but to explain the general basis of the cuts, he was clearly at a loss how to answer. This was not only the impression of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) who pointed it out at the time; it was referred to in the Press. "He was largely caught unawares", was how the Financial Times described it. Perhaps we should not be altogether surprised about this. After all, if Cabinet responsibility as interpreted by the Labour Party can be stretched sufficiently wide to include the views of the Minister of Technology, I suppose that we cannot expect the Chancellor of the Exchequer to take the Minister of Transport into his confidence, even if he is proposing cuts in a road programme
  1406
  which affect the right hon. Gentleman's own Departmental responsibility.
  But the fact that these cuts have been imposed in this way without proper detailed investigation as to all the consequences shows that the Labour Party, far from being a party of planning, is a party dithering from one inappropriate expedient to another like a drunken man searching for the next lamp-post against which he might prop himself up.
  What is the justification for this cut in the road programme? Houses are exempt, schools are exempt, hospitals are exempt. Why not roads? They are the life-blood of the nation, every bit as necessary for our economic recovery as the favoured three which are exempt. Perhaps they are even more necessary if the cuts are looked at ruthlessly as a once-for-all operation to save the national economy. Yet roads are classified as candy floss and are put in the same "unnecessary non-industrial category" as the reading rooms and the swimming baths over which the Chancellor spilled his usual crocodile tears the other night on television. He is getting quite good at it now. He is certainly giving himself plenty of practice at it.
  The object of the cuts in the road programme is, we are told, twofold. It is designed, first, to reduce internal pressure. But these road contracts are all long-term contracts. Indeed, the Minister said this afternoon that it is unlikely that the cuts will have any effect for two years, and that possibly £1 million would be cut. But that is all in the next two years. If that is so, what on earth is the purpose of these cuts? Does it mean that the Government anticipate that the critical state of our economy will continue for another two years and that it is not now but in two years' time that the pressure will require to be taken off the economy? That is the logic of what the Minister said this afternoon.
  Sir D. Glover: That applies, of course, only if the Labour Party remains in power.
  Mr. Galbraith: Yes, and they will not be in power by that time. However, if what I have described is the case, then it seems that we are more likely to suffer further cuts in future than to have anything added back to the programme, as the right hon. Gentleman

  1407
  suggested we might, to make up for the cuts which are now being imposed but which will not take effect for another two years.
  The second object of the cuts, so we understand, is to divert more of our resources to exports. This sounds an excellent idea, but the horny handed men who do the construction work on the roads will not suddenly turn to the manufacture of machine tools, the build-of computers or whatever else the right hon. Gentleman has in mind. They will merely go slow and, in the meantime, their expensive equipment will not be used to the full extent. It is, in fact, a sheer waste of resources—that is, unless the intention is that there shall be a permanent cut or postponement of a proportion of the programme for the rest of the five-year period.
  This is the 64,000 dollar question which the right hon. Gentleman did not answer and which my hon. Friend the Member for Truro (Mr. Geoffrey Wilson) so rightly pointed out. I hope that the Joint Parliamentary Secretary, when he speaks, will not mince words but will tell us fairly and squarely whether this is a once-and-for-all cut which is to take place in two years' time or whether the six-monthly postponement will be carried forward from one year to the next for the whole of the five-year programme.
  Sir D. Glover: The Joint Parliamentary Secretary does not know.
  Mr. Galbraith: That may be so, but we want the answer to this question.
  When the Chancellor of the Exchequer applied the chopper to the roads programme the implications were not fully thought out. Indeed, the whole operation involves a contradiction. At one moment the roads are regarded as candy floss and investment on them can be safely cut while, at the next moment—
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler)indicated dissent.
  Mr. Galbraith: Surely this follows from the Chancellor's statement. The Chancellor lumped in roads with non-industrial investments such as swimming baths and new libraries. I saw the right hon. Gentleman do it for the umpteenth time
  1408
  on television the other night. Indeed, I am getting sick and tired, as are people generally, of this sort of thing.
  As I was saying, at one moment the roads are regarded as candy floss and investment on them can be safely cut while, at the next moment, we are told that they have a valuable part to play in aiding our exports, and for that reason access to the docks is to be improved. This is excellent news, but where does access to the docks begin? It does not begin just a few miles from the docks. It starts at the gates of the factory where the goods are made and from where they are exported. This was made clear by the hon. Member for Bodmin (Mr. Bessell) and my hon. Friend the Member for Southampton, Test (Sir J. Fletcher-Cooke). It is no good diverting money from a bottleneck on an important trunk road to a bottleneck just outside the docks and hope that by removing the one just outside the docks and leaving the one on the trunk road this will speed our exports. All that it will do is transfer the bottleneck from one point to the other. The reference to improving access to the docks in the context of a general cut in the road programme is simply a gimmick. It is a face-saver to reduce criticism, but it will not do any good. The trouble with the Party opposite is that they always try to govern by gimmicks instead of by worth while action.
  Another example of the attempt to stave off criticisms—because that is what it is—is that we are told that road building in the development districts will not be subject to the cut. But has this decision been taken for transport reasons, or is it a hedge against the unemployment that the Government's deflationary policies will almost certainly bring in a couple of years time?
  The right hon. Gentleman, I know, is not responsible for roads in Scotland. But he is a Scotsman, and there have been contributions from three Scottish Members. Presumably he or some of his hon. Friends read the Glasgow Herald from time to time. In one of its leading articles on Saturday last it stated:
  "Trunk routes … are of little use if they are incomplete through gaps left in areas not deemed worthy of special attention for development."
  So it is no good the right hon. Gentleman patting himself on the back because he

  1409
  is going on building roads in development districts and not cutting them, unless the roads lead somewhere and lead somewhere at the same standard. The right hon. Gentleman should realise that the only hope for a development district is not to have first-class communications within the area of the development district, but to have first-class access from it to the main industrial centres in the rest of the country. That will often mean improvements on roads outside the development districts, on roads which I would expect from the right hon. Gentleman's statement would be subject to his cut.
  About motorways, is is true that the hon. Gentleman said at Newcastle-under-Lyme at the weekend and again in the House tonight—and I quote what he said at Newcastle, referring to the cuts—
  "I do not anticipate that our prospects of having 1,000 miles of motorway by the early 1970's will be affected."
  That is a pretty feeble sort of assurance. It is not very encouraging when, in spite of the robust assertion which he gave in the House on 3rd March that,
  "We are determined not to cut the programme",—[OFFICIAL REPORT, 3rd March, 1965; Vol. 707, c. 1311.]
  four months later we find that the programme is cut and we find the right hon. Gentleman still a Member of the Government acquiescing in and indeed justifying a cut which he said previously that he was determined not to have.
  He referred tonight to the link between the M.1 and the M.6, about which his hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) pressed him last week during Questions. All he could say was:
  "In the light of what my right hon. Friend (the Chancellor) said yesterday, I cannot repeat with any assurance that it will be completed by then, but I hope that it will not be long delayed beyond 1970–71."—[OFFICIAL REPORT, 28th July, 1965; Vol. 717, c. 445.]
  "I hope"—that is all that the Minister can do. He can only hope. There is no sign of determination now to stand up for the programme. It is not very convincing. But let us give the right hon. Gentleman the benefit of the doubt. He says that the motorways are to be finished on time, in the early 1970's. But will he nail his reputation to the mast and say that they will be finished by 1973, as we
  1410
  have said in our election manifesto? The early 1970's might mean as late as 1975.
  We are told that roads in the development districts are to proceed as planned, and we give the Government the benefit of the doubt there—there will be no cuts there—and that urgent action is to be taken to improve access to the docks. Does that mean increased expenditure on access to the docks or just that access to the docks is not to receive the cuts that are to be imposed on other roads in other parts of the country?
  In spite of the fact that the motorways are, apparently, to go ahead, in spite of the fact that roads in development districts are to go ahead, in spite of the fact that improvement of access to the docks is to be increased, there is, overall, to be a cut amounting to approximately £75 million, so we are told. What the country wants to know is where this cut will be applied. Presumably, it will be applied to schemes such as the Newcastle-under-Lyme Bypass which, ironically enough, the right hon. Gentleman opened at the end of last week.
  Again, I imagine that minor improvements by local authorities will suffer fairly substantially, yet these are the sort of schemes which, though they may not look very important from a transport point of view, are often, from a safety angle, very valuable indeed. It will not be much good the right hon. Gentleman starting a blitz on drink in relation to driving next Session as part of his safety campaign if he goes slow on improving dangerous black spots on the roads and on carrying out measures such as those suggested by his hon. Friend the Member for Dundee, West (Mr. Doig).
  The Parliamentary Secretary spoke very enthusiastically at Question Time last week about the provision of car parks. He even gave me the impression that it was his Government that had started the ball rolling in co-ordinating car parks though, as the annual report for 1963–64 shows, the credit for this should go to my right hon. Friend the former Minister. Perhaps the Parliamentary Secretary—whom, I hope, is listening to me—will tell us what is to happen about the provision of car parks. Presumably, this is not now to be a go-ahead, in spite of his bold words last week at Question Time.

  1411
  That leads me to the whole problem of urban traffic to which the hon. Member for Chorley (Mr. Kenyon) referred. A vast amount of money needs to be spent in the towns, but it seems to me that it is precisely in the towns that the cuts will be felt most severely and most damagingly. The right hon. Gentleman, after all, is not an exponent of expansion. He always talks about restricting traffic. He even gives the impression that a lot of traffic can be taken off the road and put on the railways—which personally, I do not believe is possible. The recent increases in petrol duty and road fund tax to say nothing of the stiffening of hire-purchase terms, shows how basically anti-motorist the whole outlook of the present Government is. Instead of trying to improve the roads, their whole instinct is to try to restrict the traffic. It is the old licence-and-quota mentality which is part and parcel of the outlook of the party opposite.
  In imagining that they can restrict the traffic like this they are behaving like King Canute. The increasing flood of motor cars is as irresistible as the incoming tide—
  Sir D. Glover: If my hon. Friend will allow me—
  Mr. Deputy-Speaker (Dr. Horace King): Order. I think that the hon. Member for Ormskirk (Sir D. Glover) has about exhausted his right to intervene, except formally.
  Sir D. Glover: On a point of order, Mr. Deputy Speaker. I have not intervened in this debate for the last six hours.
  Mr. Deputy-Speaker: I am sorry to correct the hon. Member, but I have watched him and heard him intervening from a sedentary position during the last half hour.
  Mr. Galbraith: I thought that my hon. Friend was about to correct me on a matter of history. It was not King Canute who behaved so stupidly—it was his advisers. The Government, in thinking that they can restrict traffic, are behaving like King Canute's advisers because the increasing flood of motor cars is every bit as irresistible as the incoming tide. Whatever should be cut in order to enable the Government to get
  1412
  out of the serious economic situation which they have created, the roads certainly should not be cut. [Interruption.] It is the Government's job to decide what cuts are to be made. After all, they try to pretend that they are a Government even if they do not give much sign of being in command of events.
  How much wiser the Conservative Party acted when in office. In 1957, when emergency economic measures had to be taken, we actually doubled the road programme because good roads help productivity and in 1961 my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), who was Chancellor of the Exchequer, had this to say:
  "For roads, the Government have decided upon a firm five-year programme, which will involve a considerable increase above the present rate of expenditure, but one which I judge to be within our capacity, and also one which, I think, is directly related to production and productivity."—[OFFICIAL REPORT, 26th July, 1961; Vol. 645, c. 437.]
  This is where the Government are making a terrible mistake. They are applying the chopper in the wrong place. By cutting down on roads they will diminish national efficiency and make it more difficult for exports to be competitive. They are also applying the chopper in the wrong way. It is bound to undermine the confidence of the construction industry and also to reduce its efficiency.
  The right hon. Gentleman should think again and rearrange his priorities within the programme if he thinks that is the right thing to do but he should not cut the programme or delay it or postpone the total of the programme which, by no stretch of the imagination can be described as over lavish or beyond the economic requirements of the country if it is to be able to thrive again. Let the right hon. Gentleman remember the wise words of William of Orange:
  "No country is rich enough to pay for bad roads."
  Before the right hon. Gentleman goes on holiday let him use his great persuasive powers—but do not let him get angry, as he does sometimes—to get the Chancellor to change his mind before it is too late and before irreparable harm is done to our industrial potential by cutting the road programme and thus squeezing the vital arteries of economic growth.
  10.24 p.m.
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler): I will endeavour to be brief because it is only fair to remember that 14 other back benchers on both sides—there may be others—wish to raise subjects tonight which are no doubt of great concern to them and their constituents. We have had a fair run on this subject, which was raised by the Opposition, and I hope that I may be forgiven if I am fairly brief.
  It is quite understandable that the hon. Member for Glasgow, Hillhead (Mr. Galbraith) should speak rather loud and long. He of course, bears his share of responsibility for formulating a road programme on a production rate never achieved under the Conservative Government. His Government bequeathed to us the problem of achieving the 4 per cent. economic growth rate which was the basis for the calculations upon which their road programme was widely advertised.
  The hon. Gentleman boasted that in an economic crisis under the Tories expenditure on roads was doubled. It was just that against which his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) resigned. The hon. Gentleman and his right hon. Friend ought to have a little get-together after the debate to decide what happened and what ought to have happened during the 1950s. As my right hon. Friend reminded the House, in the book approved by the right hon. Gentleman for issue this year he made a strong point about not increasing public expenditure beyond the means at the nation's disposal and not formulating plans for public expenditure far ahead of the date when one could possibly calculate what national income would be.
  Mr. Alfred Morris: I am sure that my hon. Friend will agree that the hon. Member for Glasgow, Hillhead (Mr. Galbraith) remembers the eleventh century more clearly than he remembers the 1950s.
  Mr. Swingler: That may be, but I was suggesting that there might be a little more co-ordination between the hon. Gentleman and his right hon. Friend about the past and about the present.
  1414
  We have had a wide-ranging debate on this subject since the time some time ago when my right hon. Friend demolished the arguments of the right hon. Member for Wolverhampton, South-West, starting with the hon. Member for Bromsgrove (Mr. Dance) who has had to disappear. We have covered repairs to the M.1, access to Southampton, priorities at the docks, sanitary facilities on lay-bys and a vast number of individual schemes, showing the many frustrated demands for Adjournment debates still lying dormant. I hope that hon. Members will appreciate that I cannot answer individually all the questions about their particular bypass schemes and other problems—[Interruption.]—but I can assure them that they will receive comments from the Ministry on the issues which they have raised—[Interruption.]
  Mr. Deputy-Speaker: Order. We have a long night ahead of us and back-chat does not help.
  Mr. Swingler: I do not mind, Mr. Deputy-Speaker. I am accustomed to the knights opposite—of both kinds.
  Mr. Carlisle: Is the hon. Gentleman saying that he does not propose to answer the various issues which I raised, for example?
  Mr. Swingler: Hon. Members must learn to exercise a little patience. Let us take the instance of the hon. Member for Runcorn (Mr. Carlisle) who mentioned the A.56. I know that the improvements to this road were programmed only last year. Even so, if the hon. Gentleman's constituents and those for whom he is speaking are extremely keen to bring these schemes forward within the budget for that part of the country, no doubt they will suggest to the Ministry what alteration in priorities they believe should be made in that part of the world in relation to the facts and figures which I very much appreciate but which must be related to the whole cost of other very important schemes in that region. If there is a desire to alter the priorities or order of schemes, no doubt suggestions will be made to the Ministry. The scheme the hon. Gentleman has mentioned has been programmed only recently for some period ahead and there is therefore no question of these schemes on the A.56 coming under the statement of the Chancellor of the Exchequer.

  1415
  Likewise, the hon. Member for Truro (Mr. Geoffrey Wilson) asked why there had been delays in capital projects on the roads and not on the railways. He has overlooked the fact that my right hon. Friend's statement also applies to the nationalised industries which have been asked to review their programmes of capital projects from the point of view of the call they make on the country's resources. Therefore, it is not true that there is any differentiation in the treatment of road capital projects and that of rail capital projects.
  The hon. Member for Bodmin (Mr. Bessell) spoke a great deal about priorities for the docks and ports. We agree that this is extremely important. He perhaps overlooked the fact that my right hon. Friend the Chancellor said in his statement that high priority would be given to access to the docks and ports. It is from this point of view that we are looking at the programme as a whole.
  Mr. Arthur Lewis: Will that include the continued delay and putting off of schemes by the previous Government? We in the Royal Group of Docks have had road schemes promised for many years.
  Mr. Swingler: I take the point. This is not the first time that there has been procrastination in the road programme. It has happened in some parts of the country many times. The hon. Member for Hillhead seemed to resent the fact that we have a bypass scheme in Newcastle-under-Lyme for which we have been waiting for 25 years. That is a considerable improvement in the fortunes of that part of Staffordshire.
  Mr. Galbraith: I do not bother about the hon. Gentleman's quip about Newcastle-under-Lyme, but I am interested in the point about the problem in relation to the docks. Is more money to be spent on roads leading to the docks than was anticipated under the existing five-year programme, or is it merely that schemes in the existing five-year programme are not to be cut?
  Mr. Swingler: Let us come to grips with the facts. Many hon. Members have spoken in this debate, partly encouraged by the hon. Member for Hillhead, in terms of cuts, and others as if
  1416
  it were a budgetary problem—a problem of money. One hon. Member spoke as if it were a question of raising money by some other means to promote a larger road programme, as if we could devise a new form of taxation or raise loans and so on, and suggested that that would solve the problem. To summarise the major point or theme passing through our discussions and made by my right hon. Friend in reply to the right hon. Member for Wolverhampton, South-West at the beginning of the debate, first we have a larger road programme anyway. Also, work on the road programme is increasing anyway. Let no one talk of a cut. What we are talking about is contracts which have not yet been placed. We are not talking about the fact that at the moment there is £300 million worth of work in hand in the road programme—an enormous volume which it is projected to increase further.
  The second point is that this is a programme which we in this Government inherited based upon rising production, a regular 4 per cent. growth rate in the economy and a projected rise in road expenditure of 14 per cent. in the five-year programme. If anyone asks wherein lies the difficulty in achieving this or any other programmes, it is in the fact that we inherited this programme and an enormous deficit on balance of payments, not a 4 per cent. growth rate in the national economy on which the Tories based the programme.
  Mr. Powell: What has happened since March when the Government themselves, knowing all these things, accepted and affirmed the programme?
  Mr. Swingler: It is extraordinary for the right hon. Member to raise this. We have not made the progress in exports and in increased production and productivity that we need to make. I should have thought that the right hon. Member would have seen that perfectly clearly. Therefore, it is clear that further measures are necessary. I should think that the right hon. Gentleman would have agreed that it was necessary, in order to increase production and raise productivity, to stimulate exports, if we are going to be able to carry out programmes of the kind which have been advanced. We must create a stronger export drive, and rescue the balance of payments from the

  1417
  shocking position which we inherited last October. To do this we have been asked to accept some delay in the development of these programmes and to exercise a stricter sense of priorities in carrying them out.
  That is the position. It is not a question of raising money. It is a question of the call on our resources, relative to the resources available for other things, such as the hospital and school programmes, and above all, the export programme. Can hon. Gentlemen opposite deny the need for more exports to help the balance of payments position? We know that they have spent a very pleasant couple of weeks trying to conceal it and gloss over it. The hon. Member for Hillhead had the impudence to stand up—he who participated in formulating a road programme based on a 4 per cent. growth rate in the national economy, which his Government never achieved. They never even attempted to plan for it. Now we have inherited the difficulties and the contradictions.
  The hon. Gentleman the Member for Truro, above all, knows that this is the basic position and the bearing it has, not only upon matters connected with the roads, but with those matters connected with the railways. Whatever one may want to do, whatever one may desire to do, and conceive to be the most desirable of transport policies, one has to bear in mind the resources which are available.
  Mr. Galbraith: Would the hon. Gentleman answer this one question? Could he explain how the right hon. Gentleman the Member for Vauxhall (Mr. Strauss), speaking on behalf of the party opposite, as the shadow Minister, said that our programme was inadequate? He said so last year.
  Mr. Swingler: The hon. Member for Hillhead does not need to refer to my right hon. Friend the Member for Vauxhall. Let him ask the serried ranks of hon. Gentlemen opposite. The hon. Gentlemen there are queuing up to come to see me to say just this—that the programme is not adequate. That is what they are constantly saying from Winchester—even the knights there are saying it—that the programme is inadequate. But the question is where are the available resources, not merely for enlarging
  1418
  the programme, but for sustaining the existing programme, based as I say it was, and no one can controvert it, upon the achievement of a 4 per cent. growth rate in the national economy?
  Sir D. Glover rose—
  Mr. Swingler: Under these circumstances what we have done, as my right hon. Friend the Chancellor said, is to exercise a stricter sense of priorities—to give priorities to those schemes which are in development districts, areas of high unemployment, which have direct connections with the export drive because they provide access to the docks. We have the responsibility for interpreting what that means and deciding how we can best achieve such an aim.
  May I repeat what I have already said in relation to other proposals? One cannot have postponements except where one has set dates for starting a scheme. It is no good hon. Gentleman talking about postponements in 1969 and so on, when no dates have been fixed. We are talking about those things over which one has the power of postponement and delay, because a date has been set. In view of the insufficiency of resources, where those dates have been set, we are making postponements, and the speculations by hon. Gentlemen opposite about the money involved are wildly exaggerated and wildly out. I ask them once again to pay attention to the figures given by my right hon. Friend at the beginning of this debate.
  Nevertheless, as my right hon. Friend said, in spite of the difficulties and in spite of the inevitable delay that this will cause to some part of the programme, we have the intention, and we are confident in having the intention, as a Government that we are determined to complete this programme, to improve the efficiency of conducting it and to achieve the 4 per cent. growth rate, keeping to the scale of priorities set for the next few years, and I believe that we shall do it.
  Mr. Bessell: Will the hon. Gentleman answer my question? Is he able to give the House an assurance that no further passenger rail closures will be authorised unless the money is provided for the execution of essential road improvements where buses will replace the rail service?
  Mr. Swingler: It is clear that where my right hon. Friend has to give consent, or to consider giving consent, to a rail closure, and road improvements are required to provide adequate alternative services, he would be obliged in such a case to refuse to consent to depriving an area of its rail service if he could not guarantee that the alternative services would be available. The hon. Member can, therefore, take it that my right hon. Friend will give careful scrutiny to any such situation.
  10.42 p.m.
  Sir Douglas Glover: I shall not detain the House for more than two or three minutes. [HON. MEMBERS: "Hear, hear."] Do not encourage me. The Joint Parliamentary Secretary was not willing to give way to me, perhaps because he thought that I would be hostile to his argument; he referred to the knights of the shires or the like. His argument about the cuts was rather like Marie Antoinette who said, "We have no bread. Give them cakes." If it is not a cut, the guillotine is falling pretty hard.
  I do not, however, want to go into that argument, because I want to be much more constructive. Whichever party is in power, a certain amount of money will be allocated to the road programme. Whichever party is in power, whatever amount is allocated, it will not be considered to be sufficient by the backbenchers in Parliament. No ideology is involved in this. It is not a Socialist, a Conservative or even a Liberal policy. It is a question of how much money is available for the construction of roads.
  In Parliament, a great deal of behind-the-scenes talk is going on about forming committees to consider this or that problem—foreign affairs, defence, and so on. I suggest to the Minister that perhaps the road programme is the first object that such a Parliamentary committee could consider. It would not remove the Parliamentary battle between the parties as to whether £200 million, £150 million or £75 million should be allocated. We should still have across the Floor of the House a great battle about one party being efficient and the other inefficient. We should have all that.
  1420
  I am sure that when my right hon. Friend the Member for Wallasey (Mr. Marples) was Minister of Transport—[HON. MEMBERS: "Where is he?"] It is not my business where he is. I am making a serious argument. The Minister of Transport knows that whatever is done in this programme, he is under enormous pressure to allocate penny packets all over the country.
  For instance, in my constituency we have a great new road programme going on from Liverpool on the way to Preston. Under any logical, non-party, sensible road scheme, it would go all the way to Preston, but because an hon. Member at, say, Bathgate or another distant place wants a bottleneck on a road removed, what will happen to this road? A great new treble carriageway is being built from Liverpool half way to Preston. A mile from where it finishes all the traffic has to go over a bridge which is only just wide enough for two lorries; they almost collide on the bridge, which is the narrowest bridge in Lancashire. Yet we are spending millions to produce the treble carriageway up to this point.
  Problems such as that could be anticipated and discussed practically if we had a Parliamentary committee, consisting, of course, of Members from both sides of the House. People talk about modernising Parliament. Is not this just the sort of problem which we ought to be discussing in a committee? Is not this the practical work of Parliament? Leaving aside individual constituency problems we could in such a committee discuss a road problem from the point of the national interest, in a practical manner.
  We have a limited amount of money to allocate to the road programme. It certainly cannot be sense in any road programme to produce half a road. I would far sooner not have an improvement in this road if some other road somewhere else could be completed—all the way, say, from an inland manufacturing town to the docks. As it is, all over the country there are road schemes which are carried just so far and then stopped—unfinished. This is so even with the M.1 and the M.6. The right hon. Gentleman is now talking about a five-year gap in joining the M.1 and M.6, in the middle, north of Birmingham. I should have thought it in the national interest to have finished both

  1421
  lengths of both roads and to have given that first priority. It would be well worth while, providing a link between Scotland and London, all through the North-West and the Midlands. But while that gap remains, the road is a nonsense, and the reason why the right hon. Gentleman does not get on with it is the enormous pressures put on him from hon. Members from the North-East and from Scotland and from the West Country, all wanting some other projects done.
  At this time of night I am not going to pursue this any further, but we are talking nowadays in Parliament about having committees to consider a great many different matters, and aside from party politics, and I can think of no matter which could more profitably be discussed in the cold light of logic and aside from party politics than the matter of the roads programme. We could do in
  1422
  committee, after the money has been allocated, and after debate and argument here on the Floor of the House about the allocation of money, and after Divisions, and after complaining about this or that Minister's inefficiency or this and that party's inefficiency. This road programme business is just the sort of problem to consider behind the scenes in committee, aside from party politics. In such a committee the Minister could protect me from his back benchers, and I would protect him from my own back benchers. [Laughter.] This is not a joke. I am very serious. That is the sort of committee we want, to deal, from the point of view of the national interest, with the practical details of the road programme. If the right hon. Gentleman would start to set up such a committee as that, I assure him I would willingly be the first Member on it.

  DRY DOCK, BELFAST
  10.48 p.m.
  Mr. Rafton Pounder: We have discussed at some length and for some time the question of roads, which is a very important matter, but I hope that the House will permit me now to move to a different subject, the need for a giant dry dock in Belfast. I realise that a number of hon. Members on both sides of the House wish to raise other important subjects in the course of the next few hours, and being conscious of this I do not intend to detain the House for a moment longer than is absolutely necessary for me to deploy my case.
  I hope, however, that the House will bear with me for a few moments if I preface my remarks by seeking to eliminate one or two misconceptions which seem to have arisen in connection with this project. Perhaps the most undesirable and damaging misconception which has arisen concerns the length of time which has allegedly elapsed since this project was first mooted.
  It has been contended repeatedly and erroneously by the Northern Ireland Labour Party that my colleagues, both here and at Stormont, have dragged their feet on this project. Nothing could be further from the truth. For several years the former management of Harland and Wolff appeared to be disinterested in the idea of a great new dry dock, and while this mood prevailed it was clearly quite unrealistic to proceed with a project whose value those persons who were in the best position to judge, and who were going to operate the dock, appeared to question. Clearly there was no sense in investing a huge sum of money in this project while the shipbuilders of Belfast were lukewarm about the idea.
  However, early in 1963 the management of Harland and Wolff changed their view, and no time was lost either by the Northern Ireland Government or by my colleagues in this House in making the strongest representations to have the project proceeded with. Since March, 1963, this project has been pressed for relentlessly, and on 14th July, 1964, my right hon. Friend the Member for Hampstead (Mr. Brooke), who was then
  1424
  the Home Secretary, announced during the course of a debate on Northern Ireland in this House that the proposed dimensions of the dry dock would be 150 ft. by 1,000 ft. The necessary soil surveys and so on were conducted, tenders were asked for, and they revealed a capital cost greater than that which had been expected, and a further period of six months anxiety ensued during which nothing further was heard, and this takes us literally up to today.
  It was rumoured that the original estimate of the cost of constructing the dock would be in the region of £4 million, but when the tenders were studied in the spring of this year they revealed a cost considerably in excess of this reported figure. I must admit that I am very surprised indeed that anyone should seriously have estimated that the cost of this dock would be in the region of £4 million, bearing in mind, first, the type of soil on the site selected for construction, and, secondly, the very costly equipment which is essential for any dock, and perhaps when the hon. Gentleman winds up the debate he will be able to give us, if not the actual tender figures, then some approximation, which will be of tremendous help, bearing in mind the figure of £4 million which was so widely bandied about some months ago.
  Make no mistake, there is a real need for a large new dry dock in Belfast. It is, however, perfectly correct to say that there is a dry dock of sorts already in existence, the Thompson Dock, but this dock is satisfactory only for smallish repair, reconditioning and conversion jobs—smallish, that is, by current day standards. The Thompson Dock was constructed in the early years of this century, in about 1911. It was built at a time when it was assumed that the trend in shipbuilding design would be for long, narrow ships. The advent of the diesel and turbine engines, with the consequent use of fuel oil in place of coal bunkering, resulted in a revolution in ship design, and in particular in engine layout. The fore and aft principle was superseded, and in consequence the Thompson Dock, which I think is about 1,000 ft. long, is far too narrow. Clearly, therefore, it is important that this new dock should be able to take full account of the anticipated increase in ship dimensions, and

  1425
  also of possible fundamental changes in marine design which might take place consequent on the advent of marine nuclear propulsion on a commercial scale.
  Despite the current stop which has been placed upon the development of a nuclear powered merchant ship, there is no reason to assume that the day will not come when marine nuclear propulsion is a viable commercial proposal. That being so, it would surely be shortsighted not to take account of this development when considering the dimensions of the new dry dock, and while there is no reason to assume that the basic engine room design of a nuclear powered ship would necessarily be very different from that of a conventional ship, nevertheless I would be glad if the hon. Gentleman could give us some indication of how much emphasis has been placed on this very likely future development in marine construction when considering the dimensions of the dock. Stripped of all technical jargon, and simplified into layman's language, nuclear power basically requires just a different type of boiler.
  Reverting to my main theme, I do not pretend to be competent to discuss the technical requirements which must be embodied in the dock—matters such as flap gates, main pumps, auxiliary pumps, filling valves, keel blocks, heel blocks, bilge blocks, and so on. All these are matters for engineers, but there is one technical point on which I would presume to make a suggestion. Particular attention should be paid to the question of tanker cleaning and gas freeing facilities, bearing in mind that a great proportion of the largest ships afloat are oil tankers and that a proper tanker cleaning installation can handle up to 100 vessels a year, if necessary. When it is remembered that there is a large B.P. oil refinery in Belfast the case for including in the dry dock installation adequate tanker cleaning facilities is self-evident.
  The four essential criteria when determining the location of a dry dock are that it should be built, firstly, where there is an adequate depth and expanse of water for manoeuvring ships into and out of the dock; secondly, where suitable ground conditions permit of an economical civil engineering design; thirdly, where there is a suitable sheltered area for the docks, quays, jetties and shops, and, fourthly,
  1426
  where there is an adequate skilled labour force.
  On all of these and other points the case for Belfast is overwhelming. Also, it is desirable that there should be a background of ancillary industries to the shipbuilding and engineering industries within a reasonable distance and capable of servicing ships within a reasonable time and at an economic cost. Again, Belfast can offer these facilities. It is often forgotten that shipbuilders require to have dry-docking facilities at hand, as there is always a certain amount of risk of damage in the launching of ships. This risk is not likely to be minimised as ships become larger. In any event, a ship built on a berth requires to be dry-docked at some stage in its construction before going on trials.
  When a new ship has to be dry-docked before trials outside the area in which it is built the shipbuilder has considerable extra expenses to bear, for which there is relatively little, if any, return. Two examples are the outworking allowances and expenses due to the fact that the furnishing trades must accompany the ship to dry dock. These are costs which the shipbuilder has to absorb, and the bill is considerable.
  For these reasons large dry docks are normally built in shipbuilding areas and close to ship-repairing establishments. In this context it is worth noting that the great P and O liner "Canberra", which was built in Belfast about five years ago, had to be taken to Southampton for dry-docking. Recently Harland and Wolff secured an order for a mammoth tanker of 167,000 tons. What will happen when this and other comparable ships are to be dry-docked? Belfast has not got the facilities at present, until a new dock is built.
  Let me illustrate the situation which arises. A super tanker sailing from Belfast to a port somewhere in the south of England—say, Falmouth—at an average speed of 16 knots will take about 30 hours to complete the journey. The cost of fuel, assuming a consumption of about 200 tons for the round trip, would be about £1,600, to which must be added victualling costs, labour charges and sundry expenses. This all adds up to a very sizeable bill, which could be reduced

  1427
  substantially, or virtually eliminated, if there was a local dock available.
  The Rochdale Report anticipated a rise in dry cargo imports and exports of 100 per cent. between now and 1980. This may well mean that many additional bulk carriers and large cargo ships will require to be built. If so, Belfast can reasonably expect to build its share of these.
  Turning to the very important employment factor, I cannot and will not pretend that a great new dry dock will create a shipbuilding Utopia in Belfast; nor, indeed, is it realistic to regard the dock as a great new source of employment for shipyard workers. Of course it will provide additional employment, but the number of additional jobs may not number more than a few hundred. It must not be forgotten that a new dry dock is absolutely essential for the survival of Belfast yard as a great shipbuilding centre.
  The average occupancy of a dry dock is about 65 per cent. or about 240 days a year, and at ten days per vessel, on average, this represents 24 ships a year. There is no doubt that a sizeable dock would command this sort of turnover in Belfast. With a skilled labour force available, and modern facilities provided, Belfast would be able to compete in time and efficiency with any other shipbuilder or ship repairer in the country.
  Having enunciated my case in some detail, I should now like to draw the threads together. Firstly, I cannot emphasise too strongly that the advent of supertankers, bulk carriers and large cargo ships make the need for a giant dry dock vital to a major shipbuilding centre such as Belfast. Equally, there is no doubt that super-tankers of even larger dimensions than those presently being constructed will be on the stocks in the coming years. The 200,000 ton tanker may well be commonplace within the next decade. It is, however, pure speculation to try to anticipate how large tankers ultimately will become. The one thing that is certain is that the supertanker is here to stay.
  Secondly, if Belfast is to maintain her position in world shipbuilding, a giant dry dock of realistic dimensions is absolutely essential. On this there can surely be no argument. The projected
  1428
  size of 150 ft. by 1,000 ft., capable of docking a tanker of 150,000 gross tons is clearly inadequate. Such a dock would be obsolete within a relatively short time. We must think in terms of a dry dock capable of handling tankers in the region of 200,000 tons dead weight. It is unrealistic to think in terms of building a dock now which would be capable of extension at a later date. A dry dock is not a concertina in cement capable of being easily expanded. The cost of any such extension would be immense. We must build what we require now, not some time hence.
  It should be remembered that a dry dock once built lasts for 50 to 100 years and that a very long-term view has to be taken in its planning. Although ship-repairing, like shipbuilding, has known more prosperous days, those dry docks which have become redundant have done so because of age and lack of size to suit modern vessels. The potential users of a large dry dock are increasing in numbers steadily and many of the large ships constructed some years ago are now approaching the major survey periods when greater amounts of work on them are necessary. The existing dry dock facilities in the United Kingdom capable of carrying out work of this nature are inadequate.
  Let us think big, and act big. The time for getting on with the construction of this Belfast dry dock is already overdue. This is not a prestige project, but it is a vital shipbuilding necessity for Belfast.
  11.06 p.m.
  Mr. Stanley R. McMaster: I support what my hon. Friend the Member for Belfast, South (Mr. Pounder) has been advancing to the House. I sincerely hope that the Joint Under-Secretary of State for the Home Department will be in a position to answer the arguments. As hon. Members will well know, for the last five or six years, since I first came to the House, I have repeatedly referred to this project for a new dry dock in Belfast and I have had the backing of senior members of the management of Harland and Wolff in my constituency in making this plea.
  As recently as 26th May, in an Adjournment debate dealing with shipping and shipbuilding, I asked for an early decision on the project and regretted that

  1429
  the Minister responsible, as reported in col. 810 of HANSARD, only said that nothing had yet been finalised and therefore he could not give a decision on that occasion. More recently, on 8th July, I asked the Home Secretary whether he could report progress and he gave a little more encouragement when he said that tenders had been received and a statement would be made as soon as possible.
  There is no doubt that what my hon. Friend the Member for Belfast, South has said is true. The facilities at Harland and Wolff lack this new large dry dock. As the Joint Under-Secretary knows, many millions of pounds have been spent by Harland and Wolff in modernising its yard during the last five or six years. New prefabrication and heavy craneage facilities have been provided but there is no doubt that the existing dry docks are not up to the standard of the rest of the facilities in the yard. Harland and Wolff is the largest single shipbuilding yard in the United Kingdom. My hon. Friend referred to the Thompson Dock. When that was laid down over 50 years ago, our predecessors showed remarkable foresight. They laid down a dry dock which was capable of taking vessels of 50,000 to 60,000 tons deadweight. That was because the vessels in those days were longer and narrower. There are a small number of vessels of this weight which will be accommodated by this dry dock, because of the difference in shape.
  When one thinks of 50 years ago and vessels of that size, one realises the foresight of those responsible when the Thompson Dock was laid down. In the last half century, this dock has served its purpose very well and brought many orders to the shipyards of Harland and Wolff, both in peace and war.
  I would therefore ask the Government to look ahead, to have the same foresight in dealing with this problem as our predecessors had, to look not just to the 1970s but right to the end of the century, if they can, and decide whether the estimate originally based on a dock 1,000 ft. long by about 150 feet wide would be adequate by modern standards. We see in the Press every day that ships, particularly bulk carriers and tankers, are getting larger. It was recently stated that the Japanese are expecting to be
  1430
  building vessels of 200,000 tons and probably even more by the 1970s.
  A report has been published of a visit which the Minister for shipping made to Japan, in which he refers to the type of docks he saw in Japan. He spoke of one yard which he visited a few months ago—the Nagasaki yard, part of the Mitsubishi Heavy Industries—and said that there were six berths in that yard from 25,000 tons to 100,000 tons deadweight capacity. But only four will be used when the new building dock—which is to be 1,150 feet long, 150 feet longer than the one proposed for Belfast, and 185 feet wide or 35 wider than that proposed for Belfast, by 33 feet deep—was completed in May, 1965. This will have a capacity of up to 170,000 tons deadweight and will be served by two 300-ton Goliath cranes and four 80-ton luffing cranes.
  For ship repairing, there was a similar sized dock under construction and another of 95,000 tons deadweight capacity. This yard is already building two new docks, both of them larger than that which is the subject of the debate. We must keep level with the facilities provided in Japan. We must think to the future. I am aware, as are all hon. Members, of the difficult conditions which the country is facing. We know the effects of the credit squeeze, and we spoke as recently as the debate yesterday of the effect of high interest rates. I ask the hon. Gentleman to consider this particularly in relation to our shipyards.
  However, I ask him not to be deterred by the present financial situation, but to look at the export capacity of such a dry dock. In the last six or seven months, since the Government increased their E.C.G.D. provisions in respect of the ordering of ships in British shipyards, about 400,000 gross tons worth of orders, which would bring in more than £30 million, have been placed from abroad in British shipyards. In addition, there were 80 inquiries accounting for £120 million more. This is being earned by shipyards in orders and inquiries made since the beginning of this year.
  A dry dock, rather larger than that which we have been discussing up to this evening, is vital not only to meet the requirements of the British shipbuilding industry but to meet export demands. I

  1431
  regret to say that the Government's approach to the problem does not appear to be very scientific. As recently as yesterday I received an Answer to a Question which I had put down to the Minister. I
  "asked the President of the Board of Trade if he will seek power to enable him to ascertain the number, tonnage and cost of new ships ordered abroad by British shipping companies and oil companies; and if he will regularly publish the information so obtained."
  These are orders lost to this country. The Minister replied:
  "Powers to collect information about orders placed by British companies exist under the Statistics of Trade Act, 1947. These powers are not used. Much information about orders placed abroad for new ships is already published in the Press."—[OFFICIAL REPORT, 2nd August, 1965; Vol. 717, c. 249.]
  I have since asked what was the effect on the balance of payments of such orders lost to Britain by British shipping companies, and the Minister has replied that he had made no estimate of the effect and that it would be difficult to produce reliable figures because the terms of these orders, including the prices paid, were not usually published. I received that Answer today. These two Answers from the Board of Trade within a day are contradictory. I feel that the Government should adopt a more enlightened attitude to our shipping problems than that reflected in those contradictory Answers.
  I have asked in the past that British shipowners should be given the same type of credit facility as foreign owners get when they order in Britain. My hon. Friend referred to the order which the Norwegians placed for a 167,000-ton vessel in Harland and Wolff in the face of competition from Japan and every other country with a shipbuilding industry. The reply which I received a few months ago was that we already gave investment allowances to British shipping companies. That was not a very intelligent reply, because these allowances can be used anywhere in the world and I had asked that British shipping companies should be given the same facilities as foreigners have when they order in Britain. It was not a very good reply. These investment allowances have been increased in the recent Finance Bill but they are still available anywhere in the world.
  We see the result today when the Shell Tanker Co., a British oil company, placed
  1432
  four large tanker orders similar to that placed in Belfast—three in Japan and one in Germany. My hon. Friend referred to the Canberra, built in Belfast. The P. and O. Company recently ordered new boats in Japan. I ask the Government to try to balance this type of assistance which they are giving to British ship-owners in investment allowances to build abroad by giving assistance to our shipbuilding yards which will counteract this loss of money to the balance of payments so that we can carry out these orders in Britain. This is the nub of the problem, and this is why I argue that the Government should invest—even if it is £1 million or £2 million more than was originally estimated—in the new dry dock in Belfast so that Belfast may remain not only the largest shipbuilding yard in Britain but one of the leading yards in the world.
  As the report on Japan, which I mentioned, pointed out, there are perhaps ways in which our shipyards could be improved. The management could perhaps be more progressive, just as I have said the Government could be more progressive in their approach to shipping; they could employ more graduate engineers in middle management. They could take more trouble to put their point of view across to the trade unions, particularly to the chaps on the workshop floors. Equally, the trade unions could be more progressive in their approach to demarcation and similar problems.
  Having said that, I must ask the Government to consider why the trade unions or management should be more progressive unless the Government are prepared to give a lead and show a progressive attitude to British shipbuilders and show that they are prepared to support them. The people in the industry, all sides of it, must see that the Government accept that there is a future for the British shipyards. Only when the Government show a more progressive attitude can we expect management and trade unions to do likewise. Tonight the Government have an opportunity to show their sincerity and intention of assisting British shipbuilding.
  People might ask, "Why should the Government put this money into the provision of a new dry dock? Should not Harland and Wolff put its own money into such a project"? The answer is that

  1433
  Harland and Wolff leases the dry dock from the Harbour Commissioners. This is, therefore, a question of public investment. It is, in turn, the duty of the Government to put public money into this investment so that it may be rented to Harland and Wolff for a reasonable return. The initiative rests with the Government.
  For these reasons, not only do I join with my hon. Friend in hoping that the Government will help to ensure that Harland and Wolff survives, but I urge the Government to get on with the construction of a really large dry dock so that Harland and Wolff may prosper, flourish and expand. I hope, when the Government are making up their mind on this issue, that they will remember that only by showing confidence in Belfast—and by building this dry dock—can one of our oldest and most important industries survive, remembering that, as a maritime nation, it is on the prosperity of our shipyards that much of our wealth and earnings, visible and invisible, depend.
  11.18 p.m.
  Mr. R. Chichester-Clark: I will not speak for more than a few moments because the subject has already been comprehensively covered by my hon. Friends. I do not know why my hon. Friend the Member for Belfast, South (Mr. Pounder) said that he was not technically qualified to pronounce on the technical aspects of this issue. He demonstrated his technical knowledge by his words and his speech, if not uncontroversial, was convincing, cogent and persuasive. My hon. Friend the Member for Belfast, East (Mr. McMaster) also made a convincing speech and, as a result of his activities in the House for many years, his concern for the people of Belfast is appreciated on both sides of the House.
  My hon. Friends were saying to the Government, "Will you for goodness sake get on with it or, if you do not intend to get on with it, let us know that you do not so intend?" As my hon. Friend the Member for Belfast, East pointed out, the dry dock proposal has been dragging for a long time; since approval for it was given by my right hon. Friend the Member for Hampstead (Mr. Brooke) when he was Home Secretary in July, 1964. As I
  1434
  remember the sequence of events, on 1st August, 1963, during a debate on Northern Ireland, my right hon. Friend announced that financial assistance would be made available for the provision of a new dry dock to be substantially larger than the new Thompson Dock and capable of enlargement in future years to be able to take the largest ships.
  Following that statement, the Belfast Harbour Commissioners engaged a firm of consultants to make a detailed survey. The results of that survey were available last summer and it was after that that my right hon. Friend the Member for Hampstead, when in office, announced that the Harbour Commissioners could proceed to call for tenders for the construction of a dry dock capable of taking vessels of about 150,000 tons deadweight; that is, a dock measuring 150 ft. by 1,000 ft. That was the sequence of events.
  My hon. Friend the Member for Belfast, South asked about the tenders, and said that he did not expect to be told the size of those tenders. We do not expect that, either. What we have heard—and I am sure the hon. Gentleman will be able to tell us something about it—is that the lowest tender did disclose an unexpectedly high figure, and that, because of it, a great many further discussions have been taking place upon the financing of the project. We would like to know a bit more about the tenders. What has happened to them? When did they come in? How long have the discussions been going on, and how long will they last? It may be that the Under-Secretary of State will not be able to give us a definite conclusion as to the future of the project, but my hon. Friends have asked a number of questions on which we want straight answers. In my view, we are more likely to get them from the hon. Gentleman than we are from the other 108 or 109 Ministers in the Government. If I have the number wrong, who can blame me? There are so many. I must say to the hon. Gentleman that we believe that he takes a very sincere interest in the affairs of Northern Ireland, and if he is fighting an uphill battle in the Government, he is doing it as well as possible, and we will give him all the support that we can.
  However, we should like some answers. Can we know, for instance, whether the present financial stringencies will interfere

  1435
  in any way with the project? I cannot tell, but I imagine not. I can only judge from a reply given to my hon. and gallant Friend the Member for Down, South (Captain Orr) yesterday by the Chancellor of the Exchequer. My hon. Friend asked the Chancellor whether he would exempt Northern Ireland from the restrictions on public capital expenditure and from the operations of the proposed licensing control, and the reply, which seemed to be reasonably favourable, said:
  "I would think it right that Northern Ireland should be exempt to the same extent as the development districts in Great Britain, and I understand that the Northern Ireland Government whose responsibility this is share this view."—[OFFICIAL REPORT, 2nd August, 1965; Vol. 717, c. 246.]
  He went on to talk about the licensing control. I imagine that the dry-dock project would be embraced in these exemptions, but perhaps the hon. Gentleman will give us some clear answer on that.
  It is perfectly clear, as my hon. Friends have said already, that the recent order which Harland and Wolff have won for the 167,000 ton tanker demonstrates that the firm has the ability to attract orders for the largest ships, and I am sure that the hon. Gentleman would agree in every way with that. I am also sure that he would agree that the firm is capable of making a tremendous contribution to our balance of payments problem. But we must ask the Government tonight if they believe beyond all question that a new dock capable of handling such ships and bigger, therefore, than 150 ft. by 1,000 ft. should be provided, and do they believe that it should be done without further delay? Have they made up their mind? If not, will they get on with it, because at some time this dilly-dallying has to stop.
  I appreciate that the Under-Secretary may not be able to give us all the answers that we would like to hear tonight, but may I ask him to go back to his Department and, if necessary, to other Departments and chase someone until he gets the green light to go ahead with the matter, or until someone puts him in the position of being able to say on this project whether it is "stop" or "go".
  11.24 p.m.
  The Joint Under-Secretary of State for the Home Department (Mr. George Thomas): I am very grateful to the hon. Gentleman the Member for Londonderry (Mr. Chichester-Clark) for that part of his speech which was a compliment to me. As for his side reference to my colleagues, although I am not Irish, I know an Irish compliment when I receive one. I am always grateful for a kind word, and I am deeply grateful in this case.
  The hon. Gentleman the Member for Belfast, South (Mr. Pounder), who opened the debate in a most informed speech, if I may say so, expressed some remarks at the beginning about the Ulster Labour Party, to which I will just refer in passing. He would not expect me to share in his views, because the members of the Ulster Labour Party, particularly their representatives in Stormont, are personal friends of mine, and I know that they play an honourable part in the life of Ulster. As happens on all great issues, there will be controversy between parties. I will only say that I understand the impatience of my friends over there—an impatience that has been reflected in this debate.
  It must be a great comfort to those who love Ulster and who have its best interests at heart that my right hon. Friend the Chancellor of the Exchequer and the Government of Northern Ireland, whose responsibility it is, have decided to exempt Northern Ireland from the restrictions on public capital expenditure and from the operations of the proposed licensing control, so that it will be treated as other development districts are treated. My right hon. Friend gave a categorical assurance to the House and to the country that we intend to be selective in the restrictions in order that the development districts, where assistance is needed most, shall not suffer unduly.
  We have tonight had our attention drawn to the expected increase in ship dimensions. The hon. Member for Belfast, South asked me what consideration we have given to the provision of nuclear-powered ships. He maintained that the new dry dock is essential for the survival of the Belfast docks as a viable unit in our modern life. But he went on to ask—as did his hon. Friend the Member for Belfast, East, who has played

  1437
  such a gallant part on behalf of Belfast, and the hon. Member for Londonderry—for a giant dry dock. From time to time, they have all made the House consider this question. They have all asked for a dry dock larger than that which the previous Administration decided but a year ago was adequate to meet the demands of Belfast.
  The hon. Member for Belfast, South, seemed disturbed at the thought that if the decision taken a year ago to establish a dock of 150 ft. by 1,000 ft. was put into effect, any possible expansion would prove very costly. He reminded us, in the colourful language that Irishmen like to use, that a dry dock is not a concertina in cement, and that we must build now what will be required. He and his hon. Friends asked us to look ahead, to think big and to act big.
  I realise that the new Belfast dry dock is a major item in the planning for a prosperous Ulster in the days to come. I understand the anxiety that we should be able to compete with the great shipyards of Japan. The hon. Gentleman referred in particular to the Nagasaki yards, which my hon. Friend the Minister of State, Board of Trade, visited in fairly recent months.
  As the House was informed by the then Home Secretary on 14th July, 1964, the last Administration saw no reason why the Belfast Harbour Commissioners should not be authorised to invite tenders for the construction of a dry dock of 150 feet by 1,000 feet capable of accommodating vessels of 150,000 tons deadweight. The House was also informed then that the final decision to begin construction of a dock of this size could not be taken until the tenders were received, at which stage questions of size in relation to cost and other financial aspects would need to be looked at afresh.
  As the hon. Member for Londonderry has reminded us, these tenders have now been received and I confirm to the House that they show a substantial increase over the cost as it was estimated last year. There is, of course, an additional factor to be taken into account and it is the factor to which attention has been given. The ever-increasing size of ships now under construction or projected gives good ground for the argument of the hon. Gentleman that the size of
  1438
  the dock ought to be greater, that it should be 160 feet by 1,100 feet rather than 150 feet by 1,000 feet. If this new, larger dry dock were given the go-ahead it would be capable of taking vessels of 160,000–170,000 tons deadweight, which would be equal to the Nagasaki shipyard.
  To provide a dock of this size will, of course, mean that we shall have to add to the estimates which were available to the previous Administration. Against this sharp rise in costs in a year—not due to the Government, mind, but due to the changed estimate of the size of the ships—the local interests in Belfast have agreed to step up their contributions.
  I am happy to be able to tell the House and to give the good news to Ulster that the Government for our part see no reason why the Northern Ireland Government should not now provide such measure of financial assistance as will enable the construction of the larger dock for which hon. Members have asked tonight—that is, of a size to accommodate vessels of up to 170,000 tons deadweight—to proceed on the basis of the present tenders.
  I was asked about the financial aspects of the tenders. I am sorry that I cannot give more details. I know, however, that what I have said will be more than welcome news in Ulster and the important thing is that the green light is now showing to go ahead with what will be the largest dry dock in Europe and one of the largest in the world. This is looking ahead. This is thinking in a big way. This is acknowledging that a dock which has played a great and honourable part in peace and war will be able to play an equally great part in future in the industrial and commercial life of the country. Of course, it will, we hope, make a major contribution to the balance of payments.
  The House will not expect me to go into the proposed financial arrangements whereby the cost of this very large dock will be shared among the Northern Ireland Government, the Belfast Harbour Commissioners and Harland and Wolff, who will be the main users. I join with hon. Members opposite in paying tribute to Harland and Wolff for the honourable part it has played in our shipbuilding and ship repairing.

  1439
  The Government's views have been conveyed to the Northern Ireland Government on whom responsibility will rest for concluding the financial agreement. I am sure that the House will appreciate that in reaching this decision, which is a far-reaching decision of great consequence to Ulster, the Government cannot be sure that the venture will prove to be an unqualified economic success. The hon. Gentleman was optimistic. We must all be hopeful, but this is an act of faith in the future of Ulster. We cast our bread upon the waters. I do not want to weary the House with too many scriptural quotations, but I will say that I hope that the act of faith will be justified by works.
  It is our confident hope that the provision of this very large dry-dock, equal to the largest in the world, will not only make a substantial contribution to the prosperity of Northern Ireland, but also add appreciably to the strength and efficiency of the shipbuilding and ship repairing of the United Kingdom as a whole.
  I am very glad that it has been my good fortune to give this good news to the people of Northern Ireland.
  Mr. McMaster: This is good news for all in Belfast. Can the hon. Gentleman say when work is expected to commence?
  Mr. Thomas: It depends on the pace at which events now move in Ulster. The ball is now in Ulster's court. I do not want to mix my metaphors too much and perhaps I had better say that the ship is now in Belfast's harbour. It is now a matter between the Commissioners, the Northern Ireland Government and Harland and Wolff. It remains for us only to express the hope that this new venture will mean a new era of greater prosperity for that part of the United Kingdom which has served mightily in the build up of the United Kingdom.

  MEMBERS OF PARLIAMENT (FACILITIES)
  11.40 p.m.
  Mr. Michael English: The subject of the debate I want to initiate tonight—and which, Mr. Speaker, by calling me you have very kindly selected—is entitled, "Parliament
  1440
  and the Members thereof and the facilities they require for the proper performance of their functions."
  I do not claim to have originated that phrase. I think that my right hon. Friend the Minister of Public Building and Works was the originator of most of the phrase. Many of my hon. Friends and other hon. Members have interpreted it to mean that I intend to talk solely about accommodation in this building and things which have been talked about at some length in this Chamber on former occasions. Recently we have had the Report of the Palace of Westminster Committee. The Report is to be debated after the Recess, as also are Reports on the procedure of the House. I should prefer to leave such subject matter largely to those debates. I deliberately used this phrase, however, to enable any hon. Member who wishes to join in the debate to be within its scope.
  We are formally discussing the Consolidated Fund (Appropriation) Bill. Embedded in its intestines, if I may so describe Schedule B, there is an appropriation of a substantial sum of money to the purposes of this House, in fact to the expenses and salaries not only of all its staff but also of all hon. Members. I ask the ancient question, in the financial procedure of this House, are we obtaining value for money in respect of this item? The item in this Bill is based on a Supplementary Estimate produced some time ago—a very famous Supplementary Estimate in this case—because it is substantially the increase in salaries which we as hon. Members have voted to ourselves.
  This obviously has been a matter of some concern to people outside, for reasons which most hon. Members—including myself—would not necessarily share. Before we finally appropriate this to what is literally our own purposes, it is appropriate to ask the ancient question, is the taxpayer obtaining value for money in respect of the salaries of ourselves? This involves asking the question, is the membership of this House of the highest possible calibre that it could be? Is it the most desirable membership there could possible be? My hon. Friends might say that it would be more desirable if there were more of us on this side of the House than there are hon. Members opposite, but I do not put

  1441
  this matter on a party basis. I am asking a serious question.
  If one is selecting for a job in the Civil Service or in industry, the first thing one wants to ensure is the widest possible choice of candidates for the job. Clearly, to select the highest calibre of person, the wider the choice the more likely one is to achieve that object.
  The first limitation we place on a wide range of choice is a purely financial one. It is in the nature of the salary itself. It is inevitable that a person who before he is elected to this House has an unearned income will find that it will not alter when he has been elected; a self-employed person who can still carry on his profession may be in the same position. But if a person is in a profession such as that of a doctor who cannot attend to his patients after being elected, he finds his financial position altered.
  He is like the overwhelming majority of people who are employed. Some hon. Members of this House are still employed, perfectly legitimately, by firms which recognise that they cannot attend to their duties full-time but which nevertheless continue to pay their salaries; but generally the employed person will lose most of his income on becoming elected to Parliament and get in return a Parliamentary salary. If such a person's income is less than his Parliamentary salary then to that extent the job is financially attractive, but if it happens to be more than his Parliamentary salary it will not be an attraction. Whatever salary is devised, it would not satisfy everyone in this respect.
  In another respect he will, if he is a self-employed person, lose any pension rights which he has accrued, although again this will depend upon the particular firm. This is something that is not exclusive to Members of Parliament. One sincerely hopes that Her Majesty's Government will, as soon as possible, complete what I know they are undertaking, the extremely complicated task of making pension rights transferable, through all forms of industry and employment. This is one of the things that, from the point of view of the economy of the country as a whole, is desirable in order to encourage mobility of labour, especially in these days when such pension rights are not only
  1442
  applicable to office jobs, but also to very large numbers of people on the factory floor.
  The third unattractive possibility which might restrict possible choice of membership of this House would be the possibility of losing a seat after a person had been elected for a time. We have just passed in this House, for the benefit of most people, a Redundancy Payments Bill, which is, to my mind, an admirable Bill for its purposes. The Member of Parliament, however, is a self-employed person, technically and in law. If he loses his seat that would be the end of his Parliamentary salary; indeed his Parliamentary salary ends not merely when he loses his seat but when Parliament is dissolved, even if he is subsequently re-elected.
  The intriguing thing is that this sort of situation has arisen in the past in other respects. It arose during the war on an enormous scale when people who were called up for National Service and subsequently, as legislation provided, had a right to their own job back, or a job similar to it. Such rights do not exist for Members of this House. I do not, quite frankly, see what great constitutional principle would be shaken if that precedent were to be followed in respect of Members of this House.
  Another item recorded in the Estimate upon which this particular Bill is founded, is the travelling expenses of Members. I think that we should not, as Members, think solely of ourselves. We ought to think of the people who want to get here. These are people who, in many cases, are spending a large amount of their own money, not with any reward by being in this Chamber, but simply as candidates for Parliament. Is there any reason in logic why, if we are prepared to pay the travelling expenses, for example, of a Member of this House in going to his constituency from London or from his home, we could not pay the travelling expenses of a candidate, duly adopted by a political party, who is doing the same thing? He is very often spending money out of his own pocket. Not in all cases, but very often. It would seem that it would be not irrational to put the two opponents on a similar footing. One presumably would want some safeguard, that if a person did

  1443
  not, in the end, stand for election, the money would be paid back.
  The last thing that deters people from membership of this House is the one about which we have talked so often here, and that is the facilities provided in order to do the job properly in comparison with the facilities provided in order to do any other job properly in the outside world.
  As all of us, on both sides, know, the first thing that a Member of this House will understand (which the outside world largely does not understand) is that the Parliamentary salary is not what would be described as a salary in the outside world. It is not in those terms take-home pay; it is not what an individual in this House takes home to his wife and family, after tax, to spend. It is simply a sum of money from which come considerable and substantial expenses.
  The Parliamentary salary is calculated to include the average amount of those expenses, which means, in the context of the Lawrence Report, that £1,250 of the £3,250 is regarded as the average amount of expenses. It also means, if one looks at the Lawrence Report, that a Member can spend, perhaps, the whole £3,250 or a very substantial sum upon Parliamentary expenses if he has income from other sources on which to live. Alternatively, if he so chooses, he can spend virtually nothing out of the £3,250.
  The principle upon which the Parliamentary salary has always been founded is the ancient principle, which trade unionists like myself feel bound to support, that it should be the same amount for all Members—the rate for the job—and, in the context of this House, the other principle of the equality of each Member of this House within it. These are sensible and valid principles, but is it sensible and valid to construct the Parliamentary salary in this way?
  Personally—obviously, one cannot do more than speak personally on an issue of this character, on which many hon. Members are clearly sensitive—I would be quite happy with substantially less salary than I now receive—"salary" being in inverted commas, as in this context it is—provided that I was given, as I would be in outside industry or in the Civil Service, the facilities that one needs for the performance of one's job.
  1444
  Let us consider what those facilities are. In this building—I am not being critical of all the facilities of the place, because some of them are excellent—we find an admirable post office. It is extremely efficient. If we vanish to other parts of the country, our mail will follow us wherever we go, speedily and efficiently. But there is, incidentally, the peculiar situation that if we want to write to a Government Department or a nationalised industry, we do not pay the postage, whereas if we want to write to a constituent, we must pay the postage. The rule seems a little strange. It is in no way comparable with what would happen if a civil servant were writing to one of our constituents or if anyone in industry were doing the same thing.
  I regret to say, however, that I cannot give to the other side of post office activities in these premises the same tribute that I give to the place where we post our letters, because the telecommunications side of the activities of the post office in this building is quite archaic. As to telephones, we in this building have caught up with what could be done at the time of the First World War and we have never progressed further.
  Nearly every industrial firm of any competence and comparable in size to this place, where several thousand people are employed, would have what is called a P.A.B.X. system whereby one can dial another extension number inside the building or, to make an outside call, one dials "0" or whatever the code might be and asks the operator for the number. This is, perhaps, too modern. This is replaced in this building by a system which could have been installed, and presumably was, for aught I know, before the First World War. We ask the operator for every call, even if it is only an internal call within the building. We have to be, in that respect, and financially—and this is what we are appropriating money for tonight—less efficient. We have, therefore, as a result, more telephone operators than we need; we are, therefore, as a result, delaying our own calls; we are, therefore, as a result, spending more money than we need, simply because we have not modernised our telecommunications within this building.

  1445
  I am not for a moment going to suggest that the Post Office has not realised this. Indeed, I understand that it is about to get or has got some consultants in to look at, for example, the telephone system in this building. It was not beyond the wit of the Post Office to have seen this before. The telecommunications branch of the Post Office is one of the best in the world. It is, perhaps, a little strange and significant that it is only here, not in a Civil Service office, not in industry, where the same Post Office provides the same sort of service, that it is inefficient, and one begins to suspect that it is not that the Post Office has been unable to see the system could be improved. I certainly give the Post Office credit for that; it saw it elsewhere, and I am sure it could see it here. One begins to suspect that what is at the back of it is lack of desire to spend the initial capital cost of putting in a modern system, and for that I think one must find the Treasury more to blame than the Post Office.
  But our telecommunications system is strange in other respects. If, for example, somebody rings us up from the outside world the call is received and a note of the message left is duly made. There are three copies. Two follow us round the building and perhaps half an hour later, or perhaps one hour, sometimes two hours, later, we get the message. It is unfortunate if the message says, "Will you ring me immediately". It is all unnecessary.
  Mr. David Steel: The hon. Member will concede, of course, that we have done away with the cleft stick?
  Mr. English: I recognise that the cleft stick has gone. What is recorded on the tablets of stone, I am not sure. But we still have the hand that holds the cleft stick, because these messages are taken round by those excellent and reliable men, our doorkeepers. In the present age of communications this is unnecessary. Members could carry a receiver and could be called by means of a small radio transmitter with, say, half-a-mile radius, the sort of thing which is used in factories and hospitals. When there was a telephone call the receiver would buzz, or if there were objections to that happening in the Chamber, there could be a
  1446
  flashing light. It is quite simple, and instead of getting the message two hours late after it has been carried round the building—round our Commons, half of the 1,100 rooms in the building—one would get it immediately, go straight to the phone and take the call.
  Here again, although this is a thought that could readily come to mind, no one has applied his mind to it, and no provision has been made for the relatively small capital cost of such an installation which would provide a considerable saving in the annual costs we incur to the taxpayer because we would not need so many people walking round the building all day carrying messages.
  The same applies when a member of the public fills in a green card. What right have we to say that we will be so inefficient and so discourteous that we will leave people sitting in the Central Lobby for half an hour or an hour when they come to see us? This is an unnecessary discourtesy, because the system which I have just described would ensure that the Member knew that his visitor was waiting to see him. If the Member was in the Chamber, or was otherwise too busy to see his visitor, that would be different, but if he was available he could see him straight away. These are minor inefficiencies. These do not cost the individual Member anything.
  When we come to the normal services which industry or the Civil Service would provide, we find the strange situation that the Member has to provide them out of his so-called salary. If he wants a secretary, or even only half or a third of a secretary, this comes out of his so-called salary. How different things are in, say, the United States where, provided that he does not pay over certain rates, and provided that he does not have more than a certain number, a Member of the Senate, or a Member of the House of Representatives, can have a definite staff of his own, not merely secretarial, but also for research work.
  One sometimes wonders whether the accusation that has been thrown in the past, that the heart of Government, the Treasury, does not want the average back-bencher to be so provided with research facilities, is true, and whilst I am on that subject, let us consider the Library of this House, which includes a research department.

  1447
  On looking at the Estimates on which this Bill is founded, I discovered something quite extraordinary. Item H of Vote 2 is:
  "Library—for the purchase and repair of books, &c."
  I do not know what the "&c." means, but presumably it means something more than just the purchase and repair of books. On that we estimate to spend £9,000 in the current year, and in the previous year we spent £8,000. This may seem a fairly substantial sum, but it is intriguing to note that the item immediately below that one—an item to which I do not particularly object—shows that we estimate to spend £16,000 on
  "Presentations to the Legislatures of the Commonwealth."
  In the previous year we spent the same amount, and in the year before that we spent £17,000.
  Roughly speaking, every year we spend half as much on books as we spend on gifts to our fellow legislators in the Commonwealth. We might conceivably think that charity should begin at home. I have no objection to the presentation of these gifts, which I think are not books, but are furniture and things of that kind, and which represent honourable and ancient traditions amongst Commonwealth legislatures, but, nevertheless, I think that we might consider spending something more in proportion on the facilities provided for this House. One would have thought that we would not be spending on Library facilities only half of what we spend on gifts to overseas legislatures.
  There are other items that one could look at in these rather interesting Estimates. I turn, for example, to the question of the total salaries of the staff in the same Library—including not merely the salaries of the Librarians but also those of the research staff of the Library—and I find that in the current year it is estimated at £56,000. This, again, seems a substantial sum of money. But we estimate that we shall spend £80,000 on the OFFICIAL REPORT. We spend 50 per cent. more on seeing that our words go out to everybody than we spend upon the staff who provide us with the facts to go behind those words. We consider it more important that our words should be publicised—and I know that every
  1448
  Member, including myself, thinks this important—than that our words should be well-informed. We should be spending rather more on seeing that this is so. Again, there seems to be something rather disproportionate about this.
  I have dealt with some of the main matters which might disconcert someone in an ordinary job from coming into this House. There are obvious reasons why people do. The average person in this House is here in many respects without having considered the difficulties that I have outlined. But it is wrong to have a system under which we pay Parliamentary salaries and provide that any expenses must come out of them. I say this because I am a bachelor, and the people that I pity most are those Members with wives and young children. They are at the point of highest expenditure in their lives. At the beginning and at the end of their lives they do not have so many personal expenses.
  The system is wrong, because we should never present to such a person the dilemma that we do present to him. We say that every time he does his job—every time he sends a letter to a constituent, or does his job properly in other respects—he must lower by a proportionate amount the standard of living of his wife and family. He might be able to endure a reduction in his own standard of living, but he will find it hard to put up with a reduction in that of his family. But we place him in a dilemma arising from the knowledge that they will literally live better if he does his job worse, and vice versa.
  I now turn to a subject which has not yet been broached in this Parliament. In fact, it has hardly been broached in the country. The elector is almost the last person to decide who becomes a Member of this House. As we all know, the average elector votes for a political party—I shall not go into the arguments about this—but he also votes for an individual who has been chosen as a candidate by a political party. The real determination of the question who will be a Member of this House has been made some time ago, by the Conservative, Labour and Liberal Parties—placing them in alphabetical order for this purpose.
  It is interesting to note that hardly any study of the way in which this

  1449
  process takes place has been done in this country. In a well-known book on British political parties, written not by an Englishman but by a Canadian—Mr. Robert McKenzie—a few pages are devoted to this subject, and an American professor was in this country last year studying the question. But to my knowledge that is about the sum total of the research work that has been done in this country on the subject of the selection of candidates.
  The methods by which both the major parties and, I believe, the Liberal Party, select their candidates are in broad terms very similar. I suggest that not merely from the point of view of the individual parties but of the country as a whole these methods, as much as any other feature of our Constitution, should be looked at, because we should consider whether as taxpayers we are getting value for money in our Members of Parliament.
  The first stage of the selection is to compile a panel of possible candidates. This is done normally by interviewing. In the Opposition party one of its vice-chairmen is primarily responsible. In my party a sub-committee of the National Executive has responsibility for it. It is primarily done by interview and it is interesting to note that the interview alone is regarded by industrial psychologists and personnel institutes as not necessarily the best way of selecting people for jobs. Several books on this subject tend to prove that one might select a good salesman by this method but one might select inappropriately for other occupations. One could see a similarity between salesmen and hon. Members who have to promote the interests of their parties, but one wonders whether that is the sole desirable criterion. Industry spends vast sums of money, the universities spend considerable sums, and the Civil Service substantial sums on methods of selection and we might well consider whether in the case of Members of Parliament the best system is being followed.
  The next and last stage in selection is that carried out by the constituency party. After a short list has been compiled it hears speeches, asks a few questions and makes its choice. This happens in all the parties and sometimes it leads to difficulties, as in a recent case, where a Member may turn out to have views completely different from those of the con-
  1450
  stituency party that selected him. I do not want to go into any detail now but it is possible that the system could be improved. It is certainly desirable that, in the interest of the country as a whole, it should be looked at.
  Mr. Russell Johnston: The hon. Member's arguments are surprising. If he is criticising the method of selection of candidates in all three parties, it falls upon him to suggest ways in which the method could be improved.
  Mr. English: I could readily do that, but I do not think that the House wants to be wearied at 12.15 a.m. with detailed suggestions. There are other methods adopted in other countries: ours is not the only method. Let us not be parochial and think that our methods are the only ones. Because we are in this House we have a tendency to think that the methods by which we got here must be the right ones because we are here and other people are not. [HON. MEMBERS: "Hear, hear."] Obviously, I sympathise with this view, but we are in duty bound to consider the question: is it entirely so? Might there not be other methods?
  Obviously, this is a matter which the House would never permit anybody else to look at on its behalf. The ancient principle of this House regarding such matters is that it looks at them itself. If they were looked at—I think that they ought to be—the proper body to do it would be a Select Committee of the House. I hope that some day some Government—
  Mr. Albert Murray: Surely this is a matter for the political parties and not for this House?
  Mr. English: This is the way in which it is constantly regarded. The political party does not exist in law, but it exists very much in practice, in our Constitution. It might be desirable, for the sake of the country as a whole, if we looked at this little hidden corner of the Constitution as a country, and not merely from a party political point of view. It may be that the Member who is the best from the point of view of a political party is not the best from the point of view of the country as a whole. Whether we share this view or not, there are substantial numbers of people outside the Chamber who do.

  1451
  Of course, the one thing which we have to consider when talking of anything of this character is the function of the Member of Parliament. If a constituency perpetually wants its Member to be in that constituency, he will not be doing his duty in Parliament. The House used, in times past, to meet on Fridays and Saturdays as well. I am not suggesting that that is what it ought to do, although that arrangement provided long recesses—[An HON. MEMBER: "It will do, the way we are going on."] It will not do for more than two minutes longer, at any rate.
  Now, of course, the aim is to get back to a constituency immediately at the weekend, which is desirable from the point of view of the constituency's contact with the Member, but sometimes these weekends tend to spread over large parts of the week as well. We have to decide what is the function of our M.P.s. This is where we get back to facilities. If we are to provide these, they are presumably being provided for some purpose.
  Although my suggested criticisms may be of the processes of selection to the House, what I admire in it very much is that, whatever these processes have been, they have created a tremendous variety of ability, talent and completely varied interests amongst the membership of the House. I am suggesting that we should look at modernising these processes, as well as others. The old adage is true, that the man who has been there is on one's own benches and the man who has done it is on the other benches. There is an immense variety of talent and, in some cases, lack of talent in this Chamber, which is what makes it one of the most interesting places in the world to be in.
  Because that is so, we should not therefore assume that we are totally and always right. We should occasionally consider looking, first, at the facilities which are provided for us, and, second, at the methods by which we arrived here.
  12.19 a.m.
  Mr. David Steel (Roxburgh, Selkirk and Peebles): The hon. Member for Nottingham, West (Mr. English) is to be congratulated on raising the subject of Member's facilities for debate at the tail-end of the Session. I agree with most
  1452
  of what he said. It was an interesting and thoughtful speech. I dissented from his theme about prospective candidates and the choice a candidates, which has nothing to do with this House. Still less is it any part of the taxpayers' duty to pay for any expenses of a prospective candidate. I dissent from that view entirely. These are matters between the individuals concerned and the political parties. With that exception, I agreed with his speech, in which he put forward many interesting ideas. I look forward to hearing the Minister's reply. May I add one or two further points, to which perhaps we might also have a reply.
  I should be interested to learn how soon we can expect the new offices for Members to be constructed, ready and in use across the road. For architectural reasons most of these offices will be across the road, and I should therefore like to know which system of conveyance will be used between the Chamber and those offices. Will there be a horizontal elevator, if there can be such a thing? What method will be used to ensure that there is ready access for hon. Members to the Chamber without undue inconvenience? I should be grateful if the Minister gave us some indication of the range of facilities which will be afforded, and how soon, under the Government's new plan.
  Before we look into the distant future, however, I believe that something should be done to improve existing arrangements within the House. I refer, first, to the allocation of rooms and desks to Members. We are nowhere near the stage at which each Member can have a room of his own. That being the case, it would be desirable to take account of the various interests and groupings of Members in the House. Members are herded haphazardly into rooms throughout the building and throughout buildings at various points of the compass across several streets adjacent to the House. My hon. Friends and myself in the Liberal Party are a fairly small and easily accommodated unit at present, but there is no thought of providing us with one room, all together; we are scattered all over the place. The same is true of the Members from Northern Ireland, who, I should have thought, had a joint interest. If they are to remain here by courtesy of the Government, they should be provided with a room, all together. A more economical

  1453
  use of existing premises could help to make the working of Members much more efficient.
  Why is there a room still allotted to an entirely mythical and non-existent body called the National Liberal Whips? This is very difficult to understand. Indeed, I understand that the National Liberal Party no longer exists. There are six hon. Members who declare themselves to be hyphenated in some way—Conservative-National Liberal or National Liberal Conservative. But these are purely sentimental attachments without political meaning, and there is no separate body with a claim to such a room. These are one or two points which I should like answered.
  For the general well-being of Members, I think that it is time that something radical was done in the kitchens of the House. I do not know what the Kitchen Committee is doing, but I know that the staff work under very great difficulties and work very long hours. I understand that the kitchen premises are totally out of date, and certainly those of us who work here most of the time and take our meals here regularly are getting a little tired of the monotony and lack of quality in the standard of meals in the dining room. These are simple matters which could be improved.
  I very much agreed with the hon. Member when he spoke about providing facilities out of Members' salaries. To my mind, Parliament made a great mistake at the beginning of the Session in giving a dramatic rise in Members' salaries. I know that this was an all-party agreement, and I dare say that if I had been in the House at the time I should have voted for it, along with everyone else, but I think that it was thoroughly bad public relations. The average member of the public is ready to believe that Members of Parliament are now living a fairly comfortable life on £3,250 a year, but we all know that this is just not so. It would have been far more sensible to have retained the salary of £1,750 and to have provided funds for the necessary expenses of hon. Members. I say this not just because this would be sensible public relations but because I believe that it is unrealistic to suggest a figure of, say, £1,250 as representing the average expenses of hon. Members. There can be no such thing
  1454
  as average expenses because our expenses vary according to circumstances, constituencies and the positions we hold in our parties.
  Very few members of the public realise that from his salary of £3,250 the hon. Member must pay for his own secretary, if he has one. I discovered, to my surprise, when I first came to the House that not only did I have to find my own secretary but I had to buy her a typewriter. The public do not appreciate these things. I also cannot understand the system of charging for telephone calls. If an hon. Member has a London constituency—and, in any case, does not have the same expenses as rural hon. Members—he is able to telephone constituents without charge because we are not charged for local calls. On the other hand, an hon. Member who represents a constituency outside the London area must pay for his calls. This is a ludicrous arrangement which penalises the hon. Member who represents a distant constituency.
  A major item of expenditure for those of us who have constituencies some distance from London is accommodation. This is an extremely important and costly matter because I believe that we should be in our constituencies as often as possible. Naturally, constituencies vary greatly in the demands they make on us. By their nature, constituencies which are sections—slices of cake, so to speak—of big cities require perhaps less work on the part of individual hon. Members than rural constituencies, where the hon. Member may be the only person to whom the constituents can turn. In constituencies such as these—and this applies to the majority of constituencies in Scotland, outside the urban areas—it is vital for hon. Members, if they are to do their work effectively, to be in their divisions a good deal. The result is that hon. Members who represent such areas must either live in their constituencies, in which case they must pay for accommodation in London, or live in London and pay for accommodation in their constituencies. Either way, the cost is considerable indeed.
  I hope that when the new buildings are being erected across the way we will copy some other legislatures and have a Parliamentary hostelry in which hon.

  1455
  Members who live in their constituencies and come here to work during the Parliamentary week may be accommodated.
  In short, there is no incentive for an hon. Member to do his job effectively. In fact, there is every disincentive. The more letters he writes the more out of pocket he is. That applies to telephone calls and everything else. The more work he decides to do the more secretarial work is involved, thus costing him more. The more he visits his constituency, if he lives in London, the more out of pocket he is. The whole system is bad and needs overhauling. I would be in favour of a complete reduction in Parliamentary salaries—back to the £1,750 figure if necessary—if we were provided with adequate facilities and expenses.
  The way hon. Members are treated stems basically from the part-time approach to the job, although that approach is all wrong today. We must be Members of Parliament first and any other interests we may have should come second. Only by adopting that attitude to the job can we serve our constituents and this House effectively. If that were the basis on which hon. Members' facilities were worked out and on which their salaries were arrived at, I do not believe that we should have the present system.
  If an hon. Member has, say, a business in the City and spends his mornings there, with his secretary paid by his company, and if, in addition, his constituency is near London, on £3,250 he has a comfortable time. His only expense is postage for his correspondence. He has no living expenses or secretarial expenses. He has no trunk telephone calls. On £3,250 he is doing very well. Other hon. Members who are here as professional Members of Parliament, whose sole income it is and who have constituencies which demand a lot of attention and which, by their distance from the House, involve a lot of expense, are very badly off compared with some of their brethren. In my opinion, the system requires to be revised completely.
  It used to be said, and possibly it still is, that the House of Commons is the best club in Europe. But it is time we stopped running this establishment as a club, and started running it as a business establishment. Speaking yesterday in the censure debate, my right hon. Friend the
  1456
  Leader of my party referred to the debate as being
  "the House of Commons engaged in a party wrangle".
  He went on:
  "This serves to confirm two growing suspicions. The first is that Parliament is not a serious instrument of government and that, while calling for everyone else to modernise, we in this House are quite incapable of modernising ourselves."—[OFFICIAL REPORT, 2nd August, 1965; Vol. 717, c. 1112.]
  I would echo those words today, and I hope that the initiative that the hon. Member for Nottingham, West has taken in raising this subject will be carried through, and that we will take steps to cease stumping about the country on every political platform, calling on everybody in sight to modernise and work more efficiently, and then being content to come back to sit in our best club in Europe.
  12.32 a.m.
  Mr. Evelyn King: I, too, am obliged to the hon. Member for Nottingham, West (Mr. English) for raising this subject tonight. It is a good thing that we should consider Parliament as a whole and forget our parties. At least, so far what we have heard has been nothing which is not concerned with Parliament. It is because I am jealous of the good name of Parliament, however, that I do not feel able to subscribe to either of the two speeches that we have heard so far. The hon. Gentleman the Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) spoke of modernisation, and I am wholly with him on that. But there certainly crept into his speech and that of the hon. Member for Nottingham, West a plea for additional assistance to hon. Members, and I personally would oppose that because it would do Parliament a considerable degree of harm.
  Mr. English: I hope the hon. Gentleman will recollect that both the hon. Gentleman for Roxburgh, Selkirk and Peebles (Mr. David Steel) and I suggested that we would be satisfied with a reduction in our salary if the alternative facilities were supplied. I should like to make that clear.
  Mr. King: I agree, and I accept what the hon. Gentleman says. The only point that I make is one of public relations psychology. I am one of those who

  1457
  have doubts in the economic climate which exists and in the light of the appeals made from both sides of the House to restrict wage demands. Rightly or wrongly, we have already been subject to a good deal of criticism for what we have given ourselves in this Session. It may be said that we had to do it—I am not disposed to reopen the subject now—but, having done it, I at least am conscious that, rightly or wrongly, among the general public as a whole we have aroused considerable criticism. That having been done, for goodness sake let us leave the subject alone. It will do Parliament no good, and we shall do ourselves no good if we seek any other advantage which is to our personal cash profit. That is a point that I would like to make, and I should like to think that someone else in the House would make it, too.
  I turn now to the quite separate point of modernisation, which was a much better case. I found some of the suggestions made by the hon. Member for Nottingham, West a little difficult to accept. There was his suggestion that each Member should carry in his pocket some form of wireless set to keep a link with the messengers so that we could be "buzzed" at any moment. That seems to be a little impracticable. Is the buzzer to go in the middle of a speech? If I carry such a machine, is it likely to buzz me in mid-speech? Here, I cannot resist paying a tribute to the messengers, who do a first-rate job with the maximum of courtesy and efficiency.
  The hon. Member referred to the Library. I do not for a moment quarrel with his view that additional research facilities should be available, but when he spoke of a sum of £8,000 being spent on books and of twice as much being spent on presents to other Parliaments, I could not see the relevance of the comparison. The only relevance of the amount we spend on books is: can we get the book we want when we want it? I can say that after six years membership of the House I have never yet asked for a book and failed to get what I wanted.
  That being the degree of service, I find it very difficult to find reasonable grounds for criticism there. For my own satisfaction I would like to pay a most enormous tribute to the Library staff, who are the
  1458
  most helpful people I have ever met in any library in this country. In saying that I hope that I represent the whole House. I am sympathetic to the quite separate point about additional research facilities being provided. That is what I consider to be modernisation—there is no cash profit in it for ourselves—and it is the sort of thing on which money ought to be spent.
  I cannot see how the Minister can reply to what was said about the selection of candidates—he simply cannot have any responsibility for that, so I do not see any point in the subject being raised. What I consider to be by far the greatest deficiency in this House is the lack of separate rooms for individual Members. I have not presumed to count the number of Parliaments I have visited, but I recall those in America, Canada, Japan, India, Germany, France, and most of the Middle East. I can honestly say that in no one of them have I found the lack of facilities of that kind so deplorable as in this House. There are, I believe, 107 seats in the Library, which often has to accommodate some 600 Members. A Member who wants to prepare a speech, write an article or prepare a broadcast, will often have to do so standing up. During all-night sittings, the facilities are quite deplorable.
  The hon. Member for Roxburgh, Selkirk and Peebles thought that it would be difficult to provide a room for each Member, and he may be right, but it may not be as difficult as it is sometimes thought. We have rather over 100 Ministers. I do not believe that each has a room of his own, although a great many of them have. That knocks off something like 100. If we take in the desk rooms now shared between three or four Members, that must also knock off a considerable proportion. We all know that a number of rooms are allocated to officials in a way that dates back a long time. There are more rooms that could and should be made available to hon. Members.
  I am also conscious that we have been spending in recent years very large sums of money on providing for hon. Members rooms in which there are five or six desks. I ask the Minister for how long these rooms are likely to be in use before we get nearer the point when an hon. Member gets a room of his own. I am

  1459
  curious to know whether we would be accused of wasting money in providing a form of accommodation which, however well provided in that form, will not, in the end, be efficient.
  I make the plea that the Minister will give us an indication of how long we are likely to have to wait before we achieve the goal of one room for each Member, what difficulties and what cost he foresees and where these rooms are likely to be.
  12.41 a.m.
  Mr. Russell Johnston: I, too, welcome the initiative of the hon. Member for Nottingham, West (Mr. English). One of the things we should emphasise is that this is not simply a matter of hon. Members raising something for their own benefit but of drawing attention to the fact that they cannot effectively, in existing circumstances, return their duty to their constituents as it should be possible for them to do. When we talk of facilities for hon. Members, we are talking about the performance of hon. Members as well, for that performance is affected immediately by the facilities available. This is extremely important.
  I am a new Member but this applies equally to me as it does to older Members. What is an hon. Member concerned to do? First, to put the argument for an individual constituent and, secondly, although seemingly contradictory, to put the point of view of a party. The odd thing—and this is probably why the House and the country as a whole have been hesitant about supplying certain facilities—is that, inevitably, in supplying those facilities to individual Members one is not just benefiting certain individual hon. Members but also a particular party.
  This is one of the things we must recognise. It is inevitable. We cannot dodge it. I do not think that, merely because we enable a particular hon. Member in a particular constituency to do his job well and, of course, incidentally benefit his party by so doing, that we must necessarily draw the conclusion that we should detract from his ability to serve as a Member because of party considerations.
  1460
  An hon. Member is concerned with argument. As the hon. Member said, how does he substantiate his argument? He is concerned, for instance, with argument of a constituent's case. How does he find out about that case and put it properly to the Minister concerned so that the Minister will pay attention to it? The first thing, as was pointed out by my hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) is that he must, if he is effectively to serve them, move around among his constituents. He must meet them, talk to them and be available to them.
  I represent the largest constituency in the United Kingdom. If I travel from Inverness in the eastern part to the extreme west, I cover more than 120 miles. Frequently at the weekends I drive 250 to 300 miles within my constituency. I do not do it for fun. It is not that I like Grand Prix rally driving. I like driving a motor car to some extent, but I drive that mileage in order to present a service to the constituency. Incidentally—and this is also true of Labour and Conservative Members—while to some extent I am also rendering a service to my party, I do it basically in order to render a service to constituents, irrespective of party.
  We are given a salary which some newspapers have painted as princely. We are now regarded as people who earn a vast amount of money and can afford to go on expensive holidays and generally live it up. As we all know, we are allowed to write off certain expenses against tax, but they are written off against a fixed sum and there is thus a limit to what we can do. It is a bad thing for the limit to what a Member can do to be financial. He should be limited not financially, but by what he is personally capable of doing and willing to do.
  I have no malice in saying that a Member for a constituency in London, or a large city such as Birmingham or Glasgow, travels to his constituency by air or train and then walks around his constituency, but a country Member frequently has to travel far if he is to do his job effectively and he also has to pay for doing so.
  The hon. Member for Dorset, South (Mr. Evelyn King) may not have intended to do so, and I do not want to argue with him if he did not, but he seemed

  1461
  to imply that some of us were looking for more money in our pockets to benefit ourselves, possibly to have a higher standard of living. I assure him that that is not the case. I am not making a profit and I did not come to the House to make a profit. This is certainly not the occupation which I would have chosen had I wished to make a profit.
  Mr. William Yates: The hon. Gentleman makes a loss.
  Mr. Johnston: It is a loss. What I am asking is that in exercising his ordinary and proper duties a Member should not make a loss. I do not want to make a profit out of this business.
  Therefore, I agree with my hon. Friend the Member for Roxburgh, Selkirk and Peebles and the hon. Member for Nottingham, West, that the Lawrence Report made a fundamental mistake in not relating our productive work to our incomes. After all, we are talking about an incomes policy and relating productivity to wages and it is only fair and reasonable and sensible that there should be some relationship between a Member's productivity and the allowances which he receives for it. In present circumstances, at a certain stage a Member must say that while he wants to travel 70 miles to see X—and 70 miles back—he cannot afford to do so. That detracts from his ability to serve his constituents properly.
  An hon. Member is involved in putting forward an argument and in order to do so he has to produce facts. He may have to see a constituent to obtain facts from him. He has to employ a secretary if he is to do his job properly. The question of research assistance has been referred to. With the hon. Member for Dorset, South, I pay great tribute to the Library staff. As a new Member finding my way about, I have had tremendous help from them. But they are heavily overloaded and if all hon. Members put on them the sort of load I feel I must put, they would not be able to cope with it. It is not unfair to ask whether there could not be some sort of research facilities, not necessarily on a personal but possibly on a collective basis, made available to members of all parties. This would be a reasonable thing to do, possibly on the American model.
  1462
  An hon. Member has to put his case by wording. As a new Member, one of the things I cannot understand is the number of times—as happened frequently on the Finance Bill and on other Committees—a Government spokesman says, "We accept the general sense of this Amendment, but the words the hon. Member uses are unsatisfactory". Why in heaven's name cannot back-bench M.P.s have the facilities of Parliamentary draftsmen? If an hon. Member on either side of the House wishes to make a case their services should be available to him so that he can use the sort of phraseology which is apparently legally acceptable. That seems a basic requirement.
  From the point of view of facilities of M.P.s, there is the facility of the hon. Member to speak. I may have been speaking for a long time.
  Hon. Members: Hear, hear.
  Mr. William Yates: Go on. There is plenty of time tonight.
  Mr. Johnston: Members of the Front Bench, on either side of the House, speak for an inordinate length of time. Frequently they speak for up to an hour. If it were lively, scintillating, provocative stuff it would be all right, but often it is drab, dull and repetitive. We have had examples of this in recent days. The time has come if all hon. Members want to participate in the work and thought of Parliament and in constructive debate, for a limitation to be placed on the length of speeches. Occupants of the Front Benches require rather longer time to justify themselves, but to allow them to speak for an hour is a wee bit thick.
  I speak as a member of what is commonly called a minority party. Frequently when talking to hon. Members from all parts of the House in the Lobbies and other places, I am told, "Aren't you a lucky fellow! A Liberal is always called to speak in a debate."
  Mr. Deputy-Speaker (Sir Samuel Storey): Order. I think that the hon. Gentleman is getting very far from the Consolidated Fund Bill.
  Mr. Johnston: I would not dream of contesting your Ruling, Mr. Deputy-Speaker. I was merely making a simple point, that when one considers the salaries

  1463
  of Members of Parliament one also considers the facilities they have with which to make a contribution in this House. I feel that this was possibly a relevant point, but, of course, I would not dream of arguing with your ruling.
  I disagree with the hon. Member for Nottingham, West in his remarks regarding the selection of candidates for this House. Let us be quite honest about it. This is a democracy, which very often works in an imperfect way. It very often throws up imperfect solutions. It is an imperfect fact that 3 million people should vote Liberal and 10 Liberal M.P.'s should be returned. Nevertheless I feel that when we consider the salaries of Members we cannot properly consider the way in which these people are selected as candidates. This is not a proper point for argument.
  After what I have said the next point may be considered frivolous, but I feel that it is not unimportant. We have been engaged in some extremely long sittings in this Session, and the fact is that that profession, if that is the right word, of a Member of Parliament is a somewhat sedentary one. One sits in the House, one sits in one's car, one sits here, there and everywhere, and one becomes very unfit, very fat, very sluggish, and this is undoubtedly reflected in Member's physique and, from time to time, in their contributions.
  I quite honestly believe that it would be a very proper thing if in this House where we are concerned so very much about fitness—and I know that the Government are concerned about the fitness of their Members—we had some sort of facilities for exercise. I think that a gymnasium, or something of that sort, would be a very desirable thing in this House.
  Mr. Evelyn King: Is the hon. Gentleman aware that there was a gymnasium, but I am told that it was removed because no one ever used it?
  Mr. Johnston: Oddly enough, and I hope this will not be considered an improper remark, I remember seeing when I was young a picture in the Picture Post of the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes) hanging upside down in the gymnasium.
  1464
  I think it is a great pity that this is not still available. This is not a question of asking for particular facilities to be available for Members. It is a question of recognising that we are engaged in a very difficult and arduous task. We come here willingly and voluntarily, but the fact is that something like 17 to 18 Members die in the service of the House a year. I think that some sort of facility ought to be available to Members who wish to maintain themselves in a reasonable condition of physical health.
  Mr. William Yates: The hon. Member must understand that so long as the country is willing to pour more and more money into this ancient, shambolic building in this area of London, there is no chance of getting that or having any of the facilities that he wants, because by now he must know, and everybody knows, that this building is absolutely out of touch with the time and era which we we want to represent. There is absolutely no chance of getting any of the facilities he suggests in Westminster, such as a tennis court or anything else.
  Mr. Johnston: I do not want to carry on much longer.
  I echo the remarks of the hon. Member for Dorset, South that it is a wee bit unfair on the Minister for us to be posing this debate to him. He has newly come to office. He is certainly not responsible for the existing state of Westminster. Nevertheless, I suppose that any Government which comes to power, whichever one it is, takes upon itself the responsibility for supply facilities for Members.
  Therefore, in conclusion, I should like briefly to ask the hon. Gentleman four questions. First, what are his views on the existing shape of the salaries of Members of Parliament and as to whether there ought not to be a close relationship between them and expenses? Second, is there a possibility within the existing framework of supplying the office facilities which Members of Parliament indubitably need, on all sides, to perform their duties adequately?
  Third, does the hon. Gentleman regard it as of any importance that there should be facilities for Members to maintain themselves in a reasonable physical condition? It is easy to joke about this but it is important. Lastly, does he feel that the existing method whereby time is

  1465
  allocated in terms of contribution in this House is fair or equitable or offers the proper facility either for minority parties or, for that matter, for back-bench Members?
  1.2 a.m.
  The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. James Boyden): No one can charge me with extra long speeches from this Box—I might be charged with tediousness, but not with that—and in view of the long list of subjects which it is hoped to debate tonight, perhaps hon. Members will forgive me if I am as brief as possible.
  This debate has served as a useful curtain raiser to what will be a major debate in due course on the Palace of Westminster, when I have no doubt that the suggestion will be made for a House of Commons Services Committee, with a different sort of sub-committee to it from the kinds of Committees that we have had, which might well provide the forum for hearing the sort of discussion that we have had tonight, and allow hon. Members to make their case for change more easily than is done at present, and also to feel that they are participating more in the running of this establishment—I say that with an undertone as well—than has been done in the past. The changes which have recently taken place, and which are suggested in the Report which is before us, open the field for a great deal more participation by every Member of the House in running his own environment.
  Reference has been made to the catering. It has always struck me that the catering service in this House has an admirable range of services. One can have almost anything from a banquet to an immediate snack. As the hon. Member for Dorset, South (Mr. Evelyn King) paid tribute to the Library staff, I should like to pay tribute to the catering staff. Anybody who brings a visitor to the House gets admirable treatment. The catering staff seem to have the psychology to adjust their service to the demands of one's visitors, whether they are a little hard and irrational or modest. Whatever the kind of guest or party one brings, it always seems to me that the catering service does admirably in providing the food.
  Mr. Robert Cooke rose—
  Mr. Boyden: I will not give way. The hon. Member has only just come in to the debate. Time is short, a great many hon. Members are waiting to participate, and I shall not give way to him.
  Mr. Cooke: The hon. Member is very bad tempered.
  Mr. Boyden: The hon. Member might have waited for a more convenient moment anyway, because I would like to pay tribute to the catering staff, who manage under very considerable difficulties. I am well aware—indeed, my right hon. Friend is—of all the difficulties which the catering staff have, and I imagine that to get the kind of modern catering facilities which perhaps would be highly desirable would be very expensive and, of course, would involve a lot of reorganisation. There have been improvements in the last year or two which have made an amelioration of the conditions.
  I am sure there is no Ministerial responsibility for one of the major points which my hon. Friend the Member for Nottingham, West made, that Ministers, or even this House, should have things to say about the people who are sent here. The historical precedents are rather unfortunate in cases where the House excluded people like Wilkes or Bradlaugh. History had some rather rude things to say subsequently about the House of those times. The House has never taken upon itself that it should decide what sort of people come here, except in those very bad cases, as history records, when it excluded Members.
  My own feeling is this. However angry I may feel about a Member, however stupid I may feel him to be, I always think that anybody who has got into this House has got here by a rough path and must be a person of some distinction; and that always moderates any critical feeling I may have about somebody with whom, perhaps, I may be in conflict, because I think that to be a Member of this House is a great distinction. This the British public, I think, recognise. Indeed, I think that very often Members of Parliament get perhaps rather more credit for being persons of authority and ability and so on than they sometimes deserve.

  1467
  But still, I think that is the right thing, because if one denigrates Parliament or Members of Parliament—except for any specific action for which they deserve to be criticised—one is not serving democracy or the best interests of this country—or of other countries. One of the great contributions this country has made to civilisation is the democratic parliamentary way in which we conduct our business, a way which has been imitated all over the world. And, of course, parliamentary government generally is on the retreat. Although we fought a massive war to preserve democracy and to preserve parliamentary institutions, the fact remains that today there are fewer parliaments functioning in the way we think is the proper way for them to function than there were before.
  Therefore I do very sincerely say to the hon. Member for Inverness (Mr. Russell Johnston) and the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) that I am not here for profit, and that most of us come here for a variety of reasons, but certainly not to make a lot of money; and that any kind of ill-considered criticism which damages the coinage of the Parliamentary system is against the things our ancestors struggled for and for which we ourselves still struggle today.
  So I would say that the rugged individualism which charaterises M.P.s is a very good thing, and I would be loth to make them much more academic. That is not to say that facilities cannot be improved. They can be improved, but I think we should need to hesitate a lot before going as far as a Congress system of research facilities. I would have thought one of the things in favour of our Parliamentary system is that Members have contact with their constituents. Even though a Member has to travel 150 miles to meet them, it gives him political refreshment, gives him political and economic knowledge which he could not get from a library however good it might be. Also, Members have enough initiative and intelligence to go to their own sources of information—among the groups they are familiar with, the bodies they are associated with—and bring back here the benefits of that experience, very often vicarious, which does not come from reading books or even using the Library
  1468
  here. This is not to say—I am speaking not for the Government, but for myself—that within the new establishment that I have a strong feeling will be set up, there will not be many opportunities for making suggestions for improving the Library service, and I am sure that this will be done.
  Perhaps I could turn, as the hon. Member for Dorset, South so wisely and forcibly said, to the limited amount of the debate for which I might be said to have some responsibility. What is likely to happen with regard to accommodation facilities? The second stage of the roof space scheme will, it is hoped, be completed towards the end of the year to provide accommodation for a further 28 Members. The Star Chamber Court scheme, which hon. Members know is getting under way—
  Mr. Evelyn King: Can the Minister elaborate that? Can he say how many Members there will be in each room, or what space they will have?
  Mr. Boyden: They will be small rooms, and it will depend to some extent on whether the Fees Office is brought across, as it is suggested it should be. I am afraid that Members may still have to share rooms. They may not all be one-Member rooms.
  Mr. Robert Cooke: I am sorry that the hon. Gentleman felt that my intervention a little earlier was ill-timed, but I am deeply interested in this subject. Will he confirm that 28 Members could be accommodated individually in stage 2 of the roof scheme, and can he tell the House how many Members could be accommodated if the Fees Office did not come into stage 2, which would not appear to be the wish of the most recent Select Committee Report?
  Mr. Boyden: The situation about the allocation of rooms is that the Serjeant at Arms allocates the space that he has, and I was going to make a point about this in relation to what the Liberal Party said. The Serjeant at Arms has given evidence to this effect to the Select Committee. He is anxious to please the House. He is anxious to arrange things so that those Members who want to share can do so, or at least be adjacent to each other. From the Liberal Party's point of view, I

  1469
  suggest that, when the allocation of rooms is made when this new accommodation comes in, the points that they have made in this debate should be put to the Serjeant at Arms, and I am sure that he will do his best to accommodate the hon. Members.
  Ministers' rooms are allocated in a block by the Serjeant at Arms to my right hon. Friend who re-allocates them to Ministers. As far as the House is concerned, this is within the control of the Serjeant at Arms, and he is very anxious to meet the wishes of Members in this respect. I think that my right hon. Friend has shown a good deal of wisdom in the way that he has paired Ministers in rooms. I share a room with a friend and colleague. This has been done with a certain amount of sensitivity, and I am sure that it can be done with regard to Members sharing rooms in the House.
  Going on to what accommodation is likely to be available, the Star Chamber Court scheme is about to be started, and is due to be completed at the beginning of 1967. It will provide about 9,000 square feet of usable office space, and again in terms of Members it will provide individual rooms for about 67 Members. My right hon. Friend estimates that by the time this is brought into operation there will probably be enough desk room anyway—not individual rooms, but desk room—to satisfy all the Members who want desks, and a fair amount of this accommodation can be single rooms.
  I should like to take up the point made by the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) about hostel accommodation. Beatrice Webb raised this in about 1900 in one of her famous tomes, in a footnote—she was probably thinking of this side of the house—saying that it would be good for us to live in hostels and get to know each other rather better. Things were rather different in those days, and nothing has ever come of that. When I first came to this House I thought that that was a good idea, but since then I have been worn down by the traditions of the place and I have found more and more that Members do not particularly want to be so close to each other in view of the hours that they are penned up anyhow. Therefore, there might be a strong argument for not having facilities of this
  1470
  sort, and for getting our own accommodation.
  This comes back to the rugged individualism which characterises our pay arrangements, and the provision of facilities and accommodation. Partly because Members are rugged individualists and partly because they have very differing needs they prefer to have a sum of money and to dispose of it to meet their own requirements.
  Mr. David Steel: I agree with what the Minister is saying. I am not passionately concerned about hostels as such. The point I was making was taken up by the hon. Member for Dorset, South, namely, that it might be more understandable to provide Members with a place to stay here, from the point of view of members of the public, than to provide them with a sum of money. I would prefer the sum of money and have to find my own accommodation—but I would rather have hostel accommodation than nothing.
  Mr. Boyden: It is difficult to find accommodation near Westminster. In any case, I would refer the hon. Member to the Martin Plan, which has just come out, which provides, at the far end of the Palace, and in the far distant future—and this is a proposal upon which the Government has made no pronouncement—a nice little row of flats across in Victoria Tower Gardens. Both hon. Members who have spoken on the subject have time on their side, so if they can still resist the mellowing influence of this House they will be able to push for these flats to be built across Victoria Tower Gardens. But I am not authorised to make any Government statement on this issue.
  I want to say a word about the communications system, which my hon. Friend the Member for Nottingham, West was stressing, including an electrical paging system. The servants of the House try to improve, and have improved, their own speed of communication. The Postmaster-General is looking into the possibility of introducing a better system. Again—and in this respect perhaps it is a case of a reactionary worn down by tradition—I cannot help feeling that if members of the public come to see their Members of Parliament, in nine cases out of ten, or even 99 cases out of 100,

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  they should make some advance arrangements. To be buzzed when one is very active and busy, or heavily engaged, is undesirable.
  But there is something more serious behind this. We live in an age where communications are becoming faster and faster, and sometimes they make the human being a victim of speed. One quality of this House is that it tends, in its procedures, to ignore speed. Perhaps that is not a wholly desirable thing, but to go to the opposite extreme in this somewhat cumbersome arrangement of buildings and procedures that we have and that we want to improve, and to impose upon them suddenly the latest method of communications with the constituent who has arrived in hot haste to demand something or other might be to create, somewhat rashly, the worst of both worlds.
  I know that my hon. Friend is a moderniser, and I wish him well in his pursuit of more rapid communications. The matter is being looked at, as are improvements in respect of Division Bell facilities, and things of that sort.
  I was made forcibly aware of the fact that some Members would prefer facilities rather than money. I do not think that I can do better than refer the House to the Lawrence Committee's findings. They were pretty universally accepted. The Report was accepted by both sides. The Committee went into very great detail. It asked any hon. Member who wanted to make a contribution to do so, and all these contributions were carefully considered.
  The very points made by my hon. Friend and other hon. Members about the variations in money spent on travelling and other things were incorporated in the Appendix and collected up, and the Committee came to the firm conclusion, in Paragraph 38, that the amount of salary required to cover all individual needs
  "can only be an act of subjective judgment. Parliamentary service is an occupation of which the nature is unique and therefore neither the principle of 'fair comparison' nor any comparative method can give guidance towards the appropriate figure. Nor is the remuneration of this service something which ought properly to be governed by the forces of competition or by market value."
  The Committee's subjective judgment was as reasonable a judgment as prob-
  1472
  ably anyone could arrive at. It is true that hon. Members, as they have said, would have liked it in another way but the report of the Committee which laboured so well has been pretty unanimously adopted. I agree with the hon. Member for Dorset, South that this is perhaps not the moment to raise the issue. As the Committee says, in the same kind of tone, in paragraph 67 on facilities:
  "In reaching our conclusion on the amount of the salary for Members we have, for the reasons we have given, taken the present practice as we find it and on this footing have recommended a remuneration out of which they can choose and pay for such facilities as they personally decide best meet their individual needs."
  This is what has happened, but this does not militate against hon. Members making representations later so that they will be clearly heard and probably brought into more active consideration.
  In considering our facilities and the things which we would like, we have to bear in mind not so much that by having improved facilities we serve the public better but the sort of improvements which have taken place over the last few years and our plans for the future. Undoubtedly we need to go faster but this place moves rather slowly. The pace is improving and, as was said on another famous occasion, no doubt will improve still further.

  GIBRALTAR
  1.22 a.m.
  Mr. Colin Jackson: I wish to raise the subject of Gibraltar, which will be a little more serious and heavy than the topic we have just discussed, though I hope that we shall make more progress in solving the Gibraltar problem than, as far as I can see, we are likely to make in modernising the House, judging from what the rather lighthearted remarks which we have just heard implied.
  I believe that I speak for all hon. Members when I say that I think there is real alarm in the House now at the state of affairs in Gibraltar and the way in which the people of Gibraltar are being subjected to a siege by the Government of Spain this summer. I think that tonight we should send out, regardless of party, a message of encouragement and good cheer from the House so that during

  1473
  the months when we are in recess the people of the Rock will know that the House of Commons is concerned about their fate and their future.
  I want to try to do something at which many of us have been singularly unsuccessful up to now, and that is to speak briefly, which is one of the things which we would do if we had a modern Parliament. I therefore briefly state the facts. We know that the siege has been going on since just before Christmas. It has been one in which exit from Gibraltar has been denied to motor vehicles, except to the French—some strange kind of privilege which they have. As a result of this encirclement the income of Gibraltar has dropped by 40 per cent. and the tourist trade has virtually collapsed. Business in hire cars for self-drive has been completely ruined. The shopkeepers are now gravely financially embarrassed. Sir Joshua Hassan and Mr. Peter Isola of the Government of Gibraltar had to come to London to request assistance from Her Majesty's Government. I do not want to go into detail tonight about the amount of financial aid available—the £1 million from the Overseas Development Corporation over three years, the £100,000 to finance immediate needs and the £200,000 of Exchequer loans, which are contingent funds available. Other hon. Members may wish to go into the question of whether or not this sum is sufficient.
  With regard to housing, I feel that, with the 500 people coming into Gibraltar from the Campo area, there will be a serious worsening of the housing waiting list, with genuine hardship for many Gibraltarians as a result. This House and the Government of this country should not get into a position in which we have totally to sustain the people of Gibraltar. We do not want the people of the Rock en masse to be on the dole. There are 25,000 people in Gibraltar, and we could easily maintain them within the financial resources of this country, but think of the effect if this "squeeze" continues on the morale of the people of Gibraltar if their elected representatives have to say, "The only way in which we can sustain you is through grants from London."
  The people of Gibraltar will say, "What kind of Government are you to
  1474
  preside over our fortunes, that you can exist only on aid from the heart of the Commonwealth?" The Ministers of Gibraltar might lose public support and be forced to resign, as would the rest of the elected representatives, so that we should be back to direct Governor's rule in Gibraltar. We should preside over a reluctant, embittered, encircled community. General Franco would be able to say to the world, "Here is British colonial rule." He would be able to say in the United Nations: "This is a direct administration by the United Kingdom: there is no democracy in Gibraltar."
  Therefore the vital factor which we should be considering in the coming months is not how much extra aid may be required by Gibraltar for specific problems like housing, although we may feel strongly about it. It is a question of what actions the Government of Spain will take to lift the barrier and make easy legitimate access by peaceful people from Gibraltar into the neighbouring territory of Spain.
  It is not my task to go into my personal feelings about the present régime in Madrid. Those of us who were in the war remember what General Franco's attitude was then. He worked with Hitler and would not have been disappointed if Britain had lost. He did not go to the frontier of Spain to meet Hitler just for a honeymoon. He went there as an accomplice. But, as Hitler failed and his power receded, the Franco Government became a little more cautious. There was a proposal at one time that we should negotiate, in order to keep Spain neutral, the future of Gibraltar. A former Prime Minister, Sir Winston Churchill, said that there could be no question of negotiations, because if we lost General Franco would take Gibraltar and if we won there would be no question of his having any right to it.
  Many of us have personal friends in Spain, and we look forward to a period when there may be some Christian Democratic Government in Madrid. Therefore, I do not want to say anything tonight which would come between the people of Britain and the people of Spain.
  Nevertheless, we have to admit that the Government in Madrid are responsible for this barrier at the frontier.

  1475
  Messages have been sent by Her Majesty's Government to the Government of Spain requesting them to negotiate on the matter—I should like to ask the Minister whether she can say what replies we have had from Madrid on the question of negotiation in the recent past, because if the Government of Spain and General Franco, regardless of his record—and I will not comment on that—are not prepared to negotiate, we must make things as uncomfortable for Spain as Spain is making things uncomfortable for the people of Gibraltar. Some ideas may be put forward on how this discomfort for the Government of Spain may be produced. I have one or two ideas. This should be said, because the Government in Madrid should realise that there comes a point when the patience of the British people and the democratic structure of this country will be strained no further. One can push it so far but no further.
  For example, we might have a tax on Spanish citizens coming to this country, raising a sum which would go towards sustaining the people of Gibraltar and making up to them the loss which they have suffered from the frontier restrictions. Perhaps we might have a tax on goods coming into this country from Spain. That money, again, would go to help the people of Gibraltar. I do not favour the suggestion of a tax on British subjects going to Spain on holiday. I do not see why we should punish the British for what the Spaniards are doing on the Gibraltar frontier. Such a suggestion seems odd to me. Nor do I suggest that British tourists should stop going to Spain. There is no reason why the British and the Spanish people should not be friends, regardless of the activities of the Government in Madrid. We might perhaps limit the number of Spaniards coming into this country. I should be loth to do so.
  If General Franco would negotiate, and if he would lift the frontier restrictions tomorrow, all these matters of retaliation would never arise. But the fact remains that the morale of the people of Gibraltar is sinking. I know that a number of hon. Members talked to the delegation which came to Britain this summer. The people of Gibraltar are asking, "What is Britain doing about this? How and when will this frontier
  1476
  restriction be lifted?" They do not want a lot of charity from Britain to be doled out to keep them alive in Gibraltar. They want the frontier restriction lifted or retaliatory action to be taken against the Government in Madrid.
  If we do not get a satisfactory reply from Madrid about negotiations this summer, then action must begin. It is highly regrettable. Nobody likes to engage in acts which would harm individual Spanish people, who are certainly not the target of the displeasure of this country. The time has come for action. If we go on much longer we may have a slump in Gibraltar, with a collapse of support for the Gibraltar Government. We may find ourselves accused of colonialism, at the same time presiding over a bitterly disappointed people. This country has done a fine job in many corners of the world. Examples are independence for India and on actions in Africa. If we cannot guarantee the rights of this small Colony, the people of which are not Spanish but British and who have loyally supported this country throughout their history; if we cannot stand up for them and accept the fact that we shall lose a little money in trade with Spain; then I am afraid that we shall be judged harshly in Gibraltar, harshly in the United Nations and harshly among our friends everywhere.
  1.35 a.m.
  Sir Frederic Bennett: As at least 95 per cent. of what I shall say will be complimentary and complementary to what the hon. Member for Brighouse and Spenborough (Mr. Jackson) said, I will, therefore, voice my only criticism of his speech at the outset of my remarks. I will then be able to support everything else he said.
  It was a pity that he brought into his comments his personal feelings about the Spanish rôle during the last war, because I do not think that that was particularly helpful at this time. If we look back we can see many occasions when nations with whom we are now closely allied were once our enemies. When the hon. Gentleman spoke about Franco going to the border to meet Hitler, I recalled the time when Ribbentrop and Molotov met. I seem to remember that Russian oil was supplied to German bombers which flew over this country. As I say, it is not

  1477
  always helpful to hark back to the past and say what certain people did at certain times. I suggest that one might find past enemies in some most unsuspected quarters.
  Having said that, I congratulate the hon. Gentleman generally on having raised this important subject. Having listened to our earlier debates for some hours—particularly our discussion of facilities for hon. Members—I was beginning to think that we had forgotten that we are an imperial, albeit not imperialistic, Parliament. As I say, I am grateful to the hon. Gentleman for having initiated this debate, and I wish that I had had the chance of doing so. It does not matter about the lateness of the hour, because the people of Gibraltar will still know that we are interested in their future.
  I agree with every word the hon. Gentleman said, apart from the criticism which I have expressed. As he pointed out, this is not just a question of cash. The people living on the Rock would not be impressed if they were given £1,000, £500,000,50 houses or 150,000 houses. I was there recently and I assure the House that a psychological problem is involved, amounting almost to claustrophobia. This is understandable when one considers that they have been penned up, so to speak, on the Rock with every form of humiliation being practised against them for many months, dating back to before last October.
  I make that last remark to show that I do not wish to score any party political points on this issue. The hon. Gentleman said that the problem dated back to last December. In fact, it has gone on for much longer than that, with the tension mounting the whole time. A definite change of attitude on the part of the Spanish came at the time of the Monarch's last visit to Gibraltar. As I say, I have no wish to place the blame for the present situation anywhere and I never thought that it was wrong that the Monarch should, during her tour of the Commonwealth, visit Gibraltar, particularly since we all regard the Rock as one of the most loyal parts of the world to this country. Indeed, it would have been wrong had the Monarch not visited Gibraltar. I am merely pointing out that that gave an excuse to the Spanish to behave unreasonably, as they have done since. It can be said that that visit accentuated the prob-
  1478
  lem, although, as I say, it would have been wrong had Gibraltar not been included for a visit.
  Having said that, it must be remembered that when the former Government were in office there was the Socialist argument over the frigates. That was not exactly helpful to the forming of opinion in Spain. Nor was the cancellation of the Royal Naval manoeuvres, because it is an historic fact that the Spanish Navy ranks among our best friends, irrespective of the Government in power in that country.
  I do not want to allow this to develop into an argument about who is to blame for the present difficulties. It has been a steadily deteriorating situation, and the worst that anyone could do would be to try to solve the problem by being offensive to the Spanish Government, not because we should mind very much what the Spanish Government thought of us, but because we have to consider not what just we feel about it but what effect it will have on the people who have to live there. When I was in Gibraltar recently, the attitude of the average Gibraltarian was to say, in our party warfare context, "A plague on both your houses". They are only interesed in making sure that they and their legitimate interests are reasonably looked after as a loyal part of the British Commonwealth. They do not want to enter into the internecine party struggle in Britain about who is to blame for their problems.
  I am sure that my hon. Friends on this side will agree that it has been our case all along that it would be a great pity to allow the situation to be the cause of a party argument. There is a genuine ground for agreement here that something more has to be done for Gibraltar than has been done by any Government, including the last one and the present one. It is not a matter of how much cash can be provided. There are 25,000 people on Gibraltar and, without even noticing it, the British public could provide every one of them with a substantial weekly income without any one of them having to do a day's work for the rest of his life.
  There are 25,000 loyal and devoted people on a little piece of rock, unable to move freely as they are entitled to do and have done for a very long time. I shudder to think what would be the reaction of the average citizen of this

  1479
  country if he was suddenly told, quite unreasonably, that he could not move more than half a mile from his front door—not week after week, but month after month. It is almost claustrophobic. When I was in Gibraltar, I went down to the frontier on a Saturday night, and there I found crowds of people who simply wanted to go somewhere else in a taxi or a car to have a meal out, and they found that they could not do what any reasonable person in this country or elsewhere in the free world can do and go where they wanted, in human terms, for an evening out.
  However, I believe that we shall not get very far by negative retaliation. In the end, we may have to retaliate, but I hope we will not.
  The best way of proving to the Spanish that we will not concede to what is, in effect, bullying is not by retaliation. It is very difficult to think of effective retaliation, and that is going to be the problem, because ineffective retaliation gets one nowhere at all. We may have to do it, and it may be that we shall have to hurt ourselves, hurt the Spanish, and hurt the Gibraltarians by a form of tit-for-tat retaliation, but it should not be done unless we are driven to it, because it is not the best answer.
  The best answer is to try to convince the Spanish that we never intend to give way over Gibraltar and that we shall provide the Gibraltarians with a normal life without their connection with Spain. One way of doing it would be to increase the number of tourists from this country going to Gibraltar on their way to Tangier. Another way would be to increase the provision for Gibraltarians coming to Britain. It has been announced that there is going to be a quota for Maltese coming to the country, but I was very disappointed to find that there is not to be a special quota for Gibraltarians to come.
  In every possible way we must try to convince the Gibraltarians and the Spanish that, whatever the Spanish Government do, the people of Gibraltar are not going to be bullied or chivvied into a way of life that they do not want to adopt, and there are many ways in which we can do that without adopting purely tit-for-tat measures of retaliation.
  There are many hon. Members on this side, including myself, who have sought
  1480
  over the years to get better relations with Spain, irrespective of its Government. At the moment, the Spanish Government are doing their very best to lose the best friends they have in this country, and that is where they are being singularly stupid. They already have plenty of enemies on the benches opposite, so they should not act so as to lose the friends they have on my side. In this rather anachronistic argument about the sovereignty of Gibraltar the Spanish Government are not being very clever, because if they persist they will, in the end, find that their friends are driven to say "All right, if they want to play it rough we, too, will play it rough." That would be a very great pity, and would not help anyone at all—
  Mr. Peter Bessell: I have been following the hon. Member's argument with great interest. I wonder whether, from his own considerable experience of the subject, he feels that sufficient has been done through diplomatic channels to persuade the Spanish Government to adopt a more constructive attitude?
  Sir F. Bennett: The hon. Member places great faith in my capacity to speak for Her Majesty's Government—a faith which I am sure Her Majesty's Government would not share. I am trying to avoid developing the argument on party lines, as I have said, but I would say that at the moment rather more could be done in this respect. I want to keep this debate on a more friendly level, but I do not think that Her Majesty's present Ministers are those best calculated, from their record, to receive the best and most friendly attention in Spain. Perhaps rather more could be done and should have been done before now; for past British Governments have decided that it is no good arguing about internal systems of Government, whether it be Yugo-Slav Communism or the system in Spain. It is up to us to live with each country and try to make the best arrangements we can with them, both economically and otherwise, and should not allow political feelings to enter into it.
  Another reason for saying that Spain is being rather silly over this matter is that if she insists on this point—which really is the only one—that it is wrong for a foreign country, however legally

  1481
  well established, to have an enclave on her continental territory, she is automatically depriving herself of her own case for her enclaves on the African mainland. I do not think that it is sufficiently appreciated in Madrid that if Spain were to succeed in this present dispute over Gibraltar she would not keep Ceuta or Rio De Oro or the other enclaves, because every argument she now uses to try to get us out of Gibraltar applies to her own position on the African continent. We might even get a Committee of 24 there discussing her African enclaves. This is another reason for some sensible reassessment by the Madrid Government.
  Looking beyond this silly and unnecessary quarrel, one sees the whole of Europe moving towards a closer link, whether within the Six or the Seven, or within an even wider entity. It is a little immature for European nations to indulge in this sterile argument about whether this or that sovereignty dates from the Treaty of Utrecht. Under present conditions, the people of Gibraltar want to maintain, and we must ensure that they do maintain, British sovereignty, but there is no reason why Gibraltar should not move from its present colonial status, not to semi-independence or autonomy but to a really close link with the British Isles, which is what the people of Gibraltar would want. What they would like is something approaching the status of the Channel Islands or the Isle of Man. They want to get away from colonial status but not through self-government.
  If I am to attribute any genuineness to the Spanish argument—and in this I think they have a good case—they are nervous, quite fairly, of a Gibraltar perhaps emerging as an independent state. Everyone knows that a rock with 25,0000 inhabitants cannot be an independent State but the Spanish, in a world of nationalism, are nervous. After all, they have heard "never, never" from British Governments about self-government for Cyprus, Malta and other places regarded previously as too small for independence but have seen them nevertheless be granted independence. They are right, therefore, to worry about the possibility of a State of Gibraltar ending up, perhaps, under hostile influences. If we thought that the Isle of Wight would end up
  1482
  independent with the possibility of coming under the influence of a hostile power we would get nervous.
  Hence the way forward is to encourage the idea that Gibraltar has a special kinship with this country and that there is, therefore, no fear of such a thing happening there. When I was last in Gibraltar two weeks ago I did not meet one Gibraltarian who did not want the sort of solution I have outlined. If we adopted it, it would relieve the only genuine anxiety that the Spanish can possess. If we in Europe are moving to greater unity, I make the passionate plea that there is no reason why we should not seek such a solution as I have suggested, with special facilities for the Spanish in economic relations with Gibraltar. They have, after all, the right to be worried about the possibility of smuggling, for instance. There is no reason why Gibraltar should not be permanently part of the United Kingdom but with close ties with a reasonable Spain. There is no reason why Britain and the other countries of Europe, including Spain, should not join together in great unity when these narrow questions of sovereignty will not appear as important as they do now.
  1.53 a.m.
  Mr. Dan Jones: I want to continue the debate on the non-partisan basis that has been established but at the same time to return to considering the 1939–45 period, which I have good cause to remember for rather different reasons from those mentioned by my hon. Friend the Member for Brighouse and Spenborough (Mr. Jackson), who referred to General Franco. I want to do so for constructive reasons.
  We are not discussing Gibraltarians so much as we are discussing real friends. I hold the view—and I hope the House agrees—that friends who are friends when one needs friends are friends indeed, and that the people of Gibraltar very definitely fill that rôle. I hope my hon. Friend the Under-Secretary of State will keep that point in mind in her reply.
  I must tell Her Majesty's Government that I have deep misgivings. This has been a year in which I have been in Gibraltar, spoken to the people there and have assessed the feelings of all sections.

  1483
  What these people, quite rightly, complain about now is that during the year Her Majesty's Government and the Spanish Government have never once come together. I am aware that there are some reservations on both sides, that apparently the Spanish Government are not prepared to talk unless it is on the question of sovereignty. I understand that we are not prepared to engage in talks until the restrictions at the border are removed. This is a dog-in-the-manger attitude by both Governments. The parties ought to sit down together to see what can be hammered out.
  It is not only the people of Gibraltar who are suffering. Anyone with experience of the area knows that the whole of the Costa del Sol is suffering similarly. I have reason to believe that 50 per cent. of the normal tourist trade in the area has suffered during the year, from La Linea down as far as Malabar and San Roque, with consequent reductions in standards of living.
  It may be said that this area has never mattered to General Franco until now. Whether that is true or not, it should matter to Her Majesty's Government, and it is time that they did rather more than have these intermediary exchanges and that the two Governments met at the conference table to discuss the area.
  It should be remembered that this affair has now lasted a year, a year of siege for these people. As the hon. Member for Torquay (Sir F. Bennett) said, these people are almost isolated on the Rock. As I have said before, they are suffering from a form of geographic claustrophobia. One has only to live there to appreciate what that means. It is said that there is a desire to get out, but to where? The only outlet is to Spain, and that outlet is now closed.
  I fear that there may be some ugly uprising among these people in a short time unless something tangible is done to give them hope that their problems will be fully discussed. When the issue means so much to those concerned, why has not a senior Minister actively participated in the dispute? The Colonial Secretary recently had an outstanding success when he visited certain Arab States with complex problems. I am not sure that he would have more power than his juniors, but if he went to Gibraltar and made his
  1484
  personal overtures to Spain, that would have a tremendous effect on the people of Gibraltar. I have already said that they are not so much Gibraltarians as our friends and they are entitled to such treatment and I have some misgivings because they have not yet received it.
  I do not want to detain the House, for this subject has been discussed for so long that it would be very difficult to find anything new and constructive to say about it. However, I appeal to the Government to demonstrate to Spain our allegiance to these people by not applying to them the new immigration laws. For them there should be a far greater degree of liberalisation because of their geographical isolation.
  I feel deeply about this subject because I know that these people are bonded to these islands, and I am not sure that we have demonstrated reciprocal feelings. For that reason, I am very glad that my hon. Friend the Member for Brighouse and Spenborough has initiated this debate. I hope that it will be further tangible evidence that we have not forgotten the people of Gibraltar. I hope that the Minister will say those things which will mean so much to the people of Gibraltar, because I am certain that they need and deserve them.
  2.0 a.m.
  Mr. Patrick Wall: Having spent 16 years in the Royal Marines, I have known the Rock fairly well. I am therefore particularly grateful to the hon. Member for Brighouse and Spenborough (Mr. Jackson) for initiating this debate at a period which obviously is very critical for the future of Gibraltar.
  In my speech, I shall be bound to say things which may be interpreted as an attack on Spain and unkind to Spaniards. I regret this as I have always regarded myself as a friend of Spain. Anyone who served in the Neutrality Patrol during the Spanish Civil War and had the opportunity, as I had, of going behind the lines into "Red" Spain at that time will realise what a debt the Spanish people owe to their leader for ridding Spain of the bestiality of red Communism and freeing them from the scourge of war since the end of that fratricidal struggle. The fact that he kept Spain out of the Second World War may not have helped us, but it was certainly in the interests of the Spanish people.

  1485
  Over the years ever since the Spanish Civil War there has been what can only be described as a phobia among certain members of the Labour Party over the Spanish Government. This is probably one of the reasons for the blockade which may not be lifted until the Government here changes. Hon. Members opposite, if they are fair, will realise that certain members of their party—not the whole party—have had a phobia on this subject ever since the Civil War and this must have an effect on relations between Her Majesty's Government and Spain.
  Mr. Dan Jones: We have tried to keep this debate on a strictly non-party basis. If we are to help these people, we must try so to do. May I remind the hon. Member that these overtures took place long before the present Government were in office and that that should be kept in mind?
  Mr. Wall: I was not referring to the present Government, but to what I describe as a phobia which has existed for the last 30 years among some members of the Labour Party which has led to a deterioration of relations between members of the party and the Spanish Government.
  I want to raise two points in this debate. One concerns the constitution, the other positive assistance to Gibraltar. One of the keys to the present situation is the 1964 constitution, which installed for the first time an elected Chief Minister and Ministers in Gibraltar. The Gibraltar Council became the executive body of Gibraltar, which consisted of the Governor, four ex-officio members, the Chief Minister and four elected members. The White Paper issued by Her Majesty's Government said:
  "The Gibraltar Council is responsible for general direction and control of government of Gibraltar subject to the powers of Her Majesty's Government and the Governor."
  Logically, the next step, if Gibraltar was to follow the same progress as other colonial possessions of this country, would be a wholly elected Council with the Chief Minister in the chair. So it would gradually progress as Malta and other Colonies have done, to complete independence. I echo the views of my hon. Friend the Member for Torquay (Sir F. Bennett), who pointed out that the
  1486
  Spaniards have a genuine fear that the present constitution of Gibraltar is not the end of the road. The end of the road, if the precedent were followed, would be independence for Gibraltar. We know that this is not the intention of any party in this country, and is never likely to happen because it is not the wish of the people of Gibraltar. There is no positive guarantee of this. I think that they have a justified fear, and therefore I believe that it is essential to give Gibraltar a new constitution which would provide a final solution to this problem—a solution other than independence.
  I believe that there are two possibilities. One is integration with this country and the other is, as has already been suggested, and as I suggested in the last debate we had on Gibraltar, a constitution such as the Channel Islands, or the Isle of Man. Very briefly I would like to remind the House of what that means. Integration would leave Gibraltar with full internal self-government, maintaining their own legislative assembly, but would probably mean representation of one or more individuals at Westminster. It would inevitably mean United Kingdom income tax, as well as, presumably, United Kingdom social services. It would mean administration through the Home Office. Although it sounds relatively simple I think, when it is looked into, certain snags became apparent, income tax being one.
  The other alternative seems to be the best, and I would like to remind the House of the administration of the Channel Islands and the Isle of Man. The citizens of these islands are citizens of the United Kingdom Islands and Colonies. They are not just citizens of the United Kingdom and Colonies. They have a special status. They are administered by the Home Office, and not by the C.R.O. or Colonial Office. The United Kingdom conducts their foreign affairs and defence, and in the Isle of Man, their Customs. But they have their own legislative assemblies, and their own system of local administration. The laws of these islands depend for their validity on Orders made by the Queen in Council. Their legislature can therefore be said to consist of the Sovereign, the Privy Council and the local legislative assembly acting jointly.

  1487
  I understand that the Lieutenant Governor is the personal representative of the Sovereign and is also the official channel of communication between the United Kingdom authorities and the Island authorities. I believe that this form of government would be very suitable to Gibraltar, would obviate the difficulties of having representation in Westminster, would also obviate the necessity of having a British income tax, and would provide a final solution to the constitutional future of the Rock, a solution which would endure as long as has the independent Government of the Channel Islands, or the Isle of Man.
  The last point I want to raise is the whole question of assistance. Her Majesty's Government have given generous assistance to Gibraltar; £1 million spread over three years from the C.D. and W. funds, £200,000 Exchequer loan, if required, to assist the Gibraltar Government, and the special grant of £100,000 for budget aid this year. These are assisting the Government of Gibraltar not only in balancing their budget, but in creating new housing and other schemes for the benefit of the people of Gibraltar. But they do not assist the trader, the man running a shop, the merchants, the taxi-driver.
  These people cannot be assisted by Government aid. They can only be assisted by restoring Gibraltar to its normal conditions, when trading and tourism can continue uninterrupted. I believe, if we are to continue to rely, as we have in the past, on the loyalty of the people in Gibraltar, we must show them open and positive support. There have been a number of suggestions made. One has been the recall of Her Majesty's Ambassador in Madrid, another has been the imposition of tariffs on Spanish imports, and the additional amount of money being used to defray the additional costs in Gibraltar. Another suggestion is the control over the landing of Spanish aircraft at British airports, or the blocking of part of the pay of Spanish workmen, which is earned in Gibraltar. Personally I would regret that, because I think it would be a punishment imposed on the Spanish workmen, who are doing a very good job, for themselves, their own country and for Gibraltar.
  There could be a campaign to check British tourism in Spain. As my right
  1488
  hon. Friend the Member for Torquay suggested, the whole question of Spanish colonies in Africa, which seems to have been overlooked by the Committee of 24, could be brought to the attention of the United Nations. I regret having to make these suggestions because, like my hon. Friend the Member for Torquay, I do not want to pick a quarrel with Spain, but Spain has herself initiated this quarrel, and I believe that we must show the world that we are prepared to share the consequences of the blockade, and not merely to pay for them. In other words, Gibraltar's trade is being demolished and I believe that our trade should take its share of this punishment. If by putting tariffs on Spanish imports our trade suffers, then I believe that it is the right contribution that we should make. A recent incident in Gibraltar, in which, I believe, my hon. Friend the Member for Torquay was involved, started because French tourists were turned back from the Gibraltar—Spanish frontier. They resisted by sitting in the road. A little later the French Consul got in touch with Paris and President de Gaulle made a direct request to Madrid. The next day the people were allowed through in their cars. This shows that positive, forceful action pays off.
  Spain knows full well that we will never give up Gibraltar as long as the people of Gibraltar remain loyal to this country but the Spanish Government believe, that the blockade may well weaken the will of the Gibraltarians and, therefore, their loyalty to this country and that next time, whenever it may be, five or ten years hence, a similar incident might finally lead to Britain agreeing to cede the sovereignty of Gibraltar because the people of Gibraltar were fed up with the continuance of these appalling conditions.
  It is, therefore, immensely important for this House to demonstrate our full loyalty to Gibraltar. We cannot deserve or expect that loyalty unless we are prepared to be loyal to the Gibraltarians. This does not only mean helping them with cash, but it means positive action to demonstrate our common association with Gibraltar in her hour of travail. I hope that when the Minister replies, she will tell us what positive action the Government intend to take if the Spanish Government continue to refuse to come to the negotiating table, which, obviously, is the answer that we all desire to achieve.
  2.12 a.m.
  Mr. Nigel Fisher: I am glad that the hon. Member for Brighouse and Spenborough (Mr. Jackson) has taken the opportunity to raise again the problem of Gibraltar. The hon. Member put the case well and briefly and I certainly do not want to go over the facts again. For several months, however, the Government have been under gradually increasing pressure, both in this House and outside, to act effectively on behalf of Gibraltar. In this House, both sides have been patient, and certainly the people of Gibraltar have been very patient, because we have all known the difficulties, but nine months have now passed and nothing really effective has yet been done.
  Significantly, the pressure now is from all three political parties; from the Front and back benches of the Conservative Party, from the back benches of the party opposite and from the Liberal Party, too. Adjournment debates have been initiated from both sides of the House and literally dozens of Parliamentary Questions have been addressed to the Prime Minister, the Colonial Secretary, the Foreign Secretary and the Minister of Overseas Development, all put by hon. Members who have been to Gibraltar and who have seen for themselves the serious and distressing effect which the Spanish blockade has inflicted upon the economy of Gibraltar.
  An all-party group of the Commonwealth Parliamentary Association has now been formed under the Chairmanship of the right hon. and learned Member for Rowley Regis and Tipton (Mr. A. Henderson), himself your Deputy Chairman, Mr. Speaker, of the United Kingdom branch, supported as officers by the hon. Member for Devon, North (Mr. Thorpe) and myself.
  What is much more important is that in Gibraltar there has been increasing frustration and disillusionment, culminating in the large public demonstrations not long ago and in the formation of a National Government to press the case of Gibraltar upon, no doubt, sympathetic but certainly, so far, inactive British Ministers. I do not like having to say that to the Under-Secretary of State for the Colonies. I have great faith and confidence in the hon. Lady; she is an extremely intelligent and a very good
  1490
  Minister—I hope that in paying her this tribute I do not embarrass the hon. Lady—and on this issue I know her heart is in the right place. Nevertheless, nothing effective has been done.
  The Chief Minister of Gibraltar, his deputy and other prominent Ministers and businessmen have been here again and again to plead for help. That is all they can do. Because, of course, Britain is directly and immediately responsible for the foreign affairs and the defence of the Rock, and ultimately for its trade, economy and living standards as well.
  The response of Her Majesty's Ministers has really been, I think, a little pathetic. After nine months of ineffective diplomatic protests to Spain and repeated assurances to Gibraltar that we would defend her interests there has last been an offer, I think quite a good offer, of financial aid, but that really, in this context, is only a palliative. No action whatever has been taken against Spain, and no real attempt has been made to change the policy of the Spanish Government.
  Even worse—and this is the point I very much want to impress upon the hon. Lady—there have been repeated public statements from the Government Front Bench—I do not think by her, but certainly by the Minister of State at the Foreign Office—that the Government do not intend to take any action at all. "No reprisals" is the parrot cry. But why not? If persuasion and protest have not raised the Spanish siege of this loyal little Colony why should reprisals be automatically ruled out?—without even a warning to Spain of the retaliatory measures which are open to us, and there are many. To say publicly to Spain that we shall do nothing—and it has been said from the Treasury Bench—is an open invitation, it seems to me, to Spain to continue her present policies.
  I really must say this to the Government. If they will not defend the interests of Gibraltar, at least let them not shout their tepid irresolution from the house tops. It simply plays into the hands of the Spanish Government. They know now, from all they have heard from Ministers of this Government, that they can get away with virtually anything. They know their claim to have isolated the whole Gibraltar issue from

  1491
  the context of Anglo-Spanish relations has in fact succeeded. It is a sad and humiliating state of affairs.
  Indeed, it is rather worse than that. If the Government continue to do nothing, I believe—it has been said before, by my hon. Friend—the disillusionment in Gibraltar will be complete, and anti-British as well as anti-Spanish feeling will begin to develop on the Rock and then the Government of Gibraltar may well have to resign. If that happens we shall be forced to return to direct colonial rule by a British Governor—What a position for the Labour Government of Britain to find themselves in! What an embarrassment in the United Nations! I hope that if the Government dare not defend Gibraltar they will at least wish to defend themselves against the criticism of world opinion.
  What action could the British Government take, if they wanted to take any action at all? I do not suggest at this moment we should withdraw our Ambassador from Madrid, although this should not be absolutely ruled out if Spain's policy persists for much longer. I do not suggest at this moment that we should reduce the amount of currency available to British tourists to Spain, although that would bring Spain to her senses more quickly, I believe, than almost anything. I do not suggest at this moment we should restrict Spanish imports into Britain, although I believe we may have to consider that very seriously—
  Sir Douglas Glover: Why not?
  Mr. Fisher: —if there is no change in Spanish policy in the very near future.
  I do say there are a number of smaller measures which would at least show Spain that we are taking this issue seriously. We could—I admit it is a sacrifice more for Gibraltar than by us—limit the number of Spanish workers entering Gibraltar, or refuse access to all Spanish workers, so long as the frontier restrictions continue. There is no reason why restrictions should be a one-way traffic. I think we could find workers from Tangier and perhaps Portugal to replace the Spanish. Alternatively, we could refuse to allow Spanish workers to take
  1492
  their Gibraltar earnings, or a proportion of them, out of Gibraltar. Their money is earned in Gibraltar and it is perfectly fair to say that at least part of it should be spent there. We could refuse entry to Britain of holders of Spanish passports so long as discrimination against Gibraltar passports continues. These are not major reprisals, but they would at least show Spain that we are in earnest, and this is what I want to get over. They should—and this is most important of all—be accompanied by a stern and genuine warning that there is more, much more, to follow if these do not produce results. My main complaint is that the Government not only do not warn Spain publicly, but they say, in effect, "We are not going to do anything, so you can carry on".
  It was always thought—and I think that my hon. Friend the Member for Haltemprice (Mr. Wall) mentioned this—that Spain's friends in Britain were only to be found in the Tory Party, and indeed we want, and have always wanted, to have friendly relations with Spain; but not at any price. Not at the price of the people of Gibraltar. After all, it was a Labour Government who objected to selling Spain the frigates, and who cancelled the naval manœuvres. But now it is a Labour Government of Britain who dare not say "Boo" to the Spanish goose.
  Talk about appeasement of Hitler! At least Germany was a mighty world power threatening world war, but to have to appease Spain … We never did that at the very peak of Spanish prestige in the reign of Queen Elizabeth I. To do it in the reign of Queen Elizabeth II is not only betraying the people of Gibraltar, it is humiliating to the people of Britain.
  2.21 a.m.
  The Under-Secretary of State for the Colonies (Mrs. Eirene White): I think that we would all like to thank my hon. Friend the Member for Brighouse and Spenborough (Mr. Jackson) for having raised this subject, not for the first time, in this House and thus displaying his continuing interest in the problem. It has brought forth, even at this hour of the morning, some extremely interesting speeches and a very eloquent peroration from the hon. Member for Surbiton (Mr. Fisher).

  1493
  It is very interesting to note that on this subject of Gibraltar we do, by and large, cut across party lines, and that there is very deep concern on both sides of the House, as has been shown in our debates, and as the hon. Member for Surbiton reminded us, in the recent formation of a group under the general aegis of the Commonwealth Parliamentary Association which I am sure is very much welcomed in Gibraltar, as it has been welcomed here at Westminster.
  The formation of this group will be of particular comfort to the new governor, and I think that it would be appropriate on this occasion to remind the House that there is about to be a change of governor in Gibraltar. Sir Dudley Ward, who has had a difficult period of office, will be leaving on the 16th of this month, and his successor, General Sir Gerald Lathbury, will arrive in Gibraltar aboard H.M.S. Eagle on the 28th of this month. There will be a very short interregnum. I think that this will be acceptable to everyone, and I am sure that we all wish General Sir Gerald Lathbury well, and hope that very early in his tenure of office we shall see some solution to this problem.
  I do not want to be political, because I think that that would be against the general spirit of the debate, but there have been one or two political remarks, and I do not think that I can accept the taunt that this Government have done too little in nine months when, after all, the Government who preceded us did not solve the problem of Spain and Gibraltar in nine years. As the hon. Gentleman knows—he was my predecessor in the Colonial Office—there is correspondence there of twelve months ago on this very subject of the awkwardness of relations between Spain and Gibraltar. I agree that the situation was nothing like as intense as it is now, but to pretend that the preceding Government managed in nine months to solve the difficulties from 1954 onwards is unreal. They did not begin to solve them within two years, and they had not completely solved them at the end of nine years. I had to make this point in reply because we have been taunted with something which is not entirely fair when one considers past history.
  I am content to leave it at that, because I grant immediately that the present situa-
  1494
  tion is much more serious, in the sense that it affects to a much greater degree the life and commerce and wellbeing of Gibraltar. It was for this reason that we were particularly glad to have this recent opportunity of discussions with the Chief Minister, Sir Joshua Hassan, and his deputy, Mr. Peter Isola, of the Coalition Government. The House may be interested to hear the message that we received from them after their return to Gibraltar. It was from Sir Joshua to my right hon. Friend and it said:
  "Now that we have returned to Gibraltar Isola and I would like to express our appreciation of the courteous, helpful and frank way in which you and all Ministers and officials treated us and our problems. We were naturally particularly grateful for the opportunity to see the Prime Minister. We have reported to our colleagues on our visit and would like on their behalf to thank Her Majesty's Government for the financial help and technical aid which … has been promised to us."
  We fully recognise that money is not everything, but to pretend that money does not help, or is of no consequence—as seemed to be suggested by the hon. Member for Torquay (Sir F. Bennett)—
  Sir F. Bennett: The last thing I want to do is to interrupt the hon. Lady when she is saying so much with which I agree, but that remark is not fair. I said that money generosity was one thing, but that this was not what was concerning the people of Gibraltar. However generous we are, we cannot buy the loyalty of people who have already given their loyalty to us.
  Mrs. White: I appreciate that. I suggest, however, that money can help. I am not speaking now just of the immediate budgetary assistance to help with the extra expenses incidental to this crisis, but the very substantial sum—for a population the size of Gibraltar—of £1 million in development aid. That is a real, constructive help to Gibraltar in meeting this new situation. It is true that even though, as we all hope and trust, we find a way of resolving this completely unnecessary quarrel with Spain, Gibraltar remains geographically vulnerable, and it is important to build up its economy as far as possible.
  I was particularly glad to have the opportunity recently of talking to one of a team which has been engaged by the Government of Gibraltar, with financial

  1495
  assistance from the Ministry of Overseas Development, in working out an intelligent plan for the best possible use of the land space, general resources and potential tourist attractions of Gibraltar itself, because Gibraltar has so far been regarded by tourists merely as a gateway to other places. Although I fully appreciate that there are geographical limitations in a place of this size, I am convinced—as is everybody who has been there—that a good deal more can be done, with imagination, to develop the facilities of the Rock itself.
  I was glad to have an opportunity of speaking to a member of the team—the very well-known architect, Mr. Maxwell Fry. He and the other members will produce an imaginative and exciting plan for Gibraltar. Its report is to the Government of Gibraltar, but we hope to see it in about October. It is very important that we should encourage Gibraltar in the idea that it should improve its own resources and make itself as self-supporting as possible.
  Furthermore, we were glad that on their visit to London the Chief Minister and his colleague saw not only Government officials but also commercial and tourist interests, and that they have arranged a very important visit from the National Association of Chambers of Commerce in the autumn. I was glad, on making inquiries on the tourist side, to find that British European Airways is taking two groups of travel agents to Gibraltar, one in September and one in November, to study the potential there and take advantage of the fact that from Gibraltar one can fly north or south.
  They will be looking particularly at the possibility of developing tourism with North Africa, using Gibraltar as a base, or combining a brief stay in Gibraltar with going across to Tangier and Morocco. If hon. Members will look at forthcoming brochures published under the auspices of B.E.A. they will find that there are proposals of this kind. It seems to me, therefore, that although we are perfectly well aware that this is not the full solution by any manner of means—that can only be achieved if we reach a sensible agreement with Spain—these should be admitted as being important both for themselves and for morale.
  1496
  The question of immigration has been mentioned and the treatment of Gibraltar for this purpose. We by no means rule out the possibility of this but it was not a strong talking point with our friends in Gibraltar because naturally we hope that there will be some improvement there and it will not be in their best interest to encourage the best, enterprising people to leave the Rock while there are the possibilities of developing their own facilities. Gibraltar with its qualifications would be eligible to come in under the arrangements announced by the Leader of the House the other day, but at the moment we do not feel that this is an immediate issue.
  It might become an issue later on if we found that all our other efforts failed but at the moment we do not wish to encourage the idea that one should leave Gibraltar unless one otherwise wished to do so. This is not ruled out, but at this point of time it would not be in the best interest of Gibraltar to encourage this thought. We want to encourage Gibraltarians to develop their own resources, and they will need energy and enterprise for that.
  As for tourism, it is perfectly true that the total air traffic going to southern Spain from this country has declined. We have no means of telling what the traffic may be from the north moving south direct, but the combined air traffic through Gibraltar and Malaga has declined by one-third compared with last year and it therefore appears that there has already been some resistance on the part of tourists to going to Spain. At the moment we take no particular steps to discourage tourists from going to Spain but the end of the present tourist season is approaching and if it proves impossible to get any alleviation of the situation on the frontier it will have to be seriously considered.
  When arrangements are being made by tourists agencies and people themselves for next season we might have to ask them to consider seriously whether or not it is in the general interest that they should take their holidays in that part of the world. We have not quite reached that point yet because we are still hoping that we may have some sensible conversations about this, but it is interesting that, without our taking any particular action, except for remarks by myself, the right

  1497
  hon. Gentleman the Member for Preston, North (Mr. J. Amery) and the hon. Member for Devon, North (Mr. Thorpe), all made with a consensus of opinion on this point. People have been drifting away of their own accord.
  On the major political questions which are the nub of all this, I was interested in the suggestion made by more than one hon. Member that we should seek a final solution of the Gibraltar problem on the lines of a Channel Islands relationship. The Secretary of State for the Colonies recently held a conference in Oxford to consider precisely this sort of problem in relation to the remaining dependent territories in general. This was one of the solutions which was suggested for one or two places, of which, hypothetically, Gibraltar could be one. Whether this is what Spain wants is another matter.
  The difficulty is that, unless we can have proper talks with Spain, we cannot even find out whether this sort of solution, which might have certain attractions, is the kind of solution which might satisfy Spain. If people will not talk, one cannot find out what is in their minds and what their difficulties are. One Minister after another has said at this Box that we have no intention whatsoever of pursuing a course leading to independence for Gibraltar, because we do not think that, in these circumstances, it has any validity. The Gibraltarians have never asked for it: they recognise their situation.
  I and my colleagues have said that Malta is no analogy. When one says this and means it, one hopes it will be accepted. It is very difficult when one says these things and they are not accepted.
  We should like to have the opportunity of discussing with Spain real and not bogus issues. Her Majesty's Government—this is a matter for the Foreign Office—have made it clear already, and we have informed the Spanish authorities, that we have at no time wished to insist on preconditions for conversations in a way which would prevent those conversations from starting. We feel that we have been entirely reasonable in all this and that it is up to the Spanish Government, if they want to reach a civilised solution, at least to come and talk and
  1498
  let us see whether we can work out any sort of sensible arrangement.
  I hope that after this period, when it is plain—as our recent offer of assistance has emphasised—that we have no intention of weakening on Gibraltar, and that we shall sustain Gibraltar but that this is not really a sensible solution, the Spanish Government will be prepared to have talks with us. We cannot go further than that at the moment.
  We have so far—I repeat, "so far"—resisted taking retaliatory measures. In fairness to my hon. Friend the Minister of State for Foreign Affairs, I would draw attention to what he actually said in the general debate on foreign affairs on 19th July. Referring to suggestions that a policy of retaliation should be adopted, he said that he did not think that, at present—and he repeated the words, "at present"—it would be the appropriate way to help the people of Gibraltar. About seven or eight lines further on, again he used the phrase, "in present circumstances".
  I should not like the House, or, through the House, the Spanish Government, to be misled—I am sure unintentionally—by the hon. Member for Surbiton in saying that we had suggested that there was no possibility of this. I merely put this right for the record.
  Mr. Fisher: I was not referring to the speech in the foreign affairs debate. I was referring to the Minister of State's speech in the last Adjournment debate on Gibraltar, when those covering words were not used. I am very glad that he is learning and being influenced by the hon. Lady. I think those qualifying words are very important, because we must not let it go out to Spain that we shall never take any action.
  Mrs. White: I am quoting from the latest text, of 19th July. I hope that the House will be satisfied with that.
  We are extremely grateful for the interest taken by hon. Members in all parts of the House in this very difficult situation. We have said that we should like to find a friendly and reasonable solution, and the Spanish Government would be well advised to pay attention to what was said from the benches opposite as well as from this side of the House that by continuing this policy they are very

  1499
  seriously endangering their store of good will in Great Britain. We hope that they will not press us to the point at which any overt action would have to be taken to make these views clearer.
  Mr. Dan Jones: May I have one point clarified? My hon. Friend said that at the moment the Spanish Government will not talk. Do we understand that offers have been made to the Spanish Government by Her Majesty's Government to sit down and discuss the problem but that those offers have not been accepted?
  Mrs. White: Those offers have not as yet been taken up.

  RATING VALUATION
  2.42 a.m.
  Mr. Terence L. Higgins: I am glad to have the opportunity of exercising the traditional right of a backbench Member to raise a matter which he feels is of particular concern to himself or to his constituents on the Third Reading of the Consolidated Fund Bill. Although I do not expect it to be universally popular at this hour in the morning, I would say, "Long may this tradition continue".
  The point which I am anxious to raise concerns the basis of valuation for rating purposes, and I am very glad that the Financial Secretary has done me the honour of offering to reply to the debate, not least, perhaps, because speaking at 2.45 a.m. is something for which he is admirably fitted by his recent training on the Finance Bill. I will try to put the point to him as briefly as I can.
  The whole question of rates is of vital importance to my constituents, because the number of elderly people in Worthing over retirement age is almost one-third of the total population. They have been badly hit by the rise in the cost of living, because many of them are living on fixed incomes. The burden of rates falls particularly harshly on them because there is very little industry in the constituency.
  I hope that I shall not introduce too partisan a note into the proceedings if I say that the whole problem of rates has been largely overlooked in recent discussions which we have had in the House, and in particular people in my
  1500
  constituency have become concerned because of the promise which was made in the Labour Party manifesto which said,
  "We shall also seek to lighten the burden of rates which today falls heavily on those with low incomes. While the reform of the rate system and investigation of alternative forms of local government finance may take some time to accomplish, we shall seek to give early relief to ratepayers by transferring a larger part of the burden of public expenditure from the local authorities to the Exchequer."
  This was not adequately covered by the Prime Minister in his reply to the debate last week, and this is a very important matter to my constituents.
  In writing to one of my constituents the Prime Minsiter tried to explain that the reason why early relief could not be given to ratepayers was the economic situation, but this is a completely invalid argument because the way in which the burden of public expenditure is shifted from one part of the community to another is surely in no way affected by what the current economic situation may be. My constituents are greatly disappointed by the fact that the Minister of Housing had an opportunity of transferring part of the cost of certain local services from the rates to the central Exchequer soon after the Labour Party was returned to office in October and did not take it.
  This is by way of setting the general background to the problem, because clearly all these problems become much more crucial if doubt is cast on whether the basis on which the rates are levied is disputed. There has been a considerable amount of doubt about the basis of valuation on which rates are charged. This has been particularly important in Worthing, and I put a Question to the Chancellor of the Exchequer last March asking how many appeals against rating assesments in Worthing remained undecided and when all of them were likely to be heard. I received this Written Answer:
  "By 12th March, 3,206 appeals against assessments in the 1963 lists for Worthing had been received by the West Sussex Local Valuation Panel: 1,616 remain to be decided.… the appeals … should be cleared within 18 months …"—[OFFICIAL REPORT, 16th March, 1965; Vol. 708, c. 239.]
  In these circumstances, there is a great deal of delay in hearing appeals against

  1501
  assessments, and this obviously must reflect the dissatisfaction which people have about the assessments which have been made.
  It is true that people disputing assessments can defer payment of half the increase until the appeal is heard, but this is not a reasonable means of relieving hardship in such cases because people often dare not defer payment of that part of their rates because they may find at a subsequent date that they must find a large lump sum which they are unable to afford out of their incomes. It is vitally important, therefore, that appeals against the basis of assessment should be speeded up as rapidly as possible.
  I come to the whole question of valuation. As the law stands, assessments are deemed to be correct until they have been proved to be incorrect, but in the absence of adequate rental information on which valuations can be based and challenged the historic check or safeguard has largely vanished. This has happened, first, because the percentage of houses which are being rented as against the number of houses which are owner-occupied has greatly decreased and, consequently, the amount of rental information available has correspondingly diminished. It has happened, secondly, because the control of rents which will be carried further by the Rent Bill, when it becomes law. This will mean that there will be no market valuation regularly available on which valuation officers can base their assessments. This change must be faced up to as an inevitable consequence of the introduction of the Rent Act. I hope that the Financial Secretary will give his views on this point. In writing to one of my constituents in December, the hon. and learned Gentleman stated:
  "In considering the rental evidence on which to base their valuations, valuation officers normally discard those rents which, for one reason or another, do not represent a fair indication of the free market value of the property; for example, controlled rents, service tenancies or rents which seem excessive".
  But once one has controlled rents under the Rent Bill, the whole basis of valuation largely falls to the ground and we will have rents based on rateable values and rateable values based on rents. Then the whole process of valuation becomes circular and inevitably grave doubts will
  1502
  be cast on the fairness on which rates are being assessed on individuals.
  The situation becomes increasingly bad when we discover that rents may be taken as a basis for valuation when a very large number of properties of a particular kind remain unoccupied and are being held back until the market price rises to reach what the investors originally intended to obtain. No account appears to be taken of that when assessing the rateable value.
  The main point that I want to raise, therefore, is whether the Financial Secretary will think seriously about an alternative to the present basis, or, if that is not considered desirable, whether he will at least agree and, if necessary, introduce legislation to implement a better check on the present basis of valuation.
  The crucial points which arise are twofold. First of all, on the question of comparisons between different types of properties, at the moment anyone complaining about the basis of a particular assessment is not generally allowed to make comparisons between different types of properties, although as far as the legislation is concerned it would be allowed. The reason for it is that there has been a decision of the Lands Tribunal, I understand in the case of Wilson v. Taylor on 29th April, 1957, where the Tribunal held that in determining the rateable value of flats comparison with houses is of little value, as normally rents of flats bear little or no relation to rents of houses, even where there is similar accommodation. The extension of that decision has been to rule out in any appeal case the idea that one can compare, even in general terms, the rateable value of a house with that of a flat which may be next-door to it. It seems that this has been an extremely restrictive ruling, preventing people from appealing against a rateable value which has been assessed by the valuation court on an effective basis.
  I hope that the Financial Secretary will agree that, in view of the increasing control of rents which is going to take place and in view of the diminishing proportion of houses, flats and bungalows which are rented as against owner-occupied, it is reasonable to extend the comparisons, not only within the same type of property, but also between different kind of property—between flats and bungalows, or between bungalows and

  1503
  houses, and so forth. Unless that is done, it seems that the basis on which anyone can appeal effectively against a decision will be severely and drastically limited.
  I would urge the First Secretary, in view of the circumstances which I have outlined, that he should consider whether capital values are not, in the present situation, a better basis on which to evaluate the rateable value of property. We have heard a great deal of talk during the Finance Bill about discounted cash flow, and it would be reasonable to put forward the view that the value of any particular property represents the discounted value of its expected future earnings, and therefore that the ratio of the rentable value of a property to its capital value must be the same if it is compared with the ratio of some other property's rentable value compared with its capital value. However, if one looks at the valuations which have taken place in a number of instances, it is possible for two properties to be rated at the same value for purposes of assessing rates, and then to find that the capital or selling values of those two properties are totally different, even double in some cases. I hope that the First Secretary will agree that the situation must be regarded as a piece of economic nonsense.
  I also hope that, when the review of rates and the rating system which is being undertaken is completed, we will find that the Government will feel the need to alter the present basis of assessment for rating purposes, and that they will overrule the decision of the Lands Tribunal which has prevented in recent times a reasonable comparison between different types of properties as well as between properties of the same type, such as flats, such as houses and such as bungalows. I hope that legislation will be introduced which will enable capital values to be used, if not as a substitute for the present notional rents, at least as evidence against the assessment made by rating officers on the basis of the notional rent, by those who feel that the present basis has not operated fairly in individual cases.
  2.55 a.m.
  Mr. R. W. Brown: Many of my constituents are finding the present rateable values to be extraordinarily high. I pay tribute to my hon. Friend, who looked into the
  1504
  matter for me but was not able to solve the problem. In my constituency it has become much clearer just how stupid the present valuation system is. Finsbury has been joined to Islington to form a new London borough. The figures show that people in the Finsbury area have rateable values twice as high as those of people living in Islington for precisely the same type of property. That is an absurd situation when it is appreciated that the owner of the property is the same company and that the houses were built at exactly the same time in exactly the same style, and have the very same amenities. The whole matter needs to be looked into especially since my constituents are now faced with rent increases based on rateable value which means that in one area the people not only pay higher rates but higher rents as well.
  The rating system as a whole is, in principle, based on an Act of 1601, and much of that Act has not yet been repealed. It seems absurd that in 1965 we should still regard such a system as sacrosanct and impossible to change. In the Finsbury part of my constituency, the idea of trying to ascertain what the rent would be if the property were freely offered for letting in a free market, and with no legal restrictions on rent, is quite impossible. In making an analysis of what happens in my constituency, I was astonished to find that out of about 15,000 hereditaments the assessment was made on the basis of about 300 privately-owned properties. When I challenged the rating officer the only answer I got—after, as I thought, proving my case—was, "Whilst I accept what you say, I can only work within the law. If you want this system altered, you will have to change the law."
  Another influence in one part of my constituency is its close juxtaposition to the City. I know that normally it is quite impossible to have a very wide difference on the two sides of a road where the rateable value can be high on one side and low on the other, but in this special case the people concerned are not living there because they want to but because they have no freedom to go elsewhere, due to their jobs and 101 other factors.
  The City rating is, of course, very high because of the type of place the City is. What the valuers have done in Finsbury is to tail off rateable values from the

  1505
  high City levels down to the Islington part of the new borough very gradually. Thus, those of my constituents who live close to the City—they do not have fine views because many overlook such things as breweries and other industries and have to suffer the smells and noise therefrom have high rateable values on their property because of the influence of the City.
  I urge the Government to look at this situation. I am sure they must try to find a solution in order to get a more modern method of assessing rateable value of what a property is worth. I was sorry that the hon. Member for Worthing began by making a political point. Some of us in London have been trying to fight this situation for many years and it came to a climax in 1962 when all heriditaments came up for revaluation. There is no need for this to be a party political point. It is a difficult situation and it will take a great deal of effort on the part of any Government to find a new norm for assessing the worth of property in terms of rent. As my hon. and learned Friend the Financial Secretary knows, my constituents are suffering and I urge him to try to find a solution.
  3.2 a.m.
  The Financial Secretary to the Treasury (Mr. Niall MacDermot): The hon. Member for Worthing (Mr. Higgins) and my hon. Friend the Member for Shoreditch and Finsbury (Mr. R. W. Brown) are both trying to lead me from the path of virtue, because it is not in order to discuss future legislation on this Bill. I will seek as far as I can without straying too far from the rules, to answer their points.
  The hon. Member for Worthing introduced his remarks with general comments about the question of local government finance as well as that of the rating system. It is not only at a quarter to three in the morning that we on this side of the House are getting a little tired of that sort of sniping with which he began. The system he is complaining about was introduced by his Government. The revaluation that he is complaining about was started by his Government. If he is complaining that we have not altered the whole of that system within one year, a year in which we have had to grapple with the most serious economic situation the country has met in recent
  1506
  times, I think it is time he chose a different tune.
  Mr. Higgins: I think we entirely agree that the problem of valuation is an intractable problem that has confronted both Governments. My point was that it was not reasonable to say that the economic situation had prevented the transfer of part of the expenditure from rates to the central Government.
  Mr. MacDermot: I entirely reject that argument. One cannot do a major operation of this kind except within the context of a total review of the system of local government finance. That is what is taking place now, and included is the problem of the rating system. It is well known that the present system has been a matter of widespread complaint for many years by people who feel that it has caused a burden to fall unfairly and we are seeking to find practicable and equitable remedies. This examination is now in its final stages and I hope that it will soon be possible to make an announcement of the Government's proposals.
  On the general question of the revaluation, I emphasise what I said in the Adjournment debate on 9th July—the Inland Revenue office has a very onerous job in conducting this revaluation as well as many other responsibilities. Since I have been responsible for this aspect of the Treasury's responsibilities, I have been most impressed by the way in which, despite the severe staff shortage, the valuers and their staffs have carried out their work.
  I do not accept that the revaluation was inadequately done in Worthing or elsewhere. Undoubtedly there have been some mistakes, but of course there will be in any such system. That is why we have the appeal procedure. When the hon. Gentleman gave notice that he was to raise this subject tonight, I made inquiries to see what had been the total number of rating appeals since April 1963, when the current valuation lists came into force, compared with the number for the corresponding period following the introduction of the previous list in 1956. At 30th June, this year, there had been fewer proposals for the reduction of rating assessments than by 30th June, 1958, with the old list. This time it is just under a million and last time it

  1507
  was just over a million, although there were 17½ million hereditaments in the June 1963 revaluation and only 15½ million in 1958.
  The hon. Gentleman referred especially to flats. I remind him that valuation officers are obliged by law to assess all properties according to the rents which they may reasonably be expected to bear. The valuation officers have to follow the views laid down by the Lands Tribunal that they should have regard to the rents paid for flats when dealing with flats and, when dealing with houses, to the rents paid for houses. It is only when there is insufficient rental evidence for properties of a particular type that rental evidence of properties of a different type is relevant, and even then it has nothing like the same force or relevance.
  I am told that in Worthing and district the rental evidence for properties of different classes was reasonably plentiful and that when valuing flats and houses, respectively, the valuation officer did not need to go beyond the evidence available to him for that type of property. The Worthing and District Flats Residents Association over the last two years has repeatedly criticised the general level of the assessments of flats as being too high in comparison with the level for houses. It has forwarded evidence of rentals being paid and on which it relies for substantiating its case.
  The Inland Revenue has looked into all this extremely carefully in the light of the evidence produced by the Association and other evidence at its disposal, but it concluded, as I told the Association in the correspondence to which the hon. Gentleman referred, that the general level was correct and that any individual mistakes which might have been made could be put right by the ordinary appeal system. It is of interest that of 900 or so appeals which were heard by the valuation court in the district in the first year, some two-thirds related to flats and in about 90 per cent. of those 600 appeals the valuation officer's assessment was confirmed. I appreciate that the hon. Gentleman is making an attack on the basis of valuation as laid down in the existing law, but I am pointing out that in performing their task, which is what we as Parliament have put on them, the valuation officers have applied the exist-
  1508
  ing law, and the figures show that they are doing their job competently.
  The hon. Gentleman suggested that the general existing valuation basis was unfair and that we should abandon it for valuations based on capital values. This is one of the proposals which the Government are looking at. While I cannot forecast the outcome of the examination, I recognise that there could be certain advantages in changing to a capital basis.
  Clearly, there would be more evidence available of the capital value of dwellings. The basis might be more intelligible to domestic ratepayers. On the other hand, a change to capital values would obviously lead to some pretty drastic changes in the relative rate burdens of different classes of ratepayers and of different ratepayers in the same class. It is the preliminary view of the Valuation Office that if we shifted to a capital valuation basis the effect would be to increase the burden on dwellinghouses compared with other properties. For commercial and industrial properties in some areas there would be less evidence of value instead of more and special difficulties in arriving at the capital value of public utilities.
  These difficulties could no doubt be overcome if it were thought that it would be a fairer basis for valuation. In any event, revaluation on a capital basis might take five or six years to carry out, assuming that there were valuers available to do that work. If the suggested basis for revaluation is the right solution, I must point out that it is very much a long-term solution. In the meantime, the Government are concentrating on what can be done to make the rating system more tolerable in the immediate future and we hope to make an announcement very soon.
  The remarks I have made—which seem to have induced a state of somnolence on the part of one hon. Member—apply also to the remarks of my hon. Friend the Member for Shoreditch and Finsbury about his constituency. As he pointed out, the propinquity of the City of London, with its very high rateable values, to a part of the area of that borough produce, on applying existing law, differences in rating valuations which may seem surprising to people merely comparing two properties which are very similar in themselves, but which

  1509
  because of their situation have a very different rental value. It is this which leads to the difference in rating assessment. The valuation officers can do no more than apply the law as it is laid down. They make such use as they can of things like the tone of the list to even out imbalances which there may appear to be within the valuation list. Subject to that, all they can do is to apply the law.
  I am satisfied that the Valuation Office is doing this in a fair and reasonable manner. Whether the system can be improved is outside the scope of what is legitimate for us to discuss, but I hope that we shall have announcements soon which will help on this matter.

  EDUCATION (CAPITAL PROJECTS)
  3.14 a.m.
  Mr. Christopher Chataway: The House debated higher education on 25th March this year. That was a debate in which we achieved a wide measure of agreement in all parts of the House and a debate particularly notable for the similarity of views expressed by the Secretary of State and my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle).
  In summing up that debate, in what was an admirable speech, the Minister of State, Department of Education and Science, concluded by talking about educational building programmes. He said:
  "As a nation, we have not had a large enough or good enough programme. Now we must have a mood of impatience in which we are prepared to go forward and expand higher education and all aspects of education at a faster rate than ever before."—[OFFICIAL REPORT, 25th March, 1965; Vol. 709, c. 841.]
  That was in March of this year. Last week we had the Chancellor's statement which made no mention of universities or colleges. It must have been a surprise to many people to discover that the stop on building programmes was to apply to universities, technical colleges, colleges of education and to the Youth Service. These programmes, except in development districts and in areas of high unemployment, are to be postponed for six months.
  I do not wish to jog backwards to election promises, or to go over the ground that has been fairly adequately
  1510
  covered in lengthy censure debates in the past week or two. I want to inquire from the Minister of State what will be the effect of this very serious stop on educational building, because we have had no information so far. The Guardian reported the day after the Chancellor's statement that the Education Department had had to answer their inquiries by saying that the Department had no intimation of the Chancellor's intentions. Certainly in the succeeding days we have not been able to get any detailed information as to what this stop will mean. I want to look at the justification that has been given for these measures and to consider what alternatives might have been open to the Government and to the Department of Education and Science.
  I would like to ask the Minister of State two preliminary questions merely asking for confirmation. I take it that when the Chancellor says this stop is not to apply to schools this means that the minor works programme is to go forward this year as planned.
  The Minister of State, Department of Education and Science (Mr. R. E. Prentice)indicated assent.
  Mr. Chataway: I am glad to see the Minister of State nodding. The second question is, will the school building programmes stand, to the middle of 1967–68, as previously announced?
  Mr. Prentice indicated assent.
  Mr. Chataway: I see the Minister of State nods again. I am sure the House will be glad to know that. I pass on to five of the building programmes which have been affected.
  First of all, the Youth Service. Since the publication of the Albemarle Report there has been something of a rejuvenation of the Youth Service in this country, and I believe that what has happened in the Youth Service is regarded with approval by most Members in this House. It is a fairly general view that there is a vital function to be performed by the Youth Service, voluntary and statutory organisations. Throughout that period, as hon. Members will know, the Youth Service has asked for bigger building programmes than we have been able to give. They have been substantially bigger in the pre-Albemarle days, but the Youth

  1511
  Service Development Council has never made any secret of its wish for a substantially bigger programme than the £4½ million programme of last year, which was to have been repeated this year.
  This must mean a substantial reduction in that programme and must constitute about the most serious setback to the Youth Service since the publication of the Albemarle Report.
  Secondly, the programme of building of sports and recreational facilities will be very hard hit. The curbs on local authority capital expenditure must mean that in the remainder of this year we shall see only a proportion of the building of sports facilities that would otherwise have occurred.
  I have admired the enthusiasm of the Joint Under-Secretary of State to the Department of Education and Science, whose concern for the Youth Service and for sport is not in question. It is something of a tragedy that he should preside over the Youth Service and be responsible for sport at a time when both these programmes are to suffer such heavy cuts. He has been able to give out hundreds of thousands of £s of additional help to various sporting organisations, but those efforts will be completely overshadowed by this stop on the building of sports facilities.
  Thirdly, I want briefly to refer to the colleges of education. I know that my hon. Friend the Member for Tonbridge (Mr. Hornby) hopes to be able to say something concerning teacher training. It seems, however, a curious choice of priorities that the Government should bring the colleges of education under this axe. The Secretary of State for Education and Science has again and again said that he regards the teacher shortage as his first priority. We have not thought it right to press him to agree to the recommendations of the National Advisory Council on the Supply and Training of Teachers, who wanted the Robbins target for 1973 to be brought forward to 1970, but to postpone the building of colleges of education for six months seems to be an extraordinary selection of priorities.
  Those who have been members of Sub-Committee B of the Estimates Committee will not be in much doubt that the effect of the stop on building for the universities
  1512
  must be to put in serious doubt our ability to attain the Robbins targets at the Robbins standards of provision over the coming years.
  It may be that the Estimates Committee took too readily and too wholeheartedly the view of the universities about building programmes after 1967, although I do not want to enter into that argument tonight, but certainly the Estimates Committee was persuaded that the existing provisional building programmes—I realise that they are only provisional—after 1967 were inadequate to the universities as they stood. The Estimates Committee was persuaded that the universities would not be able to reach the Robbins targets at anything like the Robbins standards of provision unless there were substantial additional capital grants before those years.
  In paragraph 120 of its Report, referring to the years after 1967, the Estimates Committee stated:
  "It is not for Your Committee to recommend a reduction in student numbers but they must make it clear that, if the Robbins target is to be achieved without prejudice to accepted standards of university education, a further large increase in the capital grant of the Vote which they have been investigating would appear unavoidable."
  To postpone starts over the next six months must mean a delay in completion of university buildings until well into 1967. The Government's decision must, therefore, make it seriously questionable whether it will be possible in the years after 1967 to reach the Robbins targets.
  But what of the immediate building programme? My right hon. Friend the Member for Handsworth, in a letter to The Times of 2nd August, said that it was the view of the University Grants Committee at the time that the last building programme was negotiated
  "that the 1965 building programme, as announced, was the absolute minimum required if the Universities were to be able to meet the Robbins estimate of the short-term demand for places during the critical years of the bulge."
  I do not think that any hon. Member will accuse my right hon. Friend, who was quite largely responsible for the negotiations with the University Grants Committee, or my right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg), of pretending it was overgenerous. Indeed, I well remember how

  1513
  many suggestions there were from the other side of the House that the programme was inadequate to the needs of the universities. It is, therefore, a little strange that the Secretary of State for Education and Science, in his rather unhappy and uneasy winding up speech the other night, should have said that the Government still believe that the Robbins targets can be met. Nobody will be more delighted than I if the Minister of State is able this evening to substantiate that claim and to show that the Robbins figures or anything like the Robbins standards of provision can be met despite this postponement of the university building programme.
  I now refer to the technical colleges and the fifth and last of this series of cuts, and perhaps the most serious of all. The House will be aware that since 1957 there has been a steady expansion of industrial training and of the technical colleges. I think that the least explicable of all is that the Government should have decided to include the technical colleges within this postponement of public building. These colleges are faced with a very heavy pressure of numbers indeed, and the passing of the Industrial Training Act, of course, has added to the pressure upon the colleges. Those who know the education world will know that most of the technical colleges are not luxurious places. They are not places in which there is a great deal of space to spare, and I am sure those who do know the technical colleges well will have difficulty in imagining that they can readily squeeze in greatly increased numbers, without additional building.
  Mr. Tam Dalyell: Would the hon. Gentleman not agree that any blanket view can be misleading, and that it does vary from region to region and place to place?
  Mr. William Hamling: And from college to college.
  Mr. Chataway: Well, the hon. Gentleman may know of areas where there is no pressure upon technical colleges. All I can say is that in settling the last building programme for the technical colleges at £24 million we had at the Department of Education and Science requests from local education authorities
  1514
  for building programmes of not less than £69 million. We gave £24 million. The bids were for £69 million, and I do not believe that any hon. Member would seriously contend that those programmes, either, were over-generous.
  The numbers in the technical colleges are increasing at the moment, probably at the rate of about 70,000 a year, and the House should be in no doubt at all that this recent action is a serious blow to industrial training in this country. A great deal of emphasis has been laid, and rightly, upon the necessity for more training and better training for industry. There is no shortage in this Government of Ministers who are supposed to be concerned with technology and technical training. One wonders what the Minister of Technology had to say in the Cabinet when this suggestion was put forward, and how hard he fought it.
  I remember the noble Lord, Lord Bowden, being reported as saying, I think it was in Australia, that he was brought into active participation in Labour politics by the Conservative Government's decision at the time of the quinquennial review on grants for the universities, and that it was the Government's decision then not then to meet in full the requirements of the U.G.C. which persuaded him into active participation in the Labour Party's affairs. If that was so, and bearing in mind that the Government at that time were not going back on a building programme that had been agreed, and bearing in mind that the sums involved may even have been smaller, I think that this might even be an occasion for him to make his exit from Labour politics.
  There is also the Joint Parliamentary Secretary to the Ministry of Labour, who I rather hoped might be here for this debate. When the Government were being formed, he came out of Downing Street saying, perhaps a trifle self-importantly, that he had a job which did not exist in the last Government. It turned out to be the Joint Parliamentary Secretary to the Ministry of Labour who was responsible in the last Government, as he is in this, for industrial training, in conjunction with the Department of Education and Science. I wonder whether the hon. Gentleman was even told that the Chancellor was to make

  1515
  this statement to cut back industrial training in such a severe fashion.
  Mr. James McInnes: Does the hon. Gentleman realise that it took his Government five years to give university status to the Royal College of Science and Technology in Glasgow?
  Mr. Chataway: I am not sure that that is directly relevant to the question of industrial training. I have no doubt that the hon. Gentleman feels strongly about this matter, but I am not sure that I would regard it as an indictment of the previous Government to set against what we are discussing this evening, which is the most serious stop on education building for a number of years.
  What are the justifications which have so far been given for this? It has been suggested by the Chancellor and by the Prime Minister that this decision is a result of the review of Government expenditure. This is an explanation which I find difficult to accept, and which I am reluctant to accept, because if we have these measures announced as a result of a carefully thought out review of Government expenditure, presumably the reduced programmes are to stay for a number of years, and it is not just a question of a six-months' postponement that we are discussing.
  It has also been suggested that the pressure on the building industry is too great, and that demand has to be reduced. It may well be—and I shall come to this in a moment—that there is a case for reducing Government expenditure, but the evidence that there is substantial pressure on the building industry—so substantial as to warrant huge cuts in Government expenditure—is difficult to discover. All the evidence that I have been able to collect shows that the pressure on the building industry is less now than it was a few months ago, and certainly that was the conclusion of the report of the National Institute to which my right hon. Friend the Leader of the Opposition referred in his speech the other day.
  In any event, surely it is now understood that cuts in capital expenditure are a very long delayed business? Reductions in capital expenditure do not have any immediate effect on the pressure of
  1516
  demand on the building industry. Their effect will be felt a year or 18 months hence, and I should have thought quite likely amount to a prescription for a recession in the building industry.
  The truth of the matter—and it is probably recognised by many hon. Members—is that the Government believed that our creditors wanted to see a reduction in Government expenditure.
  Mr. Hamling: So did you.
  Mr. Chataway: I am coming to the case for a reduction. It is my view that the Government were persuaded that there was a case, or that our creditors believed that there was a case, for cuts in public expenditure, but that they were too afraid to make a reduction in current expenditure and were reluctant, for whatever combination of reasons, to make any reduction in consumption. They have therefore let the axe fall upon capital expenditure. This is a grave mistake.
  Mr. David Webster: My hon. Friend has made a very valid point. The argument about trying to change our revenue affairs on capital account is irrelevant. The Minister of Transport today said that the cut of £75 million on our road building programme will be worth £1 million only in the current year on that account.
  Mr. Chataway: I am grateful to my hon. Friend. That shows that cuts on the capital side must have a long-delayed effect. But let us for a moment concede that there was a case for a reduction in Government expenditure. I am prepared to concede further, for the sake of argument, that it was reasonable to choose education to bear a substantial part of the brunt of that cut in expenditure. But does it really make sense—even if all that is conceded—to choose universities, technical colleges and colleges of further education for cuts in capital programmes?
  We have no figures to go on, but I guess that about £40 million will be taken from capital programmes for educational expenditure as a result of the Chancellor's announcement. If it were decided that educational expenditure had to be reduced by £40 million, surely it would have been more reasonable to reduce by that amount the £93 million Exchequer subsidy on school milk and school meals

  1517
  rather than to cut back these vital building programmes. I see the look of horror on the face of the hon. Member for Willesden, East (Mr. Freeson), but there are provisions for the relief of those who cannot afford to contribute towards the cost of school meals.
  I am not advocating an increase in the price of school meals. It is not a reform that I am desperately anxious to see. But I believe that any reasonable Government would have chosen a reduction in expenditure here rather than on the capital side. Such a reduction would be far more relevant to the needs of our economy.
  Mr. Reginald Freeson: "The hon. Member misinterpreted my expression. I may well wish to quarrel with any suggestion of cuts in the services that he has mentioned, but what is the connection between his suggestion and easing the strain on the building industry? How do we do this by cutting the subsidy on milk supplies in schools, and so on?
  Mr. Chataway: I am sorry. I hoped that I had made it clear to the House that I saw little evidence that there was a need so substantially to reduce the pressure on the building industry a year or eighteen months hence as the Government's programme will do, and that the case that exists for reducing Government expenditure or the level of demand relates far more to consumption than to capital expenditure.
  This is the contrast to the action taken by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) in 1961. Then, school minor works were to an extent reduced, but no other capital programme was interfered with and, whatever criticisms are made, I believe that he was far nearer to a correct decision in those circumstances than the Government are in these circumstances today. He let his axe fall on consumption rather than on the capital expenditure which is vital to the future of this country. The Government have said again and again that these reductions are selective. All I can say is that they are very strange selectors indeed.
  Dr. Jeremy Bray: Will the hon. Gentleman recall that among the cuts made in 1961 was a
  1518
  sum of £40 million in subsidies to building societies for mortgages?
  Mr. Chataway: While it would be in order to go on to roads, housing or overseas aid, we are discussing education, and it was to the education capital programmes that I was referring when I talked about the action of the previous Administration.
  I find this action on the part of the Government hard to understand. I genuinely find it extremely difficult to understand how a Government could have the view of economic and educational priorities which is exemplified by the statement which we had from the Chancellor of the Exchequer last week. I can only say that it seems to me to show all the hallmarks of over-hasty decision and of a Government who are no longer in control of events. I hope that the Minister of State will be able to give us some figures and will be able to say by how much he expects these programmes this year and next year to be affected.
  While I hope that we may have the figures I am not too confident, because I fear that the decision was taken without any detailed, clear assessment of the effect which it was likely to have on education. This is, as I have tried to suggest, a bad day for education. I hope that the Government or their successors will speedily be able to restore building programmes, particularly for the technical colleges, to the levels which those colleges have come to expect.
  3.43 a.m.
  Mr. William Hamling: The hon. Member for Lewisham, North (Mr. Chataway) said that this was a bad day for education. It is indeed, and I as a former technical college teacher and a man who has been engaged in education since 1931 as a teacher take a very serious view of the postponement of some of these capital expenditures, particularly in the two forms in which the economies have been directed, first to teacher-training and secondly to further education and the technical colleges.
  Not long ago I initiated a debate in the House on the question of the training of teachers and the increase in the number of teachers which we might obtain. It is quite clear that we have been attempting to put pressure on the training colleges to expand and to adopt extraordinary

  1519
  methods to bring in more students. We have been asking them to adapt their programmes, their syllabuses, their buildings and their training methods to absorb more students, and now they are faced with this decision. I wonder, for example, how far these cuts will inhibit the capacity of the Ministry to raise the school-leaving age successfuly in 1970 or to reduce the large number of over-sized classes in primary and secondary schools. These are very serious problems. We have asked former members of the teaching profession to come back; we have asked the profession to adopt extraordinary methods in coping with the press of the increasing population in schools. Then they are faced with these severe cuts.
  The hon. Member for Lewisham, North, spoke about industrial training. As one who has taught in a technical college in an industry which I would describe as slightly old-fashioned, I am not so much concerned with industrial training. What I am concerned about is the liberal education which technical colleges provide. I have felt and have said in the House before that technical colleges could provide a tremendous opportunity for young men and women who have missed their opportunities at school to receive later in life a full and wide cultural education. This is what technical colleges should be looking at in 1965 and even more in the future.
  We on these benches take a very serious view of these cuts, and I hope that my hon. Friend will tell the Government so. One question to which the hon. Member directed his attention was how much these cuts will be. What is the actual amount? I am sure that it was very difficult for him to present his speech on the basis of this ignorance, coupled with the doctrinal ignorance to which my hon. Friend the Member for Willesden, East (Mr. Freeson) referred. This combination of ignorance must make things very difficult. This is a very important question, with which I hope my hon. Friend will deal.
  Having expressed our criticism of these cuts, I would say that it does not lie within the mouths of the Opposition to mount the attack which they are mounting tonight. The hon. Member spoke about election programmes. Let us look at some. I have here the White Paper
  1520
  which was the "dud" prospectus on which they fought the election. The figures show that, between 1963–64 and 1967–68, educational expenditure was to go up, in real terms—not just in figures—by 25 per cent. This was nonsense when it was written, and it is even greater nonsense tonight. Total public expenditure was to go up in this period by 17 per cent. in real terms—
  Mr. Chataway: Is the hon. Member aware that the increase in educational expenditure proposed for these five years is slightly less than the increase which took place in the last five?
  Mr. Hamling: We are talking in real terms, not just in money terms.
  Let us look more closely at this. Let us look at the increase in capital expenditure which they were talking about, as exemplified in this White Paper—an increase of about 24 per cent. on the basis of a 4 per cent. increase in the national product every year, a figure which was never reached during the 13 years of office of the previous Administration. Yet they have the nerve in the White Paper to say that
  "the costing is as accurate and realistic as the Government can make it at the present time."
  They further say that this is
  "an approximate calculation of the prospective level of public expenditure in 1967–68 at constant prices on the basis of the Government's present policies and programmes."
  Mr. Chataway rose—
  Mr. Hamling: I will not give way again.
  Hon. Members: Give way.
  Mr. Chataway rose
  Mr. Hamling: I will give way when I want to. I give way a great deal; the last time I spoke at any great length I was interrupted 28 times—not only by right hon. and hon. Gentleman opposite, for some of my hon. Friends had a go, too. I give way very easily, and I will give way again when I have finished this section.
  Will any hon. or right hon. Gentleman opposite say that at any time in their 13 years they approached an increase of 4 per cent. year by year in the national product, or that they came anywhere near it, or that there was any steady approximation towards 4 per cent. towards the end of their 13-year rule?
  Mr. Chataway: Yes. Last year.
  Mr. Hamling: The hon. Gentleman was not in office last year. Look at the graphs. They show that the average increase in productivity over the years was about 3 per cent.—nothing like 4 per cent., and there was no prospect of 4 per cent. This prospectus was false.
  For hon. Gentlemen opposite to talk about promises is a little invidious, especially when the hon. Member began the debate by referring to the Robbins Report. Everyone knows that the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) accepted that Report within 48 hours of publication. He mentioned the strictures of the Estimates Committee on the present programme of building—that it was "inadequate". This is not an indictment of my right hon. Friend but an indictment of the Tory Government. What was being said by the Estimates Committee was that the acceptance so lightly of the Robbins Report by the previous Prime Minister shows his abysmal ignorance of the basic preparation for the acceptance of that Report. A massive expansion of our education was agreed—and what basis in planning did they provide? None. It does not lie in the mouths of hon. Gentlemen opposite to criticise my right hon. Friend.
  I have spoken about the White Paper. Looking at the tables for the National Income and Expenditure, it is seen that particularly in the last four or five years there has been a fair expansion of education which contrasts sharply with some other social services, which have been comparatively neglected. I refer, in particular, to the Health Service. Since 1953 it has been increased by only 98 per cent. One of my hon. Friends referred to the policy of the previous Administration, and I should like to comment on what the attitude of the Conservative Party might have been if they had been faced with the massive financial crisis which we have faced over the last nine months and which we inherited from them. It is not a crisis which we invented. We inherited it from them. What would have been their reaction?
  Remembering that there has recently been a salaries award, it is well to consider the attitude of the former Government to the Burnham Committee award
  1522
  of 1961. Instead of it being £47½ million the Minister arbitrarily reduced it to £42 million and, remarkable though it seems, he not only reduced it but also altered the terms of the award. That was quite unprecedented. That was the policy of the former Government when faced with an economic crisis which was nothing like as serious as the crisis which we face today.
  Mr. Chataway: The hon. Gentleman and his hon. Friends must stop trying to dine out on this one. They must realise that the award of £42 million given by the former Administration at that time was slightly more, in real terms, than the award to the teachers which came out of arbitration on the last occasion.
  Mr. Hamling: Ask the teachers what they think. Did it correspond to a 13 per cent. increase? I was a teacher and I know the answer. And the answer is that it did not. The hon. Gentleman will have to go back to school and learn his arithmetic a little better.
  The hon. Gentleman then referred to minor works, although he did not give any figures. The policy of the former Government resulted in minor works being reduced by 50 per cent. in 12 months. Then he went on to speak about cuts which are now taking place, but his remarks did not reveal the true situation. The previous Administration made cuts in major works by £10 million. In this connection, one of my hon. Friends put a Question to the then Minister in April, 1961, about major works for education. The Answer was concealed in a Written Reply. That was the attitude of the Tory Administration, who reduced from about £65 million to about £55 million the major capital works programme.
  Mr. Chataway indicated dissent.
  Mr. Hamling: That was the policy of the hon. Gentleman's party. The facts are on the record. The Director of Education for Derbyshire said about minor works that the programme was a specific slowing down of the 1958 White Paper's plan for secondary school organisation. The National Association of Divisional Executives commented:
  "By August, 1961, all attempts at the systematic remodelling of older schools were abandoned".

  1523
  It added that the minor works programme was made
  "… an economic cushion to absorb the shock of demands for economy".
  It should be remembered that the National Association of Divisional Executives is not made up wholly of Socialists. Most divisional executives are in county areas, which are Tory constituencies. It is, therefore, no good the hon. Gentleman coming to the House in a white sheet tonight expressing pious appreciation for the education policy followed by his Party when he looks back at the former Government's record. In general, their policy was to produce a White Paper before the election—a White Paper full of grandiose schemes—and then, a year after the election, to cut the programme. They did that in 1957 and again in 1961. If hon. Gentlemen opposite had gained power at the last election they would be making much more massive cuts than my right hon. Friend has announced.
  Then, for the hon. Gentleman to talk about the Industrial Training Act, was a real piece of impertinence. What provision did they make in technical colleges for industrial training? They did nothing. They drew an arbitrary distinction between training and further education. What was the first act of the present Government in that field? They set up a co-ordination committee between three Ministries—Scotland, Education and Labour—to provide for the implementation of industrial training. No such machinery was ever set up by the previous Government. They had no ideas.
  One might ask what financial provision had they made for developing industrial training, and the answer is none. Every time that my friends at the Ministry of Labour have produced draft plans for industrial training, they have objected. It does not lie within their mouths to criticise the educational policy of the Government.
  Let us look at the figures of education expenditure by this Government so far. Expenditure on teacher training is up by 25 per cent. since 1962–63. Expenditure on further education is up by 46 per cent. since 1962–63.
  Mr. Webster rose—
  Mr. Hamling: I will not give way. I am in the middle of giving some figures.
  1524
  I will give way when I have finished my sentence. The hon. Gentleman knows that I will give way; I have given way twice already.
  As I have said, expenditure on further education is up by 46 per cent. Expenditure on universities has increased by exactly 100 per cent. since 1962–63. Does that sound like a Government which are economising on education?
  If we look generally at expenditure on capital projects by the Government, the increases are substantial, notwithstanding that ever since we came to power we have been facing an economic crisis. It does not lie in the mouths of the Opposition to criticise Her Majesty's Government on this point tonight.
  4.02 a.m.
  Mr. Richard Hornby: The purpose of my right hon. and hon. Friends in raising this subject was to try to get some clarification of the impact on the educational world of the announcement which the Chancellor had to make last week. It would be very much more to the point if I directed my remarks back at the hon. Gentleman who is going to reply later on to try to get some of that elucidation from him rather than follow the example of the hon. Gentleman the Member for Woolwich, West (Mr. Hamling), who seems to be trying out the election speeches that he is going to have to use fairly soon. I can assure him that if he tries out the same inaccuracies on a Saturday afternoon in his constituency, he will certainly get the 28 interruptions about which he has spoken.
  Mr. Hamling: The hon. Gentleman has used the word "inaccuracies". Will he quote one?
  Mr. Hornby: When the hon. Gentleman referred to the comparison between the salary award this year and the one of my right hon. Friend he was certainly making a mistake. When he attempted to run down the record of the previous Government and talked of cuts in education, he failed to realise that year by year, throughout our period of office, educational expenditure had risen to a point where there was only one other country in Europe, namely, Sweden, which could remotely compare with what we have done. However, as I have said, it

  1525
  is more to the point to return to the question of getting some elucidation of the meaning of the Chancellor's statement for educational authorities.
  One has a good deal of sympathy with the hon. Gentleman opposite and his Department in a time of retrenchment like this. It is never easy for big planning Departments in times of retrenchment, and everyone on this side is happy to know that his Department is one of the very biggest spending Departments in the country. That is what we are concerned about, when we realise that education is vital to our national development and to the growth that we want to see.
  The first anxiety on this side, and I am sure that it is shared by many people in the Ministry, is about what the total expenditure is likely to be. When the Chancellor of the Exchequer talks of reshaping the programme, one has a nasty feeling that the shape to come will not necessarily be quite as expansive as the shape to which we had until recently been looking forward. The sooner the authorities know what is intended, the more helpful it will be to them in the planning of their programmes.
  Secondly, what priority are the colleges of education to get? Much has been said on both sides, in the House, in election speeches, and on many other occasions by Ministers and by my right hon. Friend's about priorities. I say that the top priority should rightly be ascribed to the supply and training of teachers, and good teachers. The election manifesto of the party opposite said:
  "… Labour will give to teacher supply a special priority in its first years in office …"
  Mr. Hamling: It has done so.
  Mr. Hornby: I recognise that we have had statements from the right hon. Gentleman the Minister, and I will come to that point in a moment or two.
  In February, the Secretary of State assured us that the target was to be 122,000 teachers by 1973–74. Will the hon. Gentleman be able to tell us this evening that that figure still holds good as the share of the Robbins target? I hope so, but I am sure that it will be a very big and tight squeeze. It will not be easy to achieve that target, bearing in mind, again, that in paragraph 72 of its Report the Advisory Council said that
  1526
  it was of the opinion that it is accommodation
  "… that sets the over-riding limited …"
  and it is accommodation that is bound to suffer by the six months' delay we are now discussing.
  When the right hon. Gentleman addressed the N.U.T. in the Isle of Man, in an impressive speech in which he looked in great detail at the problems of teacher supply, he made 14 points. We have debated those points which, as I am sure he would be the first to admit, were largely an amalgamation and collection of a great many suggestions from all quarters over a period of time. How many of those 14 points still stand? Are they still to make the contribution for which he hoped when he made that speech? Are the colleges of education to be allowed to rent additional buildings and to purchase houses in their vicinity? Will that be affected by the present measures?
  Will the colleges of education, under the new conditions and with the effect of the six months' delay, be able to help in the way that was foreseen? Are the technical colleges to be able to make the contribution to the supply of teachers that the Minister hoped from them? Are we to have, at the date we hoped for, the four or five day colleges that the right hon. Gentleman mentioned in his Isle of Man speech? How will all this affect the size of classes, and the total picture which, as we all know, is difficult and gloomy enough, with the prospect, even before these setbacks came along, of not being able to reach the standard of 40 in primary schools and 30 in secondary schools in 1978 on present trends?
  These are not easy questions. I come back to the point raised by my hon. Friend—that one is bound to question whether the priorities have been judged rightly in letting the cuts fall in this field rather than in the more politically difficult but, in the long term, better field of consumer expenditure.
  The schools, we are told, are to be contained within the existing programme. Does this mean up to the figure already agreed or is the level likely to be less? This is of special importance to Kent. I am happy to say that Kent is not an area of unemployment but it has genuine problems. The growth in school population

  1527
  is estimated to be as high as 65 per cent. over the next 20 years. I recognise the pressures on school building and on the building industry in the area and, in that context, I hope that the Minister of State will look at the methods of tendering in some of the areas where pressure is high. He may learn from the experience of some universities that there are ways in which tendering by the building industry for school projects could be more attractive.
  When the Chancellor refers to the deferment of purchases of equipment in the schools, does that apply to books, scientific equipment and so on? If so, again this is of great importance to the education authorities and the sooner we can have accurate information on it the better. One regrets the necessity for these measures but I question above all the wisdom of letting them fall in the places they are falling, in particular on the colleges of education which, time and again, we have been told are to have top priority. Patently, they have not received it.
  4.13 a.m.
  Mr. Tam Dalyell: Let us pursue the subject of university accommodation and tendering raised by the hon. Member for Tonbridge (Mr. Hornby). I had the good fortune the other day to go to his county of Kent, to Canterbury to see the new University of Kent. I will say at once that the concept of halls of residence, with their great refectory windows, picturing out the Cathedral, is wonderful. But what strikes one in general terms, in a situation of rapid higher education expansion, is the question of whether we are certain that we can afford these sort of excellent facilities.
  Many of us here have benefited from a residential education. But if the choice is to be a residential education for some on the one hand and higher education for more on the other, I would come down on the side of higher education for the more because of a deep belief, shared, I am sure, by most hon. Members, that any boy or girl capable of higher education is entitled to it from the State. This is his or her right.
  It was for this sort of reason that 18 months or two years ago I and a number of others were great supporters of a possible university in north London, per-
  1528
  haps based on Mill Hill. Professor Medawar was very frank and said that of course he would like a university in north London based on the existing facilities of the M.R.C. research unit at Mill Hill, and that the presence of expert staff, many of whom would be very happy to take part in university work, was not the over-riding consideration. The overriding consideration in Professor Medawar's view was that students would be going in the reverse direction to the major flow of the traffic. That may seem to be a fairly mundane consideration when discussing universities, but it is nevertheless important, in relation to resources devoted to residence. My first point is that faced with the difficulty of accommodation, which is exceedingly expensive, we have to face the choice that more students will have to travel daily from home to colleges of advanced technology or universities.
  The hon. Member for Tonbridge spoke about tendering. Here I quote not my own opinions which are extremely critical, but those of the Public Accounts Committee, opinions to which the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and a number of other hon. Members opposite subscribed. Nor shall I quote from the more censorious Amendments which I tried to persuade the Public Accounts Committee to accept. This is the considered view of that Committee with all the expert knowledge at its command in the shape of the Comptroller and Auditor General and his staff of 600 and which in its Third Report, available on 26th July, 1965, said:
  "Your Committee note that the study bedroom unit formula for halls of residence, which was first introduced at the end of 1958, is only now being replaced and that the financial savings expected under the new system will not start to materialise for nearly two years; that so far no bulletin has been published to give advice and guidance to universities on the planning and design of halls within that formula, and that a bulletin based on the new cost system is only now being considered"—
  the hon. Gentleman was right to wonder about the whole system of tendering—
  "and that the analysis and assessment of standards for even the simplest type of academic building has not yet been completed."
  We as a House of Commons are entitled to ask why not. The Committee added:
  "Your Committee are dissatisfied with the progress which has been made in the review and reassessment of standards and cost limits

  1529
  and urge upon the Department of Education and Science and upon the U.G.C. the need for much greater efforts to ensure that as much as possible of the university expansion programme is brought under the improved system of financial control."
  When the hon. Member for Lewisham, North (Mr. Chataway) talks of having to have cuts somewhere in the education system, he may agree that the point at which superfluous expenditure is most easily eliminated is not the primary schools, not school meals or school milk, but higher education. Here is the greatest scope for saving.
  Mr. Hamling: Is my hon. Friend aware that in their White Paper the last Government forecast a heavy increase in expenditure on school meals and milk as a result of their policy?
  Mr. Dalyell: That just adds to the number of contradictions from hon. Members opposite.
  The Public Accounts Committee went on to speak of capital expenditure, furniture and equipment. It says:
  "Your Committee regret that the Department and the U.G.C. have not obtained more information about the possibility of securing financial savings by bulk purchase of furniture through the Ministry of Public Building and Works, and have not made more rapid progress in developing financial control, through monetary allowances and cost limits, over grants in respect of furniture and equipment other than for study bedrooms and kitchens. They welcome the assurance that information about the Ministry's costs will be sought and recommend that this enquiry and the further work on the determination of monetary allowances and cost limits should be expedited."
  When a Select Committee makes those sort of remarks, strong language by their standards, we are entitled to ask who was in control at the time to which they refer. The right hon. Member for Birmingham, Handsworth (Sir E. Boyle) has some explanation to do here because he and his right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg) were in control at the time to which the Public Accounts Committee referred. Either he can admit a great deal of strength in the evidence of and questions put to his then Permanent Secretary or say that the Public Accounts Committee was wrong. He has either to say that the Public Accounts Committee was misguided or that there is
  1530
  some reason for very considerable stricture on the lack of economy when the right hon. Member was in charge.
  I wish to refer to a general point of a non-party nature. Under the present cuts, let me say frankly that it seems that research, particularly post-graduate research, will be harmed. The facts as I understand them are that every year for the last six or seven years research which is State-financed has been increasing at an annual rate of 15 per cent., compound interest. It is well known arguments are going on in the Treasury that this should be pared down gradually, so that by 1970 it will be 8 per cent. Apparently this year 15 per cent. has been allowed. My hon. Friend the Minister of State can either confirm or deny this. If he can confirm it, it will be to the credit of the Government that they have done so in a situation of financial difficulty. The university world has got wind of the fact that by 1970 the amount will be pared down to 8 per cent. increase. Its grounds for alarm are substantial. It is said that the number of research students is increasing 7 per cent. each year, that there is an annual increase of 5 per cent. in "sophistication" factors and it is argued that in order to stand still there has to be an increase of 12 per cent. in research expenditure each year. If in fact this is pared down to 8 per cent. there will be regression in per capita expenditure.
  In a situation where the gross national product is expected to rise by 4¼ per cent. or 5 per cent. a year, how long can the university world expect to go on increasing by 15 per cent.? Clearly it cannot go on for eternity. The question therefore arises, what savings can be made? A 7 per cent. increase each year in the number of researchers may be questionable. It is not always practicable for a politician to say so, but it is the general impression of some of us that much research taking place is of monumental irrelevance. Some of the resources should go into advanced forms of regular training for those who are going to be regular teachers at universities and colleges of advanced technology.
  When we are looking seriously at how expenditure on higher education can be brought under some reasonable form of control, because that is what we are

  1531
  debating, we should look at the expense attached to the lonesome Ph.D.—a highly expensive course and a course which some of us would guess is not rewarding for the expense involved. Of course there have to be individual projects going on, but there are many advanced courses that can be arranged at less expense, and at a saving of the nation's resources, which would do at least an equal amount of good to those who are going to be university teachers.
  Could we put the day behind us when it is necessary, in order to be a university science teacher to embark on a Ph.D.? Let the Ph.D. no longer be a passport to university teaching and let us have other avenues to becoming a don. So I offer, in shorthand because of the hour of half-past four, some measures which will bring our financial situation, in relation to higher education, into a more realistic sphere.
  4.27 a.m.
  Mr. Harold Gurden: I intend to save the time of the House by not referring to the controversy, about which we have heard so much, about who is to blame for the present economic situation, and the difficulties in which the Government find themselves today. There have been some very good speeches in the past few weeks about this from both sides of the House, and some speeches that were not so good, and it has certainly crept into this debate.
  As I understand it, if the Labour Party's policies for this period of Government mean anything, they certainly put everything on the expansion of science and technology. I think that my hon. Friend's who have spoken are quite right to highlight the cuts now proposed in this matter, because they seem to strike at the very roots of what the Government intend to do or originally intended to do.
  While we are talking about the cuts being made in this field the right hon. Gentleman the Member for West Lothian (Mr. Dalyell) reminded me that we ought not to forget some of the serious needs in education. The capital projects of today and the primary schools came to my mind at once, because expansion is needed in the primary schools and the back-log there is rather serious with the
  1532
  higher birth rate and with so many immigrants coming in, even under the new proposals. Primary schools are very important indeed. The comments made by the right hon. Gentleman the Member for West Lothian which brought this to my mind were the suggestions he made about residential accommodation for colleges and universities.
  One has, as he quite rightly said, to ask oneself, is it right, in the present situation to see these elaborate and expensive halls of residence go up, as they are going up, in Birmingham, and to know, at the same time, of the needs for new capital expenditure so urgently needed in other fields of education, such as primary schools? This is disturbing, and although we like to see these halls of residence one has to look at it in perspective.
  The other question we have to ask ourselves, in the light of the announcements which we have had, is what is going to happen to the raising of the school-leaving age? Will this be achieved by 1970? It was agreed upon by both parties and we all hope that it will be possible. Let us face the fact, however, that it now looks more and more impossible to achieve that aim.
  I wish to raise another matter which might be helpful. I wonder whether we are handling in the right way the proposals for capital projects put forward to the Ministry by the local education authorities. The building programme priorities submitted by the local education authorities are the result of comparisons only within their own areas. Since the economic squeeze is with us, as it always has been to some extent, should we not view the situation nationally and compare the priorities on a national basis which can be applied to the whole country, so that priorities in one area can be matched against those of another area? The result of this might well be that some local education authorities would have greater cuts than others, while others in greater need would have more money.
  My hon. Friend the Member for Tonbridge (Mr. Hornby) has mentioned the need that will arise in his county, and it is very real. The same thing applies in areas which have a high intake of immigrants. I do not consider it right, therefore, to continue any longer on the

  1533
  basis that capital project priorities are decided simply for each separate area. The needs of one area should be matched against those of another area.
  Something else which might be helpful in the discussion which has taken place concerning the low productivity which is obtained from the capital assets in use in education. A tremendous amount of money is invested in the buildings used throughout the education system, and the extremely low productivity is a vital point. I know that we cannot expect schools to go on to night shifts, but one cannot help feeling that far too little use is made of the expensive buildings and material. Certainly, one could point a finger at universities in this regard.
  In considering savings that might be made, we must look again at the wastage in teacher training. As we all know, teacher training is expensive, but we are not getting the goods out of the pipeline. We have to pay for a lot of teacher training which never produces anything, or produces very little, in the schools. All these are difficult problems, otherwise they would have been dealt with before, but I hope that a fresh look will be taken at some of these things in a further endeavour to find a solution. Let us ask the teachers' organisations and unions to look at these problems for us to see whether they can come up with any ideas to effect savings.
  I suggest to the Minister that he should have another look at the suggestions about comprehensive schools. I do not, however, want to enter again into this argument, which goes on not only in this place, but throughout education. I think, though, that it is relevant to talk about this in relation to money because, obviously, it is going to cost money if we are going to change the system and rush into a comprehensive system and push local authorities into it. This might begin to the detriment of the primary school building, if more is to be spent on secondary school building. It will have to come out of the total programme.
  It may be worth having another look at what the Ministry has been recommending to local authorities. I hope that the constructive suggestions which have been put forward this morning will be looked at, since we have had quite enough of accusing each other about who is to blame for the present situation.
  4.36 a.m.
  Dr. Jeremy Bray: There must be a very strong reason for keeping you, Mr. Deputy-Speaker, out of your bed at this time of the morning. My reason is that I hope it will be possible to persuade the Government to treat this matter somewhat differently from the way it has been dealt with in announcements which have been made and, I suspect, will yet be made this morning.
  The strongest condemnation which can be made of the cuts in the building programmes in education are that they bear too much resemblance to the steps taken by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) and the right hon. Member for Hampstead (Mr. Brooke) in 1961 and 1962. I should like to remind the House of what the late Hugh Gaitskell had to say in the debate on 5th April, 1962, dealing with the cuts at that time. He quoted from a letter from the vice-chancellors about the cuts in the University Grants Committee grant, saying,
  "'Nor can it be supposed that the promise of a review next year will enable lost ground to be recovered.'"
  Hugh Gaitskell said:
  "I can only describe what the Government are doing in this matter as discreditable in substance, dishonourable in presentation, and deplorable in its consequences. It would at least have been a somewhat redeeming feature of the whole thing if the Government had come clean and said, 'We cannot and we will not reach even this inadequate target'; if they had said, 'Sorry, the rate of expansion must be cut. …' Brains and skill are the nation's chief assets; we have not much else. … All our prospects of higher productivity and higher prosperity depend on this. I should have thought that everyone was really agreed on that. I know the Government will plead the pay pause and speak of their economic difficulties in recent months."—[OFFICIAL REPORT, 5th April, 1962; Vol. 657, c. 731–2.]
  And so he went on.
  The hon. Member for Lewisham, North (Mr. Chataway) made an important statement when he said they would prefer to see cuts in school meals and school milk rather than the capital programme of school building. One may differ about this, but certainly I would entirely accept what he says about the uncontrollability of changes in the capital expenditure programme.
  On the limited point of controls on the level of activity in building Mr. C. E. D.

  1535
  Wooster, Director of Building Management in the Ministry of Public Building and Works, had this to say at the neutral date of 13th October last year at a conference on planning. He said:
  "Because of the long time cycle, whatever measures have been taken by Government to regulate building investment in the past the tendency has been to produce the wrong trend at the wrong time."
  This is not the time to debate the full range of possible Government measures which might have been and might still be taken. We must now, I think, accept that these cuts have been made, and we must look at what the effect of these will be. How many student places will be affected? It is quite possible to say they will not affect any, for this reason, or that, impossible to equate them with a particular number of places. That ways and means will be found of adjusting accommodation in class and the coverage of teachers. But we do have to look still at the number of places affected.
  The number of students in higher education was planned by the Robbins Committee to increase by 66,000 between 1964 and 1967 if there were an adequate building programme. To accommodate those students, even under great pressure, the building programme would provide an additional 10,000 places for each six months' work of construction. Therefore one can assume that a postponement of six months in the building programme will, in one way or another, have the equivalent effect of reducing the number of places in high education by 10,000 by 1967–68.
  We have the saving clause in the Government's announcement that the programmes in development districts and areas of high unemployment will not be affected, but I would hazard a guess that in the higher education programme, in the university programme in particular, this will not save more than one-fifth of the projects. I take this not as a condemnation of the saving clause, but as a condemnation of the mis-location of the development of higher education in this country, that so little of the investment is in those areas where the social benefits to the surrounding community can best be felt. So the development district clause does not now very much affect the position.
  1536
  Because of the record of the previous Government in cuts in university expediture, and because of these regrettable cuts in educational investment, universities might well be justified in calling down a plague on both our houses and simply fume at the Government, demanding recompense. I very much hope that this will not be the reaction of the universities, not out of any desire to protect the Government, but because of the 10,000 boys and girls whose future and whose services to the country are being threatened.
  There are obviously other needs. The hon. Gentleman opposite spoke of primary school needs, and who can doubt the need for them. And the country is facing an economic crisis. But because of this crisis, there is even more need to make the best use of our resources and to safeguard the future. I devoutly hope that the reaction of the universities and of the higher education world to what will undoubtdly prove in the weeks ahead to have been a great shock to them will be to seek to rationalise the existing university organisation and methods of university government.
  The Secretary of State, in his speech at Woolwich Polytechnic on 27th April of this year, which was widely reported, distinguished between the autonomous sector and the public sector of higher education. He treated as the autonomous sector the universities and colleges of advanced technology under the U.G.C. and as the public sector as those colleges under the control of the Department of Education and Science. Among the distinctions that he made was that it was desirable that a substantial part of the higher education world should be under social control responsive to social needs. This was the rôle of the public sector. But the implication that what he called the autonomous sector is not responsive to social needs is wrong. This must become the feeling in the world of the universities and C.A.Ts.
  I think that the Secretary of State must now call for a far higher degree of social responsibility and a greater acceptance of this in the universities and C.A.Ts. than any Secretary of State has previously been able to assume. We had a very encouraging statement from the Chairman of the U.G.C. in this respect. Some hon. Gentlemen opposite and on this side of

  1537
  the House who were present at Cambridge when we explored some of the problems here were surprised at the gain which would come directly in the university world from a greater acknowledgment and greater provision for the exercise of social responsibility in the universities.
  The Chairman of the University Grants Committee has described the present system as crypto-dirigist, in that we are able now to direct new development in as rational and economic a way as possible in the expansion in the universities, but we have no means of reshaping the existing activities of universities. We have the appalling situation of fragmentation in classics, modern languages, sciences, arts and technologies, grossly mismatched in students-to-staff ratios, with far too small classes in many cases, through lack of co-ordination between universities and, indeed, between technical colleges in particular areas.
  It would be far more satisfactory, both from the research and teaching point of view, if, in the course of the next two years—which is the time it would take to put up the buildings which are now being deferred—the universities were to carry out a major measure of rationalisation of their existing courses.
  To do this the U.G.C. will undoubtedly need to help them. It will also need to develop its own organisation. The Estimates Committee has pointed the first step on the way. It has recommended that there should be a full-time deputy-chairman. I think there might need to be three or four deputy-chairmen. Further, the organisation of responsibility in the universities can no longer be left simply to the universities themselves, with each professor having to plead his case before his own senate or court of the university, among men who, to all intents and purposes, are laymen and amateurs in the matters on which they are being asked to judge. Instead the appeal should be, in each subject, to a commitee of the peers of that particular professor in his subject, thus having, at the University Grants Committee level, an active committee in each subject area.
  This would not be like the present U.G.C. technological sub-committee, which meets once a year and is totally ineffective, but a committee which is more like the medical educational sub-
  1538
  committee, meeting twice a week under the University Grants Committee at the moment. There is a similar need for rationalisation in the local technical colleges in certain areas. In the North-East there is no serious attempt to co-ordinate the courses between the regional colleges or, at the lower level, between the area colleges. There is a great waste of staff time as a result, and too small courses. The encouragement of students to go to certain places where scope exists for them in the course in which they want to study needs to be much more highly developed in the technical colleges.
  The Secretary of State could wait for the storm of protest which will brew up in the university world and the world of higher education in the next few weeks—if he does that I would not care to be in his shoes—or he can step out and go further than any Secretary of State has yet gone, and say to the universities, "We have been forced into this desperately unsatisfactory position. What I am asking you now to do is to share the responsibility which rests upon us nevertheless to provide for the education of these 10,000 boys and girls who are threatened, and to undertake that major measure of rationalisation which is needed to employ our resources more efficiently not only for these but for the whole future of the country."
  4.49 a.m.
  The Minister of State for Education and Science (Mr. R. E. Prentice): It is a tribute to the seriousness with which this House treats education that we have had a debate of this length and quality at this unearthly hour in the morning. I will do what I can to reply to the points which have been raised in relation to the effect of the Chancellor's measures on education. I must restrain myself from replying to all the other points which have been raised by hon. Members who have ranged widely—naturally and properly—in some of their contributions. If I tried to reply in detail to every speech I should be at this Dispatch Box for the next two hours. Nevertheless, all the points raised will be studied within the Department.
  I welcome very much the chance to discuss at this stage the effects on the education service of the measures which the Chancellor has had to announce. I

  1539
  accept straight away that these are serious effects and that all of us on both sides of the House will regret their necessity. At the same time, I do not face the House in any apologetic mood. We have to see this matter in the perspective of the economic situation facing the country and we have to recognise that that affects every aspect of our national life—education along with everything else. There is no such thing in an economic crisis as being able to contract out of it. The nation can only afford the education service that it earns for itself, just as every other aspect of its national wealth has to be earned. Everything has to be seen in that relation.
  It is the easiest thing in the world to say that economic crises are for other people and that there are special cases and exceptions. The fact is that we as a nation have to face up to what we mean by the term "economic crisis" and recognise its harsh realities. I say as a member of the Government that we made it perfectly clear before the election and during the election that the social progress to which we were committed as a party was something in which we would give a lead to the country in terms of economic recovery and that the nation had to face the problems of the economic malaise which had been facing us for so long, that we had to find our way out of that and that it was only in that context that we could fulfil our programme. We said that before we knew the extent to which the country was running into debt under the late Government, and the situation which we have been facing since last October has made it more imperative to take the economic steps which have had to be taken.
  Here I ask the House to see in perspective what we have done. First, it is wrong to speak of measures which have affected education as reductions or cuts. They are a number of postponements of improvements. In other words, we are dealing here with programmes which are improving and expanding, and the Civil Estimates for education in the current year are up, to a far larger proportion than the estimates of any other Department of State. We are seeing a service which is expanding and improving and saying that an economic situation has compelled us to enforce a postpone
  1540
  ment for six months of capital improvements in the education service as a whole, except for schools.
  This is a serious matter but it is a postponement of improvements rather than a cut in an existing service. We must see this in that perspective. Some of the comments made by some hon. Members have been of a rather exaggerated nature and a rather alarmist character. For example, when the hon. Member for Birmingham, Selly Oak (Mr. Gurden) speaks, as he put it, of almost the impossibility of raising the school-leaving age to 16 in 1970 I need remind him only of two facts. One is that we are not imposing any postponement on the school-building programme. The other is that the teacher supply position, in terms of teacher-training and the numbers of teachers in training in our colleges, is somewhat ahead of schedule at the moment. For these two reasons there is no need to come to the conclusion to which the hon. Member came.
  Mr. Gurden: Does the hon. Gentleman really think that we will have enough teachers to do this by 1970?
  Mr. Prentice: Yes, Sir, I do, and I will expand on that in a moment. At this stage I merely ask hon. Members to see what is perhaps a serious measure but not to exaggerate it. It is simply not true to suggest, as the hon. Member for Lewisham, North (Mr. Chataway) suggested, that somehow or other we put all our restrictions on capital investment and none on consumption. The postponements of improvements affect consumption as well as capital. For example, one measure of social reform to which we attach great importance on this side of the House and for which many of us have argued for many years is the concept of an income guarantee in regard to social insurance, and the Chancellor had to announce that this was postponed and that the prospect of doing it next Session had given way to that of doing it in a future Session. There were other things—which I need not list—which dealt with consumption and not merely with capital.
  A number of hon. Members asked me to define the total cost of these measures in regard to the education service. I am afraid that I cannot give a figure. If I were to try to give an estimate, it might

  1541
  not be right, and I would rather not give it. I would explain that by telling the House that there are some aspects of this which we are still working out. The House will be aware that areas which are not really development districts as defined in the usual way but which have heavy or above-average unemployment are to have a measure of exemption and those areas have not at the moment been defined. There is also the problem of how far we are going to impose a complete ban on all projects, however small.
  This is something which we are examining. I am not sure to what extent we may be able slightly to modify the impact of the policy in this regard. We are also working on the problem of projects which could be regarded as being of a series. I can say that we shall certainly be able to look exceptionally at a case of a building which has been nearly completed but for which a contract has not yet been signed for the plumbing or heating arrangement and where the whole of the previous work would have been wasted but for this contract. There will be the need to define—we have not yet had the time to define—exceptional circumstances of that nature.
  Therefore, although one could make an approximate guess at this, it would not be right to do so. There are a number of factors besides those which I mentioned which might influence the total figure. But the essential policy—it is more important to recognise this than to quote figures—is that we are saying in general that, for educational building projects other than school building, there will be a postponement for six months, just as there is for other kinds of public expenditure.
  I should like to deal with this briefly in relation to the various main categories. For the universities, this is clearly a serious matter, particularly in the sense that the current programme, which, as the House will know, is a 15-month programme ranging from January of this year to April of next year, was designed particularly to provide accommodation for the bulge year of 1967–68, when it is hoped to reach the Robbins target for that year of 197,000 students. This presents many universities, of course, with a serious problem. I do not want to quantify, but my hon. Friend the Member for Middlesbrough, West (Dr. Bray)
  1542
  said that a six months postponement in relation to universities may have the effect of about a 10,000 decrease in the number of students who could be taken on.
  If other things were equal, something like that effect might be true, but other things need not necessarily be equal. This is where I come to the statement which my right hon. Friend made in answer to the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) the other night. We are hoping that a number of steps can be taken and will be taken within the universities to reach that target, despite the difficulties which the economic situation is imposing on them. We are making the kind of appeal to the universities which my hon. Friend made in his speech, which I thought he made very well. His general sentiments deserve and have the support of the Government.
  We are bound to ask the universities in this situation to look at the effect on this generation of students and to see what they can do to meet their needs. This is not an easy thing to ask, but the economic situation is not an easy situation for any of us to face. There are a number of ways in which universities can approach the problem. There are a number of ways in which some are approaching it already—and others are not approaching it so well. There is the intensive use of all existing accommodation and taking steps to plan that use intensively so that it does not remain idle as long as it sometimes does in some cases.
  This is the kind of operation which has been going on this year in the colleges of education and which could go on to a greater extent in some of the universities. There is the possibility in certain cases of expanding their accommodation by taking over other buildings and perhaps by renting other buildings—the sort of thing on which no ban is imposed within the framework of the measures which we have announced. There will be the possibility when we are able to sanction building to start again of their considering in certain appropriate cases the use of temporary buildings to get accommodation more quickly then would have been achieved by more traditional means.
  Some suggestions have been made to them in the Robbins Report which have

  1543
  not yet been acted upon in as many cases as one would have liked. For example, the Robbins Committee recognised that this period, around 1967, when the bulge of the population would be making extra demands on the universities, was a period which would require them to consider some extraordinary measures to try to meet that demand. In paragraph 820 of the Report there was a suggestion of the establishment of more evening courses for first degrees, perhaps combined in suitable cases with study during vacation under special arrangements. In paragraph 821 there was a suggestion of the establishment by more universities of correspondence courses, perhaps combined with special courses in the vacation. None of these expedients, we know, is as good as traditional methods of organising a university year in the way in which we should all prefer, but there were suggestions made by the Robbins Committee in relation to a particularly heavy demand and this is the kind of solution to which we should like universities to be turning their minds.
  Sir Edward Boyle: In his helpful remarks the hon. Member has not mentioned the University Grants Committee. Do I take it that the University Grants Committee will be circularising universities to see what they are able to do and the number of places which they are able to provide, despite the complications and difficulties caused by the six months delay?
  Mr. Prentice: I would rather put it this way: we should expect the universities on their own initiative and the University Grants Committee, too, to be looking at this problem and trying to devise methods of meeting it. I do not think that I want to spell out precisely in what way the U.G.C. should approach universities. It is a problem for them as well as for individual universities.
  I was about to point out by way of example that in the immediate post-war period a very great expansion took place in the student numbers in this country virtually without any capital development at all. A figure of over 85,000 students was reached in 1949–50 compared with 38,000 at the end of the war and 50,000 immediately pre-war. In other words,
  1544
  there had been an increase from pre-war to 1949 by 70 per cent. in the student population by crowding them in, often in uncomfortable circumstances—and I speak as a student of that period myself. Nevertheless, the expansion was achieved without the capital expenditure which would have been desirable. It is in that spirit that we have to ask the universities to approach the problem, and we hope that in spite of the difficulties which are forced on them by the economic situation they will manage to achieve the target which we all have in mind.
  There is one other aspect which I ought to mention briefly before I go to further education, because in a sense it links the two. It has been envisaged that part of the expansion of higher education would be within the technical colleges—within the degree courses and equivalent courses offered in the technical colleges. The Robbins Report made a special reference to this and pointed out that the technical college world was, in some ways, more flexible and more able to cope with student demands than the university world.
  It is interesting to note that in November 1964—that is, at the beginning of the last academic year—there were 39,640 students in technical colleges doing degree or equivalent work, which is two years ahead of the expansion programme for that sector expected by the Robbins Committee. We are, therefore, ahead of Robbins in that sector and it may be that there is scope there for a faster advance than the Robbins target.
  That brings me to the subject of technical colleges in general, and here I suggest that although, of course, the decisions which have been announced are serious for the technical colleges, we feel that, on present evidence, they are probably less serious than some hon. Members have tended to suggest. We are finding that in many parts of the country there is a bottleneck, so to speak—that a number of local education authorities are starting projects later than they had hoped—that a number of building projects which have started are taking much longer than planned and that some local education authorities have already told us that the six months' delay will not have very much practical effect on their progress in this sphere.

  1545
  The building programme for the technical colleges in the current year is much higher than last year. From £17 million last year it has gone up in the current year to £26 million, almost a 50 per cent. rise. Although I agree with the hon. Member for Lewisham, North, who said that this is not over generous, it does represent a big rise. This shows that the practical effect of the measures is not likely to be of the order suggested by some hon. Members.
  I agree absolutely with hon. Members who have referred to the importance of the Industrial Training Act in this context. That Act will lead to a bigger demand for day and block release facilities and other courses in the colleges. It is our intention and hope that the demand will grow and that the system will be able to carry it.
  We look forward to the system being able to carry it by a number of means, partly through the building projects which are already under way and those which we hope will take place in the next few years; partly because the number of these classes for day release students and others are at the moment too small, and everyone recognises that there are too few boys and girls in classes of this sort and that there is room for expansion; and partly because there is scope for the reorganisation of courses and the use of accommodation in technical colleges so as to make them more efficient. We have already announced that a study group within the National Advisory Council for Education in Industry and Commerce is looking, under the Chairmanship of Sir Harry Pilkington, into the problem of making more productive use of technical college resources.
  It is against this background that my right hon. Friend the Minister of Labour was able to announce recently, in connection with the Industrial Training Act, that he will normally only approve training orders which recognise day release or an equivalent for apprentices and others, young workers under 18, who are continuing the training period for 12 months or more. This announcement was made after close consultation with my Department in regard to the various means by which we believe that these facilities can be improved. It is fair to point out that the extra demand may
  1546
  well be irregular; may vary in different parts of the country. Therefore, I would not want to preclude some local difficulties in connection with the Industrial Training Act. However, generalising about the whole country, we expect to meet this extra demand.
  I ought to refer to the colleges of education with a tribute to the way in which, in recent years and in this year in particular, they have taken steps to bring more students into their existing accommodation by reorganisation, by taking over temporary premises and that sort of thing. The figures are very impressive. In September 1962, there were 17,000 entrants. By the following year, it had become 21,000. By last year, it became 24,000. In the coming September, we believe that it will be of the order of 28,000 entrants into the training colleges, which will give us a student population in those colleges of about 70,000. That is three years in advance of the Robbins targets, so we can be very pleased with and ought to congratulate the colleges of education on the work that they have done.
  They will be disappointed by the effects of the postponement in the building programme. We have to admit that they will be a great disappointment to them. I can only modify it by saying that the period ahead did not include the beginning of any major new developments. The current year and the coming year were, on the whole, periods by which the building programme in the colleges was for various ancillary additions such as kitchen accommodation, dining room accommodation, private study accommodation, and so on. It is very important, and I am not minimising it or the effects of postponing it; but it is not of the same relative order of importance as that in the university field.
  Mr. Freeson: Referring back to some earlier remarks the hon. Gentleman made about universities, he suggested that since the ban only applied to capital projects, it would still be possible for universities to commence buildings, possibly houses, to improve their facilities. Would that be a possibility in the mind of the Ministry for the colleges of education? The hon. Gentleman will know that there are some cases where requests are being made for the conversion of office blocks which are

  1547
  already constructed and are standing empty, and such conversions would not impose any great strain on the building industry.
  Mr. Prentice: Yes. That was one of the questions raised by the hon. Member for Tonbridge (Mr. Hornby), and I am glad to have an opportunity to tell him and my hon. Friend for Willesden, East (Mr. Freeson) that the renting of premises is not affected by this measure, and therefore we can go ahead and, in certain instances, we will be going ahead in the period concerned.
  On another of the points raised by the hon. Member for Tonbridge, the fourteen points set out by the Secretary of State at Douglas still stand. The hon. Gentleman's other main question was whether we stood by the target of 122,000 places by 1973. Yes, we do; and, as I indicated a few moments ago, we are ahead of what Robbins expected to be the progress towards that target by now. We have recently asked the colleges of education to consider further methods of improving their productivity. We have sent a circular letter suggesting to them a number of alternative methods of taking more students in their colleges by such schemes as those known as the Box and Cox scheme and the four-term year scheme. Those and other methods are being considered in the college of education world at the moment, not without a certain amount of controversy and a number of difficulties being raised. But, here again, we hope that they will begin to make a contribution to the number of students in training during the coming year.
  The hon. Member for Lewisham, North raised some questions about the Youth Service. It is difficult to be precise, partly because we are considering the impact on small projects, and we are concerned here with a very large number of projects, some of which are fairly small, although they vary in size. The Youth Service programme in the current year is £4½ million. If it were all postponed, it would mean projects to the value of £2¼ million being postponed for six months, because there is a fairly even flow of starts throughout the year. But I do not think that it is necessarily the true figure, and I would rather leave it at that point. There will be some impact, which it is difficult to
  1548
  assess, on projects for grant under the Physical Training and Recreation Act, and projects sponsored by the Central Council for Physical Recreation. I understand that all or most of the projects in connection with the World Cup series have been commenced, so that programme is not likely to be substantially affected by what we have in mind.
  Here, I should like to answer the specific question asked by the hon. Member for Tonbridge on the subject of equipment. The Chancellor of the Exchequer's statement asked all public authorities to review their stocks of goods of all kinds, to see that they were not overstocked and, if they were, to run down those stocks and reduce purchases and, in general to review the level of their purchases. This applies to educational institutions and local education authorities as to everyone else.
  On the whole, we do not think that it will have a big effect here, because we do not think that, in general, there are many relevant big stocks. Nevertheless, I assure the House that it is no part of this operation in any way to reduce standards of equipping schools, or authorities, but a matter of so handling all stocks and purchasing power that, where practical and without reducing standards, it is possible to have a smaller effect on the economy—
  Mr. Dalyell: We have the assurance that my hon. Friend's Department will study very carefully the strictures of the Public Accounts Committee on the administration under the right hon. and learned Gentleman the Member for St. Marylebone (Mr. Hogg) and the right hon. Member for Birmingham, Handsworth (Sir E. Boyle), and learn there-from.
  Mr. Prentice: Yes. I was resisting the temptation to refer to them, but I can assure my hon. Friend that we shall study that matter very carefully. So many points have been raised in this debate that I was rationing myself to the central theme of the impact of the Chancellor's statement.
  I would conclude by reminding the House that what we propose is the postponing of some capital improvements. It is a postponement that we all regret, but we are not proposing cuts in existing standards. The postponements are

  1549
  serious postponements—it would be ridiculous to suggest otherwise—but they have to be regarded in the context of the economic situation.
  During their latter period of office, the last Government undertook a lot of new commitments in education, as in other parts of social expenditure. I do not know what credit they want to take for that, but I believe that the nation will judge them by what they actually did in those 13 years, and not by what they promised in that latter period of office. It is true to say that they then committed the country to a number of advances that could be afforded only if the nation achieved a rate of economic growth which it never did achieve. While in office, they committed the country to a higher school building programme of major works rising from £60 million last year to £80 million this year, and a further education building programme increasing from £17 million last year to £24 million this. They accepted the Robbins proposals, with all their implications of higher expenditure.
  I do not criticise these objects; I simply say that whatever Government are in power they have to relate this to the rate of economic growth and the general economic situation of the country. We are determined to do this, and a lot more besides. We are determined to get the economic situation right, and then achieve a rate of social advance based on real prosperity. That will be our aim in all these matters.
  5.20 a.m.
  Sir Edward Boyle: I am sure that the House would like to express its thanks to the Minister of State, Department of Education and Science, for that helpful and informative answer. Perhaps, on a non-controversial note, I could start my own remarks this morning by expressing what I am sure are the thanks of the whole House for the very courteous and lucid way in which the hon. Gentleman has addressed it during the Session. The House should know that the hon. Gentleman has three more debates to answer before our proceedings finally come to an end.
  I hope he will feel, as I do, that it has been worth spending some time on this subject, because the education implica-
  1550
  tions of the Chancellor's statement were of high importance and it is important that the world outside should realise that right hon. and hon. Members on both sides, between the hours of three and 5.30 a.m., have tried to address themselves to this in one of the most coherent debates in the early morning that I can recall during my 15 years in the House.
  I do not want to say a great deal about the past, and I will deal with it shortly. I should be sorry if anyone gave the impression that education expansion in recent years only began at the end of 1963 at the time when the Robbins Report was accepted and the new building programmes were announced. It has been happening over a number of years.
  Even before the Robbins Report, expenditure on higher education in the last Parliament went up from an annual rate of £100 million to one of £275 million between 1959 and 1963. It is a fact that not only in 1961 were there no changes announced in the major programmes but also that expenditure on education building as a whole did rise sharply in the last Parliament. Starts were about £100 million in 1959–60, rising to £160 million in 1963–64 and to £220 million, if my memory serves me right, in the current year.
  I hope that it is common ground on both sides that we rightly expand education expenditure at a more rapid rate than the gross national product. This is something I believe to be right even though, as a whole, we have to plan expenditure in line with resources. Expenditure on education is something which, on both social and economic grounds, should rise in real terms at a faster rate than the gross national product.
  There is one question I want to put to the Minister of State in particular. One sentence of the Chancellor's statement sounded to me a little ominous. The Chancellor said:
  "I am giving instructions to Departments that the 1966–67 Estimates shall be drawn up within a limit which has been determined for each Department within the agreed total."—[OFFICIAL REPORT, 27th July, 1965; Vol. 717, c. 229.]
  Of course, the Chancellor—and I understand his reasons—did not give any percentage figures for that limit but I put this to the Minister of State: In our

  1551
  White Paper at the end of 1963 we envisaged expenditure on education rising annually in real terms at a little below six per cent. a year. I hope that, whatever the temporary difficulties, that figure has not been abandoned as a long-term approach, and that that percentage figure, in real terms, remains the policy of the Government.
  Mr. Prentice: I do not think that the right hon. Gentleman wants me to forecast the Estimates for next year, but I can assure him that there is nothing in the Chancellor's statement to suggest that the basic assumptions of that policy have been altered in any way.
  Sir E. Boyle: That is a highly important point that I wanted to clear up in this debate.
  Now I come to the capital postponements. Here it is legitimate to consider just how serious these are going to be and whether they really represent the right priorities. I will just say a word briefly in turn about the universities, the technical colleges and the colleges of education in the same order as the hon. Gentleman did.
  I was glad that the hon. Gentleman did not in any way minimise the seriousness of this matter to the universities. It is important to realise the seriousness to them both in terms of money and of timing. From the point of view of money, it would not be right for me now or at any hour of the day to go into too much detail about the negotiations which took place between the Government and the universities, through the University Grants Committee, last year. But I will say that, in order to accommodate the extra numbers, the universities and the University Grants Committee felt that a minimum extra capital sum of £60 millions was necessary over and above the rate of £33 million a year on which we were then working. I am referring, of course, to the year 1964 and to the 15 months represented by 1965 and the first quarter of 1966.
  Eventually the University Grants Committee was prepared to agree that the Robbins short-term expansion target could be achieved by the universities for the sum of a little under £40 million extra, but I am bound to say that that was always looked upon as the absolute
  1552
  minimum. There was also the consideration, which is of high importance, that 1965 is of crucial significance from the point of view of projects to be completed by the end of 1967.
  It was always the view of the University Grants Committee that while we worked on the 15-months basis it was highly desirable that as many projects as possible should be started in 1965 so that we would be pretty close to the same level of starts in this current year as in 1964—that is to say, pretty close to £48 million. Therefore, while it is entirely right that the universities should be asked to consider other possible ways of increasing numbers, I do not think that anyone ought to be in doubt about the seriousness of the postponement of capital projects for the universities at this time.
  While I listened with great interest to what the hon. Member for West Lothian (Mr. Dalyell) had to say, I do not think that to increase the number of home-based students is a complete solution by any manner of means. In any case, the proportion of home-based students has been falling in recent years from 27 to 21 per cent. While the fall will be less steep during the next few years, there are many who wish to go to university from parts of the country which are not near universities. I can assure the House that when the programme for last year was announced, it was with the fullest determination not to waste money unnecessarily on residence and so far as possible to provide residence where that could be done most cheaply. I very much doubt whether there is a large-scale saving to be made by increasing the number of home-based students.
  Frankly—and this is the point which the University Grants Committee itself would make—it is not easy to say to a girl in Dorset or parts of Somerset, "If you had happened to live in the Thames Valley, you might have had a choice from a number of university places, but because you live a long way from a university, you have no chance of getting a place." It must be recognised that an irreducible amount of residence must be provided.
  Mr. Dalyell: Is not the right hon. Gentleman being too gloomy about those who do live in the Thames Valley?

  1553
  Could they not go to Reading University, for instance, on the basis I suggested?
  Sir E. Boyle: I do not want to argue this out at great length now, but this approach may not be altogether easy. In the north of England, for example, and taking two towns at random, one could not say to a headmistress in Rotherham, "I am sure that your girl has a good reason for wanting to go to a university in the South, but I am sorry to say that as your school is at Rotherham, she must go to Sheffield and like it." Beyond a certain point, dirigisme—and I am not having an ideological quarrel with the hon. Gentleman—makes for acute difficulty in individual cases.
  Mr. Hamling: Would not the right hon. Gentleman agree that to working-class students in crowded homes it is a great advantage to be able to study in residence?
  Sir E. Boyle: There is a great deal of truth in that. I realise that we must not carry on this debate too long and I will not develop the point further. I am only making the point that in making these plans and deciding upon the figures we carefully considered all these matters and I believe that there was no wasteful provision of residence in the programme of the universities.
  I have already had my say in The Times on the subject of the technical colleges. In the debates in the last week hon. Members have been discussing the importance of efficiency and productivity and so on. There can be no doubt that further education, and in particular the work of the technical colleges, is of particular importance to Britain's economic efficiency. I do not think anyone doubts that we need in Britain not merely top-line scientists and technologists, but also technicians and craftsmen to back up their efforts. It could not make sense to pass the Industrial Training Act, thereby greatly stepping up the demand for technical college places, and then drastically to reduce the supply. That is why, while I accept what the Minister of State said about the larger programme not being able to be rapidly undertaken, I hope that there will not be any real cut back in technical colleges this year and
  1554
  that the number of postponements will be as few as possible. Particularly in the south of England and the Greater London area there are real problems of "roofs over heads".
  I was bothered by the number of times that the Minister of State referred to improvements. We are not dealing here with improvements. When we replace an old primary school or a thoroughly bad Newsom secondary school, we are making improvements to the system, but what we need in technical colleges are not so much improvements as provision for basic needs. In the larger programme the actual improvement element is very small.
  Mr. Prentice: I was using the word "improvement", not in the narrow sense of replacing a building, but in the sense that it represented an advance. If we have more students in universities and more young workers getting day release, that is the kind of improvement I meant.
  Sir E. Boyle: I accept that. We should remember that we are dealing overwhelmingly with the pressure of demand for new places.
  Now I pass to the colleges of education which, as we all know, are doing remarkably good work. I can tell the hon. Member for Woolwich, West (Mr. Hamling) that the expansion of the colleges has gone on steadily—and indeed dramatically—for a number of years. Since 1958 there has been a steady expansion—larger building programmes being used by the colleges to take in larger numbers than one would have dared to hope a few years ago. When I first become Minister in 1962, winding up a debate somewhat analogous to this but not at this late hour, we were pleased that there were nearly 50,000 at those colleges. Now we are looking forward to 70,000, which is an outstanding achievement.
  A circular has gone out asking that the colleges should step up their productivity. The six months postponement will come to them as a great shock. It is very much harder to expect people to crowd up and adopt proposals like box and cox—and even to consider one or two others which I shall not be so tactless as to mention now, if one is then going to say that plans will be held up. This decision will come as a great shock to a number of college

  1555
  principals and staffs and to a number of local authorities.
  There is an aspect which has not been referred to in this debate. I recognise that we are ahead of the Robbins target, but the National Advisory Council has wanted us to go further still and to reach the Robbins target of 122,000 by about 1971. This is not a matter on which we have pressed the Government very hard. It was a considerable request. None the less, I do not think we should take a step which will make it impossible to do this. It is a matter on which the Government of the day should reserve their freedom of action. This postponement will make it very much harder to achieve the figure of 122,000 as early as many would like.
  Those are some of the reasons, and I could cite others, why we on this side feel extremely anxious about these decisions that have been taken. I quite agree with the Minister of State that we do not want to be alarmist, that we do not want to exaggerate here. Maybe the hon. Member for Middlesbrough West (Dr. Bray) was exaggerating just a little in estimating the shortfall of places threatened as being as great as 10,000. I only say that because, as the Minister of State pointed out, quite fairly, we are ahead of Robbins so far as degree courses at the technical colleges are concerned.
  The number of those doing degree level courses in the technical colleges are higher than Robbins pictured at this moment, and I hope that the short-fall will not be as high as 10,000. None the less there is the risk of quite a considerable shortfall here, and I think that one cannot help wondering whether these were the right measures to take, assuming that economies had to be made.
  I agree with the my hon. Friend the Member for Lewisham, North (Mr. Chataway) that, in general, there is very much to be said, both on educational and economic grounds, for considering economies in consumer spending and recurrent expenditure, rather than in capital expenditure. The hon. Member for Birmingham, All Saints (Mr. Walden) in his remarkable speech in last night's debate spoke, most courageously, on this topic and I am bound to say that I think that this is the right approach.
  1556
  We have expressed cur doubts about the Government's decision. I think that the whole House has had a thoroughly useful debate and all I can say is that we, on this side, strongly hope that the expansion of higher education, and further education and of the colleges of education will not be too severely handicapped by these postponements. We are bound to say that we have very considerable doubts whether the priorities here are right or wise, and we think that it is right that our anxieties and criticisms should be expressed.

  ANDOVER AND BASINGSTOKE (DEVELOPMENT)
  5.37 a.m.
  Mr. David Mitchell: Although the hour is late, I am glad to have the opportunity of drawing the attention of the Government to the hardship and unfairness caused by some aspects of expanding town development in Basingstoke and Andover. I am delighted to see the Joint Parliamentary Secretary to the Ministry of Housing and Local Government is here to reply, and I hope not only to reply but also to take note and to take back to his Ministry some understanding and some sympathy with the problems which we have in these two towns.
  I know the Parliamentary Secretary will realise that I am raising this subject in a constructive spirit and not to create party political controversy. I believe that the Minister, on his recent visit to both towns, was very impressed with the progress which was being made under the expanded town procedure under the Town Development Act, 1952. I think he will probably find that it is a more economic procedure than building new towns. He may wish to expand this and make more use of it in the future, but he will be able to do this only if the earlier towns, such as Andover and Basingstoke, are seen to be successful and are approved of by their existing population. If these people find that they have put their heads into a noose, then others are not going to follow suit. There are three points I wish to make.
  First, I hope that the Minister will be able to clarify what will be the effect of the Chancellor's announcement last week. I assure the Parliamentary Secretary that

  1557
  I will refrain from the obvious comments about suffering the effects of an incompetent government's economic policy. Secondly, I want to draw the attention of the Parliamentary Secretary to the growing burden facing ratepayers if no special financial assistance is forthcoming, and, thirdly I wish to draw the attention of the Parliamentary Secretary to the hardship and unfairness arising from the compensation for displaced householders, farmers and shopkeepers. I have given the Parliamentary Secretary advance warning of the fact that I was raising these particular items, in order that he would be able to be informative in his reply, and I have already deposited with him a map which shows some of the affected areas, which I propose to talk about later.
  Naturally, there is widespread anxiety about the effects of the cuts announced by the Chancellor of the Exchequer. He said that
  "The Government intend to slow down the rate of expenditure on capital projects … Loan sanction and grants will only be given to local authority projects which are urgently required."
  If I may make a plea straight away to the Minister, right at the top of his "in" tray, the Andover by-pass is urgently required. The chaos in the town at the weekend has to be seen to be believed.
  I hope that after this debate has concluded the Minister will be looking forward to the Recess and, perhaps, taking himself and his family down to the West Country for his holiday. If he does, he may travel through Andover, where he will probably be held up for half an hour, when the problem which we often see there will be brought home to him clearly and firmly. It is like a blockage in a main artery right through the centre of the town. One can neither go one way through the centre of the town nor, without great difficulty, cross the town the other way.
  The Basingstoke-North trunk road has been designed to fit in with the housing and other developments of the current major town expansion. This is all part of a jigsaw puzzle. It is wrong to give approval for housing and factories but not for roads, because they are essential. When the factories and the housing are
  1558
  there, we must have the communications around them. The starting date had been fixed for early 1966 and I ask the Minister specifically whether he can give an assurance that there will be no interference with that starting date as a result of the cuts announced by his right hon. Friend the Chancellor.
  The Chancellor said that non-industrial capital projects would be postponed. I wonder this includes teacher-training colleges—I gather that it does—because we are to have no less than 22 new schools in Basingstoke in the whole of the development and I cannot imagine how we will find the teachers to staff them if there is any hold-lap in the building of the teacher-training colleges.
  The Chancellor of the Exchequer said in his announcement:
  "In particular, sanction will not be given except in special circumstances to loans for expenditure on land purchases in advance of requirements, on civic buildings, offices and a variety of miscellaneous projects which, though desirable in themselves, are not essential at this time."—[OFFICIAL REPORT, 27th July, 1965; Vol. 717, c. 228–9.]
  This is disturbing when one is concerned with the comprehensive development or redevelopment of a major part of a town. I hope that "special circumstances" will include Basingstoke.
  The population of 33,000 is increasing at the rate of 4,500 a year. One cannot simply dump down a large number of people with inadequate facilities for social, cultural and recreational activities. A sports centre, a swimming pool and things of that sort are all an essential part of the overall picture of the town. There are churches, "pubs" and shops, and shopping facilities are urgently needed with the enormous increase in the population. A town must have a heart. It must have more than simply factories and houses, and I ask urgently that this aspect should not be forgotten. I hope that we may have reassurance from the Minister that we in the town will be regarded as a special circumstance.
  I should like to draw attention to the growing burden which faces Basingstoke's ratepayers. Many people do not seem to realise just how big the scheme is. Four years ago, the population of the town was 26,000, it is now 33,000 and in ten years' time, it is estimated that it will be 76,000. The all-in cost of

  1559
  this—I do not think I am revealing anything which is secret—will amount to some £126 million.
  Here we have an immense project, which is helping to solve a major national social problem, the problem of moving people out of London and providing work and housing and other things away from the capital. I would pay humble tribute to the skill and efficiency of those who are responsible in the towns for doing this, Hampshire County Council and Basingstoke Council, which has done a tremendous job, and the development group themselves, who are carrying out so much of the work.
  Over the next four years Basingstoke Council will need to borrow £18 million, a very substantial sum, and it is out of all proportion to the size of the population now, or to the resources of the town. Already the servicing of loan charges accounts for 23 per cent. of the total rate fund expenditure, and next year it is estimated it will rise to no less than 30 per cent. High interest rates will increasingly reflect themselves in demands on the local ratepayers, and this is what is causing me and a great many ratepayers very considerable concern. One has had a raised Bank Rate now for a very long time. No doubt I shall be corrected if I am wrong, but I think it has been as high as this longer than at any time since the war, but if one takes only ½ per cent. increase on £18 million it will cost £90,000 a year, and for a population the size of ours it is a very serious burden.
  So my first call is for money at a reasonable rate of interest, and also its availability. It is not only the interest rate; it is the problem of finding the money at all. We are particularly disconcerted, therefore, at the Chancellor's statement that local authorities will be subjected to more restraint in the timing of their borrowing from the Public Works Loan Board. I interpret that to mean—no doubt the Minister will tell me whether I am right or wrong—as Treasury jargon for saying it will be darned tight-fisted in the next few months. If that is so, how will a town like Basingstoke deal with the problem with which it is faced?
  I said at the time of the Budget, it has been said by Basingstoke's Council to the Treasury, and also, I believe, to the
  1560
  Minister of Housing and Local Government, and I say it again now, that a town in specialised circumstances of this sort, where expansion amounts virtually to a new town being built, ought to have something like 50 per cent. access to the Public Works Loan Board. I hope that will be considered.
  There are three choices in front of us: the ratepayers will suffer; or the scheme will be slowed down; or the money will be made available. I would urge the Joint Parliamentary Secretary to ask his Minister to try to melt the heart of the Treasury, if such a thing can be done, in order to see that this scheme of reconstruction is not slowed down and that the ratepayers do not suffer; because if they do, there will be no more willing lambs for the slaughter in future in would-be expanded towns.
  The third and final point to which I want to draw attention is that of compensation. The basis of compensation, in my view, is not working fairly; I do not think it is working in the way in which it was originally intended it should. A number of cases of hardship have come to my attention. Under the Act, the system which is used for compensation in towns such as Basingstoke and Andover is that the council pays what would have been the value if it had not been an expanded town under the Act.
  Perhaps I might quote a concrete example. The property in question was worth £2,800. The compensation offered was £2,300, on the basis that that is what it would have been worth had Basingstoke not been an expanded town. The constituent concerned accepted £2,300 and he was then faced with the problem of finding somewhere to live. He found himself an almost identical house to the one in which he had been living. This house cost him £2,800, which I said was the value of his original house. Having received only £2,300 by way of compensation, he is £500 worse off because he is one of the unfortunate citizens affected by the expanded town position and by the compensation provisions.
  That sort of case seems to bring in a degree of hardship which it is unfair for a citizen to have to bear. I appreciate that if the man concerned took his money and went to Romsey, or Devon, or somewhere like that, he would be able to buy a similar house, but one cannot expect

  1561
  people to uproot themselves from their houses, their families, their friends and their jobs and move out of an area. If they remain in the area, they have to pay the house prices reigning there at the time, and the values reigning in Basingstoke now are the values which ought to be paid in compensation to a person who is going to stay there.
  The basis of town development seems to be, "You buy cheap today and tomorrow you sell dear". I can appreciate that this can be very profitable, but in this instance it seems to be a case of, "We buy at yesterday's prices and sell at tomorrow's", which is even more profitable. In these circumstances, it is essential that people get the compensation to which they are entitled.
  It is very difficult to decide the amount to which a man is entitled. I presume that the district valuer's figures are not the best bargain that the council can get. They represent what is fair and impartial between the two parties—and I would value the hon. Gentleman's confirmation of that—but many people think that they are very hard done by. I have received many letters on this subject, and many people have got in touch with me about it, and I assure the hon. Gentleman that there are genuine misgivings about the matter.
  What advice can I give? What advice would the hon. Gentleman recommend me to give? One can say, "If you do not think it is a fair offer you have the right of appeal to the lands tribunal", but this will cost a man perhaps £100. If it is a big case and leading counsel are engaged, it may cost anything from £100 to £1,000 a day to fight the case, but in a small case a man who has received £2,300 by way of compensation will think very seriously indeed before he risks spending £100 of it because the district valuer has stated what he considers to be a fair price. Joe Snooks or whatever his name is may not feel that he should risk £100 on that sort of basis, and it is therefore very important that the compensation should be fair.
  To my knowledge there has been only one appeal in my area, and that was on 10th July, 1964, in connection with 63½ acres of land. The price offered was found to be £19,000 below what the lands tribunal thought was a fair price. That gives one cause to pause and think. Two
  1562
  big cases which are regarded as test cases are shortly to be heard in the area. These are the cases of Lord Camrose and the Honourable Douglas Vivian. They are now before the Lands Tribunal, and it may be that it would not be proper for me to comment on them at all. But a lot of people are watching this.
  I ask the Minister specifically to answer one important question. Should the district valuer's figures in thise case be found not to be supported by the Lands Tribunal many cases which are coming up for hearing, or which are in the pipeline, will be altered, and the district valuer will presumably increase the basis of his valuation. If, on the other hand, the district valuer is found to be right, many people who have been holding out, expecting better terms, will accept what they have been offered. But what happens, if the district valuer's figure is not accepted, to all the people who during the past months have carried out a private bargain with the council on the basis of the district valuer's figures?
  Will they just be regarded as having lost? Is it to be just their bad luck, in not being wealthy enough to fight the case as to the Lands Tribunal? I am concerned about the small people, not those who have plenty of funds and large estates, who will be able to argue their cases very effectively. It is the small shopkeeper and small farmer about whom I am concerned.
  I want to mention tenant farmers briefly. They do not just lose their homes; they lose their livelihood, and they are entitled only to tenants right and a discretionary payment. There is extraordinarily little known about how much this is to be. There is no appeal against the amount when it is decided. At the moment there is a lot of delay in the agreement of some of these discretionary payments. If the Minister reexamines the situation he will see that some farms have been cut in half, others reduced in size and still others have had pieces taken out of them.
  Farming is like any other business, with overheads, building, machinery, tractors, and so on. The large farm is more economical. If we start taking bits of a farm away we do not reduce the overheads correspondingly. The profits are reduced far more than the amount of land which is taken away. There is

  1563
  therefore a strong case for saying that there should be generous discretionary payment in those circumstances.
  One sees the effect of this particularly in Old Basing. The land has been interfered with very badly. Land has been broken up. Mr. Snook, of Chineham Farm, has had a great slab taken out of the centre of a field, making it extremely difficult to work the remainder of the land. There are other farmers, one of whose farms has been completely chopped up and ruined. In these circumstances I ask that the discretionary payment which is now being referred to Whitehall should be on a fair and generous scale.
  I want the expanded town developments to be a success. We want it to be fair on the ratepayers and on the displaced occupiers. We want the Government to bear their share of the burden of solving the national problem of reconstruction that is going on. We want clarification from the Minister of how much damage the Chancellor's cuts will do to the plans which we have in hand. We look to the hon. Gentleman, as the Minister responsible, to help us by regarding expanded towns as a special case, which is exactly what they are.
  5.59 a.m.
  The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): I agree with the hon. Member for Basingstoke (Mr. Mitchell) that expanded towns in general, and Basingstoke in particular, are playing—and, I hope, will continue to play—a very important part in the work of rehousing overspill population, especially from London and other overcrowded conurbations. I share with him his appreciation of the work done in the expanded towns. As he said, when my right hon. Friend went to Basingstoke he was very impressed with what was going on, and by what could be done in them. We owe a tribute to the people who are co-operating in making them a success.
  I must make it clear that, like other towns which are going in for town development, they have to make some contribution towards the savings on capital expenditure for which the Chancellor of the Exchequer has asked. This is part of the common sacrifice which we all
  1564
  have to make to save the economy of the nation, something we have been discussing exhaustively under rather more congenial conditions than those of the debate to-day. They will be affected in the same way as other local authorities.
  While industrial development, housing and school-building will continue, capital expenditure which is not essential for these purposes will be cut back. Housing will continue within the existing programme. Housing proposals in the schemes will go forward as at present. Other essential public schemes, such as water supply and sewerage, essential for town expansion, will be looked at carefully, and will go forward if they are shown to be urgently needed. Less essential projects—shops, offices, town centres and civic amenities, must be deferred, though I recognise that this will be a disappointment to everyone. We cannot exempt places with town development schemes from these necessary restrictions. So much for investment by local authorities.
  Private investment connected with town development schemes will be subject to the licensing procedure referred to by the Chancellor. That control will not apply to houses and factories.
  The Minister will be issuing a circular to all local authorities in the course of the next few days explaining in more detail the effect on particular forms of local authority investment. If after local authorities receive this circular they want to find out how the proposals affect them in more detail and want to argue their case the Department is at their service and will be glad to discuss details and clarify the issues. On the second point—
  Mr. Mitchell: Before the hon. Gentleman leaves the first point, could he say something about the two roads—the Andover bypass and the north trunk road which is an integral part of expanding new town development at Basingstoke?
  Mr. MacColl: I cannot possibly give further undertakings. Roads are a matter for my right hon. Friend the Minister of Transport. They will be covered by what I said about consultations with the Departments concerned.
  The second point was about the burden which falls on the ratepayers, and I would not deny the fact that if one undertakes schemes of this sort they impose financial

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  burdens and capital commitments. But in return there are great increases in rateable value as a result of development. On the other hand, so far as I have been able to ascertain, there is no evidence that at the moment Basingstoke is suffering. Its rate poundage is not noticeably higher than the average, and it is receiving very substantial help under the town development agreement from both the planning authority, the Hampshire County Council, and the Greater London Council.
  The grants which they receive under those agreements include capital loans. For example, the Greater London Council provides the initial capital for the purchase of land for housing or industrial development, and the borough council repays them when the houses and factories are let. In the case of the development of shops and other places, when the private developers take over responsibility, they have to be reimbursed. In other words, a good deal of the extra "dead" capital which arises out of development and on which there is no return is supplied under the agreement.
  My right hon. Friend has not shut his mind to this problem. If there were evidence of a serious situation, he would of course look at it and watch it carefully, but at the moment he has no evidence that Basingstoke is suffering more than any other town engaged in similar activities. The point about access to the Public Works Loan Board is very much involved in what might be done if, in future, it is discovered that there is an unreasonable burden upon the town.
  The final point concerned the assessment of compensation and hardship caused. The hon. Gentleman challenged the whole basis of assessing compensation on market value, without taking into account increases due to the expansion of the town. That principle is entrenched in the legislation which applies to these towns and I should be very sorry to see it go—
  Mr. Mitchell: It would appear that this was designed for the new towns, because we have a totally different situation. There is a great deal of difference between considering a piece of blank countryside with nothing on it and saying, "We will not give an immense increase in value to the farmer or estate owner", and the situation of an existing town
  1566
  where people are displaced from their houses and have to find somewhere else to live, which they often cannot find at an equivalent price.
  Mr. MacColl: That is a good point, but it is difficult to assess. It is true that, in a substantially built up town with its own life and activity, it is very difficult to assess the impact of a new development scheme, but it is not true that all new towns are small. Hemel Hempstead started as a town of about 25,000 people, and Runcorn is the same size. These problems have arisen with the new towns as well. However, the principle remains the same—that an enormous amount of public money is being sunk in the development of the new and expanded towns and the people in those areas will benefit very much from the increase in value due to the attraction of people and the consequential development of the town.
  Therefore, it would be altogether wrong in principle that that betterment should be taken into account in assessing compensation. This was discussed exhaustively when the last Town and Country Planning Act was going through the House, and it was accepted by the last Government. Similarly there is no doubt that where there is a comprehensive development scheme one cannot take into account the increases in value due to that development for the purpose of compensation. That is the principle, and it would require legislation to alter it.
  The other point concerned how it is being administered, and there the hon. Gentleman asked the question and answered it himself. He said, quite rightly, that the district valuer is there to fix a value which is open to negotiation, between the land owner and the acquiring authority. If they feel, at the end of their negotiations, that they are not getting a fair figure, they can go, as he said, to the Lands Tribunal. He pointed out himself, quoting a particular case, that the Lands Tribunal does its job effectively and factually. It does not hesitate to disagree with the district valuer if it thinks that he has erred in fixing the value.
  I do not agree with the hon. Member in suggesting that this is necessarily a very complicated, expensive and terrifying business. It depends to some extent on the size of the property and the expertise required. While waiting patiently for

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  this debate I was reading of a case in which someone had gone to the Lands Tribunal, without assistance, and had argued his case and won it. Indeed, the Lands Tribunal have a very high reputation as being a cheap, efficient and competent tribunal. If the hon. Member asks what advice he should give a constituent, I would say, "If you do not think that you are not getting the right value, go to the Lands Tribunal".
  The hon. Member touched on the problem of the tenant farmer. Here I have nothing to add to what was said in the debate of 15th February. The Government are considering the whole problem of landlord and tenant relationship in agriculture, and as part of that they are looking at the special problem whether in certain cases more can be done for the tenant farmer. Many of the difficulties arising over tenant farming come from the fact that the tenant himself does not get a very great share in the compensation. The land owner gets the larger share. But one cannot just increase the tenant's share without taking into account what is the balance between the landlord and the tenant, on the one hand, and the owner-occupier-farmer on the other hand. It is not an easy problem, to be immediately solved. But it can be eased by discretionary payments, and a circular has been sent to local authorities urging them to make such payments where they think that that will help.

  JOHN INNES INSTITUTE (REMOVAL)
  6.13 a.m.
  Mr. John Wells: I want to raise this morning the question of probable swallowing up of the John Innes Institute by the University of East Anglia. The John Innes Institute has been in existence for 55 years and has a superb record for practical research, theoretical research and the training of scientific manpower in horticulture. This Institute has a very great tradition and is world famous. The name John Innes, which came from the founder, whose will made it possible, is a well-known household name with everyone who has any connection with horticulture. To my mind, and to the minds of everyone concerned with horticulture, it would be a tragedy
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  if this Institute lost its identity and were broken up.
  Today the activities of the Institute are financed to about 90 per cent. by the Agricultural Research Council and to 10 per cent. by the trustees of the John Innes will. Under the terms of that will the purpose of the Institute should be to study the growth of trees and the improvement of horticulture by experiment and research. By the trust deed the Institute is also directed to provide a certain amount of direct horticultural training. It is on those twin points of direct horticultural training and the improvement of horticulture by experiment and research that I want to base my argument, because in my opinion this probable swallowing up will jeopardise the fundamental principles of John Innes' will. As recently as 1949 the Institute was moved from John Innes's home to Byfordbury in Hertfordshire and my noble Friend the Member for Hertford (Lord Balniel) has always taken a great interest in the affairs of the Institute. Indeed, it is largely due to his intervention in this matter that I am speaking on this topic now.
  When the Institute went to Bayfordbury much expensive equipment was installed in new buildings and a clear assurance was given to the staff at that time, and again later, that it would remain for many years in its new home. A new laboratory block was completed only four years ago at a cost of about £100,000 and it was equipped for a further £50,000. The Institute is, therefore, admirably equipped to undertake technical work of all sorts. In particular, it is well suited for growing plants for experimental purposes on a very extensive scale. Considering the research which will need to be done for years to come, it is almost certain that it will be necessary to have some research institute somewhere in the country which is able to grow plants on this massive scale.
  In the past the Institute has been well equipped for the work in hand, but if it is moved to East Anglia, all these buildings and the expensive equipment will either have to be duplicated or this source of work will be lost, which, in itself, would be a great tragedy.
  If it loses its identity and if the horticultural tradition of the Institute is lost

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  in the pure scientific direction of the new university it will also be a loss to the horticulture industry and, in my submission, a costly one for the taxpayer and ratepayer. New training establishments of a smaller and more diverse nature will inevitably have to be set up—that may take some time, but it will inevitably come—and with their coming there will be duplication of cost and this body of skilled men and their scientific equipment will be lost.
  One naturally appreciates that certain benefits would result to the Institute by it being closer to a university, either physically or working closer to one. I do not wish to belittle these benefits in any way. However, I am not sure that, with its geographical position at Bayfordbury, it could not work closer with either Cambridge, with its great horticultural tradition, or London University or—not that I wish to make a constituency point—Kent, which is world famous for horticulture. We have great research establishments in Kent, including Wye College, which is associated with part of London University, and the Research Establishment at East Malling. If it is necessary to move the John Innes Institute to a new university, it might have gone to the University of Kent at Canterbury, which would have made far geater sense from the horticultural point of view. Without wishing to press this point, I might add that in Kent we have the two largest apple growers in the world. Kent has always been the heart of horticulture.
  We wonder if this move partly stems from the Zuckerman Report of 5th July, 1961. It is obvious that that Report has a bearing on the matter, particularly paragraph 81 of it, which stated:
  "… pure basic research is best carried out in the environment of a university rather in that of a Government research establishment."
  One accepts that for pure basic research, but I would ask the Minister to read on to subparagraphs (c) and (e) of paragraph 85. Subparagraph (c) says:
  "Where the basic studies involve the use of extensive facilities which are already available (or largely available) at Government establishments"
  then the establishment should be left doing the research. Sub-paragraph (e) says:
  "Where there are special advantages in linking the basic work with related applied
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  research projects. It may be, for example, that equipment (including, in agriculture, experimental stock and field plots) and supporting staff could be shared."
  Those two subparagraphs are far more relevant than paragraph 81, because the practical work and tradition of these great buildings are very important.
  I hope that the Minister will not tell us, "Oh, well, they dropped the word 'horticultural' from their title a few years ago." We know that they did. The fact remains that the John Innes Institute, whether or not it calls itself a horticultural institute, is a great practical institute and has this great practical tradition. Many people involved in the industry have been trained there, and it is the only place where such training exists. I hope that those two subparagraphs of the Zuckerman Report will be looked at closely.
  The argument has been raised that the trustees have taken a wise step in getting in on the ground floor of the new university. I wonder if breaking up the institute is getting in on the ground floor. If it is virtually destroyed, one cannot call that getting in on the ground floor.
  No doubt great savings can be and have already been made in cash. I understand that there is talk of pruning the expenditure from something of the order of £1 million to £400,000. If that is the order of the saving that can be achieved, surely some other method could have been found than virtually murdering the Institute.
  I should like, therefore, to ask the Ministers to answer five specific points, and I shall be grateful if he can give us some assurance on them. If he cannot give it to the House this morning, perhaps he can write to me or let it be known at some convenient date, I hope not too far into the Recess and not when the decision has been taken irrevocably.
  The first point is that something must be said clearly about the jobs of the technical staff. Naturally, the staff have been very anxious. They have had reassurances, but they are not very happy about the reassurances they have had. I am aware that there has been a drastic rundown of staff, but I should like an assurance about the jobs of all the technical staff that will be assimilated or not into the university.

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  Secondly, I hope that we can have a clear and irrevocable statement that the Institute will not lose its identity. That is vital. Thirdly, I hope that the expensive equipment and buildings at Bayfordbury will not be wasted. After all, they are very modern. I know that there has been an argument bandied about that they are out of date, but that is absolute rubbish. The buildings and glasshouses are first-rate by modern British standards. They are as good as almost anything else in the country. I hope that we will not hear any argument put forward that they are out of date, because it is not true. May we have a clear assurance that the buildings will not be wasted?
  Fourthly, I hope that the practical character of the work of the Institute will be maintained, whatever happens to it, because that is of the essence of its tradition. My last specific point is, in a way, the most important, and it is that the spirit of the will of John Innes, the founder of the Institute, should not be violated.
  We are in grave danger as a nation when the Government gobble up bequestes from public-minded people and, a few years after they have gobbled up a bequest, they completely pervert the original purpose of it. That happens far too frequently. I hope that the lifelong ambition and then the very generous bequest of the late John Innes will be honoured for many years to come, and that I will have clear answers to my five points.
  6.25 a.m.
  The Minister of State, Department of Education and Science (Mr. R. E. Prentice): By leave of the House, I should first like to thank the hon. Member for Maidstone (Mr. John Wells) for raising this question. I agree at once with what he said about the achievements of the John Innes Institute and the reputation it has in this country and in other parts of the world for the work it has done during the last 55 years. I accept that completely. Nevertheless, I shall argue for the move into the University of East Anglia.
  The hon. Member has anticipated a number of my arguments. Indeed, he has referred to the merits of some of them, as he sees them, but takes a view
  1572
  of the balance of argument rather different from that of the Government. He said that I might refer to the dropping of the word "horticultural" from the title of the Institute, but that is not the case. The Institute has done, and is still doing, tremendous work for horticulture, and I hope that it will continue to do so in the new setting. The matter has aroused the anxiety of a lot of friends of the Institute, and particularly of the staff, which made representations about it.
  The whole question really resolves itself into where, and in what setting do we consider that the work of the Institute can best be carried out in the future, and in what setting can it make the maximum contribution to agriculture and horticulture. I emphasise the word "future", because we have to recognise that the scientific background of the work has been changing, and will change even more in the future. To say that is not in any way to cast any doubt on the past achievements of the Institute but, as I understand it, as the work has developed, it is now closely connected not only with various branches of plant biology but also with new and developing sciences such as radiation biology, molecular biology, and cellular biology which require a number of sophisticated techniques and also require expensive equipment. In other words, it is work which, by its very nature, can beneficially be carried out not merely in touch with a university but within the university, so that there is on the spot the equipment which is being used for other purposes, and so that there may be the frequent contact of staff with joint research projects, and everything that goes with it.
  That concept comes up in the Report of the Zuckerman Committee on the Management and Control of Research and Development which was published in 1961. The hon. Member will agree that, even taking into account the paragraphs that he read out, the general tenor of that Report was that it was beneficial for research institutes to be working more closely with the universities; that this could often best be achieved by close physical proximity to the universities, and being within their framework, and that there was some danger of institutes that are too small or too isolated becoming remote in the future from the main

  1573
  streams of relevant scientific work. There is no doubt that this is a small institute. At the moment, the establishment is 24 scientific officers. The Agricultural Institute at Rothamsted has 120—
  Mr. John Wells: The Minister says that at the moment it has an establishment of 24 scientific officers, but there were many more a few months ago. There has been a drastic and deliberate rundown.
  Mr. Prentice: Yes. I am taking the position as it is now and considering its future work in that context. Even so, I think that the figure of a few months ago is relatively small compared with other independent institutes operating, as it were, on their own. The Agricultural Research Institute at Rothamsted has a complement of 120 scientific officers and even that is a good deal smaller than that of many other independent institutes, including the National Physical Laboratory.
  The John Innes Institute had a link with the University of London. There was a joint staffing arrangement and a number of the Institute's staff taught at the University. This link no longer exists. If there had not been a scientific revolution in the work, one would have had to replace that link with some other development.
  The new University of East Anglia fits the need of the Institute. It is developing a strong School of Biological Science. It is a happy relationship that is proposed and which is being negotiated between the trustees of the Institute and the University—particularly happy because the Agricultural Research Council's new Food Research Institute is also to be in Norwich and a link will be available with the work we have in mind.
  I cannot give any precise assurance about the agreement between the Institute and the University because it is still being negotiated, but I am assured that both parties share a great many of the objectives the hon. Gentleman mentioned. The University is keen that the Institute should keep its identity and not be swallowed up. It is concerned that the Institute should be able to carry on its scientific and research work and training in a new setting. It is not proposed to take anything away from what the Institute has been doing.
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  The hon. Gentleman mentioned the money that was invested in the existing buildings. I am informed that, over 20 years, some £220,000 in all has been invested in capital grants but, meanwhile, the Institute is costing £200,000 a year to run. Therefore, I think that, if one looked purely at the economics of this, one would have to ask whether that sum is the right sort of expenditure for the results which one would get in future if the Institute were not to develop in a university setting. Although I agree that the previous investment is a factor, I do not think it is as big a factor as the running costs in this respect.
  I am assured that the transfer to Norwich can be financed by the trustees. Their resources are adequate for the task and, of course, the sale of the Bayfordbury property will help. I understand that they have already purchased 160 acres of land near Norwich as a horticultural field station for that side of the work and will be able to provide the laboratories and other facilities needed there out of their own funds.
  Mr. John Wells: Is this 160 acres of land about 20 miles from Norwich or nearer to the city?
  Mr. Prentice: I am sorry, I have not that information but I will find out and write to the hon. Gentleman.
  The hon. Gentleman raised five questions which I have partially answered already. He asked about jobs for the staff and here I can assure him that there are jobs for all the existing staff at Norwich. It is appreciated that many of the staff are reluctant to move, as would be anyone else, for it involves some upheaval and some problems. I understand that the Institute is anxious when the move comes to give some help with the problems of transition.
  The second question the hon. Gentleman asked was whether the Institute would lose its identity. I have dealt with that. His third question was about the buildings at Bayfordbury. I understand that they are being sold, but I do not have any information about what use is to be made of them. I will see whether I can find out and I will write to the hon. Gentleman. His fourth question was whether the practical work would be maintained. I have had an assurance

  1575
  about that and I have conveyed it to the hon. Gentleman.
  In his fifth question he asked that the will of John Innes should not be violated in any way. In the terms which I have set out to the House I cannot see that there is any violation of the will. The work in pure and applied research and teaching which has been associated with the Institute over the years in accordance with the terms of the will will certainly be carried on and, I hope, in the context of developing scientific work, will be carried on better in the new setting than it would have been in the old.
  For those reasons, I hope that the hon. Gentleman will accept that this matter has been weighed up by the trustees, the Agricultural Research Department and my Department and that on balance we consider that there is much to be said for this move. I hope that I have allayed some of the hon. Gentleman's doubts.

  THE ARTS
  6.36 a.m.
  Mr. Robert Cooke: I am very grateful to the hon. Lady the Joint Under-Secretary of State for Education and Science for coming here at this somewhat uncivilised hour in order to take part in a discussion of what I hope is a fairly civilised topic.
  The hon. Lady must find herself in a somewhat unhappy and invidious position.
  The Joint Under-Secretary of State for Education and Science (Miss Jennie Lee)indicated dissent.
  Mr. Cooke: The hon. Lady shakes her head, but I will seek to show that she is—certainly we see it that way—by virtue of the way in which the Prime Minister has moved her about and taken her away from some of those things which were closely allied to the subject of the arts for which she has a special responsibility.
  The hon. Lady started in the Ministry of Public Building and Works, a most civilised Ministry with wide interests in buildings and works of art and the commissioning of new works, patronage of one kind or another. It is a Ministry with close links with housing and local government, planning and preservation. I
  1576
  pay tribute to the individual actions of the Minister of Housing who, although he has introduced a rent policy which some of us believe will be damaging to historic buildings, his individual actions in preservation and public enjoyment on the whole has been good.
  The hon. Lady was then quite suddenly divorced from all that and taken away to be a Joint part-time Under-Secretary at the Department of Education and Science, part time, I gather, because in reply to questions we have discovered that the hon. Lady is responsible for the University of the Air and if she is to do justice to that project, which the Prime Minister has made very much his own, she will not be able to give quite the time and attention to the subject of the arts which we would like to see her give. Although she is not ready with her proposals for the University of the Air, we gathered from an Answer today that a good deal of conversation in that context is going on.
  The object of raising this subject today is for the hon. Lady to define her responsibilities and give the House some idea of the way in which she deals with the wide variety of subjects contained in the Consolidated Fund (Appropriation) Bill under various headings.
  The White Paper on "A Policy for the Arts" was issued with a blaze of publicity and we were promised a debate on the subject. We have had a somewhat scrappy series of exchanges about it. I hope that the hon. Lady will use this opportunity to tell us more about her thoughts on this subject and about the expenditure of large sums of money as provided by the Bill. I ask her in particular to tell the House what new work for the arts the Government has achieved which is not contained in the publication, "The Promotion of the Arts in Britain", published in September, 1964—before the General Election—by the Central Office of Information. In that document it is seen that under the previous Administration the historic buildings councils were set up.
  I ask the hon. Lady to tell the House what increases in moneys have been made available to the historic buildings councils, which are specifically mentioned in the White Paper. The House is entitled to know what is being done to further the activities of these important bodies. The

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  Central Office of Information pamphlet gives details of increased purchasing grants for national and local collections. Area councils were set up for museums. The work on historic buildings was co-ordinated between the two ministries. The Civic Trust was set up. We passed the Libraries and Museums Act, the British Museum Act, the Museum of London Act was negotiated and the Arts Council was expanded.
  That would appear to be the principal avenue of help for the arts which the Government are now using. I think that the House has a right to know more about it. Above all, as is shown in this pamphlet, the previous Administration created a climate in which the arts could flourish and encouraged private bodies to extend their patronage. The Administration encouraged industry and television companies—which the hon. Lady is not very fond of—to play their part. What has this Government achieved which was not contained in this document setting out what was already going on under the previous Administration? The only things I have been able to find are the mobile arts centres in gay "Come to the fair" colours, which are a matter of controversy.
  I do not want to go over again the sad history of the promised debate. I hope that by my raising the subject at this inconvenient hour the House may be told more about it. We had a debate on leisure and, in the middle of a speech made by my hon. Friend the Member for Cambridge (Sir H. Kerr), the Parliamentary Secretary in charge of sport said that that debate was not to be about arts and that such a debate could be held at a later stage. This was despite the fact that the Motion then being debated mentioned the arts first. The House had no notice of the way in which the Government proposed to tackle the subject. Hon. Members on both sides of the House felt that the hon. Lady and the House had been hard done by. She has not had an opportunity to explain her policies to the House. There has been a great deal of discussion outside, but we have not had an opportunity to examine her.
  We had a half day, half a private Member's day, for discussion of the subject and it was also raised on a Prayer when it was difficult to remain within the rules of order. There is the old complaint
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  about transfer of Questions. Perhaps I should not go into that, but I think it would be fair to complain about transfer of Ministerial responsibility. As a result, some of the things we should like to ask about have been left high and dry.
  I should like to ask the hon. Lady about the National Youth Theatre Centre. It would seem to us that it had very strong arts connections. The Question to her at the Ministry of Works was not transferred with her when she was transferred to another Ministry, and when I put it down, it was answered by the Parliamentary Secretary who is in charge of sport, who did not answer the Question at all. What are the hon. Lady's views on that subject? Does she have responsibility for the National Youth Theatre Centre? It seems that the Youth Theatre would come within the sphere of the arts.
  Then there is the question of the National Junior Music School. These are two specific items, admittedly, but this will give the hon. Lady the chance to give a much wider answer. I attempted to negotiate with her on behalf of the National Junior Music School, and the hon. Lady wrote me a very courteous letter saying she was not responsible, although she would like to help. In the end I got a letter from the Minister of State, Department of Education and Science. It would appear that music is the responsibility of the Minister of State, and the Minister responsible for the Arts is not allowed to touch that subject at all. Perhaps I am wrong, and I hope that the hon. Lady will be able to explain.
  Having made all these criticisms, I think that the hon. Lady would be entitled to ask what remedies one would propose. I am sure it would not be in order to go into this at great length, but I am not seeking to escape. There is a formidable list of achievements and a substantial programme in the C.O.I. document, and I want to make it quite clear that we on this side of the House, regard this as a most important subject, and one of increasing importance, and believe that Government interest in the arts must be continuing.
  On the subject of expenditure, we have heard a lot from the hon. Lady about the massive increases which are contained

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  within the Consolidated Fund Bill and elsewhere. I would point out that as I see it, the total increase for the arts this year, after deducting £466,000 to meet the higher salary bill, would appear to be only £291,000.
  The hon. Lady has sometimes been rather ungenerous about the previous Government's efforts in this field. She said in the House that expenditure on the arts by the last Government was extremely trivial. Figures I have here show that it ran at the rate of £9,086,000 in the last year. We said that expenditure had been trebled in 10 years and the hon. Lady said it was trebled on the basis of practically zero. I would gently remind her that the "practically zero" figure which she attacked was £4·2 million, and that was the same sum spent in the last year of the previous Labour Government.
  Without prolonging the wrangle about finance, and the Consolidated Fund is partly about finance, and also how the money is used, and who is responsible for it, I should like to conclude with a thought about the status of this subject within the Government. We feel that the status of this subject has been reduced by the way in which the hon. Lady has been treated. She has been left out on a limb by the Treasury, that all-powerful Department, and that Department no longer has a special relationship with the arts, which it used to have.
  Miss Jennie Lee: Do not believe it.
  Mr. Cooke: Well, the hon. Lady has a special relationship with the Treasury. I am sure that the House is interested to have that additional piece of information—that startling new piece of information—and no doubt much fruit will come of it. The point is that the Treasury now, in spite of the special relationship, is no longer directly responsible for a large number of the artistic institutions which were transferred to the hon. Lady. The Treasury is likely to take a somewhat jaundiced view of these institutions, as it does of anything which wants money at the present time, especially in the rather stringent circumstances, whereas when it had to deal with its own children within its own household, it might have found it a little more difficult to curtail or strangle them.
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  A number of remedies have been proposed to get us out of this difficult situation. Of course, one would have to take the situation as one found it. There has been great change in Ministerial responsibilities and many new Ministries have been created by the Government. If roughly the same pattern of Ministries existed as in the previous Administration, there would seem to be merit in the idea that a Minister of State—and the present Government is full of Ministers of State—should have charge of this subject. Preferably, the Department should be the Ministry of Public Building and Works, because it has a wide-ranging interest in the arts and many links with other Ministries. As I said earlier, I feel that the hon. Lady has been cut off and is, perhaps, unable to administer many of the funds which we are asked to vote on this occasion.
  We believe that the arts are a vital field in a modern materialistic world. With enhanced status in the Government and at a different Ministry, the new Minister for the Arts could have a wide-ranging brief and could keep an eye on the activities of other Ministries which are large public spenders and should, indeed, indulge in further patronage of the arts. In an age when private patrons are so sadly curtailed, the Government must give a lead.
  The hon. Lady has said that the Arts Council is to be her main channel for money and interest in the arts. This is not entirely satisfactory because of the difficulty of accountability to Parliament. I hope that the hon. Lady will have something to say about this, because when tthe Arts Council was a comparatively small spender that might have been all right, whereas in present circumstances, with what would appear to be an increasingly large sum of money each year—that is what the Government have suggested—some form of greater accountability is surely necessary.
  We would hope that the Arts Council will not be just a screen behind which an inadequate Government can hide, because it is frustrating for hon. Members to put forward their suggestions for Government help for the arts and simply to be told that this is a matter for the Arts Council. If we are to have a Minister in charge of the subject, it would seem that he should be answerable to this

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  House and explain why one venture is favoured and why other things are not.
  One has no wish to bring the arts within the arena of violent political controversy—I hope that I have not been controversial on this occasion—but the arts are always bound to engender a certain amount of heat and there is bound to be argument about matters of taste. One is not suggesting that the Government should become an arbiter of taste. The Government have, on the other hand, deliberately tried to make political capital out of the arts.
  Miss Lee: Nonsense.
  Mr. Cooke: The hon. Lady has used such phrases as "poor law relief basis" for the way the arts were treated under the previous Administration. She has had a crack at commercial television and the vulgarising of life. I remind her, however, that television companies are substantial patrons of the arts and that many of the theatrical ventures of which she is so fond would not take place but for the help of the television companies. I refer to the C.O.I. document if the hon. Lady does not have the figures.
  The hon. Lady has used the phrase that the arts have been financed on a shoestring basis. Well, I only hope she is successful in getting an extra shoestring out of the Chancellor. There do not seem many around just now. Perhaps she will have more luck about that. We feel that she has been put in an impossible position. We wish her well in trying to make a success of her work. We feel that a radical reappraisal of the whole field is necessary, and this tired out and bankrupt Administration cannot do it. I want to leave the country in no doubt that my party cares passionately about the quality of life, in which the arts have a major part to play.
  6.55 a.m.
  Mr. Norman Buchan: Almost inevitably at this time in the morning one is out of order, and the more so if one tries to follow the hon. Member for Bristol, West (Mr. Robert Cooke). However, I would say, let us not put the arts under the Ministry of Public Building and Works. To do that is almost to suggest that we should put the arts in an ancient keep. The arts are not naturally the concern of that Ministry.
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  That is not its task; it has other things to do.
  The second thing I wanted to do was to ask the hon. Member what he meant when he continually said "we"—this, that and the other. For whom was he speaking? He spoke from the Dispatch Box. Was he speaking for his party, or not?
  On the question of private industry, I would say that it has not got a very good record in the arts in this country. I remember examining the situation in Edinburgh with the Edinburgh Festival, the biggest and most important festival which takes place in this country. At that time—1963—it was bringing in between £2 million and £3 million in trade and commerce but was only receiving £18,000 back from it. Some of the shops along Princes Street did very well.
  I would urge my hon. Friend to pay little attention to the siren voice of the hon. Member for Bristol, West. I do not think any of us really believe that the party opposite is really concerned with those aspects of life he was talking of—and especially when he referred to a figure of £4·2 million becoming trebled to become £9 million. I would suggest that he has another look at those figures.
  6.57 a.m.
  The Joint Under-Secretary of State for Education and Science (Miss Jennie Lee): I am grateful to the hon. Member for Bristol, West (Mr. Robert Cooke) for taking an interest in this important subject and for the opportunity he gives me, even at this rather difficult hour, to give some account of what is happening.
  I enjoyed the short time I spent at the Ministry of Public Building and Works; I enjoyed it very much indeed, and I had every help in preparing a White Paper which was the basis for further action. Since then I have had the experience of working within the Ministry of Education and Science, and I can say, making a fair comparison of the work and opportunities in these two Ministries, that it really is more fitting that we should take the first steps towards a complete Ministry for the arts within the Ministry of Education.
  I accept completely what the hon. Member said about the ails being a full-time job, and I have no doubt at all that

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  if we go on from our first step which was set out in my White Paper to further steps we could easily visualise a situation in which some of the work which is now being done in the Ministry of Public Building and Works and by other Government Departments could be gathered together in one Ministry. But I am also certain, from my experience in these past months, that it would have been a mistake to have tried either to continue to operate from the Ministry of Public Building and Works or to have tried to establish straight away a complete, independent Ministry for the arts. I am hard at work dealing with the former responsibilities of the Treasury.
  There is a much bigger volume and bigger variety of work being done for the arts in the present Ministry. There is also a great deal more work, and a wider variety of work, being done by the Arts Council, and in both these fields we have had the most cordial and helpful co-operation of my colleagues at the Treasury.
  In starting a new venture such as this job, I have been extremely fortunate in the amount of co-operation that I have been receiving from my colleagues in the Treasury and in other Departments. My right hon. Friend the Postmaster-General has been busy at work with the North-East Arts Association, and he is about ready to publicise a scheme which will mean that we will use public buildings such as post offices, hospitals, and so on, to enable contemporary artists to display their work. These artists should be given every opportunity to display their work, and when new buildings are being erected more concern should be shown with regard to expenditure on the arts.
  I have no complaints to make about the co-operation that I have received from the Treasury and from my colleagues in other fields, and I am deeply grateful for the response which has been coming in from all over the country, from many different sources. This, too, is important. I have not had one letter of complaint about my transfer to this Ministry. I have heard the case put in the House of Lords by Conservative spokesmen, and I have heard it put from the benches here, but from all over the country, from all political angles, I have received many letters expressing appreciation that there
  1584
  is a Minister in the Government who is responsible for the arts.
  At the moment the country is in a mood to give the arts a very much higher priority than before, and I shall be the last to complain if hon. Members say that we are not spending enough money on the arts, because I hold that view, too. We do not have the habit of spending public money on the arts, and I believe that this is a habit that we have to learn. I believe that even in our present difficult economic situation we have to maintain our priority for the arts, and I am sure that the hon. Gentleman, and other hon. Members, too, will be glad to know that there has not been the slightest hint that the capital sum allocated for the arts should be curtailed in any way. In any event it would be too late to do that, because I was careful to see that the £250,000 was committed as soon as possible. This money has been used to prime the pump, often in combined operations for starting or carrying on projects in association with private individuals, local councils, and so on, and so far as it becomes part of a very large scheme the local authorities will be accepting a moratorium or a standstill for a certain time.
  When I first took on this job, some people felt that the private donor and the private trust were no longer appreciated or were no longer as important as they were in the past. As I said earlier, I am on very good terms with my colleagues in the Treasury, and I am also getting some encouragement from the local authorities even though they have their own difficulties. In addition, the most cordial relations exist between my Department and the great trusts and many distinguished private donors. Indeed, we have now established that the arts cannot be contained within any political party. I said that at the outset. They must be sustained by everyone, whatever their political point of view, provided that they accept the priority, and they want to see more public and private money spent on the arts.
  But I was shocked at the way in which the hon. Member for Bristol, West asked me if I was using the Arts Council as a screen, and whether I would tear away the veil and make it possible for hon. Members to start asking me, or whichever Minister was doing this job, about the

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  respective merits of individual theatres, arts centres, museums, and the rest. I am 100 per cent.—if you like, 1,000 per cent.—opposed to any political interference with expenditure on the arts, from whatever part of the political compass it comes.
  We are fortunate in having a system where our job in the House of Commons is to build up priority for the arts, and we have the good fortune to have distinguished experts to do the allocation of the money. No man or woman of distinction in this field would continue the job for one moment if, in private or public, he or she was told by any Member of this House, or the Government, how the money should be allocated. I hope that hon. Members opposite will not try to raise that extremely stale red herring.
  I am not accusing the majority of hon. Members opposite, but there are some who, from their speeches, make it plain how much they would like to establish an atmosphere following the appointment of a Minister responsible for the arts, and particularly a Socialist Minister, which would mean that we were seeking to give political direction to the arts. We are not going to do that. The only direction in which I shall go is in the direction of trying to focus the attention of this House and the public outside on some fields which at present are under-financed and which need to have a higher priority.
  I have been asked about the National Youth Theatre and the National Junior Music School. To the extent that painting, music or the arts generally are taught in schools they come within the general national body and are not my responsibility. I have a common interest. I work with all Members in seeing that we spend as much as is reasonable, and a little more, on giving children in their school years the opportunity to practice and appreciate the arts.
  In dealing with the very important question of youngsters who have left school at 15 or 16 years of age, I am most dissatisfied with the present situation. So is the Arts Council. It is now busily at work carrying out investigations into how best to build up and co-ordinate the work of our children's school, children's theatre, youth theatre, youth orchestra, and the rest, but no one can accuse the present Government of being indifferent to the
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  world of music, because it took quite a lot of pressure by us—at a time when the previous Government would have been responsible for letting one of our great orchestras go out of existence—to have the Goodman Committee established and have it operating in an atmosphere where already, in my White Paper, I give the firm undertaking that when it has completed its investigations, if extra money is required extra money will be forthcoming. I have no reason, even in the present situation, to fear that the Government and the Treasury will not carry out that pledge.
  In a score of other fields a great deal of activity is taking place. I want to pay tribute to the generosity of many private donors. They are doing an extremely exciting job at this very moment, in making sure that the Carlton Terrace scheme for contemporary art will be launched. This will have its starting point from private donors but will be kept going by additional assistance from the Arts Council.
  I hope that hon. Members will not press me for too many further details but I can say categorically that this will be a great new venture and that everyone who has been working on it has been very excited about it. My privilege has been that because there has been a Minister there has been someone to co-ordinate, faster than otherwise would have been the case, all the activities which are going on.
  I hope in the next few days, or in the next week or two at the most, to be able to announce the names of an independent committee which is being set up to inquire into whether we should have a film school in this country. I have already declared that I think that we should have one.
  At Easter I visited the film school in Rome. Although we would not be thinking of building on that scale now, and neither would the modern Italians, when I see what is happening in other countries I should like to see our young directors and producers having more opportunity for independent work. It is not for me to make any further announcement but we have agreed to appoint an independent committee of inquiry under a distinguished chairman. It is my job, having got to this point, to stand back and await its recommendations.

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  I am most grateful to the museums and art galleries in London for their reactions when I put to them that I thought that the time had come when we should have earlier Sunday openings. It is exciting to see children pouring into the science museums and it is heartening to go to the Tate and see the students there, but in my view there is something sadly wrong in having these great galleries closed until 2.30 on Sunday afternoons. It is not easy to change these things, because there are security, staff and financial problems, but I have now the good will of most of the main galleries and, being optimistic by nature, I am hoping that even in the present financial situation the relatively small sums that will be needed to carry through this operation will be forthcoming. I cannot promise that to the House but, as I have done, I can tell hon. Members of my work in the Ministry on the musical side and on the question of hours of opening, and so on, and in what London does other parts of the country will follow. A great deal of work has been going on.
  We have also been working very hard to find a scheme for giving aid to authors. I can go no further now than to report that we are making progress.
  I am grateful that in the North-East we have been making an important breakthrough in the trade union field. We have had a most successful trade union festival, bringing in over a score of trade unions. I have paid tribute to private donors who have helped us and I hope that we are now entering a phase where industrialists and trade unionists will contribute and will show much greater interest in these matters than has been shown in the past. We are beginning to go in that direction but we have not gone anything like the distance that we would wish.
  The University of the Air is also a large and important project. We are making headway on that.
  I have no doubt that the time will come when one Minister will be able to handle these different subjects, but the best possible way of making a beginning in this matter is the way which we have taken. Despite the very difficult financial situation, progress is being made in the localities in building up associations,
  1588
  which are cutting right across political differences and, at last, cutting through some of the social difficulties. This work is going on all over the country. Those Government Departments which are allied with my work but not exactly under my authority are co-operating with me.
  A beginning has been made. I have never claimed any more than that. I want a great deal more money. I want one day to see further co-ordination, but no hon. Member can have a legitimate complaint about the authority which is now given me within the sphere for which I am responsible or about the response which has been coming in from the public all over the country to this new way of tackling the problem of giving higher priority to the arts.
  Mr. Robert Cooke: Before the hon. Lady sits down, would she answer one question? She has explored a wide field. Will she seek a further opportunity for a full debate on these matters when we return after the Recess?
  Miss Lee: I shall be delighted to co-operate in putting pressure on both sides of the House. Nothing would please me more than that we should have a full day's debate on the arts.

  NORTH-WEST STUDY GROUP
  7.17 a.m.
  Mr. Charles R. Morris: The House will agree, I think, that the vital and important Report of the North-West Study Group should receive the consideration of hon. Members, even if, because of the pressure of Parliamentary time, our examination this morning will be somewhat cursory. I believe that, behind the terse language and added statistics, packed into the Report lies a problem the dimensions of which should arouse the imagination and command the attention of every thinking person in the nation. The Report is an invaluable commentary on the environmental conditions in which 6½ million decent, industrious people live in Britain in the 20th century.
  The point has been made previously that the designation "North-West" is something of a misnomer, since the area referred to is neither at the northern extremity of the British Isles, nor in the

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  extreme west. It is an area of scenic contrast, which encompasses the natural beauty of the English Lakes and includes the highly industrialised complexes of Manchester and Liverpool.
  In reading the catalogue of facts, which constitutes, by any standards, a tremendous problem of environmental renewal, ranging over a wide area of the region, one might ask how it arose. An inevitable legacy of the Industrial Revolution, neglect by successive Governments, Conservative and otherwise, the pursuit of private profit—these are all factors, but the great mills and smokestacks, the factories and the limitless rows of decaying homes are only the consequence of a nation's indifference, for which each of us must accept responsibility.
  If I tend to concentrate on those sections of the Report which deal with housing, housing land needs and environmental obsolescence and dereliction in south-east Lancashire and the great conurbation of Manchester, it is because I have no wish to impinge on the speeches which I understand some of my hon. Friends wish to make about other parts of the region. The Report does not make recommendations for solving the problems which the group encountered or suggest plans for the future. Rather, it underlines the problems and provides a basis upon which future plans for the area can be drawn up.
  In this respect I should like to make reference to three aspects. The first is the need for more homes in the region. Individual unfit houses, dwellings of £30 rateable value or less, slums, call them what you will, I think that the question which we ought to examine is what is the extent of the problem which exists; and this, I think is admirably summarised in paragraph 30 on page 106 of the Report, which states,
  "Of the 2½ million poorest dwellings in the country, about 20 per cent. are in the North-West."
  In terms of sheer numbers the position is without parallel.
  Even with the continued migration from the region, the North-West will be faced with the staggering task of finding 440,000 dwellings to replace homes already unfit to live in or will be unfit to live in by 1981. Table 20, on page 79
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  of the Report, endeavours to estimate the time it will take to clear these slums by projecting the current rate of clearance. On this basis, in the conurbations it will take four decades. In North Lancashire alone it will take 78 years. I think it is true that one's mind boggles at the fact that there are babes yet unborn who will not live to see the solution to this gigantic problem.
  This is against a background of an estimated need of 440,000 dwellings, a figure which takes into account the continued rate of migration from the region. If one ignores migration and includes the clearance of all dwellings of £30 rateable value or less, the total housing need assumes the vast proportions of 942,051, which, at the current clearance rates, will take 100 years to clear in some areas of the region.
  I suppose that it is equally true to ask—is it enough merely to indicate the enormity of the task facing the region? Is it sufficient to take solace, as the Report does, from the fact that one or two local authorities are demonstrating what it terms "vigorous action" in meeting the problem? To my mind the central question posed after reading those sections of the Report dealing with housing, housing land needs, urban renewal and environmental obsolescence is, can local government as it is at present organised carry the financial burden inherent in dealing with housing need on this scale? Are ratepayers and housing revenue accounts to shoulder the financial responsibility of all urban renewal to this extent? It may well be that no Whitehall oracle was needed to explain the vast slum clearance programme which will be needed if we are to provide for our people in the North-West the conditions of life which I believe they have a right to expect, but Whitehall must not remain for ever impervious to the financial cost which a solution to this problem will involve.
  Secondly, I turn to the question dealt with in the Report concerning housing land needs. Table 22 quite rightly draws attention to the deficiency of dwelling sites and projects the serious situation which will arise in certain areas in the region if these needs are not met by 1981. I have no wish to resurrect the controversies to which I drew attention

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  in my Adjournment debate on 3rd December—those between local authorities over the needs of the major critics such as Manchester for housing sites.
  Rather, I invite the House to consider the evident social consequences arising within such cities as Manchester and Liverpool from the pressures to utilise every piece of vacant land within their boundaries for the provision of municipal houses. The social balance reflected in a community containing a wide range of social income groups is fast disappearing in the cities of the North-West. Whereas in the traditional, smaller English community it is accepted that all income groups work and live in reasonable proximity one to the other, sharing a single social environment, in the cities of the North-West the affluent increasingly live in areas socially segregated on the periphery of the city. The only social contact which many employers have with their workers outside working hours is a nod of acknowledgement as the employers drive in their cars through the council house estates on their way to their privileged reservations on the outskirts of the city. Environmental planning should properly take account of these undesirable social developments.
  The Report pays tribute to the splendid work of societies such as the Civic Trust for the North-West in focusing attention on and seeking to encourage efforts to improve environment and banish drabness in the area. With the best will in the world these organisations have as yet merely scratched the surface of the problem. If the great task of industrial dereliction is to be tackled, Government agencies must step in to help them in their task.
  I hope that the following suggestions which I have to offer will be regarded as constructive. Considering the scale of the problem, I am reminded of the situation which operates in areas such as the North-West in connection with the designation of development districts. We issue industrial development certificates in areas of high unemployment. Against the background of the problem in areas like the North-West, the Minister might consider designating areas such as the North-West as environmental development areas—designating as such areas the sub-regions where the problems of slums,
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  general obsolescence and dereliction are most pressing. This would keep these problems well to the front of the minds of the regional planners.
  The appropriate Minister might also consider the establishment of sub-regional planning teams comprised of young architects, planning officers and traffic engineers, located in the conurbations and responsible for the overall co-ordination of environmental planning under the direct authority of the Ministry.
  The Government's comments on the Report indicated that they were in no way committed to the Group's findings. We were informed:
  "Any proposals for action which may be made will have to be concluded against the background of the national economic plan and programmes and policies for the country as a whole".
  When I read the Government's view I felt very much as I do when reading a realistic and lucid book; I invariably come across a paragraph printed in small type saying, "All events, circumstances and characters are fictitious and any relation to actual events is merely coincidental". Naturally, I accept that the Government's view on this matter must be influenced by the emergence of the national economic plan. As one who has lived in the North-West for as long as I can remember, I have faith in the resilience of the people of the area and their ability to adapt themselves to the changing society in which we live.
  As my right hon. Friend the First Secretary of State and Secretary of State for Economic Affairs has indicated, he is in the process of drawing up a national economy plan. I trust that he will not lose sight of or overlook the tremendous challenge of revitalising the North-West and creating hope for its people.
  I want to make only one further point, and that is to thank the Joint Under-Secretary of State for Economic Affairs for being present to deal with this important subject.
  7.30 a.m.
  Mr. Geoffrey Howe: I should like to express my thanks to the hon. Member for Manchester, Openshaw (Mr. Charles R. Morris) for having raised, and having had the good fortune to have the opportunity of raising, the important subject of the North-West Study. I am

  1593
  sure that hon. Members on both sides are glad that the Study Report has now come forward. It was initiated by my right hon. Friend the Leader of the Opposition. Had the previous Administration remained in office, it was expected that the Report would have been available early this year. It would be churlish of me to complain about the seven-month delay, but we are glad to see it now that it has eventually arrived.
  I was interested in the reference that the hon. Member made to the possible impact of the Government's attitude on the national plan. If one looks at the Study Report, one sees the enormously wide variations in what the Report itself describes as highly speculative forecasts about job probabilities in the North-West, and the variation in forecasts as between a surplus on the one hand of more than 200,000 jobs and a shortfall on the other hand of almost the same number. There is the same uncertainty in forecasts about population trends, as well.
  These wide variations, which are implicit in any kind of population projection even before one considers industrial trends, show that the Government would be unwise in the extreme to delay basic decisions about basic matters in the North-West on the excuse that they would necessarily have to be fitted into the jigsaw of a national plan. I know that they have that at the back of their mind.
  The questions that I should like to ask the Minister on that part of the Report are these. How do the regionally gathered figures of prospective industrial growth, which are gathered on a regional basis, fit, if they fit at all, into the industrially gathered forecasts of labour shortages and surpluses which are, as I understand it, the basis of the national plan? Is any attempt being made to reconcile the regionally gathered figures with the industrially gathered ones? If so, how is it being done? What steps are the Government taking to improve the accuracy and adequacy of the regionally gathered figures which they are getting, because that is Manly an area where much more needs to be done to improve the figures that we get? While all the process of reconciliation is going on, are any important Government decisions affecting the North-West being held up?
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  I suggest to the House that there are some things about which the Government have a clear and inescapable responsibility for the North-West and about which they have got to be ready to make the important decisions that matter. They have to make those decisions, however imprecise the compass guides may be, upon the best estimates that they can make of the growth of population and the known overcrowding which is already there.
  The four points about which I am concerned are these. First, the location of areas for overspill reception and population growth. Secondly, the adequacy of the infrastructure which the Government are planning for the area, particularly in terms of roads for which they have direct responsibility. Thirdly, the point raised by the hon. Member for Openshaw, the adequacy of the machinery for urban renewal. Finally, the clarity of the Government's policy, if indeed they have a policy, for the location and attraction of industry.
  First, on the question of the location of overspill in the North-West, I understand that the present Government have taken one major decision by designating the Leyland-Chorley new town area. All the other major decisions on location of new housing and industry were taken by the outgoing Administration. The Study says, in a short sentence, that on matters of that kind in the North-West
  "No key decisions have to be taken in the short-term."
  The Study affirms, on the basis of decisions already taken, that enough land is now available until, at any rate, the mid-seventies, or even until a little later so far as Manchester is concerned. Do the Government agree with that view? If so, on what assumption about probable net emigration rates from the region is their agreement based, and how do they justify their assumptions?
  The Report talks of the "massive investment" in road construction that was put in hand, and which is now in train as a result of decisions taken by the previous Administration. The Report says that these decisions go a long way towards providing the North-West with an adequate regional road system. Do the Government agree with that view? If they do not, in what respects do they disagree with it?

  1595
  I am particularly interested, and I am sure that hon. Members opposite will be, in the possible impact on the road construction programme in the North-West of the measures announced by the Chancellor of the Exchequer last week. I tabled a Question to the Minister of Transport yesterday on this very point, and it was very disturbing and disconcerting to find that the only answer the right hon. Gentleman could give was that he has not yet completed his review of the schemes due to start in the next few months and decided which should be postponed. Can the Minister give us some idea when we shall know which of these important schemes in the North-West will be postponed?
  Looking at the more optimistic side, what improvements or additions, if any, do the Government propose to the very full road construction programme already in hand there? One project that concerns me is dealt with very lightly in the Report of the Study Group, namely, communications between the M6 and Merseyside—whether on the Liverpool side of the Mersey or on the south-western bank in which my constituency is more concerned. The Report says in very guarded terms that an eastward link from the Mersey to the M6 "may be required." Many people on Merseyside regard the improvement of the road link between our great port and the M6 as of first-class importance. I do not want to arouse intra-regional jealousies, but one is concerned by the major improvements proposed for linkage between the M6 and Manchester both northwards and southwards. Do the Government regard as equally important the links between the M6 and Merseyside, or do they adopt the somewhat qualified view of the Study itself?
  I agree with what the hon. Member for Openshaw said about urban renewal, which is the most intractable problem of the area as a whole. One of the difficulties which the present Government are likely to perpetuate is the unrealistically low level of rents which many local authorities have been accustomed to charge and which many local authority tenants have been induced to regard as normal. We know that present construction rents have to be higher than the local authorities regard as acceptable, but are
  1596
  the Government satisfied that their rent policy, in both the public and the private sectors, is really making it easy for the local authorities to undertake the construction they should? And what machinery do they propose for doing something about the absence of urban renewal in the very many small local authority areas in the North-West?
  The last point I mention is the whole policy of the Government for the attraction of industry. What is the basis of their attitude to this in the light of the conclusions of the Report? Do they accept what I identify as the conclusions about industrial growth in the North-West? The first conclusion in the Report is that there is little reason during the period ahead to suppose that demand for labour will fall short of the supply. The second conclusion—in paragraph 8 of Chapter 16—although not setting it out in express terms, suggests that no further special measures are needed for the attraction of industry to the North-West, that although it would not be a net exporter of industrial growth potential it need not be the recipient of specially induced industrial growth.
  Do the Government accept that general view of the industrial prospects of the region—that, broadly speaking, it is all right? Whatever their conclusion, what do they propose to do about the pattern of inducements for industry to go to the area? Hon. Members on this side and, I suspect, hon. Members opposite, were concerned at the impact on the special investment allowances, contained in the Finance Act, 1963, of the changes in the Corporation Tax system. Do the Government propose to take any steps to restore the inducement value of investment allowances as originally created in that respect?
  The present development districts were created, in effect, under the Location of Industry Act, 1945, passed by the Conservative "caretaker" Government, and have been developed under the 1958, 1960 and 1963 Acts of the last Administration. Experience suggests that the development districts, especially on Merseyside, are finding it difficult to find sites for industrial development and real growth potential is being found, for example, the other end of the Wirral, at Ellesmere Port, to which people are becoming accustomed to travel to their daily work.

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  Do the Government accept the idea of narrowly defined development districts? Or do they accept the notion of growth areas that the previous Government established on the North-East Coast and which they themselves are arranging in the Leyland-Chorley area. Are they intending to re-vamp the inducements so that they are available in the region generally and are not so narrowly concentrated in development districts as defined in the old sense?
  Finally, there is the point about the adequacy of local government structure in the region. I seem to recollect that the Joint Under-Secretary of State for Economic Affairs before the election took a rather unenthusiastic view of the probable outcome of the activities of the Local Government Commission not merely on Merseyside but generally and thought that in the long run the recommendations did not go far enough to secure the reform of local government that we need.
  I am sure that the hon. Gentleman will agree that the rather shadowy substance of the North-West Economic Planning Council is only the first tenuous step towards democracy in the sense that we have come to understand it. I believe that, in the long run, if we are to get effective regional development we must think in terms of regional elective bodies with strong executive heads analogous to the State Governments in the United States. It would contribute to the metropolitan health of the regions if we had a Governor Rockefeller on Merseyside or a Governor Adlai Stevenson in the North-East. It would have been better if the Joint Under-Secretary, before arriving in the House to administer all the regions of the country simultaneously, so to speak, had proven himself as a regional administrator with dramatic policies which had revivified the North-West in which he was born or the North-East to which he migrated for Parliamentary purposes.
  I should like to think that that was the kind of thing to which we were moving in the fairly near future. That is what is necessary to restore impetus and drive to the regions and to give the country an opportunity of developing different approaches to different problems. The Government will take 20 years be-
  1598
  fore they are persuaded of the wisdom of toll roads. It might not take so long to persuade a north-west regional authority of the wisdom of a toll road from the M6 to the Merseyside ports. If the North-West wanted it, why should it not have an independent opportunity to go ahead with an enterprising government of its own to show the rest of the world how the job should be done?
  I should like to think that the Under-Secretary and other hon. Members were in sympathy with this kind of approach and that not this but the next and Conservative Government would set up the machinery for considering this sort of approach to the problems of regional government and that the Under-Secretary, having lost his seat at the next election, would make his way back into politics as regional governor doing a narrow job well instead of spreading himself so thinly over such a wide range as he now has to do.
  7.46 a.m.
  Mr. Arnold Gregory: I join with the hon. and learned Member for Bebington (Mr. Howe) in saying how indebted the House is to my hon. Friend the Member for Manchester, Openshaw (Mr. Charles R. Morris) for introducing this debate on this Report, even in the early morning. I do not agree with the hon. and learned Gentleman's hopes about what will happen as a result of the Report. If the Government take note of the warning in the Report and take early action to introduce the measures which we in the North-West believe should be applied, it will be to their credit and will cement the policies which need to be applied in the North-West and confirm the Government's interest in an area which was so sadly neglected by hon. Members opposite.
  The Report has an alarming number of revelations about industry, housing and urban renewal, population trends, employment and land. These are not problems of short standing. They have been with us for a long time, but they were aggravated by the behaviour of the last Government whose inactivity, shortsightedness and lack of recognition of what was happening in the area worsened the situation.
  The hon. and learned Member for Bebington did not speak of the part

  1599
  which cotton had played in the development of the North-West. In the last 13 years, there has been no positive Government contribution towards the future of cotton. There was a rescue operation in 1959, but this great industry, whose working force included many people from Lancashire and Cheshire and which had made such great contributions to the country's economic life, was allowed to fall behind in mechanisation and technology. In latter days it has been saved by the attention of large firms which are making heavy investments in it and now seeking the confidence and backing required if the industry is to provide satisfactory employment in the North-West and contribute to the country's economic life.
  By virtue of the age, the corosion and erosion of the cotton textile industry, there is a tremendous problem in slum clearance and urban renewal in the North-West. The old industry with its long history and peculiar social and industrial behaviour has resulted in old buildings and old town centres and the kind of conditions which need extensive and early attention. It is unfortunate that this pressure is suddenly realised by hon. Members opposite, for many of these things were recognised long before those who made the Report began their work.
  In spite of the lack of foresight of the previous Government, new technologies and industries are being created and efforts are being made to effect adjustments to the whole social life of the North-West by local authorities and industrialists in the area who have made a major contribution to the formation of this Report. All we ask is that the Government should do everything possible to back local authorities, give attention to necessary investment and subscribe to the general well-being and welfare and to the acceleration of policies which will improve the situation in the North-West.
  My constituency is probably in the worst position to find remedies as a result of developments in recent years. It is a very small part of the area on the south of Lancashire and north of Cheshire. The town of Stockport overlaps the county borders. It has to give land to meet the overspill needs of Manchester. Land shortage revealed by the Report creates the biggest scare. The Stockport Express, when it considered the Report at the end
  1600
  of last week, immediately dealt with the question of land shortage. It had the banner headline:
  "Home Buyers Face Big Prices Shock"
  Industrial and social problems were ignored, but the newspaper said:
  "Property and land prices in Stockport are expected to soar and privately owned homes may become scarce, according to local builders and estate agents.
  Their argument is based on facts revealed in the report of the Government's inter-departmental study group which for the last 18 months has been examining the North-West and in which the land-scarcity in Stockport and its surrounding areas figures prominently.
  Because of this acute land shortage, the prices of parcels of land, already exorbitantly high, may increase further, which will make building of new houses more expensive …
  This land famine may hit Stockport and its sub-region—Bredbury, Romiley, Cheadle, Gatley, Hazel Grove, Bramhall, Marple and Disley as well as Hyde, New Mills and Whaley Bridge—by the early 1970s if net immigration into the district continues says the Study Group. …"
  The point is made:
  "The town tops in two instances tables of land shortages which will occur in South-East Lancashire and its immediate region before 1981.
  If current building rates continue, Stockport will be without privately owned housing sites in 1973."
  It goes on to say that the town itself will starve of land by 1978 if there is no population movement within the area. The point is that this trend will make it more and more difficult first of all, for the local authority to clear away slums, and it will find that newly-married couples, who are taking part in the cross- and transmigration population within the North-West will find it increasingly difficult to buy a home at a reasonable price.
  I noticed, in the same report, that a local estate agent is now talking in terms of houses in the £2,500—£3,500 bracket exceeding the £4,000 mark, and probably going up to the £5,000 level within the next few years. This is the kind of thing that demands very quick and positive action. It calls for the closest attention of the Land Commission, and I hope that this will be set up by the Government in the near future. This kind of action is necessary if the North-West is not to stagnate, instead of developing and contributing to the economic and social life of the country in the way it can.

  1601
  I started off by talking about an industry which has declined in the past 20 years, which has seen the reduction of its manpower to 25 per cent. of what it was 20 years ago. We have also seen mills closing but we can expect new technologies within the Lancashire cotton industry, new techniques in fibres, in spinning and weaving methods. We may find that the shape and form of the cotton industry itself will be transformed and we will see the development of a new textile industry. Instead of the traditional mill girls we will have a white-coated industry, absorbing, I hope, female technicians and operatives within it.
  The important point is that inside the North-West, in spite of the shortsightedness of the previous Government, we are seeing new developments in the industry. In my own constituency we have—and I am very proud of the contribution we make—the development of the nuclear power industry. We recently undertook the building of nuclear power plant for Dungeness "B" power station. I could go on with the list of technological achievements in the development of the nuclear power industry. We need to attract additional labour to the town to support it. What we certainly need is faith in the North-West itself to set aright its problems. I call upon my right hon. Friend the Secretary of State, and certainly upon the Under-Secretary to make sure that we have Government support to attend to all these needs which are demanded in the Report, and that the trends, which have been so obvious for many years and ignored by the previous Government, should be recognised.
  7.57 a.m.
  The Joint Under-Secretary of State for Economic Affairs (Mr. William Rodgers): May I apologise to my hon. Friend the Member for Manchester, Openshaw (Mr. Charles R. Morris) for not being here when he began his speech? I would only plead, although this may not be a wholly satisfactory excuse, that I was in Manchester and Liverpool yesterday, and that it is owing to this visit to the North-West that I was not in my place when he began his remarks. I think that he was quite right to raise, even at this late hour, the North-West Study, which was published by the Government nine or ten days ago. It is a most important study
  1602
  and I only regret that circumstances do not allow a much fuller debate, because there is every reason to have one.
  I was greatly taken by the enthusiasm of the hon. and learned Member for Bebington (Mr. Howe) for the Study. I am only surprised, in view of his interest, that we have not had, at an early stage during the Session, a full debate on regional questions. I think that this Report is not the only factor which we could bring into account to demonstrate that in regional questions this Government have been moving forward at a very rapid speed, and a great deal more effectively than the previous Government.
  My hon. Friend made a number of very important points in his speech. I ought to say, not only for reasons of time, but for reasons I shall explain in a moment, why I do not propose to go into a great deal of detail. The principal reason is simply that in publishing the North-West Study the Government have made it clear that this is an exercise in democratic planning. We have not published the document and said, "Here is the policy. We have made up our minds and now we intend to implement it." We have gone one stage further and said that we have published the Study and now we want discussion to begin so that the right policies can be formulated.
  That is in sharp contrast to the previous Government's behaviour with the South-East Study, when, having prepared the Study, they made their policy without full consultation with the people who would be mainly affected by it. We have put the Study Report to the North-West Economic Planning Council, which will begin to discuss it fully in September. We think that this is by far the best way of making sure that when policy is made, it is in the best interest of all those who live in the region. The Council in the North-West is already functioning effectively. It has got down to its job and by the time it has looked at the Study Report and let us have its conclusions, we should certainly be in a position to make the policy decisions which are urgently required.
  To establish, perhaps, my own credentials, may I say that I was born in Liverpool and that for the first 16 years of

  1603
  my life I never went beyond the North-West and North Wales. Perhaps I am one of the few people who are exhilarated when they get north of Crewe, because I feel that I am going home. In turning to the Study Report, I was looking once again at many of the problems which I had seen in daily cycle rides round the North-West at a time which now seems to me to have been many years ago.
  It is certainly true that there are some difficult problems which the Report reveals. One which affects the north-east of Lancashire is very well illustrated by the map on page 14 showing the population decline in the north-east corner of Lancashire in the cotton towns, which were established 100 and more years ago because of the availability of water supplies and the ideal humid climate. Again, in the whole Furness area we see a movement of population and a difficult problem of isolation which the best communications in the world cannot wholly overcome.
  Then there is the problem of Merseyside, an area in the North-West which has had persistently high unemployment over a long period and shows certain characteristics which I do not think are found in any other part of Britain, never mind any other part of the North-West.
  The whole purposes of regional economic planning are twofold: first, to plan for population growth. That is something which we often overlook. We consider the needs of dealing with urban renewal, we consider the housing waiting lists, but often the layman at least overlooks the fact that the population of Britain is increasing at a rapid rate. As my hon. Friend the Member for Openshaw pointed out, one of the things which emerges from the Study is the need for major schemes of urban development to deal with population growth.
  Secondly, of course, there is the problem of economic growth, which affects both transport and also, more particularly, industrial location. I do not intend to reply in any detail, and certainly not to the points made by the hon. and learned Member for Bebington, because if this is an exercise in democratic planning he will not expect me now to make the policy statements which we decided deliberately not to make at the time of publication of the Study.
  1604
  My right hon. Friend the Chancellor of the Exchequer has, however, made clear that in deciding exactly where the burden of the decisions which he announced the other day may fall, he will take particular account of the continuing need to improve the access to our ports and will be looking at the road programme as it affects the North-West in conjunction with his right hon. Friend the Minister of Transport in the light of the need to continue to improve the access to our ports.
  Secondly, the hon. and learned Member for Bebington raised the question of industrial location policy. I think he will know that by 1967 the Local Employment Act comes up for renewal, and I have no doubt at all that my right hon. Friend the President of the Board of Trade, in the course of reviewing the working of the 1963 Act, will bear in mind the points made by the hon. and learned Member for Bebington about the need to avoid what he called, I think, narrowly defined development districts.
  I was very glad that my hon. Friend referred to the Civic Trust, because the Study refers to its work, which has had a most valuable impact on many parts of the country, including the North-West. I would agree with him about the scale of the problem revealed by this Study. All of us who travel through the North-West must be aware of that. The most dismal experience I have known is to travel through the old towns of Lancashire on a wet Sunday morning. It is an experience which confirms the need for massive urban renewal.
  It is the case that the Study Report makes quite clear the size of the problem, and that makes one doubt whether the existing local government structure will enable the problem to be tackled efficiently and with speed. I am not, of course, saying that many local authorities have not shown great energy and imagination, but, nevertheless, the nature of the area, fragmented as it is, and the size of the problem lead one at least to wonder whether some advance may be required in this direction to deal with the problems.
  I was also very struck by what my hon. Friend said about fragmentation socially—the social segregation within cities, and particularly within the periphery of cities. Here again, there is a

  1605
  sharp contrast, and we all hope that it will be removed as quickly as possible.
  I do not think I ought to go on beyond this now. The Study Report has been published. I will certainly talk to my right hon. Friend about the important points which have been made, and I know that other Departments will note the matters which concern them specially. All I would say in conclusion is that in the final paragraph of the Report the authors say, in referring to positive planning, that they think this might enable the North-West
  "to regain in the late twentieth century the same relative position in the country that it enjoyed a hundred years ago."
  I think all of us who have known the North-West or have been fascinated by its industrial growth or its social characteristics, and know how it is a dynamic and individual area, must hope that over a period—and we must recognise that with the best will in the world it must take a long period—the North-West will regain its vigour.
  The hon. and learned Member for Bebington said at one stage that he thought he would be prepared to wait for a Conservative Government to see this problem dealt with. I cannot say that I am prepared to wait as long as that, because it will be a very long time. I am sure that before this Government's time is up we shall see very substantial changes indeed, made on the basis of policy decisions which will be the result of democratic planning on a scale and of a character which we have not hitherto seen in this country.

  ARMS EXPENDITURE
  8.9 a.m.
  Mr. Eric S. Heffer: I shall be as brief as I possibly can about the point I want to raise in connection with arms expenditure. I want to raise this question because I feel that it goes to the very root of the economic problems with which we are faced at present. I think that it also has an effect in relation to international affairs and the Government's policy with regard to our rôle east of Suez.
  I am convinced that this country cannot continue to bear the present heavy burden of arms expenditure. I think that a great
  1606
  deal of our modernisation is being retarded because of the high arms expenditure. Everyone accepts and knows that we are facing a serious economic situation, and this was underlined by the news that we received yesterday of the drain on our gold reserves. Everyone accepts that we are in this difficult situation. We also know—we heard this in the discussion that took place in the last few minutes—that there is a great need to meet the needs of our people in relation to housing, schools, roads and hospitals. We know, too, that these things are being retarded precisely because of our economic situation.
  Mr. William Yates: Hear, hear.
  Mr. Heffer: The hon. Gentleman says "Hear, hear". The policies pursued by the Tory Government for 13 years are responsible for our present situation, and if we are to get to grips with it we cannot rely purely on a long-term policy of the modernisation of industry and higher productivity. It is vital that we take some immediate steps to cut our arms expenditure much more than is being suggested by the Government.
  The Government have made it clear that by 1969–70 we shall bring our arms expenditure down to £2,000 million per annum, based on 1964 prices. This is a most welcome step, and is certainly an advance on anything that we could have expected from the Tory Party. What we had from the party opposite was a continuing rise in arms expenditure, and this trend is being reversed by a Labour Government. But, having said that, I think—and the entire Parliamentary Labour Party agrees with me—that we must do much more to get to grips with this problem.
  I should like to give the House one or two figures of our overseas expenditure. Germany costs us £180 million per annum. The Middle East, which includes £35 million for the base in Aden, costs £60 million. The Mediterranean, which includes £25 million for Cyprus, costs £60 million. The Far East, including £15 million for Hong Kong, costs £270 million. At the moment we have 50,000 troops in Malysia and connected with Singapore. Army expenditure in Singapore in 1962–63 amounted to more than £28 million. Air Force expenditure

  1607
  amounted to £21 million, and for the three Services it totalled about £72 million. If we add to that certain civilian services, and so on, we find that the operating costs in Malaysia are approximately £100 million a year.
  We cannot hope to solve our economic problems, or even to begin to get to grips with them, while we have this huge expenditure on overseas bases, together with our military commitments and general arms expenditure. I appreciate that within the limit of our commitments the Government are doing everything possible to bring down our expenditure. But it is not merely a question of bringing it down within our present commitments; it is a question of reducing our commitments. This means that there must be political settlements to the situations in South-East Asia, South Arabia and the Middle East.
  I do not accept the argument that we have a special rôle east of Suez. Let us suppose that the Russians and the Chinese decided that they had a special rôle west of Suez. What would we say if the Russians decided that they ought to have battleships cruising up and down the English Channel because that part of their commitment west of Suez? We are a Socialist party. We believe in a Socialist policy, and that means that we cannot continue the Tory idea of being the policemen of the world. We must therefore cut our commitments and bring about political settlements in the Far East and Middle East.
  I emphasise that we appreciate everything that is being done by the Government. No one is suggesting that the Government are not trying to get to grips with the difficult situation that this country has inherited from the Tory Party. But we must do much more. We must ensure that our people get the social benefits that we promised. There must be a stepping up of the housing programme and not merely its containment within the present limits. We must be able to give our people the sort of old-age pensions they desire and the old people's homes that are needed.
  We can do this only if we take immediate steps to ensure a drastic cut in arms expenditure.
  8.18 a.m.
  Mr. Michael Foot: I understand the impatience of the House
  1608
  to conclude a long debate on the Third Reading of the Consolidated Fund Bill. I understand that one or two of my hon. Friends wish to speak on this matter, so I will compress what I have to say in support of my hon. Friend into what I hope will be a very few sentences.
  We understand that in one sense we are pushing at an open door, which is a very good thing to push at. If we needed any further incitement to do so it was given us by my right hon. Friend the Chancellor of the Exchequer in his speech in the Motion of censure debate, when he quoted the striking figures showing the increase in our overseas net Government expenditure in the past eight years. Comparing 1956 with 1964 there was an increase of £240 million, to £552 million. I know that some of this is not military expenditure, but I imagine that the bulk of it is.
  There has, therefore, been a sensational increase in eight years in the military burden, in terms of overseas expenditure, which the country is required to carry. Ten years ago we had greater commitments throughout the world than we have now, so there is some mystery as to how this vast increase occurred. However, it has occured, and it is quite clear that it must be reduced. If we could cut out a great part of the military proportion of that increase the consequent contribution to the solution of our balance of payments problem would be striking. Therefore, we must press the Government to do everything they can in this direction.
  The Government say that they are now carrying out a review of the defence expenditure and of the commitments generally. The reason why we are pressing so strongly in every way we can, by the statements some of us have signed and issued, supported by large numbers of hon. Members on this side of the House, and the reason why we press this matter elsewhere, and the reason why we think it was quite right to press this issue in this debate and we do not think it anything improper that the House may be concluding its discussion on the Bill with this important question, is that we want the Government, when they conduct the review during the summer—and presumably there will be some reports of their review in the next month or two
  ***
  1609
  —to understand how powerful and growing every day is the pressure on this side of the House to ensure that the review and the cuts shall be as drastic as possible and as swift as possible—swifter than the Government have already proposed to the House.
  This is what we wish to achieve. I believe that the Government, in spite of all difficulties, have, as my hon Friend has said, a great prospect ahead of them. Throughout the night we have had some indication of the great things that can be achieved if the Government can win the time to achieve them. I believe that by cutting military expenditure more drastically than they have yet attempted to do they can gain the time and the means to achieve the things which they want to achieve.
  Some of us in the Labour Party have been through these arguments before, and when we look back on them they tell on our side. Those who look at what happened in the 1945–51 Government will see how that Government had to face the enormous difficulties of how they were to deal with overseas expenditure. In Hugh Dalton's book on what happened inside that Government it is revealed how pressure from the Chancellor and the economic side of the Government lost the battle, and it was partly because they lost the battle on the burden of military expenditure that that Government later got into difficulties. I urge upon the Government to recognise how strong, passionate and determined is the desire of the overwhelming majority of hon. Members on this side of the House that the cuts shall be sufficiently drastic and swift to enable the Government to carry out their full economic programme.
  8.22 a.m.
  Mr. Robert Woof: My hon. Friends the Member for Liverpool, Walton (Mr. Heffer) and for Ebbw Vale (Mr. Michael Foot) have thrown a good deal of light upon the need to reduce military expenditure, and because we are faced with economic and financial difficulties the demands which are made upon us with so many preoccupations dominating our minds, I readily endorse the main thesis that has been advanced.
  While this is held on grounds for which there is an immense deal to be said, I think flat both sides of the House will agree that there is an earnest need to put
  1610
  our intelligence to the present situation. It bears directly and pertinently upon the reasons which have led us into the existing state of the economy, and the means by which we might hope to emerge so as to regain the offensive. Having in mind those periods in the history of the world in which the discovery of new weapons and the means of waging war fundamentally changed the art of war, the changes made necessary in the military organisation, and new techniques, are now contributing very considerably to the greatest arms race ever known.
  There is no valid parallel in history. It is going at full blast—the military expenditures of practically every Government of any consequence are straining their resources to the uttermost. It affects the existence of all of us. In terms of money, translated into military power—and manpower is sufficiently alarming—it has grown constantly more intense. Tremendous amounts of money are being spent, a tremendous amount of material used, with an army of talent and genius mobilised for the job. But the stark reality is that Governments throughout the world are spending no less than £50,000 million today and, because of its spectacular nature, it must attract a great deal of attention. It would, I think, be a mistake to judge events by themselves, without remembering that they arise out of developments which have been piling up over many years.
  As a consequence, people of profound thought and people of profound learning, realising that we are facing major tasks, warn us to set the country on its feet again, to give it a sound economic and financial basis, which implies the modernisation of our whole economic, financial and social life. It is understandable, one must admit, that our economic position would be eased only if this country is able to get out of its balance of payments difficulties, but the outstanding fact is that our annual overseas military expenditure is being soaked to the tune of £350 million in foreign currency, which is almost half last year's depressing deficit of £750 million and accounts for a great deal of the balance of payments problem.
  The unfavourable state of affairs in which a very high proportion of our national wealth is devoted to the £2,120 million defence budget should help us to interpret more accurately the reason it is

  1611
  more difficult to reorientate ourselves with the objective of harnessing wealth for the nation's well-being. This financial over-strain brings a sharp reminder of the primary and elemental place in the catalogue of our needs.
  It has been explained often enough that the previous Administration committed the Government to such an expenditure programme that was to be based on the revenue and savings which would accrue from a growth rate of 4 per cent. per year in the gross national product, but the latest survey on the state of our economy by the Organisation for Economic Co-operation and Development came to the conclusion that a 4 per cent. growth rate is beyond Britain's capacity at present.
  It also made the important point that the recovery process of the sterling crisis would be a long one and that it would be several years before Britain's debts were repaid. I appreciate that priority must be given to defence of the £. It is a very vital matter, but, as the arms bill is very much at the root of all our economic difficulties, I believe that we must have a programme designed to bring our military demand into line with our financial resources, as, above everything else, we want to avoid the bill continuing on the same upward trend.
  While my right hon. Friend the Chancellor of the Exchequer last week introduced further measures to avoid the £ coming under insuperable pressure, I feel that his announcement to reduce next year's defence programme by £100 million is inadequate. Surely it must be admitted that too much has been spent on armaments and that this gravely weakens Britain's economic strength and independence. I feel that this is not good for Britain, being saddled with such heavy bills. The only way to relieve the burden and help to solve the balance of payments problem would be to abandon much of the cold war policies which send British troops thousands of miles away, with the terrific costs of upkeep.
  This is very expensive indeed, and I believe that we must have a cost-conscious approach to the amount of military expenditure which the economy can safely bear. I think we should feel much happier by refusing to plunge into the bog of foreign military spending and
  1612
  huge armaments. Nevertheless, I wholeheartedly agree with my right hon. Friends the Prime Minister, the Secretary of State for Defence and the Chancellor of the Exchequer who are seeking with varying degree of adroitness to reduce military expenditure. One of the first facts which I think should strike them—and I no doubt that it does—is the great volume of British private investments overseas. Since 1952 more than £3,000 million has been invested abroad. While this brings in some return in the form of interest payments and profits, military expenditure which amounts to about £2,500 million over the same period has brought in nothing. A point which deserves particular notice in this respect is that while much economic history has been largely a record of enterprise, the export of capital and the activities of such financial interests has meant that some of the consequences of growing financial appetites reflects a painful and greater demand on military expenditure.
  In a way this is nothing new. As far back as 1897, in June and July of that year, Joseph Chamberlain stated in a confidential report of a conference at the Colonial Office that
  "These Fleets and this military armament are not maintained exclusively or even mainly for the benefit of the United Kingdom, or even of the defence of Home interests. They are still maintained by a necessity of Empire."
  The only difference between Joseph Chamberlain's time and ours is that export of capital and military expenditure has rocketed out of all proportions, while the Empire has largely disappeared.
  One of the consequences of this difference was noted by the Select Committee on Estimates dealing with military expenditure overseas. It stated,
  "In days before Air Trooping, it was clearly necessary to maintain forces on the spot at a base overseas capable of dealing with practically any emergency. Nowadays a military presence on this scale is no longer necessary."
  As a member of the Sub-Committee which carried out the actual investigation into military expenditure overseas, I welcomed this conclusion. There should be no cries of anguish about this. It should enable an initiative to be taken with the review of defence expenditure which has been promised.
  Might I say that "review" is a word often used as being a necessary preliminary before deciding to do nothing, but

  1613
  in this case I do think that it should mean to think of reasons why things should not go on as they are now. Old ideas, like old habits, die hard. It used to be argued that we must retain bases to safeguard our possessions and economic interests, but the idea that we can maintain trade by maintaining a military presence in some areas is now out of date.
  I think that the Persian Gulf should serve as an object lesson. I readily accept that the assurance of adequate supplies of oil is one of the first essentials even in peace time to developing and maintaining great industrial establishments and systems of transportation. I do not see why many millions of £s of the British taxpayers' money should be spent in that area, particularly when wealthy American oil companies in the area are extracting far more oil than we are and do not contribute anything by way of military defence.
  American companies have been quite successful in their petroleum enterprises, through obtaining concessions, and have developed extensive distributing and marketing facilities in both Europe and throughout the East. I believe that oil supplies should be sought and guaranteed through commercial arrangements. There is no need to spend about £125 million a year of much needed taxpayers' money.
  No one will dispute the desirability of keeping the peace in the Middle East, but there are other countries with a direct interest in the stability of the area—and their defence budgets show that they contribute far less than we do. I hope, therefore, that in reviewing defence expenditure it will be viewed in the light of changing reasons which cannot justify the spending of such colossal sums of money on military bases, wherever they happen to be.
  The Times, not usually regarded as revolutionary in matters of defence, compared the situation to the cherry tree which Catherine the Great planted in the Royal Gardens of St. Petersburg. To prevent damage, she gave orders for a platoon of soldiers to guard the tree. Years later the tree had died—but the soldiers were still standing guard over a patch of grass and weeds.
  It is not necessary for me to enumerate the stupendous tasks which we face. However, I submit that there are com-
  1614
  pelling economic reasons why we need to redeploy the forces of production and rearrange the nation's budget with a great deal less being spent on military matters. We must do this on a scale which requires a drastic cut in our defence commitments. If we are convinced that the stand we are taking is in accordance with the interests of the country as a whole and if we are to release more public money for economic and social services, then we must neglect nothing to make that aim triumph.
  8.38 a.m.
  Mr. Philip Goodhart: I intervene briefly in this rather one-sided civil war among hon. Gentlemen opposite. I appreciate that the Government are in an anxious dilemma which they have tried to get out of by speaking in different voices at home and abroad.
  On the wide economic front they have in the last few months sounded a note abroad saying that the deflationary cuts which they have been making will be effective, while at home they have been telling their supporters that the cuts will not produce deflation at all. In the rôle of defence, the picture is reversed. Abroad the Government have been telling their allies that their defence programme means that the forces of this country will continue to be strong and will continue to play a full part in all their alliances, while they tell their supporters that drastic cuts are on the way.
  It is possible to sound different notes at home and abroad, but it is not possible to do that and retain the confidence of people at home and abroad. It is that difference in emphasis that is one of the reasons why the Government's prestige continues to sink.
  8.40 a.m.
  Mr. Stanley Orme: I rise to support what has been said by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and other hon. Members on this side of the House. We welcome the intervention of the hon. Gentleman the Member for Beckenham (Mr. Goodhart), as we welcomed the intervention of his right hon. Friend the Leader of the Opposition yesterday. We welcome the fact that he quoted the widely reported resolution which had been passed by the Parliamentary Labour Party. If he and his hon. Friends would

  1615
  like to make it a political issue, take it to the country and test us on whether firms expenditure should be reduced, we should welcome that, too.
  The electorate would support us. They would support us against the party that has wasted hundreds of millions of pounds over the last 13 years, and they would support us against a party which will have left us with a current expenditure of between £2,500 and £2,600 million at the present time, the party that supported Blue Streak and the TSR2 at a total expenditure of £750 million. That is the sort of attitude that the Conservatives had. If they are going to try to end the bipartisan policy that they have pursued in the past on defence, my hon. Friends and I welcome it and will willingly take the matter to the electorate. I should be happy to take it to my own constituency, and the hon. Gentleman would be welcome to come to Salford and see the problems that are faced there of housing, hospitals, schools and planning, and justify the waste of money on arms at the present time.
  Mr. Frank Allaun: I agree with everything that my hon. Friend the Member for Salford, West (Mr. Orme) is saying, as I have agreed with everything he has said since he came to the House. The point that he is making is that here is the modern equivalent of guns or butter, but now it is pensions or Polaris, bases or bathrooms. In my part of the world, the people need bathrooms in their houses, and that is what the money should be spent on. Labour would have an overwhelming victory if it went along those lines, and I hope that it will.
  Mr. Orme: I thank my hon. Friend the Member for Salford, East (Mr. Frank Allaun) for intervening and underlining the point that I was making. We appreciate that the Government are in the process of a detailed cost analysis of arms expenditure, and cuts have been made already. But we do not want to see some of the cuts replaced by other expenditures, particularly if the Government decide to buy the American F111 in place of the TSR2, because that would prejudice our balance of payments position and our dollar exchanges with the United States.
  1616
  However, I do not think that cost analysis in itself will solve the problem. It is more a question of our overseas commitments, our rôle east of Suez and the chain of bases which we have throughout the world. I do not believe that in the present economic situation the country can afford to try to maintain a world rôle and, at the same time, put itself back on its feet economically. Therefore, the Far East is absolutely vital for us, and I want to say a few words about the Indonesia-Malaysia position.
  The Government should take some very strong action to bring the situation there to a rapid conclusion. Fifty thousand troops are tied up in Malaysia at the present time, in an area of the world which is highly dangerous. It is not in the British interest, and I feel that some urgent steps should be taken. An immediate reduction in arms expenditure could be made in that region.
  It is said in the Middle East that one cannot drink oil. The people there want a higher standard of living, and they want the goods that we can provide. It is absolutely idiotic for us to maintain bases throughout the Middle East that became out of date many years ago and, in any case, are not now viable. That is why my hon. Friends and myself feel as we do about the need for arms cuts.
  When I was in my constituency at the weekend I was made well aware of the feeling of the party there and the people about the Government's economic measures. They are prepared to support those measures, but they want to see other forms of drastic action to convince them that there is reality in the situation. As my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) has said, we have had these crises before. We had a crisis in 1931, and again in 1950–51. Now we are faced with another economic crisis at home and a heavy arms expenditure.
  I therefore hope that the Government will move much more quickly, and will not only proceed on a cost-analysis basis but will have a general review of the whole of our arms expenditure, which obviously overlaps into foreign policy. We have to do that this year. We have to turn our attention to making Britain into a viable industrial nation, and one in which we can put our skills to productive uses for the benefit of the nation

  1617
  and to help other people in the world. The day of sending arms to help people has passed—they want goods and food now.
  That being the situation, I hope that the Government will take heed of the pressure that we are putting on them even at this late hour because of the urgency of the case. I tell the hon. Gentleman opposite that we on this side are united in wanting something to be done. It will be at your peril if you do not recognise that it is what the people want.
  Mr. Speaker: Order. The hon. Gentleman must address his observations to the Chair.
  8.47 a.m.
  The Under-Secretary of State for Defence for the Royal Air Force (Mr. Bruce Millan): As my hon. Friends have kept their speeches short, I hope to be able to give a brief reply while, at the same time, of course, dealing with a number of the points they have made. Perhaps I can start by saying that the Government are as serious as any of them are about the need to cut defence expenditure. There is no difference of opinion between us on that. If there is any disagreement, it is only about the speed and the extent of the cuts that are now possible. On the main question of the necessity to cut arms expenditure, particularly in view of our very difficult economic situation and our difficult balance of payments position, there is no disagreement between my hon. Friends and the Government at present.
  I would start by saying what has already been achieved. First, as my hon. Friends will recollect, the 1965 Defence Estimates were £55 million less than the cost of the programme that he had inherited from the previous Government. That was done within a period of a very few months after our coming to office in October of last year. My hon. Friends will also recollect what my right hon. Friend the Chancellor of the Exchequer said last week about a further cut of about £100 million in defence expenditure in 1966–67.
  Looking a little further ahead, to 1969–70, our present aim—and if we can improve on it we shall be delighted—is a cut of £400 million, at 1964 constant prices, in the programme for that year
  1618
  that we inherited from the previous Administration—
  Mr. Frank Allaun: I hate to interrupt my hon. Friend, but I must, because this is being said so often and we must get it home that this is an "Irishman's" cut. The cost will not really come down from £2,117 million, but will go up. This is a notional cut, and it is slightly misleading to repeat it.
  Mr. Millan: It is not a notional cut. If my hon. Friend had been patient a little longer I was about to explain exactly what the cut means. It is a cut of £400 million at constant prices. The programme we inherited provided for an expenditure of £2,400 million at 1964 prices in 1969–70 and we intend to cut that to £2,000 million at 1964 prices. Of course it is true—and I would not want there to be any misunderstanding about this—that the defence budget, like any other, cannot be isolated from price increases.
  For example, there is the pay review for the Services which will operate from 1st April, 1966. I am sure that my hon. Friends would not suggest that we should cut the defence budget by giving up the pay review for the Services. Obviously the pay review, whatever the result may be, will add to our expenditure as from 1966.
  The fact is, nevertheless, that to get the defence budget down to £2,000 million at 1964 prices will represent a cut of £400 million and, since the gross national product will be continuing to increase in the years between now and 1969–70, it will mean that the percentage of the gross national product attributable to defence will go down in 1969–70 from about the present percentage of seven per cent. to rather less than 6 per cent. That in itself will be a considerable achievement.
  Mr. Norman Atkinson: The figures my hon. Friend is now giving assumes that we are going to achieve a 4 per cent. per annum growth rate.
  Mr. Millan: I hope that my hon. Friend does not disagree with the Government's aim of achieving a 4 per cent. growth rate. I am sure there is nothing between us on that. I repeat that, between now and 1969–70, the percentage of the gross national product attributable

  1619
  to defence will go down quite considerably.
  I want to say something about the difficulties of getting very speedy reductions in the defence budget because, again, there is a certain amount of misunderstanding. First, about 50 per cent. of our total defence expenditure now is directly or indirectly on personnel and it is not, of course, possible simply to cut personnel overnight. Before we can get a substantial reduction of the defence budget it means personnel cuts and there is considerable difficulty in doing that very rapidly.
  Secondly, even when the decisions we are taking are exclusively within our own control many of them take a number of years to come fully into effect. One of the best examples of this is the cut in the Territorial Army announced last week by my right hon. Friend. This will save about £20 million a year but it will take two or three years, for perfectly good reasons, before the full saving can be achieved. In addition, legislation is required to reform the Territorial Army.
  A number of other cuts have already been made and we have tried to make quickly those cuts on which decisions could be taken within a few months of our coming to office. There have, for example, been the cancellations of the P 1154, the HS 681 and the TSR2 aircraft projects.
  Mr. Goodhart rose—
  Mr. Millan: I am sorry. I have already given way twice. If I am to finish in reasonable time I must continue.
  These cancellations between them represent savings—even taking account of any possible replacement for the TSR2, which must await the outcome of the defence review—of more than £600 million over a period of 10 years. Substantial cuts have already been made even before the outcome of the general defence review.
  There are particular difficulties, even if we were to take decisions now to cut overseas commitments—and this again is something which must await the outcome of the defence review—about cutting overseas commitments quickly, but even in that case the House will recall the new
  1620
  agreement on offset costs which my right hon. Friend the Chief Secretary to the Treasury reached with the German Government and announced to the House on 1st July. This agreement also represents very considerable savings to the balance of payments.
  A number of my hon. Friends have mentioned particular commitments in various parts of the world. Perhaps just as an example of the difficulty of cutting quickly I can mention the commitment to defend Malaysia, which is by far the most expensive commitment which we have in the world at present. It is worth reminding the House that we are committed by a binding agreement to help to defend Malaysia. This is not something which we have taken on gratuitously. This is something which we are bound legally to do in an agreement between the British and Malaysian Governments.
  One of my hon. Friends said that we must do something urgently to get a political settlement of the Indonesian-Malaysian confrontation. Certainly the Government would be delighted if we could get a political settlement, but I must remind the House that we are dealing with an example of unprovoked aggression by a large power, Indonesia, against a small power, Malaysia. We must be clear exactly what it is that we are negotiating about. Indonesia is a large power with a population of 100 million and has attacked a small power, Malaysia, which has a population of not much more than 10 million. The large power has attacked the small power for completely invalid reasons—no reasons at all.
  The great difficulty in the situation, of course, is the complete intransigence of the Indonesian attitude, its determination to crush Malaysia which has led it, for example, to leave the United Nations and its complete unwillingness to negotiate on the situation. It is not an easy problem and this is not an expenditure which we can cut quickly, and certainly there can be no question of our getting out of our legal obligations willingly entered into with the Malaysian Government.
  I hope that in these very few minutes I have persuaded my hon. Friends that although our aim is the same, namely, to cut defence costs considerably, there are considerable difficulties in doing so as

  1621
  rapidly as some would like. Nevertheless, all the matters which I have mentioned and many others are being looked at in the context of the defence review. I assure my hon. Friends that that review is both comprehensive and thorough. It is to decide not what British defence policy is for the 1970s, but what contribution our defence forces can make to the foreign policy of the United Kingdom for the 1970s. All that is being done in the context of the country's difficult economic
  Whereupon Mr. SPEAKER declared that the Question was not decided in the affirmative, because it was not supported by the majority prescribed by Standing Order No. 32 (Majority for Closure).
  Question again proposed, That the Bill be now read the Third time.
  Mr. Goodhart: On a point of order. In view of yet another procedural defeat for the Government, will the Leader of the House make a statement on the Government's intentions?
  Mr. Speaker: That is not a point of Order. It may be a question addressed
  situation with the aim to cut our defence budget to meet our economic situation and the need to solve our balance of payments problem.
  The Parliamentary Secretary to the Treasury (Mr. Edward Short)rose in his place, and claimed to move, That the Question be now put.
  Question put, That the Question be now put:—
  The House divided: Ayes 98, Noes 4.

  Division No. 269.]

  AYES

  [9.2 a.m.

  Allaun, Frank (Salford, E.)

  Grey, Charles

  O'Malley, Brian

  Alldritt, Walter

  Griffiths, David (Rother Valley)

  Orme, Stanley

  Allen, Scholefield (Crewe)

  Hamilton, William (West Fife)

  Oswald, Thomas

  Atkinson, Norman

  Hamling, William (Woolwich, W.)

  Page, Derek (King's Lynn)

  Bacon, Miss Alice

  Hannan, William

  Park, Trevor (Derbyshire, S. E.)

  Bagier, Gordon A. T.

  Harper, Joseph

  Prentice, R. E.

  Barnett, Joel

  Harrison, Walter (Wakefield)

  Price, J. T. (Westhoughton)

  Baxter, William

  Hart, Mrs. Judith

  Robertson, John (Paisley)

  Bennett, J. (Glasgow, Bridgeton)

  Hazell, Bert

  Rodgers, William (Stockton)

  Blackburn, F.

  Heffer, Eric S.

  Ross, Rt. Hn. William

  Blenkinsop, Arthur

  Howarth, Harry (Wellingborough)

  Rowland, Christopher

  Boardman, H.

  Howie, W.

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

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

  Hoy, James

  Silverman, Julius (Aston)

  Braddock, Mrs. E. M.

  Hunter, Adam (Dunfermline)

  Slater, Mrs. Harriet (Stoke, N.)

  Bradley, Tom

  Jackson, Colin

  Small, William

  Brown, Rt. Hn. George (Belper)

  Jeger, George (Goole)

  Stonehouse, John

  Brown, R. W. (Shoreditch & Fbury)

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

  Swain, Thomas

  Buchan, Norman (Renfrewshire, W.)

  Jones, Dan (Burnley)

  Taverne, Dick

  Buchanan, Richard

  Kenyon, Clifford

  Thornton, Ernest

  Callaghan, Rt. Hn. James

  Lewis, Arthur (West Ham, N.)

  Tinn, James

  Carter-Jones, Lewis

  Lomas, Kenneth

  Urwin, T. W.

  Coleman, Donald

  Loughlin, Charles

  Varley, Eric G.

  Crawshaw, Richard

  McBride, Neil

  Wainwright, Edwin

  Dalyell, Tam

  McCann, J.

  Walker, Harold (Doncaster)

  Diamond, Rt. Hn. John

  Mclnnes, James

  Williams, Alan (Swansea, W.)

  Doig, Peter

  Mahon, Peter (Preston, S.)

  Williams, Clifford (Abertillery)

  Duffy, Dr. A. E. P.

  Mapp, Charles

  Williams, Mrs. Shirley (Hitchin)

  English, Michael

  Millan, Bruce

  Wilson, William (Coventry, S.)

  Fernyhough, E.

  Morris, Alfred (Wythenshawe)

  Woof, Robert

  Fitch, Alan (Wigan)

  Morris, Charles (Openshaw)

  Yates, Victor (Ladywood)

  Fletcher, Ted (Darlington)

  Murray, Albert

  Foot, Michael (Ebbw Vale)

  Neal, Harold

  TELLERS FOR THE AYES:

  Freeson, Reginald

  Newens, Stan

  Mr. George Lawson and

  Gregory, Arnold

  Norwood, Christopher

  Mr. Ifor Davies.

  NOES

  Farr, John

  Kitson, Timothy

  TELLERS FOR THE NOES:

  Goodhart, Philip

  Scott-Hopkins, James

  Mr. William Yates and

  Mr. Anthony Fell.

  to the Leader of the House, but he does not appear to be particularly eager to answer it. Mr. Farr.

  EDUCATION, LEICESTERSHIRE
  9.12 a.m.
  Mr. John Farr: After having sat here through most of the night, and seen many of the late hours frittered away by members of the Government, with comparatively little opportunity for Members on this side of the House to raise certain points, I must confess that I was delighted to hear the result which has just been announced.

  1623
  I particularly wish to raise a constituency point, in connection with certain educational matters in the county of Leicestershire. I make no excuse for bringing this subject up now. I think that the question of feeding the minds of children is a more appropriate breakfast-time topic than the question we were considering a moment ago, relating to various defence projects.
  In recent years I have visited a good number of primary and secondary schools in my constituency, and I must confess that I have been appalled at the conditions I found in many of the junior schools. All too often one finds a school site with, perhaps, the original buildings, built over a hundred years ago, where the pupils are spread out into a series of other premises which are quite unsuitable and quite impossible to adapt properly for the purpose of education. I have been into these primary schools and I have had the pathetic duty of seeing the way in which the teachers try to cope with classes of young children in buildings which are quite unsuitable and hopeless for the task.
  I well recall seeing classes of children being taken in an ex-Baptist chapel, where, indeed, if the school was not on holiday, they would be assembling this very morning. Again, if the schools in my constituency were not on holiday, children would be assembling for education in ex-factories, huts and a variety of halls, some of them quite a distance away from the main junior school building, and in a number of other unsuitable premises. It does not require a great deal of imagination to think what an appalling task it is for teachers to try to supervise properly, yet alone instruct properly the minds of young junior children in premises of that kind. In many of these junior schools it is the normal procedure to go outside for the lavatories, and in the depth of winter this can be harmful to the health of children.
  I should like to refer to the School Building Survey of 1962, which, after a year or two spent in amassing a great number of interesting statistics, was issued last year. Amongst its many statistics is the fact that in the North Midland region there are 864 primary schools which were built before 1875. The Leicestershire Education Authority
  1624
  forms part of that region with 13 other education authorities—one out of 14—and yet no fewer than 127 of the 864 primary schools built before 1975, or 15 per cent. of the total, are to be found in Leicestershire. This fact is probably the chief reason why the education authority for the County of Leicester, which has one of the most rapidly expanding population rates in the country, has continually to bring into use and to struggle to adapt many old, unsuitable halls and buildings.
  We have a whole day before us, but I will not trouble the House by bringing too many specific examples to the attention of the Minister. There are, however, three examples which I should like to draw to his notice. The first, which has concerned me for years, is the condition of the primary school in the village of Huncote, in Leicestershire. The Leicestershire Education Authority has submitted a project for a new primary school to be included in its next building programme to the Minister. I hope that he has not yet made up his mind on the subject and that he may be receptive to what I say.
  Huncote and district is a rapidly expanding area with new housing estates. There are 114 pupils in the school and yet approximately half of them—about 54—have to be instructed in buildings which were never erected as school building and are hopelessly inadequate for the task. I have with me a recent letter from the Clerk of Huncote Parish Council in which he refers to the appalling conditions—one cannot describe them as less in the 20th century—under which staff and pupils exist at Huncote.
  He says, for instance, in this letter written to me last month, that less than half the children at present are housed in that school, and the remainder are in what was a Baptist chapel and subsequently a hosiery factory. Further temporary accommodation is a church hall without any normal facilities and with totally inadequate sanitary arrangements. He goes on to say that in Huncote a new housing estate of 250 houses has now started, and 150 of the houses are already in the first phase, and a number are scheduled for completion in July next year. He says that the temporary accommodation available, and which is being considered by the education department,

  1625
  cannot possibly cater for the children who are likely to come from those homes. I am afraid that even if the Minister were to give his approval to the construction of a new primary school building in Huncote it could well prove to be too late for the large numbers of new children who will be attending school, or seeking to attend it, very shortly.
  Again, we have a similar problem in Market Harborough in Leicestershire, where I have been approached by the managers of all the primary schools in the town who sought an interview with me so that they could put specifically some of the difficulties under which they are labouring. I am going to see them very soon, but in the meantime I wish to quote from a letter relating to the junior Church of England controlled school at Market Harborough. It has 338 pupils at the moment. Only 184 of them are housed in the main building. No fewer than 154 pupils, nearly half of them, are housed in outside buildings such as a small old schoolroom almost opposite the main building and a R.A.F.A. hut on the south side of the Coventry road approximately 100 yd. distant from the building, and a building on the north side of the Coventry road approximately 100 yd. from the main building. There are two classes there.
  Obviously, having classes some distance from the main building necessitates about 150 pupils being marched to and fro and across the main road. Two classes have actually to cross the busy main road, the main Coventry road, which today is an artery connecting with the M.1 for all eastbound traffic. Two classes have to cross the main road and about 150 pupils have to march to and fro as often as six times in a day.
  Another village example, which is fairly typical of the ones I have illustrated, and many others besides, is at Stony Stanton. I shall not trouble the House with the details of the trouble at Stony Stanton except to say that a new junior school is urgently needed for reasons similar to those I have already given. It has been submitted for the Ministry's approval, but so far that approval has been withheld. I implore the hon. Gentleman to consider what I have said, and to look into a case of urgent need for a new junior school at Stony Stanton. He would make himself ex-
  1626
  tremely popular in that part of Leicestershire by doing something about it.
  Mr. Peter Mahon: Does not the revelation of these deplorable difficulties in these areas, as portrayed by the hon. Gentleman, point to a lack of vigilance on the part of the previous Administration?
  Mr. Farr: I am obliged to the hon. Gentleman for his remark. I do not think so, because, as I thought I had made clear earlier in my speech, this problem relates to schools built before 1876. Although we had a long run in office, it did not extend over a period of 90 years.
  What has happened in Leicestershire is that while primary, or junior, educational standards are very low indeed, and woefully lacking, a lot of the money—and some say an undue proportion—which has been allotted to the county has been spent on secondary education, and we have a comprehensive system of education of which we are all very proud. I think that possibly rather more emphasis has been placed on the secondary schools, which in many cases are first class, and not enough has been spent on junior schools such as those to which I referred.
  I should like to deal now with the abolition of the discretion formerly allowed to education authorities to carry out works up to a cost of £2,000 off the ration—the so-called mini-minor projects. Recently I received a list of some of the projects which were planned to be carried out in 1966, before this Government axed this scheme. This list of off-the-ration schemes includes such essential items as the provision of internal lavatory accommodation at a number of schools, at a cost of £2,000 or £2,500, staff rooms, and staff lavatory accommodation, additional cloak rooms and washing facilities, covering parts of playgrounds to provide covered ways, and various other projects which I am sure the hon. Gentleman will agree are essential these days in any school which is worthy of the name, and which can make a great deal of difference to the lives of not only the pupils, but the staff. In many cases the pupils are only more adequately housed than the staff who endeavour to teach them. They have no proper recreation or resting facilities, and no proper place to wash their hands or to hang their clothes.

  1627
  Earlier this year the Ministry announced that to compensate for the loss of the mini-minor discretion the local works programme would be increased from £18 million in 1964–65 to £21 million in 1965–66, and I should like to take this opportunity to point out that in fact this is an Irishman's rise in that it represents not an increase of £3 million, but a decrease of about £2 million. To maintain the mini-minor works expenditure at the 1964–65 levels, about £23 million would be required to be allotted, compared with £21 million which has been allotted.
  In Leicestershire the education authority and the county education committee view with the gravest possible concern the abolition, the cessation, the temporary withholding, call it what one will, by the Government of the mini-minor allocation. It has been running for a number of years now and in that time a considerable amount of small works of the type to which I have referred have been carried out. I have a long list of small schemes costing up to £2,000, or even £2,500, the figure to which a Conservative Government would have increased the off-the-ration level. There are pages of these schemes, which are absolutely essential if our schools are to be modernised in the country areas.
  The Leicestershire Education Authority regards the reimposition of rationing of the mini-minor programme as tragic. The Minister will be interested to hear of the effect that this will have on the Leicestershire Plan, which has pioneered comprehensive education successfully in the county. It now looks as if the implementation of the Leicestershire Plan for comprehensive secondary education for the county by 1967 will no longer be possible, as a result of the tragic reimposition of rationing of the mini-minor programme. Secondly, it will mean a virtual moratorium on all secondary improvements, extensions of grossly undersized classrooms and increased numbers of staff rooms and head's rooms where none exist at the moment. It will affect school meals projects, the enlargement of car parks, and the development of grounds, etc.
  I would remind the hon. Gentleman that this is not what I think; this is the effect of a letter from the Leicestershire
  1628
  Education Authority. It says that this reimposition of rationing
  "will spell the end for the time being of the small improvements to old sub-standard schools where mini-minor projects provided the sole way by which the Committee could demonstrate that they were not callously indifferent to the conditions under which their employees work. The effect on morale of this sort of moratorium will … be long-term in effect and once more the Committee can only appeal to the patience and loyalty of teaching and non-teaching staff."
  There is much more, which I will not go into at half-past nine in the morning. Suffice to say that it makes distressing reading. I have sent a copy of the letter to the Minister of Education and Science. I regard the imposition by the Government of this rationing of mini-minor works as one of the most retrograde and regressive measures they have taken in education.
  Once again, I ask the hon. Member to see if he can be a little more understanding on this point, which I raised with him a month or two ago at Question Time. I know that the answer at the time was not an encouraging one. The Government said that my request, namely, that mini-minor projects below the cost of £2,000 for improvements to playing fields, etc., should be allowed, could not be agreed to. I tried to make the point that we are not trying to get a foot into the door to prise it open so as to get back to the old method of carrying on the mini-minor projects, much though we should like to. What I am concerned with is that the Director of Education has a real case, in view of the fact that, in a month or two's time, all over Leicestershire, a number of ground staff who are taken on in the summer for school playing fields, but who are not needed in the winter, will become redundant.
  I sincerely ask the hon. Member to be a little more encouraging. If the Director of Education can satisfy him that there is a real risk of a number of skilled playing field maintenance employees becoming redundant in the winter, can he hold out any hope of allowing that valuable team of experienced men to be kept together, by employing them, perhaps, on some essential playing field modifications costing less than £2,000? Many of them are needed to improve the playing fields.
  In Leicestershire we are proud of our system of secondary education—the

  1629
  "Leicestershire Plan", as it is called. I admire the comprehensive system. I have seen it work and I know how dedicated to its progress are all those who are concerned with it. But just as we are proud of our secondary education so we are ashamed of the medieval condition of many of our primary schools. We believe that in the county in recent years we have not had our fair share of the national cake of expenditure on new school building. Much though I regard the Minister of State with warmth and friendship I assure him that I shall do my best to be as troublesome as possible for as long as I possibly can unless a radical improvement is brought about.
  9.32 a.m.
  The Minister of State, Department of Education and Science (Mr. R. E. Prentice): I can speak again only with the leave of the House. While I voted for the Closure just now I had mixed feelings about it because I always welcome an opportunity to take part in the discussion of school building and I welcome the spirit in which the hon. Member for Harborough (Mr. Farr) said that he would pursue the Government on this matter. I always think that if Governments are nagged and prodded about such matters it is good for us and good in the long run for the progress of education. I am therefore grateful to the hon. Gentleman for the way in which he put his case.
  I should like to deal first with the general level of school building with broad reference to major works, which was the subject of the earlier part of the hon. Gentleman's remarks, taken in conjunction with what he said at the end about the feeling in Leicestershire that people there had not had their share of the national cake. If the hon. Member is saying that the nation over many years has not devoted enough resources to school building, I would agree with him.
  The hon. Member referred to the school building survey. He will be aware that it was prepared by the late Government. It could have been published by them. It was not. Whether that had anything to do with the proximity of the General Election is not for me to say at the moment, but it has since been published by us. It showed that the kind of conditions which the hon. Member graphically described in Leicestershire are
  1630
  conditions which exist all over the country. About two-thirds of our school buildings have one or more of the serious defects listed in the survey—defects which mean that they do not measure up to the standards laid down in our regulations.
  The figure was given that to put the school buildings of the country into proper condition £1,368 million would need to be spent. That figure is perhaps in some ways artificial but at least it shows the scale of the problem which we face. Whereas the school building programme, both major and minor, in the current year is £100 million compared with £80 million last year, I would be the first to admit that this is only scratching the surface of the problem and that now and in future much higher resources should be devoted to it. But the resources which we can spare for it depend upon the economic conditions that prevail and on other demands on the national purse. Nevertheless, we can claim—not only in view of what the hon. Member said but in view of the debate which we had some hours ago in the middle of the night—that, whereas it has been necessary for the Government to hold back on a good deal of expenditure, we have exempted school building from the measures announced by the Chancellor of the Exchequer. I hope that the hon. Member will agree that this was a good thing to do.
  Mr. James Scott-Hopkins: All school building?
  Mr. Prentice: Yes, all school building has been exempted from those measures.
  Therefore, of course, I would accept the general proposition that the school buildings of Leicestershire and elsewhere are unsatisfactory. It is only fair to remind the House that, besides the actual state of the buildings, we face throughout the country a problem of very rapidly rising numbers. Just over 7 million children are in our schools now and over 9 million will be in the schools in 10 years' time, so a big increase in school building will be needed to keep pace with rising numbers, even if we were never to replace any of the substandard schools to which the hon. Member referred.
  If on the other hand, the hon. Member is saying—he did say this towards the end of his speech—that the county

  1631
  has not had its fair share, I must take issue with him. The simple fact is that resources have never been sufficient, but, of those insufficient resources, I am convinced, Leicestershire has had a fair share. A bigger proportion of Leicestershire schoolchildren are going to school in post-war schools than is the average for the rest of the country. This is due not to the fact that any Government have favoured Leicestershire as a favourite county, but to the fact that the county has a rapidly growing population and has had to provide a larger allocation of resources to meet the extra numbers. The number of children in school in Leicestershire has gone up from the figure in 1946 of 41,111 to the figure this year of 69,049.
  This has meant that many new places have had to be provided. Of course, I accept that, therefore, the contrast is all the more unfortunate between those children who are going to school in the new, post-war schols and those still going to school in the old schools. This is unfortunately the case in all those counties where the population has been going up quickly. The real answer to the basic problem raised by the hon. Member is the need for the national economy to grow and, within that growth, to provide on a bigger scale in future for school building generally.
  As to the three schools which he mentioned specifically, we are at the moment considering a number of urgent propositions put to us by the county. I have not got the list with me. I know that they include Huncote School, which was one of those he mentioned. It may well include the others, but I am not sure. I will see that a letter is sent to the hon. Member about the three schools in question.
  I should like to join with him in his reference to secondary reorganisation in Leicestershire. We in the Department regard this as one of the success stories of recent years. Leicestershire was in many ways a pioneering authority on the two-tier system of reorganising secondary education on comprehensive lines—to such an extent that people throughout the country speak of the "Leicestershire Plan".
  Sometimes they get it wrong. Sometimes they assume that this plan is for
  1632
  a system of junior high schools with a transfer based on parents' choice and that this is the permanent intention of the authority. This is regarded in the county as a transitional scheme, the objective being that all children will transfer, so there will be no sectional schemes in the secondary range at all. This is a development which we welcome, and it is in line with the circular which my right hon. Friend sent to local authorities recently.
  I want to turn to the vexed question of minor works and the mini-minor concession. This is something about which I have spoken in the House on more than one occasion, which is not surprising, as it is a very vexed question and has raised a good deal of controversy.
  Let me explain to the hon. Member that, first of all, the allocation for minor works in the current year is up from £18 million last year to £21 million this year, but within that increased allocation we have said that all minor works must be included, however small they were, whereas under the old system these very small minor works under £2,000—the so-called mini-minors—could be carried out by a local authority without being included in its allocation. This led to a misunderstanding, and it is quite clear that this misunderstanding is still widespread. There must be a misunderstanding in the minds of the Leicestershire Education Authority, from the terms of the letter to which the hon. Member referred and which he said was a recent letter.
  The misunderstanding arises in this way: people have assumed that because these mini-minors were off-ration for the local education authority therefore they did not count as part of the minor works allocation throughout the country. Unfortunately they did. Every year the Department had to lop off from the minor works total a sum representing mini-minor works. The Department had to estimate what would be spent in mini-minor works, take that off the total and allocate what was left.
  The mini-minor concession, being off-ration locally, was a very attractive proposition, and many enterprising authorities, including Leicestershire, were making larger and larger use of it in successive years. The result last year was that the Department estimated that £3 million

  1633
  would be spent throughout the country on mini-minor works whereas in fact about £7 million was spent on them. This meant that the control of school building was becoming ineffective. All hon. Members will agree that in so far as the Government have to control the level of capital expenditure on all social services, they must make their control effective. If they decide, as the last Government decided last year, that the total for minor school building should be £18 million, they must see that it is about £18 million and not let a situation develop in which the whole estimate goes wrong.
  We therefore had a choice in the current year between two alternatives. We could either do what in fact we have done—make a larger allocation and include the mini-minors within it—or we could make a realistic assessment of what the mini-minors would cost. We considered that about £10 million would have been spent on mini-minors this year if the concession had remained.
  I am sorry to inflict more arithmetic on the House, but I want hon. Members, and particularly the hon. Member for Harborough, to understand why we acted in this way. Out of the £21 million for minor works, some £4 million are allocated directly from the Department to the voluntary schools, leaving £17 million, and this £17 million we have allocated to the local education authorities of England and Wales. If we had had to take from that figure £10 million for mini-minors, we should have allocated only £7 million for all the work costing between £2,000 at the lower level and £20,000 at the upper level for the whole of England and Wales.
  In other words, local education authorities would have found that well under half the minor works amount would have been allocated but they would still have had the mini-minor concession. This would not have been a good bargain at all. It would have led to two distortions. One is that enterprising authorities would have taken more and more of the limited share of resources, leaving less for the rest and, secondly, more and more of these resources would have gone into jobs costing less than £2,000 and there would have been less
  1634
  remaining for jobs between £2,000 and £20,000.
  Mr. Farr: I am obliged for that explanation. Nevertheless, there is a feeling among a number of local education authorities that, while they can understand what the Minister has done, it would have been fairer if he had made a more realistic adjustment of the figure—instead of increasing it only by a small sum, say £3 million, he could have increased it by the £7 million which they were already spending in the previous year. The result of what he did is that they had to retrench and retract, and this has come as rather a shock to them.
  Mr. Prentice: I am well aware of the feelings of local authorities on this matter. Indeed, we have received a number of deputations on the subject. If the figure which we inherited from the previous Government had prevailed, there would have been not £21 million but only £19 million—so that there would have been a much bigger problem for the local education authorities.
  I emphasise that having made this allocation—a larger allocation—it is still up to the authorities to spend the money as they wish. In other words, it is not fair to say that this spells the end of certain small jobs of work. Neither is it fair to say that Leicestershire cannot spend this money on the ground staff to which the hon. Gentleman referred. It can employ staff on various jobs. Authorities may spend their allocation as they choose on these works. Leicestershire has a larger allocation. It was £185,000 in the last financial year and in the current year it is £256,000. I appreciate that it would like a bigger allocation still, but that brings us back to the problem of the total resources available.
  Having left the mini-minor works problem for a considerable time, I am convinced that we had to make that decision and that it was the only way by which we could get a reasonable allocation of the limited resources available for this purpose. I understand that it has been a confusing problem and I suppose that when commenting on the subject, either in the House or elsewhere, I should have a blackboard and chalk with me. I appreciate why there might have been some misunderstanding among local education authorities about it.

  1635
  I am obliged to the hon. Gentleman for having raised thin issue. I will write to him in connection with the three schools he mentioned. I hope that he will join with me in expressing the sentiment that what the country must do in future is to devote more of its resources to these problems so that the difficulties we have discussed—such as buildings and facilities—may be tackled and overcome.

  AGRICULTURE (EXPORTS)
  9.48 a.m.
  Mr. James Scott-Hopkins: I was pleased to hear the Minister of State, Department of Education and Science, say that he was glad that the attempt to secure the Closure had not succeeded. It must be a long time since any Government have been so incompetent that they have not succeeded in carrying the Closure on this type of Bill. Indeed, I understand that not since the end of the war has such a Closure attempt on this sort of Measure been defeated because of a lack of Government supporters.
  Mr. William Yates: My hon. Friend may care to know that the Closure on this type of Bill has been forced on only three occasions during the last 20 years. The Closure forced by the Government Chief Whip a short while ago was a most disgraceful and regrettable act against back-bench Members who are trying to look after the interests of their constituents.
  Mr. Scott-Hopkins: I completely agree with my hon. Friend. Perhaps I need not labour the point. I am sure that the whole country has noted how incompetent the Government have shown themselves to be once again.
  At about six o'clock yesterday evening I gave notice to Mr. Speaker and to the Ministry of Agriculture, Fisheries and Food that I intended to raise a certain matter.
  Mr. Alfred Morris: Further to the hon. Gentleman's remarks about the Closure, is he seeking to take pride in the fact that only four hon. Gentlemen opposite were present when that Question was put?
  Mr. Scott-Hopkins: I wonder whether the hon. Gentleman thinks that he has
  1636
  made a serious intervention. When he has been here a little longer he will discover that it is the job of the Government to ensure that they have sufficient supporters present when a Motion of that sort is moved. It is not the job of the Opposition to help the Government to do that.
  As I was saying, I gave notice of the fact that I intended to raise the subject of the export of beef and lamb. I told the Ministry about it and I am surprised that the right hon. Gentleman the Minister or at least another representative of the Department, is not here to listen to what I have to say and answer my questions. [HON. MEMBERS: "He is coming".] I see that the Minister himself is entering the Chamber.
  Mr. Arthur Lewis: On a point of order. As you know, Mr. Deputy Speaker, it is very wrong for any hon. or right hon. Member to suggest any criticism of the Chair. Thus, it is in no way a criticism when I say that I had hoped to be called next, to raise another subject. As it happened, the hon. Member for Cornwall, North (Mr. Scott-Hopkins) was called. Since I was next—and since the hon. Member for Cornwall, North was called before me—that probably explains why the Minister was not in the Chamber to answer the hon. Gentleman's questions, for my right hon. Friend was obviously thinking that my subject would be raised first.
  I am in no way criticising the Chair, but what I have said would appear to indicate why the Minister was not present to answer the hon. Member for Cornwall, North. Would you not agree, Mr. Deputy Speaker?
  Mr. Deputy-Speaker (Sir Samuel Storey): It does not raise a point of order, but I would only say to the hon. Gentleman the Member for West Ham, North (Mr. Arthur Lewis) that he did give notice to the Chair earlier in the sitting that he did not intend to raise his subject. I think, therefore, that he will agree that it is only fair that hon. Members who have sat here through the night should take precedence.
  Mr. Arthur Lewis: Further to the point of order. It is true that, prior to recent happenings, I did inform the Chair of that, because I thought that there would

  1637
  not be time. However, subsequently, when circumstances changed, I informed Mr. Deputy-Speaker that I would wish to be called and it would appear that he did not inform you, Mr. Deputy-Speaker.
  Mr. Deputy-Speaker: It does not really raise any point of order.
  Mr. Arthur Lewis: It is on the record.
  Mr. Scott-Hopkins: If the purpose of the hon. Gentleman the Member for West Ham, North (Mr. Arthur Lewis) was to get it on the record, he has succeeded in doing that. May I point out, too, that I intended no discourtesy when I pointed out that the hon. Gentleman the Joint Parliamentary Secretary was not in the Chamber? I knew the hon. Gentleman was in the House and was available to answer the debate, if required.
  I wish shortly to call attention to a reply which I received yesterday from the hon. Gentleman about our exports of beef, cattle and lamb to the Continent. As I am sure that the hon. Gentleman will be the first to point out, the pattern now is exactly the same as last year. I seem to remember making a statement about it, and I am sure that the hon. Gentleman will call attention to it. He may even make exactly the same speech as I made last year.
  The point is whether conditions have changed or not, and whether the position will become serious. We want to be aware of the way the Government are thinking about the matter before the Recess, because conditions are different from last year.
  But one condition which has not changed is that of the export of carcase meat and live animals on the hoof. The demand for these products in Europe has not changed at all. It is just as strong as it was last year, if, indeed, it has not been stimulated. We find continental buyers up and down the country buying in various livestock markets, and that is one condition that has not changed.
  In the 1964 Price Review brought in by my right hon. Friend the Member for Bedford (Mr. Soames) there were considerable rises in guaranteed prices for milk, calves and beef. In the one this year brought in by the right hon. Gentleman the Minister, there was a miserable rise in milk. The hon. Gentleman is
  1638
  looking astonished again. Does he wish to dispute that? There was a rise in the calf subsidy and a rise in the beef guarantee. The point is that, in spite of these rises, the change has not been, over the two years, as startling and dramatic in terms of an increase in our herds and the number of animals going to slaughter for this country's meat.
  The third point that I want to make briefly is that as far as the subsidy is concerned, the presence of continental buyers in our livestock markets has tended to keep prices at auction markets throughout the country at a reasonably high level during the year. That is to be welcomed by many farmers, and I welcome it myself. It also means that, notwithstanding the recent rise in the Price Review, the subsidy level will be almost nil for the year; the hon. Gentleman will no doubt give us the figures, but I know that last week it was nil, or practically nil. That has considerably reduced the liability. The demand from the Continent has strengthened the tone of the market, and this, of itself, helps the Minister by giving him a lower subsidy bill to meet at the end of the year.
  It is also true that home demand for meat is increasing, but not a great deal, although the pattern of demand from the home consumer is to a certain extent changing from what was known as "red" meat to the whiter types—poultry, pork, and so on—almost solely, I imagine, because of the price structure, which has also been changing in the last few years, and because of the good salesmanship of those selling the whiter types of meat. The demand is still strong at home for all types of meat.
  The first thing that has changed in the last year is the position of imports. Beef imports have gone down, although the drop has not been dramatic—from 271·4 thousand tons of beef last year to about 223,000 tons this year. That is a drop, but it is not very considerable, and it is perfectly understandable. Lamb imports have also gone down slightly. So the position is that demand on the Continent is strong and at home it is continuing, although with a slight shift of emphasis because of the price factor and the change from the red to the whiter types of meat.

  1639
  The import position is not as good this year as it was at this time last year, and in the Press this morning the forecasts by the meat trade itself of imports up to Christmas-time are not very rosy. The trade forecasts a slightly lower level of imports, particularly from the Argentine, in that period compared with what has been coming in in previous months, and previous years. We can, therefore, expect further cuts in imports, and, therefore, a lower level of imports to come, which will stimulate a higher demand.
  There has also been a change in the level of prices. I have here two price lists produced by Sainsbury's, and used by the Department. They show that the prices of beef and lamb in the shops have gone up over the past two years, until today they stand at a very high level, indeed. Over those two years, for instance, topside and top rump, Scotch, has gone up from 5s. 8d. to 6s. 8d., and Argentine from 4s. 4d. to 6s. If trade forecasts are right, we can expect a further rise in prices before Christmas. This will stimulate a rise in the cost of living, with all the unpleasant consequences that that will bring about.
  I am sure that the Parliamentary Secretary will want to do everything he can to help his right hon. Friend the First Secretary by keeping prices down, yet, as far as I can see, prices will go up. There may be a slight flattening out in animal exports, but it would appear from the figures we have that there will not be a very great deal of change there. I will not weary the House by going through all the figures. Hon. Members will see them in HANSARD today.
  The figures show that a considerable number of clean animals are being exported. At the same time, it looks as though we are arriving at a position when imports may be reduced. Obviously, we must do something about this. My purpose in raising this matter is to find out the Government's views and intentions.
  The long term answer must be that our milk and dairy herds must be stimulated to a much greater extent. We must produce more beef to eat. But what is to happen in the short term? There is no point in being alarmist, and it is not necessary at this moment. But in
  1640
  sight there is a further rise in the price of meat, both lamb and beef, and we are faced with an increasing shortage of imports. What do the Government intend to do? Are they prepared to make new and radical changes to meet the situation?
  10.1 a.m.
  Mr. Timothy Kitson: I am grateful to my hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins) for raising this important subject. It is unfortunate that the figures have not been available until just before the Recess. It seems strange, also, that just before this debate on agriculture we should have had a Closure Motion which, I am pleased to say, the Government did not win.
  It seems strange too, that the Government should produce a White Paper on agriculture today when it is impossible to take an opportunity to debate it at this late stage. It is unfortunate that the agricultural industry is being treated in this way. It is understandable, however, that the Government do not like debating agriculture in view of the Price Review this year. This is probably why the White Paper has been shelved until now.
  These figures are most interesting. They show that 104,000 cows have gone out of the country during the last nine months. It demonstrates that there is probably a lack of confidence in the milk industry. But it is a good thing for the industry that dairy farmers have had this continental outlet for their cattle. Like many in my constituency I have gone out of the dairy business and no doubt some of the animals I was milking in April are now on the Continent and have been consumed there.
  If we did not have this important trade, the price of fat cows which have dropped following the Price Review, which caused so many people to go out of the dairy business. This subject has been raised on many occasions, but I have always felt that it would be unfortunate if the Government acted. They should, however, keep an eye on the position.
  The trade on the Continent has helped to keep up the prices of beef, and this has been extremely important. If that trade had not existed, beef prices would have dropped in the home market, but it would have been slight. It is most

  1641
  important to keep an eye on the figures and see what happens. I would like to think that we could increase our lamb and fat sheep sales to the Continent. This trade would also be very helpful to our sheep farmers, for there is a tremendous opportunity to export sheep to the continent. I hope that, in some way, the Minister will encourage the export of sheep. I hope that while the Parliamentary Secretary will agree to keep a careful eye on the matter, he will hesitate to introduce any controls, because to do so would have a detrimental effect on both fat sheep and beef cattle prices.
  10.5 a.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): I do not know why hon. Members opposite were so concerned about the result of the Division on the Closure. The figures disclosed that there were only four Members of Her Majesty's Opposition in the House. That was disgraceful and reflected no credit on hon. Members opposite and did nothing to maintain the stature of Parliament.
  The hon. Member for Cornwall, North (Mr. Scott-Hopkins), speaking about the Price Review, said that the price of milk had risen by only 1d. a gallon and that that was miserable. I will not argue about that for the moment, except to say that apart from 1964 it was the highest award ever made to the milk industry, and if that was miserable, I do not know how he would describe the awards for which he was responsible.
  I understand that the hon. Member for Richmond, Yorks (Mr. Kitson) is in business and wants to make a good profit by selling abroad, but, although he has gone out of the milk business, milk production has increased every week compared with last year. We are grateful for that increase, which is good for the country.
  The hon. Member for Cornwall, North and I have discussed this problem and in reply to this debate I could have read the speech which he delivered last year and the statement by the then Minister of Agriculture because the two situations are very similar.
  Meat imports from the Argentine have been falling for a long time. Production in the Argentine has not been good of
  1642
  late. There have been complications there and the effects have been felt in this country. Our ambassador in the Argentine has reminded the authorities there that Britain has been a good customer for many years and he has urged the necessity to maintain supplies to us. We feel that our supplier has some responsibility to us and we have asked for deliveries to be kept up.
  Mr. Kitson: We have been good customers, but we cannot do anything about drought. The difficulties in the Argentine are due to the drought, but it is unlikely that the Argentine will ever be able to offer the sort of supplies which we have had over the last few years. It might be willing, but the situation there is almost impossible.
  Mr. Hoy: I do not dissent from that view. The Argentinians have had difficulties which they could not control. Internal demand there has also been increasing, which has not helped the situation. There has also been strong continental demand. Despite that, I thought that it was right—and I am sure that the House will agree—to remind them that we have been good customers for many years and to ask them to keep that in mind.
  I have nothing to add to the figures I supplied to the hon. Member in a Written Answer. They show what the movements have been. One of the things we should take the opportunity of clearing up is the amount of subsidy involved. We hear so much about all the animals pouring out as though they had been subsidised, but the House should understand that a large number do not carry subsidy at all. The only ones which might qualify for subsidy are the clean animals and we do not know whether they are all presented or even come up to standard. The amount involved is not great because the vast majority of the animals come under the heading "others".
  Changes have taken place in the meat supply and the consumer has been turning to other types of meat. I can only repeat, with perhaps a little more emphasis, that certain alternatives, such as pork, chicken and lamb, are available this year in even greater quantity than last year.
  Mr. Scott-Hopkins: Can the hon. Gentleman put on record, once and for all, any figure for the 54,700 head of cattle or 13,000 tons? It would be an advantage if we could have the figure for the subsidy.
  Mr. Hoy: I could not put a figure on that, because we do not know whether the cattle were presented or not. If they were presented, we would not know whether they were refused or not. What we do know is that, of the total, the number that received subsidy is very small. Fortunately stocks of frozen beef in cold storage are fairly satisfactory. I put it no higher.
  If no deficiency payment is made, no subsidy is paid. From October to December, the deficiency payment was nil. From January to March it rose from nil to 16s. 1d. per live cwt. That was the highest it reached. There has been a decrease since and it is nil at present. That is further proof that very little money is involved.
  This matter always causes concern, because any Government has to consider the meat position. As the hon. Member said last year, it is the simplest thing to work up a story and cut off exports. This would be a serious step. We are doing our best to keep an eye on the position and we are grateful to the Commonwealth for supplies sent to us by Commonwealth countries. They have been very good indeed. We shall keep an eye on the matter and in the light of circumstances take any action necessary. I can certainly give that assurance to the House.
  Mr. Scott-Hopkins: Will the hon. Gentleman say something about prices?
  Mr. Hoy: I am informed that the last price for lamb at Smithfield showed a slight decrease. I did not want to use this to score a debating point because prices go up and down. On the whole, the price has remained stable and we are grateful for that.

  SCHOOL BUILDING, ALBRIGHTON (LAND)
  10.15 a.m.
  Mr. William Yates: The purpose of the Consolidated Fund Bill is to give private Members the opportunity to impose sanctions and refuse to authorise the spending of Government money. Their first duty on this Bill, which does not deal with the wide and great national and state affairs which are carried on between Front Benches, is to stand up and defend, or speak about, the subjects involved in their constituency. I was appalled, when, for only the third time in 20 years, the Patronage Secretary tried to move the Closure on this Bill, against my appeal. It is a very serious matter. As for the hon. Gentleman the Joint Parliamentary Secretary, complaining that there were only four Members on this side of the House, these were four private Members wanting to speak about their constituencies.
  Mr. Hoy: May I just say to the hon. Gentleman that I was not complaining in the least? All I was drawing his attention to was that, at such a great moment as that was, only four Members opposite took the trouble to stay.
  Mr. Yates: When the Government were in opposition there were many occasions on Consolidated Fund Bills when none of their Members was present.
  The situation I am faced with is that 2,000 parents in my constituency have signed a petition, which I will give to the Minister. It involves the cancellation of a primary school at Albrighton because the local gas board, the West Midlands Gas Board, cannot agree the price at which to sell the land for the building. Here is one of those gigantic muddles between two departments—a county education authority and a nationalised industry.
  Of course, it would be perfectly easy for the County Education Authority, and the county council, being the planning authority, to put a compulsory purchase order on the land they require, but oh no! One is dealing with a nationalised industry. An Act of Parliament is required to enable the Shropshire County Council to obtain four acres of West Midlands Gas Board land on which to

  1645
  build a school, and the wrangle has been going on since 1961. I thought that this would be the right occasion to ask the Minister, or the Ministers concerned, to bang their heads together and try to get an answer either today or at least next week.
  Let me give the facts, as I know them, as given to me, by interested parties. In 1961 the Shropshire Education Authority decided that it was necessary to build a new junior-primary Church of England school in Albrighton. It looked around to find a suitable site and it noticed that the West Midlands Gas Board had 13 acres, but the whole of the acreage was green belt land. There was a dispute between the county education authorities, and the Shropshire County Council and the gas board about the price. The Shropshire County Council, as the education authority, said "Very well, if there is some difficulty with the West Midlands Gas Board we had better look elsewhere."
  It decided to look to the adjoining property owner and endeavoured to buy the lane it required from him. Unfortunately, for some reason which I cannot understand—although I am certain that the county councillor, Mr. Eric Whittingham, who has done so much to help might know the reasons—no compulsory purchase order was imposed against this private landowner. He represented that if the school was built it would be detrimental to his family, to his home and also to the residents nearby.
  As things began to drag on, very sensibly Albrighton residents combined together and formed the Albrighton Residents' Association. I am indebted to its Chairman, Mr. Hallett, for all the information which he has provided to enable me to bring this matter to the attention of the House. I am grateful also to the Clerk of the Shropshire County Council, who has given his point of view of the present difficult circumstances which his authority faces.
  Therefore, Shropshire County Council, being the planning authority, decided not to proceed on the private land which it thought that it could acquire near Meesom Road, not far from the gas board land. In 1964, however, the Shropshire Education Authority decided that it should revert to the original site in Shaw
  1646
  Lane and once more apply to the gas board for the use of the land. The county council asked the district valuer to value the land, but the West Midlands Gas Board could not accept the valuation as a basis for sale.
  I am sure that hon. Members would like to know the reason for that. There had been some stories appearing in the Press that perhaps the Minister of Housing and Local Government would relent and that as the land belonging to the West Midlands Gas Board was in the green belt, perhaps the Minister would allow planning permission to be given for the use of the land. The Gas Board decided that if it got planning permission, the value of its land would be much greater.
  Therefore, having refused to accept the valuation of the local valuer, the West Midlands Gas Board turned to the Shropshire County Council and said, "If you want to buy four or five acres of our land, it will cost you £5,000 an acre." This is a fantastic dispute between two departments, one of them doing a property speculation and holding up the whole of the school-building programme in the area. Of course, the county council could not afford to pay £5,000 an acre for a primary school site. The county council, being also the planning authority, refused the planning permission for which the gas board had applied.
  The gas board, to make matters even worse, then appealed to the Ministry of Housing and Local Government. One cannot, therefore, be surprised that the residents of Albrighton, in my constituency, and the officer commanding the nearby Royal Air Force station at Cosford, were horrified and surprised when the county council had to announce that the planning and the starting of building for the school in the 1965–66 programme had to be cancelled.
  This is an extraordinary situation in a dispute between two Government or quasi-Government authorities as a result of which hundreds of children in the area will be denied the primary school which was supposed to be included in this year's programme of the Shropshire County Council. Nobody knows how the situation will be resolved.
  I would much prefer to have had the opportunity to raise this matter on the

  1647
  Adjournment, but the debate on the Consolidated Fund Bill provides one of the great days when private Members can defend their constituents. I was, therefore, very annoyed to think that the Government should try to move a closure Motion, especially when the Minister who was to reply to me knew the seriousness of the problem.
  All I can say to the Minister is that I will be grateful, on behalf of my entire constituency and, in particular, the residents in Albrighton, and, indeed, the Royal Air Force at Cosford, to know what has been decided about the acreage of land required from the West Midlands Gas Board for building this primary school which has been withdrawn from this year's building programme because of a local dispute which badly needs settling.
  10.25 a.m.
  The Minister of State, Department of Education and Science (Mr. R. E. Prentice): If I may, with leave of the House, speak again I should like to congratulate the hon. Member for The Wrekin (Mr. William Yates) on raising a matter which is clearly of great importance to his constituency, but I would say to him, with great respect, that of course on these occasions hon. Members primarily use their opportunities to refer to matters of Ministerial responsibility, and, in the main, the matters the hon. Member has raised are not of any Ministerial responsibility whatever.
  I think that the airing of the issue in the way he has done may well prove to be a useful exercise. I hope he does not think I am speaking in any derogatory way about his raising the issue. However, the assistance I can be to him at this stage is practically negligible. I may as well tell him that at the outset.
  I cannot accept his invitation which he expressed in saying that he hoped that the Ministers concerned would bang their heads together, because I cannot accept that there is any necessity for that. Nor am I at this Box the spokesman for the West Midlands Gas Board. The hon. Member made reference at one stage of his speech to two authorities and at another to two Government authorities. They are just not so, and I think he knows they are not. At one time he was speaking of the local education
  1648
  authority, and he spoke at other times of a nationalised industry which has a commercial rôle and which disposes of its assets on commercial principles. I would not attempt to comment, and indeed, I am not in a position to comment, on whether a particular action of the West Midlands Gas Board over this land is praiseworthy or not. I am bound to say that if the hon. Member is complaining of land speculation, it is not a practice which is confined to the nationalised industries; it is a practice which is unfortunately very widespread.
  However, I want briefly to remind the hon. Member of the relationship between my right hon. Friend and the local education authority. The provision of schools in Shropshire is a duty placed by Act of Parliament on Shropshire County Council. It acquires the land itself, it builds the school, it pays for the school, and it owns the school. The rôle of our Department is in relation to including a particular school in a school building programme and is really basically a function of controlling capital expenditure, as capital expenditure on school building, as on all other programmes, is limited. We have a certain amount we can allocate every year and we allocate it school by school on a basis of priorities.
  Mr. William Yates: That is where I thought Ministerial responsibility came in.
  Mr. Prentice: Well, yes, indeed, and I can describe very briefly, in a few sentences the way in which we exercised this. We were asked by Shropshire County Council to include this proposal in the programme for 1965–6. We agreed to its inclusion. I say "we": I should say, our predecessors of the previous Government. They agreed to its inclusion in the programme for 1965–6. It was then found that the authority, because of the difficulties to which the hon. Member referred, was not in a position to go ahead, and therefore, instead another Shropshire school was included in the programme for 1965–6. Both of them, of course, were urgently needed, the state of building throughout the country being such that no school gets anywhere near being included in a programme unless it is urgently needed. So far, therefore, in the current year one urgently needed school is included instead of another, the one to which the hon. Member referred.

  1649
  Meanwhile, the school to which he referred, Albrighton School, has been included provisionally in the programme for 1966–67. When I say provisionally, I mean it is included firmly, provided, of course, that the education authority is able to go ahead and build the school. As I say, the function of acquiring land, is something on which it is not proper for me to comment, partly because it is not a Ministerial responsibility, it is a local authority one, and partly because it could reach the stage, as, according to the hon. Member, in this case it nearly did, where a compulsory purchase order was needed for the school. The hon. Gentleman explained that at one stage there was other land, not the gas board land, which was a possible site. If that were so, my right hon. Friend might have to act in a quasi-judicial capacity in deciding that issue. Therefore, it is all the more inappropriate for me to comment on the situation.
  In any event, I am afraid that I cannot help very much because the acquiring of sites for schools is carried out by the 166 local education authorities in the country, many of which have difficulties of this kind and have to overcome them. On the whole, those in the urban areas have more complications than those in the rural areas, but, admittedly, this is a difficult case.
  Mr. William Yates: I am sure that the hon. Gentleman will understand that my constituents consider the gas board land as public land and do not understand the technical difficulties of a dispute between a nationalised industry and the county council. They think that there should be some arbitration machinery between Government Departments and a nationalised industry.
  Mr. Prentice: All I can say is that, knowing that the hon. Gentleman is such a co-operative person, I hope he will explain to his constituents the difficulties involved here. I hope he does not think that I am being in any way flippant or non-co-operative. I can only define the relative responsibilities of a nationalised industry and a local authority. Education problems are often raised with us which are the responsibility of the local education authority rather than the Department, and our powers to interfere either do not exist or are limited. That
  1650
  is at it should be in a service which is administered by local government.
  That is as far as I can go. Obviously, those concerned will see reports of the debate. I appreciate the very great anxiety of the parents who have signed the petition and the other people in the area to whom the hon. Member has referred, and I hope that the airing of the issue may help to get things moving along the lines we would all wish.

  EUROPEAN ECONOMIC COMMUNITY
  10.32 a.m.
  Mr. Anthony Fell: I am sorry that the Chief Patronage Secretary is not in his place. He is, or tries to be, a courteous man, but I wanted to tell him that I was absolutely shocked by his moving the Closure at nine o'clock. In retrospect, I am glad that he did, but I was shocked at the time. I was shocked because one of the reasons why we are here now at half-past ten is that some hon. Members, particularly Front Bench Members, speak at inordinate length—and too many of them. We had a debate on roads. It started late, and went on for ages because there were four Front Bench speakers, who spoke at inordinate length for a short debate.
  Consequently, back-benchers have reason to be dissatisfied, particularly in major debates, because we just cannot get called. It is not the fault of Mr. Speaker or the management of the Chamber. It is simply that some hon. Members of the House speak so long. Therefore, it was monstrous for the Chief Patronage Secretary to try to adjourn the House, and even more monstrous that he should try to adjourn the House and then lose his Motion because there were four hon. Members who refused to let it be adjourned. This is the first time that I have been one of four hon. Members—six, counting the Tellers—who have defeated the Government.
  I cannot promise that I shall make a short constituency point. I cannot promise that I shall keep the House only for a very short time. I apologise for this, but I want to make a speech which I have been trying to make for a very long time in foreign affairs and other debates, but have not been called because of the

  1651
  enormous verbosity of so many Members, particularly Front Benchers and Privy Councillors. I have an opportunity now until such time as the Chief Patronage Secretary comes back again and decides that back-benchers ought not to have an opportunity to speak and that all the time should be carved up among Front Benchers. When he does move the Closure, I trust that we shall defeat him again.
  Having said that, I am most grateful for this opportunity to say something about one of the most major topics facing the country today, a topic all the more important because we may find ourselves in a General Election—I am not electioneering—within the next two or three months. It is doubtful whether hon. Members who are going away for a long holiday will not be recalled. Therefore, I want to raise the issue of the Common Market. I should be grateful to know whether the Financial Secretary to the Treasury has kindly appeared to reply to this debate, or whether the Foreign Office will be sending along a representative.
  Mr. Alan Fitch indicated assent.
  Mr. Fell: More than two years ago I had a little tiff with the then Prime Minister, Mr. Harold Macmillan, and I said some very hard things. I explained my reason for saying hard things in this way:
  "I would ask the Prime Minister to believe … that there are those British people who believe that it is impossible under the Treaty of Rome, except an entirely new Treaty of Rome … to protect British sovereignty, British agriculture, the British Commonwealth and the E.F.T.A. countries."—[OFFICIAL REPORT, 31st July, 1961; Vol. 645, c. 935.]
  Looking back on that, I suppose it was a large claim to make. I suppose that it was wrong of me to stand up against so many wise people who believe that the destiny of Britain may be beyond the English Channel. I suppose I was wrong to be so categoric in my criticism of the then Prime Minister. I suppose that it would have been better had I had regard to my political future and not said the things that I did to the then Prime Minister, knowing full well that the result of what I said to him would be that my
  1652
  political future—that is, ministerially, but I do not consider that the only political future—would be dead from that moment onwards.
  Nevertheless, I said it in the full knowledge of all this because I believed one thing, and that was that the very fact of our going into negotiation at that time would do nothing but harm to the British Commonwealth and to our E.F.T.A. association, and would decrease our trade with various parts of the world. I could see the busy Ministers of the Cabinet from that moment onwards being busier still and concentrating upon negotiations to get us into the Common Market and, therefore, ignoring one of the prime necessities of that time, which was to get more trade with the Commonwealth rather than less. Was I right or wrong?
  Mr. Marcus Lipton: The hon. Gentleman won.
  Mr. Fell: I did not win. President de Gaulle won.
  I come now to the 30th July, 1962, again quoting myself, though with little respect:
  "My hon. Friend said that the Commonwealth was at a crossroads. He always uses moderate language. I believe that the Commonwealth is not at a crossroads, but is on the edge of a precipice, and if it falls over it will never recover in a form recognisable to us. If we think of the Commonwealth, as far too many people do, as not including Britain, it will take Britain with it."—[OFFICIAL REPORT, 30th July, 1962; Vol. 664, c. 346.]
  I said many other things at that time, and I think it not unfair to point out now that Commonwealth trade has fallen appreciably since the negotiations opened to get into the European Economic Community. If anyone should say, "But the negotiations have had nothing to do with the diminution of Commonwealth trade", my only reply is that he ought to think a little more about what has happened. All the energies of the major Cabinet Ministers at that time were taken up with a desperate attempt to square things with the Commonwealth, to square things with E.F.T.A., to square things with British agriculture, to square things with British industry and to square things with financial interests. Had this energy been put into one of the many suggestions which had been made by my right hon. and hon. Friends for trying to "get

  1653
  something cracking" in the Commonwealth, it could have had an enormous effect in increasing Commonwealth trade.
  So far, we have not even had an agreed major review of all Commonwealth resources. How is it possible that, in this assembly of overseas nations, we have not even taken a step which would have resulted in our finding out what we possessed so that we might decide how what we possessed could be developed? We have been trying for years to find out with Europe what Europe possesses. What have we done about the Commonwealth? I could say much more about that, but I leave it there.
  I come now to the reason why I am taking up the time of the House. I am concerned about the revival of the prospect of our entering the Common Market.
  Mr. Raymond Gower: My hon. Friend is putting forward an interesting argument, but is he not tending to regard the Commonwealth from a trading and economic point of view as a homogeneous body the constituent members of which all have the same trading interests? Will he not acknowledge that, unhappily, Canada, for example, is very mixed up with the dollar trading area, and that Australia's interests as a developing secondary industry country are not always synonymous with ours?
  Mr. Fell: I have the greatest respect and affection for my hon. Friend, but if he really thinks that I do not realise that he must be extremely dim, or he must think that I am extremely dim, one or the other. Of course I realise it. I realise something else, as well. Since the announcement in 1961 of our negotiations to go into the Common Market and to try to adhere to the Treaty of Rome, Australia and New Zealand have moved closer and closer to America. Why?—because they were terrified that they would be deserted by us.
  Mr. Gower: Absolute nonsense.
  Mr. Fell: If my hon. Friend thinks that, perhaps he will recall the international Commonwealth "hook-up" broadcast which took place at a time of high ardour on the subject of Britain's entry into the Common Market. He will recall the enormous worry expressed in that broadcast by New Zealand,
  1654
  Australia, Canada and other Commonwealth countries about what would be the effect on their position vis-à-vis Britain if we went in without giving the necessary safeguards. Everyone knows, of course, that it was never "on" to give the necessary safeguards; everyone knows that it would have meant running out of the Commonwealth.
  To return to what I was saying before I was so gently interrupted by my hon. Friend, I remind the House, for the benefit for those who may have forgotten, what the Treaty of Rome is really about and what Professor Hallstein says it is all about. He made a speech to the University of Kiel on 19th February last, and I recommend hon. Members on both sides who have not read it and who are interested in the future of Britain to read this speech. It was a long and comprehensive survey, and I shall take one or two extracts from it.
  In his opening remarks, Professor Hallstein said that "they were, of course, attempting to change human nature". Something may have fallen down in the translation there. I know of good men and true who have been trying, without significant success, to change human nature for 2,000 years, and before them others had tried to do the same. So, although that may be a laudable and plausible aim, it does not seem very sensible.
  On page 16 of the report of his speech, Professor Hallstein deals with the question of union or unity. I take General de Gaulle's view that, if there is to be any political association in Europe, it should be a political association in a unity, not a union; in other words, we must not lose our sovereignty altogether. Professor Hallstein said—[Interruption.] I wonder whether my hon. Friends would care either to listen to this or to help me in some other way. I should be most grateful, because I do not wish to take up too much of their time.
  Mr. Edward M. Taylor: I hope that my hon. Friend will understand that we were not ignoring what he was saying. We were alarmed at some of the consequences of his statement.
  Mr. Fell: That may be so. If my hon. Friend had been here a little longer—[HON. MEMBERS: "Be fair."] All

  1655
  right. I withdraw that. If my hon. Friend had read the stand I have taken on this matter, he might be a little more understanding.
  Professor Hallstein said:
  "Naturally, the higher the platform or the viewpoint of the actor or the spectator, the more visibly and distinctly will the ultimate aim stand out, the more aware he must be of the final goal to be achieved"—
  this is the master mind of the European Economic Community—
  "namely, the complete political union of Europe."
  That is what has caused the trouble. It is the argument between complete political union, which can mean domination, and political unity, which means collaboration so far as it is possible to collaborate.
  I take next the attitude of France. I intend to skip this, but I shall mention it as I might be jeered if I skip it:
  "In France there was a very real danger that, owing to the traditional protectionist policy which was being followed, the economy would 'miss the bus' into the 20th century. Only a challenge of the scale of a domestic market for Europe could help. Furthermore, the social unrest among the French farm population, a fifth of the total population, which bordered on revolution, could be contained only by expanding the market for French agricultural products".
  If it was to be the saving of France, why is France walking out on this very point now?
  The next quotation—[Interruption.]
  I do not know whether my hon. Friend, again a very old friend, wants to interrupt. I should be delighted if he does.
  Sir Rolf Dudley Williams: The cause of the friction between France and the rest of Europe is that France wants everything her own way.
  Mr. Fell: That is true. I do not want to disagree with my hon. Friend, but that is another way of saying that France will not have a political union in Europe in which she gives up all political sovereignty. It is as simple as that.
  Mr. Gower rose—
  Mr. Fell: I am sorry; I cannot give way again now. I will give way later.
  The next quotation I want to make from this great speech of Professor Dr. Hallstein's is on the subject of economic union. He said this:
  1656
  "The opening of the frontiers forces them to … a unified market and a unified direction of economic policy."
  He explains this in further detail later. I shall make another quotation because I think that it is the most frightening sentence in the whole speech—
  Mr. Gower: Before my hon. Friend—
  Mr. Fell: No. I am sorry, but I will not give way. I see that the Patronage Secretary has just arrived. I hope that nothing will happen too soon. I want to try to get on.
  Professor Hallstein said this:
  "In short: to free trade in industrial and agricultural products, it is by no means enough simply to open the frontiers, as so many conceptions of market economy, as simple as they are unrealistic, would have us believe."
  This is a very important point.
  He went on to say:
  "On the contrary, extensive action will have to be taken by the Community, embracing vital parts of fiscal, budgetary, economic and monetary policy."
  I want to know whether those Members of Parliament who glibly follow the lead into Europe under the present terms of the Treaty of Rome realise that it will take from us our power in all these matters, eventually.
  The final quotation I want to make, which, I think, is the most serious of all, is this. This is the final summing up, I am glad to say:
  "Finally, it also means that, in the E.E.C., no Member State can pursue its own separate commercial policy in dealings with non-member states."
  Do those who have made up their minds that we must go in first and argue afterwards about the provisions of the Common Market realise that we shall lose totally our control over our own economy and our control over our commercial life, if we go in under the present terms?
  I intend to quote statements made by right hon. and hon. Members on both sides of the House, to be fair. I want to quote a letter written by one of my right hon. Friends, the right hon. Member for Streatham (Mr. Sandys), published in The Times on 17th July. I will quote the last part of the letter:
  "Let us announce that, without too many ifs and buts,"—

  1657
  in other words, if I read it aright, it means, "Let us announce without qualifications, without too many ifs and buts". Am I being unkind? I think not—
  "when the way is open, we shall be ready to accede to the Treaty of Rome, in the confidence that we shall be able to safeguard our interests better from within that from the outside."
  Hon. Members: Hear, hear.
  Mr. Fell: I am interested to have the Common Market lobby behind me. They do me a great honour by coming in. I only put the subject down last night, so it was not on the Notice Paper until about eight o'clock this morning. My right hon. Friend goes on in this way:
  "Let us declare our intentions, by declaring our willingness to work not only for economic integration, but also for the progressive political union of Europe"—
  with us in it!
  Hon. Members: Hear, hear.
  Mr. Fell: With the greatest respect, I am grateful to hon. Members, but—
  Mr. Deputy-Speaker (Dr. Horace King): Order. Intervention and noise prolong speeches. There are other hon. Members who wish to speak in this debate.
  Mr. Fell: He continues:
  "I believe that this positive attitude is now shared by the great majority of the thinking men and women in Britain."
  I do not know whether the last part of the letter has been the subject of an opinion poll, but I know that the last time that there were public opinion polls on the subject of Britain joining the Common Market, the opinion polls were about 70 per cent. against. No doubt the writer of the letter would not agree that most of them were serious-minded people, but I believe that they were. Therefore, it seems to be over-stating the case, to say the least, to claim that the vast majority of thinking people are for us joining Europe, particularly under these terms.
  May I refer now to the Minister of State for Foreign Affairs, who gained great prominence with his right hon. Friend the Member for Easington (Mr. Shinwell) the day before yesterday when he somewhat weakened on the five great points. The Minister of State said this:
  1658
  "There are some right hon. and hon. Gentlemen, as I said last week, who do not remember that the Prime Minister said that the question of Britain's relationship with Europe was not one of theology but a matter of practice. The five conditions are not the Ten Commandments."
  It was a happy turn of phrase and I felt that the hon. Gentleman might have been congratulated by the right hon. Member for Easington.
  "They relate to the vital interests of Britain and the Commonwealth. They will be interpreted in practical terms in the light of practical affairs as they exist between Britain and Europe."—[OFFICIAL REPORT, 2nd August, 1965; Vol. 717, c. 1043.]
  I suppose that is certainly a drift from the former position. I do not want to make too much of it. I see some small signs of disagreement, but it could at least be interpreted as a drift from the former position.
  Now the Labour Party is as divided on this issue as is the Tory Party. Indeed, the whole matter is in many ways well above party and partisan politics. The Labour Party is divided on this issue. We know full well that many Labour Members would like to go in on the Streatham terms, if I may call them that. [HON. MEMBERS: "Oh."] I do not mean to be offensive. I mean the terms outlined by my right hon. Friend the Member for Streatham. I thought it was quicker to say what I said.
  It is obvious that many hon. Members opposite would like to go in on those terms; that is—cut the cackle, let us get in, and let us argue afterwards.
  Mr. Gower: Will my hon. Friend please give way?
  Mr. Fell: No.
  It is equally obvious that many of my hon. Friends, I regret to say, have the same view. It is also true that most of my right hon. Friends do not share that view. They believe, I hope—I pray they still believe—that it is necessary to negotiate first and to get the necessary safeguards before signing the Treaty of Rome, if we can ever sign it. We have an election very possibly coming up within the next two or three months. Both parties will have to make up their minds and to give a lead to the country.
  I wonder how many people realise what a reversal we are trying to bring about in twentieth century politics. The

  1659
  twentieth century has been notable for one, among many others, major political trend, namely, the trend towards greater independence and statehood. The trend has been for nations to look outwards while maintaining their individuality and sovereignty. This is the meaning, if it has any meaning, of the Commonwealth of Nations. It is the only body in the world, the only organisation or association of States, in which members can be completely free and sovereign. This is the great thing which was worked out by us in the nineteenth century and which has come to fruition in the twentieth century.
  Some Members are talking about our signing the Treaty of Rome, which is the reverse of the system for which countries have been striving in the Commonwealth through all these long years. Why do hon. Members on both sides of the House want us to go into the Common Market? The answer is because they are frightened and are looking for an easy way out of their troubles. They want to get in without regard for the fact that the Common Market is essentially an inward-looking protected area which is surrounded by a new steel wall made out of tariffs against the world. This is the essence and basis of the Common Market.
  Those who try to argue with that must explain how they reconcile our supposed leadership of the Commonwealth of Nations—goodness knows, it has been weak and many of our troubles arise from it—now and over the past generations. It is impossible to reconcile the two. People wonder why Australia and New Zealand went closer to the United States, with the threat of China and Indonesia to the north of them and with their lack of faith in British Governments of any colour to help and develop the Commonwealth—in other words, with their lack of faith in us.
  The French fear simply is this, that if Professor Hallstein, the master of the Commission, has his way, France will lose all her economic, financial and political independence in the years to come. This is why she is having trouble with the Common Market. Do not get me wrong. I hope sincerely that the Common Market will succeed for those countries which are in it, but I hope something else as well, namely, that before Britain ever
  1660
  thinks about signing on the dotted line she will so have her agreements tied up with the Commission that the Treaty of Rome will have been changed and Professor Hallstein will have changed his tune from saying, "We are not in business; we are in politics" and that no member State of the Community can have commercial dealings with any State outside the Community without going to the Commission.
  Until those terms are changed, it would be absolute nonsense and criminal for Britain to join on the extraordinary basis that we should sign the Treaty and then afterwards try to alter it. We do not want to be put in the position which France is now in. Are we really asking that we shold join the Common Market and then try to change the basis of the Treaty and then, not having succeeded in changing it, to wreck the whole joint? This would be more than the Community could stand, and we well know it. So let us be honest in this as well.
  I have spoken for a considerable time. [HON. MEMBERS: "Too long."] I gave my reasons for speaking when I started my speech. I am delighted to see the Patronage Secretary with us, because this gives me the chance to restate very shortly—[HON. MEMBERS: "Oh."]—my reasons for making this speech.
  I was shocked at the right hon. Gentleman's attempt to move the Closure earlier because he did not realise why we are sitting so late this morning. We are sitting so late partly because of the debate on roads last night, a full-scale debate which took away our time, with four Front Bench speakers; partly because Front Bench speeches and many backbench speeches are far too long—[HON. MEMBERS: "Oh."] For those hon. Members who do not like that, let me say that I warned the House before I spoke that I could not say what I had to say shortly.
  I have been trying to say it for a very long time and have not been called, obviously not through any fault of the occupant of the Chair, but because of the length of speeches made by leaders on both sides, by Privy Councillors and others. The average length of the speeches which I have made since becoming a Member has been 15 minutes, certainly not more. I will help in any move for shorter speeches in the House

  1661
  I want to end on this note. The day before yesterday a very considerable speech was made in the House by the hon. Member for Birmingham, All Saints (Mr. Walden). It is always refreshing to hear an honest speech made in the House. His speech was of the greatest integrity and honesty. I believe that hon. Members, on whatever side of the House they may sit, should not be slow—[HON. MEMBERS: "Get on."] I believe this to be true. Hon. Members ask me to get on. I have heard some Members speak at much greater length than I have spoken today. At one stage in his speech, the hon. Member for All Saints called for more honesty in politics.
  A few years ago I said:
  "Can one appeal to the Government to understand that the British people are not so backward, so poor in spirit and so lacking in courage that they have reached a position where they are entirely unable to face difficulties?"—[OFFICIAL REPORT, 30th July, 1962; Vol. 664, c. 347.]
  I could quote more, but I will not do so. I was then appealing to the Government and, indeed, to the House of Commons to start having faith in the British people.
  Make no mistake: at the next election, no party will be able to go to the country with promises of good times ahead. Perhaps at last we shall be forced to tell the people the truth and to give them some leadership and faith in what they are capable of doing. If anybody believes that it is an impossible task to galvanise the British people, I would say this. When de Gaulle became President of France nobody would have believed that France, in the short time of three or four years, would command the attention of the world, when before she had been a minor defeated tragic nation. [Interruption.] May I appeal to my hon. Friends, so-called, behind me, one of whom said, "There! The Common Market." I have heard nothing more ridiculous and stupid in this Chamber for a very long time. De Gaulle has had little merit but a lot of tears out of the Common Market. Let us face that fact.
  De Gaulle has worked his miracle for France by being truthful and having faith in the French people. Oh, for the time when we in this country have a leader who will be truthful to the British people and have faith in them. On that day we shall begin to have the sort of integrity not only in Parliament, but throughout the
  1662
  world, that I believe this country fundamentally deserves.
  Several Hon. Members rose—
  Mr. Speaker: I am in some difficulty. I must consult hon. Members. The hon. Member for Barry (Mr. Gower) requires the leave of the House to speak again. May I ask the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) whether he desires to speak on this topic?
  11.11 a.m.
  Mr. Edward M. Taylor: Yes, Mr. Speaker.
  I should like to support my hon. Friend the Member for Yarmouth (Mr. Fell) in his plea for shorter speeches, and I certainly hope that what I say will be short and to the point. I would not like him to go away from this debate in the belief that there was no sympathy for his point of view, on this side of the House or the other, because I am sure we all appreciate that he stated his point with great sincerity. At least, the hon. Member has been consistent.
  However, I think the other side of the story must be stated, and I should like briefly to say how the situation affects an industry in which I have a particular interest, namely, shipbuilding. I hope that it will be demonstrated to my hon. Friend that this is not simply a question of this country or any other country deciding what it wants to do within a small area. We have to think of what circumstances in this country will force us to do, and of what we might be forced to do because of the economic circumstances of other nations.
  Take, for example, the shipbuilding industry in this country. This is a vital industry that employs more than 76,000 people directly, and probably another 150,000 indirectly. Because of the activities of the previous Government and, to some extent, of this Government also, we are looking forward to more favourable times but because of the mere existence of the Common Market we are faced with a situation in which the whole future of the industry is endangered.
  Only three months ago the Common Market Executive decided to recommend to the Commission that a tariff barrier should be erected for shipbuilding, that a subsidy of a minimum of 10 per cent. and a maximum of 15 per cent. should

  1663
  be paid on all ships built within the Common Market. Irrespective of whether or not we want to have anything to do with the Common Market, irrespective of whether we want to extend our Commonwealth trade, this is a hard fact which we have to face. We must appreciate the consequences.
  At present, Germany, Holland and Belgium have no protection for their shipbuilding industries, but if this proposal is put into effect this month by the Common Market Commission our prospects of obtaining work will be seriously affected. Our prospects of obtaining export orders and orders from our own shipowners could be very seriously affected. At present, we have difficulty in competing with Europe. We find difficulty in competing with Germany in certain fields and with Holland in connection with the smaller type of vessel. These proposals could have a very serious effect.
  What are we to do in the circumstances? We can make representations to the Common Market, but will the member countries listen? What precisely do those who refuse to have anything to do with the Common Market suggest that we should do? We have little alternative, as a country which depends so much on exports. The least that we can do is to adopt a flexible attitude. I would not suggest that we should rush into the Common Market, but I would not suggest either that we should slam the door in their faces, because we must face practicalities. What will happen to our shipbuilding industry if this proposal goes ahead and we take no action at all?
  The other and more serious factor in connection with the need to maintain a flexible attitude lies in one of the major problems which the present Government have been facing since they have been in office. The one great problem which they are facing and which former Governments have had to face is that of the balance of payments. As a major trading nation, everything that happens in the economy of other countries has an immediate effect on this country.
  One of the most interesting things which have happened in this House since I have been a Member was the Chancellor's announcement last Tuesday of his
  1664
  financial restrictions. It appears that many hon. Members opposite who took part in the election campaign sincerely believed that when the Tory Government went out of office the whole problem of stop-go would disappear. They must have believed this when they said that a Labour Government would bring in new measures and would get away from the policy of stop-go. However, as long as we are operating as one unit, with associations with the Commonwealth, as a small unit in a trading world which is intensely competitive, there is no prospect of us ever being able to get away from the consequences of stop-go measures. So long as we are one small unit we cannot hope to isolate ourselves from economic circumstances abroad. So long as we refuse to have anything to do with a larger unit we certainly cannot hope to solve this basic economic problem.
  We should think of this particularly in view of yesterday's announcement that our gold and dollar reserves went down by £50 million, though the true figure, as we all know, will in fact, be much greater. How long must we face difficulties like that which can arise from time to time and upset all the economic policies which Governments might wish to pursue? We must at least adopt a flexible attitude to the question of association with the Common Market.
  The other major problem which the Government have been facing—I do not agree with all their policies, but, nevertheless, they have been trying to deal with this problem—is the future of our aircraft industry. Unless we have a large export market on which we can depend and from which we can get orders by virtue of our prices and delivery dates, it is not possible to have a viable aircraft industry in this country. To that extent we have to look to markets on which we can depend. We have to look to markets from which we shall not be excluded by sudden tariff barriers or other measures.
  Looking to the future of the aircraft industry in particular, we must associate ourselves with a larger market on which we can depend and in which there is not the danger of the sudden imposition of quotas and other restrictions. The last thing I wish to do is to loosen the bonds

  1665
  which join the countries of the Commonwealth, but when we consider the major industries on which the future prosperity of all nations must depend, we must have some means of associating ourselves with the Common Market or with some comparable group. Is there a comparable group? This is the question which my hon. Friend posed. Can we get the same advantages from an even closer relationship with the Commonwealth countries than we can get in Europe? I do not think I hat present circumstances will allow that.
  My hon. Friend said that perhaps these difficulties would not have arisen if we had never tried to negotiate with Europe. He said that our trade with the Commonwealth had gone down since we entered into these negotiations, and that is true as a percentage of our total trade, but one thing that must be said on the other side is that before we entered into these negotiations our trade with Europe was about 32 per cent., and was growing. Before we started to negotiate in that way, and for two years before then, our trade with the Commonwealth as a percentage was declining. In other words, what was happening was due to natural movements that were taking place, and had nothing to do with our discussions for entering into the Common Market.
  Mr. Arnold Gregory: The hon. Gentleman keeps on referring to Europe. Does he mean the Common Market Europe, E.F.T.A. Europe, or Eastern Europe?
  Mr. Taylor: I am sorry if I have not made myself clear. I was talking essentially of the Common Market in, I would hope, association with the E.F.T.A. countries, because I am sure that no one would agree to our going into the Common Market if it meant adversely and seriously affecting our friends in E.F.T.A. who have been of such assistance to us. We hope that in any such relationship we can be associated with the
  1666
  Common Market and give comparable advantages to our E.F.T.A. friends and also bring great benefits to the countries of the Commonwealth. A strong Britain is the best friend of the Commonwealth. A strong Britain is a nation that is most able to give help and assistance to those countries in the Commonwealth which need it.
  Apart from that, on the general question I think we have to appreciate that the future of the world never looked darker than when the nations of Europe were in conflict. There is, I believe, a real need for a third force in the world which can make a contribution politically, socially, and economically. A Europe united with Britain would have more in population, in wealth, and in technological resources than any of the other major blocs in the world. For these reasons, as Members of this House, with the facts that we have, it would be wrong to adopt an inflexible attitude to the question of European unity. There will be enormous difficulties in any negotiations for a major change of this sort, but I think that it would be dangerous and in some ways irresponsible to close our minds to what may be the solution to the nation's structural problems in trade and international affairs.
  The Parliamentary Secretary to the Treasury (Mr. Edward Short)rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly and agreed to.
  Bill accordingly read the Third time and passed.

  EUROPEAN ECONOMIC COMMUNITY

    ADJOURNMENT
    Resolved, That this House do now adjourn.—[Mr. Fitch.]
    Adjourned accordingly at twenty-four minutes past Eleven o'clock a.m.

NATIONAL FINANCE
  Motor Vehicles (Duty Exemptions)
  Motor Vehicles (Duty Exemptions)
  International Monetary Fund (Spain)
  International Monetary Fund (Spain)
  National Savings
  National Savings
  Government Expenditure
  Government Expenditure
  Balance of Payments
  Balance of Payments
  Impost Surcharge (Man-made Fibre Industry)
  Impost Surcharge (Man-made Fibre Industry)
  Northern Ireland (Public Investment)
  Northern Ireland (Public Investment)
  Public Service and Armed Forces Pensions
  Public Service and Armed Forces Pensions
  North-East Scotland
  North-East Scotland
  Public Capital Expenditure
  Public Capital Expenditure
  Churchill Crown
  Churchill Crown
  Dollar Securities
  Dollar Securities
  £ Sterling
  £ Sterling
LOCAL GOVERNMENT
  Gypsies (Camp Sites)
  Gypsies (Camp Sites)
  Smoke Control
  Smoke Control
  Refuse Collection (Report)
  Refuse Collection (Report)
  Rates
  Rates
  Agricultural Buildings (Rating)
  Agricultural Buildings (Rating)
  Great Yarmouth (Bradwell Merger)
  Great Yarmouth (Bradwell Merger)
  Water Supplies and Storage
  Water Supplies and Storage
  Northolt Aerodrome
  Northolt Aerodrome
  Evesham Town Map
  Evesham Town Map
  Thames Towpath
  Thames Towpath
  Ashford
  Ashford
  Rating Relief (Mining Subsidence)
  Rating Relief (Mining Subsidence)
  Planning Permission Licences
  Planning Permission Licences
  Rating System
  Rating System
  Chelmsley Wood Development
  Chelmsley Wood Development
  Dorset Water Board
  Dorset Water Board
  South Bank Site
  South Bank Site
  Litter Offences (Penalties)
  Litter Offences (Penalties)
HOUSING
  Output
  Output
  Ex-Servicemen
  Ex-Servicemen
  House Purchase
  House Purchase
  Rent Bill (Decontrolled Tenants)
  Rent Bill (Decontrolled Tenants)
  Greater London Rent Assessment Panel
  Greater London Rent Assessment Panel
COMMONWEALTH RELATIONS
  Diplomatic Service (Appointments)
  Diplomatic Service (Appointments)
  Cyprus Constitution (Discussions with Co-Guarantors)
  Cyprus Constitution (Discussions with Co-Guarantors)
COAL
  Surplus Mining Equipment (Sales)
  Surplus Mining Equipment (Sales)
  Electricity, Gas and Public Authorities
  Electricity, Gas and Public Authorities
  Coal Prices
  Coal Prices
  Mining Subsidence
  Mining Subsidence
  Opencast Mining (Warwickshire)
  Opencast Mining (Warwickshire)
  West Midlands (Output)
  West Midlands (Output)
MINISTRY OF POWER
  S.-E. Electricity Board (Domestic Tariffs)
  S.-E. Electricity Board (Domestic Tariffs)
  Electricity and Gas Undertakings (Repairs)
  Electricity and Gas Undertakings (Repairs)
TECHNOLOGY
  Machine Tool Industry
  Machine Tool Industry
  Fast-Breeder Reactors
  Fast-Breeder Reactors
  Minister (Overseas Visits)
  Minister (Overseas Visits)
MINISTRY OF HEALTH
  Pipe Tobacco (Advertising)
  Pipe Tobacco (Advertising)
  National Health Service (Efficiency Studies)
  National Health Service (Efficiency Studies)
HOSPITALS
  Young Chronic Sick
  Young Chronic Sick
  E.F.T.A. AND E.E.C.
  E.F.T.A. AND E.E.C.
EDUCATION AND SCIENCE
  University of the Air (Annual Cost)
  University of the Air (Annual Cost)
  Lorraine Joy Jones (Refusal of Grammar School Place)
  Lorraine Joy Jones (Refusal of Grammar School Place)
  Direct Grant Grammar Schools with Lower Schools (Admissions to Upper Schools)
  Direct Grant Grammar Schools with Lower Schools (Admissions to Upper Schools)
  Direct Grant Grammar Schools (Lower Schools)
  Direct Grant Grammar Schools (Lower Schools)
  Brookhurst Primary School and Eastham Mill Park County Infants' School
  Brookhurst Primary School and Eastham Mill Park County Infants' School
  Initial Teaching Alphabet
  Initial Teaching Alphabet
AGRICULTURE, FISHERIES AND FOOD
  Farm Workers (Payments in Kind)
  Farm Workers (Payments in Kind)
  Beef, Mutton and Lamb
  Beef, Mutton and Lamb
  Agricultural Holdings (Workers)
  Agricultural Holdings (Workers)
  Burry Inlet Cockle Fishery Order
  Burry Inlet Cockle Fishery Order
WALES
  Welsh Folk Museum, St. Fagans
  Welsh Folk Museum, St. Fagans
PUBLIC BUILDING AND WORKS
  Victoria Tower Gardens (Icecream Sales)
  Victoria Tower Gardens (Icecream Sales)
  Cement Supplies (Dorset)
  Cement Supplies (Dorset)
  Timber
  Timber
RAILWAYS
  Central Railway Line, Speke to Liverpool
  Central Railway Line, Speke to Liverpool
  Closure Proposals, Birmingham Conurbation
  Closure Proposals, Birmingham Conurbation
  Closure Proposals, North-West
  Closure Proposals, North-West
TRANSPORT
  Merseyside Transport Authority
  Merseyside Transport Authority
  Victims of Unidentified Drivers (Compensation)
  Victims of Unidentified Drivers (Compensation)
ROADS
  Helsby-Frodsham By-Pass
  Helsby-Frodsham By-Pass
  Severn Bridge (Aggregate Savings)
  Severn Bridge (Aggregate Savings)
  Stokesly By-Pass
  Stokesly By-Pass
  M.1. (Coffee Prices at Self-Service Cafeterias)
  M.1. (Coffee Prices at Self-Service Cafeterias)
  North-West Economic Planning Region (Postponed Schemes)
  North-West Economic Planning Region (Postponed Schemes)
  County Surveyors Society (Recommendations)
  County Surveyors Society (Recommendations)
POST OFFICE
  Staff Side (Meetings with Ministers)
  Staff Side (Meetings with Ministers)
  Post Office Board (Meetings)
  Post Office Board (Meetings)
  Stamps (Definitive and Pictorial Series)
  Stamps (Definitive and Pictorial Series)
  Post Office Advisory Council and Post Office Users' Council
  Post Office Advisory Council and Post Office Users' Council
TELEPHONE SERVICE
  Waiting List
  Waiting List
  Maintenance Engineers
  Maintenance Engineers
  Installations
  Installations
  Subscriber Trunk Dialling (Failures)
  Subscriber Trunk Dialling (Failures)
  Exchange Equipment (Effective Life)
  Exchange Equipment (Effective Life)
  Automatic Exchanges, London (Twelve Oldest)
  Automatic Exchanges, London (Twelve Oldest)
  Local and Trunk Calls (Failures)
  Local and Trunk Calls (Failures)
  Rentals, Connection Charges, Local and Trunk Calls (Increases)
  Rentals, Connection Charges, Local and Trunk Calls (Increases)
  Capital Expenditure on Fixed Assets and Percentage of Gross National Product
  Capital Expenditure on Fixed Assets and Percentage of Gross National Product
HOME DEPARTMENT
  Au Pair Girls
  Au Pair Girls
  Hire Cars (Defaulting Hirers)
  Hire Cars (Defaulting Hirers)
  Crimes of Violence (Compensation to Victims)
  Crimes of Violence (Compensation to Victims)
  Challenor Report
  Challenor Report
  FRANCO-GERMAN TREATY
  FRANCO-GERMAN TREATY
  EUROPEAN ECONOMIC CONFERENCE
  EUROPEAN ECONOMIC CONFERENCE
  UNITED NATIONS DAY (FLAG)
  UNITED NATIONS DAY (FLAG)
  MINISTER OF TECHNOLOGY (SPEECH)
  MINISTER OF TECHNOLOGY (SPEECH)
  SOUTH-EAST ASIA (COMMONWEALTH PEACE MISSION)
  SOUTH-EAST ASIA (COMMONWEALTH PEACE MISSION)
  RHODESIA
  RHODESIA
  REPUBLIC OF IRELAND (TRADE TALKS)
  REPUBLIC OF IRELAND (TRADE TALKS)
  THE QUEEN'S AWARD TO INDUSTRY
  THE QUEEN'S AWARD TO INDUSTRY
  LEATHER CARGO, TILBURY DOCKS
  LEATHER CARGO, TILBURY DOCKS
  SECRETARY OF STATE FOR FOREIGN AFFAIRS (INTERVIEW WITH FRANKFURTER RUNDSCHAU)
  SECRETARY OF STATE FOR FOREIGN AFFAIRS (INTERVIEW WITH FRANKFURTER RUNDSCHAU)
  BUILDING LICENCES (RESPONSIBLE MINISTER)
  BUILDING LICENCES (RESPONSIBLE MINISTER)
MINISTRY OF DEFENCE
  Territorial Army (Study)
  Territorial Army (Study)
ECONOMIC AFFAIRS
  South-East Study
  South-East Study
  Traffic Signals (Increase in Servicing Charges)
  Traffic Signals (Increase in Servicing Charges)
  HOUSE OF COMMONS REFRESHMENT ROOMS AND STAFF REST ROOMS (LATE NIGHT SITTINGS)
  HOUSE OF COMMONS REFRESHMENT ROOMS AND STAFF REST ROOMS (LATE NIGHT SITTINGS)
OVERSEAS DEVELOPMENT
  Kenya (Ministerial Discussions)
  Kenya (Ministerial Discussions)
  Departmental Staff
  Departmental Staff
SCOTLAND
  Western Isles and Highland Waters (Fishery Protection)
  Western Isles and Highland Waters (Fishery Protection)
BOARD OF TRADE
  Industrial Development Certificates (King's Lynn)
  Industrial Development Certificates (King's Lynn)
  Foreign Shipyards (British Orders)
  Foreign Shipyards (British Orders)
  Severn Bridge
  Severn Bridge
  Weights and Measures (Metric System)
  Weights and Measures (Metric System)

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

MESSAGES FROM THE QUEEN
2.35 p.m.
LORD COBBOLD: My Lords, I have the honour to present to your Lordships two Messages from Her Majesty the Queen, signed by her own hand. The first Message is as follows:
"I have received your Address praying that the European Space Research Organisation (Immunities and Privileges) Order 1965 be made in the form of the draft laid before your House.
"I will comply with your request."
The second Message is as follows:
"I have received your Address praying that the European Launcher Development Organisation (Immunities and Privileges) Order 1965 be made in the form of the draft laid before your House.
"I will comply with your request."

THE WOOLSACK
2.36 p.m.
LORD HURD: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the fact that the Woolsack in this House was last refilled as long ago as 1938, and on that occasion wool given by the woolgrowers of Australia, New Zealand and South Africa was used, consideration will now be given to restuffing the Woolsack with wool produced entirely within the Commonwealth, including the United Kingdom.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR COMMONWEALTH RELATIONS AND FOR THE COLONIES (LORD TAYLOR): My
116
Lords, the interior condition of the Woolsack, even after 27 years' wear, is quite satisfactory. Although I have not personally inspected the contents of the Woolsack, Her Majesty's Government understand from those who are qualified in these matters that the contents are wearing well, and that even after 27 years they do not need renewal. No complaints have been received from noble Lords who have sat on it during that period. The reason why it was refilled in 1938 was that it was discovered that the stuffing was horsehair, and not wool at all. When the time comes to refurbish the Woolsack, Her Majesty's Government will be happy to act upon the noble Lord's suggestion.
LORD HURD: My Lords, may I thank the noble Lord for that informative reply? May I take it that he agrees that, as right from the earliest days the Woolsack has stood for the importance of the wool trade in England, it is only appropriate that wool produced in this country, in Scotland and in Wales should be included in the Woolsack? Would Her Majesty's Government consider an offer from the British Wool Marketing Board to supply wool from England, Scotland and Wales, and also to collect wool from other Commonwealth countries—including a small one that I happen to know well, the Falkland Islands—so that we really have an all-Commonwealth Woolsack? If the British Wool Marketing Board would see to that, and would also have it restuffed at their cost, would that be acceptable to Her Majesty's Government?
LORD TAYLOR: My Lords, it would indeed be acceptable to Her Majesty's Government. The Woolsack has at present a wooden frame inside it, as well as the wool, and a certain amount of horsehair on the outside of that, which is necessary for comfort. I should just remind the noble Lord that the number of Commonwealth countries which produce wool is quite substantial, and includes not only the portions of the United Kingdom but also Australia, New Zealand, Canada, Kenya, Cyprus, India and Pakistan, and the Dependencies Bechuanaland, Basutoland and Swaziland.
VISCOUNT DILHORNE: My Lords, the noble Lord referred to the condition of the Woolsack. Is he aware that in 1964, at least, there was the need for a

117
certain amount of refilling—it had sunk a little? Perhaps that has been made good since that time with horsehair or wool.
LORD TAYLOR: My Lords, I knew it had been restuffed slightly in 1950, but I did not realise that the noble and learned Viscount had himself made a deep impression on it.
EARL FERRERS: My Lords, could the noble Lord give an assurance that the Government Front Bench is not stuffed with a similar material?
LORD TAYLOR: Yes, my Lords.

IMPORTATION OF SMALL ANIMALS
2.38 p.m.
THE EARL OF IDDESLEIGH: 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 in future they will consult the Nature Conservancy before issuing licences for the importation of small animals of foreign origin.]
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES): My Lords, the Board of Trade already consult the Advisory Committee established under the Animals (Restriction of Importation) Act, 1964, before issuing import licences for animals listed in the Schedule to the Act. A representative of the Nature Conservancy attends the meetings of the Committee.
THE EARL OF IDDESLEIGH: I thank the noble Lord for that reply.
LORD HURCOMB: My Lords, may I ask the noble Lord who has just replied whether he is aware that, in their Annual Report for 1962, the Nature Conservancy issued a statement of policy about the introduction of exotic species, whether animal or plants, and drew attention to the great danger that might occur through the introduction of even apparently harmless species?
LORD RHODES: My Lords, that in itself is one advantage of having the Nature Conservancy represented on the Advisory Committee.
THE EARL OF DUNDEE: My Lords, will the Government allow entry to at least the relatives and dependants of those small animals who are already here?

THE FORESTRY COMMISSION
2.40 p.m.
LORD HURD: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the appointment of the reconstituted Forestry Commission has been completed, and when a statement will be made on the functions of the new Commissioners.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF LAND AND NATURAL RESOURCES (LORD MITCHISON): My Lords, the appointment of the reconstituted Forestry Commission has not yet been completed. It is expected that it will be completed shortly, and the names will then be announced. No change is proposed in the functions of the Commissioners, except as already explained by my right honourable friend in another place. The matter was dealt with in another place mainly in an Answer given on May 10, 1965, and there was also a reference to it during the debate on the Eighth Special Report from the Estimates Committee, which was printed on May 4, 1965. It would take rather a long time to give even a summary of what was said.
LORD HURD: My Lords, I thank the noble Lord for that Answer. Is it not regarded as a matter of some urgency that the marketing functions of the Forestry Commission should be strengthened? That, as I understand it, was one of the purposes of reconstituting the Commission as a whole. And is it not important that private timber growers, as well as Government foresters, should have the benefit of this strengthened Commission, particularly on the marketing side, as quickly as possible?
LORD MITCHISON: It is certainly important that the best people should be appointed as soon as possible. I think the name of the chairman, a prominent businessman, has already been announced. And I am quite certain that my right

119
honourable friend will bear in mind, particularly in matters of this sort, the need to get the best advice, from whatever source it may come.

CITIZENS' ADVICE BUREAUX AND CONSUMER COMPLAINTS
2.43 p.m.
BARONESS BURTON OF COVENTRY: 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 progress has been made in the provision of technical advice for dealing with consumer complaints referred to the offices of the Citizens' Advice Bureaux.]
LORD RHODES: My Lords, I understand that the National Citizens' Advice Bureaux Council are currently reviewing the progress which has been made in developing the Bureaux' consumer advisory service and are considering what further facilities may be desirable. When this review is complete the Council will no doubt have further discussions with the Board of Trade.
BARONESS BURTON OF COVENTRY: My Lords, in thanking my noble friend for that Answer, may I ask him whether he is aware that the position at the moment, since this technical advice is not available, seems to be that the staff at the headquarters of the Citizens' Advice Bureaux are being asked to decide matters for which they have not the technical competence, and that, as a result, an unfair burden is being placed on them? Would the noble Lord bear this in mind when he is considering this matter?
LORD RHODES: Yes, my Lords, of course. But as the Citizens' Advice Bureaux are within two months of coming to a conclusion about their requirements, I think that I had better not commit myself.

BUSINESS: THE SUMMER RECESS AND PROROGATION
LORD SHEPHERD: My Lords, at a suitable moment after 3.30 p.m. there will be two Statements. The first will be made by my noble friend Lord Walston, on the White Paper on the work of the Ministry of Overseas Development, and the second will be made by my noble friend the Leader of the House on awards to industry.
May I also announce that it is proposed that this House should resume after the Summer Recess on Tuesday, October 26? It is expected that Prorogation will take place during the week beginning Monday, November 1, and that the opening of the new Session will be on Tuesday, November 9.

REGISTRATION OF BIRTHS, DEATHS AND MARRIAGES (SCOTLAND) BILL [H.L.]
2.47 p.m.
Order of the Day read for the consideration of the Commons Amendments.

COMMONS AMENDMENTS
[The references are to Bill [107] as first printed for the House of Commons.]
Clause 1, page 1, line 17, leave out ("without prejudice to that generality") and insert ("subject to that general duty")
Clause 1, page 1, line 19, after ("utility") insert ("and efficiency")
Clause 1, page 1, line 22, leave out from ("containing") to ("of") in line 23 and insert ("the numbers")
Page 2, line 1, leave out ("last preceding") and insert ("to which the report relates")
Clause 3, page 2, line 24, leave out subsection (3) and insert—
("(3) The Registrar General may, with the approval of the Secretary of State, direct that any other premises shall be used for the deposit of any registers or records in the custody of the Registrar General by virtue of this or any other Act, and such premises, so long as they are so used, shall be deemed for the purposes of the last foregoing subsection to be part of the General Register Office.")
Clause 4, page 2, line 39, after ("Act") insert (", including salaries or remuneration of officers appointed by him,")
Clause 6, page 3, line 18, after ("with") insert ("the")
Clause 6, page 3, line 20, leave out ("or dates")
Clause 7, page 4, line 16, at end, insert ("(in this Act referred to as 'senior registrars')")
Clause 7, page 4, line 45, leave out ("those functions") and insert ("his functions under this or any other Act")
Page 5, line 42, after ("authority") insert ("after consultation with the Registrar General")
Page 6, line 2, at end, insert (", or any person who, but for such service of his as may be so specified, would be such a person, officer or servant as aforesaid,")
Page 6, line 2, line 25, leave out ("may be prescribed for that appointment") and insert ("the Registrar General may from time to time determine")
Clause 8, page 6, line 33, leave out ("strong fire-resisting boxes") and insert ("fireproof safes or cabinets")
Page 7, line 11, leave out ("or strong box") and insert (", safe or cabinet")
Clause 10, page 7, line 35, leave out ("register boxes") and insert ("safes, cabinets")
Clause 10, page 7, line 40, leave out ("power") and insert ("control")
Clause 14, page 9, line 17, leave out first ("and") and insert ("or")
Clause 14, page 9, line 17, leave out second ("and") and insert ("or")
Clause 14, page 9, line 22, leave out from beginning to ("twenty-one") and insert ("within")
Clause 15, page 10, line 9, leave out ("before the expiration of") and insert ("within")
Clause 21, page 13, line 38, after ("shall") insert (", so far as applicable,")
Page 14, line 9, after ("that") insert ("to the best of his knowledge and belief")
Clause 23, page 15, line 35, leave out ("before the expiration of") and insert ("within")
Clause 31, page 19, line 41, after ("her") insert ("within eight days from the date of service of the notice")
Clause 31, page 19, line 42, leave out from ("registrar") to end of line 44
Page 20, line 3, leave out ("before the date specified therein")
Clause 37, page 22, line 6, after ("payment") insert ("to him")
Clause 38, page 22, line 21, after ("payment") insert ("to him")
Clause 38, page 22, line 30, after ("payment") insert ("to him")
Clause 40, page 22, line 39, at beginning, insert ("Subject to the following subsection,")
Clause 40, page 22, line 42, leave out from ("certificate") to ("shall") in line 43
Clause 40, page 22, line 44, at end, insert—
("(2) An abbreviated certificate based on information contained in the Adopted Children Register maintained under section 22(1) of the Adoption Act 1958 shall be in such form as may be prescribed, shall not include any reference to adoption, and may be obtained only from the Registrar General.")
Clause 42, page 23, line 22, leave out subsection (2)
Clause 42, page 23, line 42, leave out ("clerical error") and insert ("such type of error as he may specify")
Clause 43, page 24, line 10, leave out ("or") and insert (", and, without prejudice to the provisions of section 24 of the Adoption Act 1958 relating to the giving or taking of a new name,")
Clause 43, page 24, line 12, leave out ("the Adoption Act 1958") and insert ("that Act")
Clause 43, page 24, line 16, leave out ("before the expiration of") and insert ("within")
Clause 43, page 24, line 20, leave out ("before the expiration of") and insert ("within")
Clause 43, page 24, line 26, leave out from ("if") to ("in") and insert ("the name was changed or given otherwise than")
Clause 43, page 24, line 39, at end, insert ("; in this definition, in the case of an adopted child, the references to the father and mother or to the parents of a child shall be construed as references to the adoptive parents of the child.")
Clause 44, page 27, line 16, after ("extract") insert (", or in any abbreviated certificate of birth,")
Leave out Clause 47
After Clause 47, insert the following new clause—
Search of parochial registers, &c, and provision of extracts therefrom
(".On payment to him of such fee or fees as may be prescribed, the Registrar General shall at any time when the General Register Office is open for that purpose—

(a) cause a search to be made of the aforesaid parochial registers or any copies or indexes thereof on behalf of any person or permit that person to search the registers, copies or indexes himself, and

(b) issue to any person an extract of any entry in the said registers or copies which that person may require.")

After Clause 47, insert the following new clause—
Decrees of court altering status
(".Where a decree altering the status of any person has been granted by any competent court the clerk of court shall where no appeal has been made against such decree, on the expiration of the time within which such an appeal may be made, or where an appeal has been made against such decree, on the conclusion of any appellate proceedings, notify the import of such decree in the prescribed form to the Registrar General who shall thereupon cause an appropriate entry to be made in the Registrar of Corrections Etc.")
Clause 51, page 28, line 33, after ("be") insert ("served").
Clause 52, page 29, line 44, leave out ("which") and insert ("if such reproduction").
Schedule 1, page 33, line 18, leave out paragraph 3.
Schedule 2, page 35, line 12, at end, insert—

("2 & 3 Geo. 6. c. 34.

The Marriage (Scotland) Act 1939.

Section 1(5).")

Schedule 2, page 35, line 16, at end, insert—

("7 & 8 Eliz. 2. c. 5.

The Adoption Act 1958.

In section 22(6) the words 'with regard to the registration of names given in baptism or without baptism after registration of birth and'.")

THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, I beg to move that the Commons Amendments be now considered. I shall propose to your Lordships in due course that these Amendments be taken en bloc, but it may be for the convenience of the House if at this stage I say a few words about some of the Amendments. Generally speaking, the Amendments are of a drafting nature; but there are one or two exceptions to which I think it would be proper to make some particular reference.
Amendment No. 11 (to Clause 7, at page 5, line 42) really arises from an Amendment moved by the noble Lord, Lord Drumalbyn, when the Bill was being considered in your Lordships' House. At that time he proposed that the words "with the consent of the Registrar General" should be inserted in Clause 7(10). At that time I was not in a position to accept the Amendment, because it was a matter for the normal Whitley negotiation machinery. It was felt, however, that there was quite some useful purpose in the Amendment suggested by the noble Lord, and the opportunity was accordingly taken in the interval to have discussions. As a result, it became clear that an Amendment, not quite in the terms of the original one but moving quite a long way towards it, would not meet with any objection from any of the local authorities. The Amendment which is now before your Lordships' House, which was accepted in another place, obliges the local registration authority to consult with the Registrar General before determining the remuneration and allowances. I think it will commend itself, in particular, to the noble Lord, Lord Drumalbyn.
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Amendments Nos. 12 and 13 (also to Clause 7, at page 6) are, perhaps, typical of one or two others. When the Registrar General and his staff started the work of drafting out the regulations which will be necessary under this Bill, they found that in certain respects the Bill did not in fact do all that is necessary to enable the regulations to be put out in the most suitable form. Amendments Nos. 12 and 13, are two which flow from this particular set of circumstances; and I would draw your Lordships' attention to them. Amendment No. 12 ensures that compensation will be payable to any of the registrars' staff who may be called up for National Service. Amendment No. 13 removes the need to prescribe qualifications, which would thereby become mandatory, and gives the Registrar General discretion to vary or modify de sirable qualifications where that is necessary. The particular field where this arises is where part-time registrars are needed and where it is not always possible to get people with the minimum qualifications who are within the prescribed age limits. It is sometimes necessary to appoint a man over the age of 60. I may say, in passing, that it is not intended to depart from the other two minimum qualifications, which are that the registrar should be of good character and be able to write legibly.
The next Amendment to which I wish to draw your Lordships' attention is Amendment No. 23, which is to Clause 21, at page 14, line 9. This relates to a declaration about a still-birth. As the Bill was worded when it left this House it placed an obligation in relation to the declaration of a still-birth, which could be reasonably made by a medical practitioner or a certified midwife, but perhaps was beyond the competence of anyone else. The Amendment, by inserting the words "to the best of his knowledge and belief" gives a qualification which is desirable where the declaration must be made by someone who does not fall within one or the other of these two categories to which I have referred.
Amendment No. 33 (to Clause 40, at page 22, line 44) inserts a provision about the giving of an abbreviated certificate in relation to adopted children. This is something which has been done for some years, but it is not absolutely certain that within the Registration Acts there is

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statutory authority for the giving of this abbreviated certificate. It was felt in another place that the opportunity should be taken to make the position absolutely clear, although I believe that the noble Lord, Lord Drumalbyn, may say that there is, in fact, some authority in the Adoption Acts.
The next Amendment in which I think that your Lordships would be particularly interested is Amendment No. 44—the new clause relating to search of parochial registers. The effect of the new clause, in place of Clause 47, which was inserted by this House and deleted in another place by Amendment No. 43, is to bring it into line with Clauses 37 and 38; that is to say, the search of parochial registers may be made by the staff of the Registrar-General's Department as well as by the applicant. As Clause 47 was worded, there was no specific authority given to the staff to make such search, whereas where postal application was made, the search could be made only by a member of the staff. There are other circumstances in which it would be desirable that the staff should make the search in relation particularly to valuable old parochial registers, where it is necessary to make absolutely certain that they are in the same condition at the end of the search as they were at the start.
Finally, Amendment No. 45 refers to another new clause inserted in another place which makes provision for an intimation to the Registrar-General of decrees altering the status of any person to be made in the prescribed form by the clerk of the court. This links with some modifications of substance to subsection (5) of the Act of 1855 which was not adequately covered in the Bill as it left your Lordships' House. I do not think it is necessary for me to make particular reference to any of the other Amendments made in another place. I beg to move.
Moved, That the Commons Amendments be now considered.—(Lord Hughes.)
THE LORD CHANCELLOR (LORD GARDINER): The Question is, That the Amendments be now considered. There will, of course, be an opportunity for any noble Lord to move that this House doth agree, or doth not agree, with the Commons in their Amendments.
LORD DRUMALBYN: My Lords, I think it only necessary for me to thank the noble Lord, Lord Hughes, for his explanation, and to say that, for my part at any rate, I express a welcome to all the Amendments from another place.
On Question, Motion agreed to.
LORD HUGHES: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments, 1 to 50, en bloc.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes)
On Question, Motion agreed to.

JUDGES' REMUNERATION BILL
2.55 p.m.
Order of the Day for the Second Reading read.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, this is a short but important Bill. It raises the salaries of the higher Judiciary of England, Scotland and Northern Ireland by 25 per cent. and increases the salary and pension payable to the Lord Chancellor. The Bill also raises the maximum number of Judges who may be appointed to the High Court in England. I say that this is an important Bill because the superior Judiciary, as we must all agree, is one of the vital components of our society; the Judges discharge functions which call for the highest qualities of character and intellect, together with great learning, and it is upon the maintenance of these very high standards that the whole fabric of our civil liberties in this country depends. It is right that Parliament should see that these offices of immense importance are properly rewarded.
I do not imagine that anyone would quarrel with that very general proposition. Your Lordships will, however, undoubtedly be anxious to ensure that the increases proposed by the Bill are as correct as they can be made. I know that a measure to increase salaries is often unpopular with everybody else, and that, whenever it may be introduced, it is always possible to find reasons for saying that the moment is inopportune. Nevertheless, the Government are convinced

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that the Judges' salaries should be increased and that the amounts we are now proposing are right.
The most important provision in this Bill is Clause 1, which provides for the increased salaries, the amounts of which are set out in Schedule 1. The House will see that these increases are substantial; with one exception they amount to 25 per cent. of the salaries fixed by Parliament in 1954. The House may remember that when that measure was passed, it represented the first increase in the salaries of the High Court Judges for over 120 years; it is now over 11 years since those salaries were raised and (since this part of the Bill does not come into force until April 1 of next year) there will have been a 12-year interval since the last increase. As the House will see, apart from the salary of the President of the Probate Division, the new salaries all represent a 25 per cent. increase on the existing salaries, thus a High Court Judge in England, who at present receives £8,000 a year will receive £10,000, and Lord Chief Justice, whose salary is now £10,000 a year, will go up to £12,500. Corresponding increases are made to the salaries of the Lord President and the other Judges of the Court of Session and of the Lord Chief Justice and other Supreme Court Judges in Northern Ireland. The Bill also raises by 25 per cent. the salaries payable to the Lords of Appeal in Ordinary who discharge the judicial duties of this House.
It might appear to some of your Lordships that an increase of 25 per cent. is not in line with the Government's current policy of restricting salary increases to 3½ per cent. This is a fallacy, however plausible at first sight, because the 3½ per cent. "norm" refers to an annual increase, while the Judges' salaries will have remained static for 12 years. Over that period, a total increase of 25 per cent. represents a compound annual rate of 1·9 per cent., so that, far from exceeding the norm, the proposals contained in the Bill are well within it. Moreover, I should point out to the House that since 1954 not only has the cost of living risen considerably, but wage rates have gone up 59 per cent. and salaries 65 per cent. The House will readily appreciate that, if judicial salaries had been increased by anything like these amounts,
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the figures in Schedule I would be very much greater. I do not want to press that point too much. We must recognise that the amounts fixed 11 years ago were not intended at that time to be subject to annual increases and it would not therefore be altogether fair to make a strict comparison with other salary increases over that period. The Government recognise, as every sensible person must, that it is not at all easy to formulate the criteria by which judicial salaries, or for that matter, any other salaries, should be assessed, or to translate those criteria into figures. I think we all recognise that the status of a High Court Judge in England or his equivalent in Scotland or Northern Ireland, should place him in a position of recognised significance in the community, and that he should certainly at the very least be shielded from financial difficulties. Taking all these and other considerations into account, the Government have come to the conclusion that the increases proposed by the Bill are right.
Before I leave Clause 1, I ought to deal very briefly with two other matters. First, your Lordships will see from Schedule 1 that it is proposed that the President of the Probate Division should have a salary equal to that of the Master of the Rolls. The second point arises on subsection (3), from which the House will see that it is proposed that in future judicial salaries should be capable of being increased (but not decreased) by Order in Council, following Affirmative Resolutions of both Houses; hitherto, an Act of Parliament has always been needed and that is why this Bill is now before the House. But the fixing of salaries by Act of Parliament leads to inconvenience and injustice: apart from Ministers of the Crown, I think I am right in saying that no salaries other than those of the Judges are nowadays fixed by Statute. At the same time, the procedure proposed by subsection (3) ensures that Parliament will maintain its control over judicial salaries; it will not, however, have to devote quite so much time to their consideration.
I hope I can take the rest of this Bill quite shortly, although I will, of course, do my best to answer any questions on points of detail that noble Lords may raise. Clause 2 raises the salary of the Lord Chancellor from £12,000 a year to £14,500 and his pension from £5,000 to

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£6,250. The House will remember that the Committee under the chairmanship of Mr. Geoffrey Lawrence recommended a number of increases in ministerial salaries, including those of the Lord Chancellor. The Government decided that, although there was a strong case for increasing these salaries, it would be appropriate to accept for Ministers only one-half of what I may call the "Lawrence" recommendations, and this decision was implemented in the Ministerial Salaries and Members' Pensions Act of this year. Clause 2 could very appropriately have been included in that Act, but my noble and learned friend on the Woolsack did not wish his own salary to be increased before those of his judicial brethren. According, Clause 2, which treats the Lord Chancellor in the same way as other Ministers by giving him one-half the "Lawrence" increases in salary and pension, appears in this Bill and takes effect on April 1, 1966.
Clause 3 deals with an entirely different matter. Under the current law, the maximum number of Puisne Judges who may be appointed to the High Court in England is 56; this number is raised to 63 by Clause 3. The noble and learned Viscount, Lord Dilhorne, and other noble and learned Lords will bear me out when I say that the growing volume of criminal and divorce business, coupled with additional pressure in the Chancery Division, makes it urgently necessary for the High Court to be strengthened. The need is undoubtedly urgent; and your Lordships will see that Clause 3 is the only part of the Bill which comes into force immediately. I need not detain your Lordships for more than a very short time on Clause 4, but I ought just to draw attention to subsection (2), under which a judicial salary is abated by the amount of any pension payable to the holder in respect of any public office. This is no new rule for the Supreme Courts of England or Northern Ireland, but the subsection extends it to the Lords of Appeal and the Scottish Judges. There is nothing I need say about Clause 5, save that, as I have already explained, the salary provisions do not come into force until April 1, 1966, while Clause 3 comes into force at once. Nor is there anything in the Schedules about which I need detain the House. I beg to move.
Moved, That the Bill be now read 2ª.—(The Earl of Longford.)
3.4 p.m.
VISCOUNT DILHORNE: My Lords, it is, I think, the custom in your Lordships' House, as in another place, that when a noble Lord has any personal interest in the subject matter of a Bill he should if he speaks declare it. In view of certain observations made in another place, I think I should declare that I have no interest in this Bill. I shall not benefit from its provisions. Of course, the time may come when that may be altered, but certainly I have no benefit at the present moment.
It was as long ago as March, 1964, that in answer to a Question in your Lordships' House, I gave a pledge that, if we won the Election, we should introduce legislation to increase the salaries of the higher Judiciary. We thought then that that should be done. But we were not able to do it that Session. I remember putting forward the suggestion that in future any increases that might have to be made should be made by Order subject to Parliamentary control, rather than by Bill. And I am glad to see that this Bill provides for that. I also remember that I urged that the position of the President of the Probate, Divorce and Admiralty Division should be made the same as that of the Master of the Rolls so far as salary was concerned. It has always been an anomaly that he has been in receipt of a lower salary despite his great deal of administrative work. This change is indeed a good one.
Apart from those two matters, I do not think that there is anything in the Bill which was inherited from the previous Administration. We had not reached any decision as to the increases to be made; I do not think that we had any talks about that. But we did recognise that there was a clear case for an increase in salary. And I must confess that I am very glad that this Government have introduced this Bill.
I understand that the noble and learned Lord the Lord Chancellor is not going to speak in this debate, as he may benefit from the provisions of the Bill. Of course, he will do so only if he holds his present office in April, 1966. While one might admire his confidence, he knows, of course, that we shall do our best to see that that does not happen and that there

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is a change of Government long before then. Seriously, I should like to congratulate the noble and learned Lord on his success in getting this Bill included in the legislative programme for this Session, when so many other Bills which we were promised have fallen by the wayside. I know that it is no easy task for any Lord Chancellor to get his colleagues to agree to a Bill to increase Judges' salaries, and I expect that the noble and learned Lord had some difficulty in getting his colleagues to agree to this Bill and to the increases he proposed.
I was glad to hear the words that the noble Earl, Lord Longford, used at the beginning of his speech, when he spoke about the need to maintain the present very high standards of our Judiciary. We always take pride in the administration of British justice. Yet there are always those who appear to think that, somehow or other, we should get justice on the cheap. If we are to attract the best brains to the Bench it is necessary to provide salaries and pensions commensurate with their high position. Many of those from whom we wish to recruit Judges are earning very substantial incomes, and if they are to be asked to give up those incomes and serve on the Bench, then indeed it is our duty to see that the salaries are right. I do not wish to say anything more about that part of the Bill.
The noble Earl has made it clear that, although the increase works out at 25 per cent. on one basis, in fact it is well below the 3 per cent. annual increase rate. The Explanatory Memorandum says that the total cost of these salary increases will be some £165,000 a year, and when the new limit of judicial strength is reached they will cost a further £70,000 a year. I should like him, if he could, to give a rough estimate of the net increase to the Judiciary, because, of course, a great deal of the money paid out in additional salary will come back to the Revenue. I have heard it estimated that the net cost of these proposals, which look so formidable, is something in the region—it is hard to estimate—of £40,000 to £50,000. That marks our present situation, if the effect of providing a charge on the Consolidated Fund of some £165,000 in fact means an increased burden of the order of some £50,000. No doubt the noble Earl will be able to
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correct me if the estimate I have given is wrong, and I shall be interested to hear what it is.
The other matter the Bill provides for is the number of Judges. In recent years the number of High Court Judges has been increased very greatly indeed. I do not doubt the need to take power to add to their present numbers, but I think we must recognise that there must be some limit to the number to which they can be increased. I very much hope that the noble and learned Lord the Lord Chancellor is exploring ways in which further increases can perhaps be avoided. It is not easy. But I get the impression that trials nowadays are apt to take longer than similar trials used to take; but that may be only an impression. I hope that efforts are being made to see whether ways can be found for accelerating trials, without at the same time affecting adversely the administration of justice. I do not think there is any more that I need say about this measure, but I do in all seriousness extend my congratulations to the noble and learned Lord the Lord Chancellor on his success in getting this Bill before your Lordships' House.
3.12 p.m.
LORD BLACKFORD: My Lords, I am sure we have all appreciated the persuasive and convincing way in which the noble Earl the Leader of the House and the noble and learned Viscount have explained this Bill to us, and it may seem ungenerous to differ from them in any way. But one cannot help remembering that one of the first acts of this Parliament was that Members of the House of Commons voted themselves an increase in salary of nearly 90 per cent., and at the same time your Lordships' expenses allowance was increased by 50 per cent. So perhaps we ought to commiserate with their legal Lordships in that they are being fobbed off with 25 per cent. I take the point put by the noble Earl about their not having had a rise since 1954, and that therefore the percentage rise per annum is as little as he said. But the idea of an absolutely certain annual percentage rise is quite a new one, and it is doubtful whether it can be sustained in the present circumstances.
I cannot help pointing out that when top and privileged people can obtain rises of this very substantial nature it

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does make more difficult the task of those of us who have to control competitive capitalist concerns, where we are urged by the Press and by the politicians, day in and day out, to export more and more, to cut our costs, to become more efficient and so forth. And is it surprising that our workpeople, our salary earners and wage earners, who, after all, constitute the major item in almost every budget, seeing the substantial rises which occur in privileged places, themselves feel that they would like a substantial share, and put in, I will say, for a rise of 12½ per cent.—half that of the Judges? We say to them, "Ah! But Mr. George Brown says that you ought not to have more than 3½ to 4 per cent." "But", they reply, "what's the good of that to us? Since the Labour Government came into office, the cost of living has already risen nearly 5 per cent., and we want not only to maintain our standards but to improve them."
Many of your Lordships must have seen some weeks ago, at the time of the Magna Carta celebrations, a brilliant cartoon by Illingworth, published in the Daily Mail, depicting the Prime Minister seated at a table, with Mr. George Brown, in scholastic garb beside him, regarding ruefully a charter on which is written: "No wage restraint"; around him stands a bevy of trade union barons, and one of them is saying, "You do not have to sign anything, chum. We will just take no notice of you, as usual." Why do we take no notice of Mr. Brown? Is it not because he preaches an unpleasant gospel? Is it not that, if we were to follow his preaching, we should be involved in some self-sacrifice and self-discipline? In other words, is he not preaching at any rate a part of a very unpleasant truth? If there is one thing more certain than another about democracy, it is that it hates hearing an unpleasant truth, until it is frightened. Until then, it derides and mocks and ignores the prophet of gloom. There are many instances of that. Throughout the 'thirties Sir Winston Churchill was derided and largely ignored as a prophet of gloom when he foretold the approach of the Second World War. Yet that same electorate which derided and ignored him, when frightened of invasion in 1940, clasped him to their bosom, when
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all he had to offer was "blood, toil, tears and sweat."
But an example perhaps more apposite to the present day occurred in 1931, when the electorate were frightened again. Remembering what happened to the mark in 1923, they were afraid that their pound would go the same way. So they threw the Government of the day out on its ear, and elected a Parliament which was pledged to a 10 per cent. cut all all round, including even the unemployed. I think—I hope that I may be wrong—that we are marching steadily towards another 1931. I believe that unless the temper, mood and behaviour of the nation, and particularly of organised labour, changes, we shall reach another crisis. Of course, as a lifelong Tory, I hope that it will be Mr. Wilson's ear which hits the ground. But, in some respects, there is not an awful lot to choose between the Parties. After all, was not the word "Butskellism" coined to indicate that fact?
And is not the sponsorship of this Bill now before the House a case in point? Here we have these two eminent personalities, the noble Earl the Leader of the House and the noble and learned Viscount, an ex-Lord Chancellor, joining together to give a jorum of jam to the Judges. Are they not just like the trade union barons in the cartoon? Can we not see them standing together, towering over poor Mr. Brown, the noble Earl's hand on the shoulder of his colleague saying, "Well, Geordie, chum, you can go on talking about 3½ to 4 per cent. as long as you like, but me and my mate here are determined to give the judges 25 per cent."? Can we not see poor Mr. Brown, gasping from the gashes of Casca Cousins in the Cabinet, gazing up into the eyes of the noble Earl in despair and saying, "et tu, Frankie!"?
LORD BOOTHBY: My Lords, before the noble Earl replies, may I just say that, unlike the noble Lord who has just spoken, I very much welcome the jorum of jam, and join with the noble and learned Viscount, Lord Dilhorne, in congratulating the Lord Chancellor in having got it? As the Government appear to be in such an expansive, generous jam-making mood, I should like to ask the noble Earl the Leader of the House one question: whether they would take into serious consideration the p ossibility of

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giving a pension to all those who have been Members of Parliament for more than 20 years.
LORD REA: My Lords, it is a little difficult to follow the noble Lord, Lord Boothby, but I should like to add to the congratulations and the welcome offered to this Bill. It is, of course, eminently suitable and eminently appropriate that those gentlemen in the very high seats of justice should be put in a place quite above the rat-race, above competition and above every sort of consideration. Therefore, I think that these increases, although they may seem to some of us, who are not so fortunate, to be large, are entirely appropriate.
I suppose that the noble Earl has taken into consideration the position of the slightly lower Judiciary officers, such as county court judges, quarter sessions chairmen, stipendiary magistrates and so on because we should not like to see them left out in the cold. I do not think there is anything with which one can compare them so that there is no obvious discrepancy between them and other increases. The only possible comparison and discrepancy I can make is that a great number of your Lordships who sit on the Back Benches, and work almost as many hours as the Law Lords, have not quite the same salary—in fact in their case the remuneration is exactly nothing.
THE EARL OF LONGFORD: My Lords, I am grateful to all the speakers who, in their different ways, have paid tribute to the ideas behind this Bill. I would inform the noble Lord, Lord Rea, that the county court judges, for example, have received three increases—all, I am sure, richly deserved—in the last twelve years, and I am sure that is why they are not included in this particular Bill.
VISCOUNT DILHORNE: My Lords, I think I am right in saying that they received their last increase in 1964. It was possible to make the increase for the lower Judiciary by orders and in other ways, but not for the higher Judiciary, except by a Bill.
THE EARL OF LONGFORD: I am grateful to the noble Viscount—I am sure that what he says is right. I am also grateful for the not altogether expected support, on a matter of this kind, from the noble Lord, Lord Boothby. I can
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assure him that his suggestion is bound to be attractive, that all Members of Parliament who have served for 20 years should be given some kind of pension. I am under the impression—and he can put me right here—that if he himself were in need, after his many years of service, he would be able to draw some benevolent payment of some kind; but I am sure he is not in need in that sense and therefore he does not qualify.
LORD BOOTHBY: My Lords, I am sure that if the noble Earl, Lord Attlee, were here, he would confirm that that is the most painful form of means test
THE EARL OF LONGFORD: I am quite ready to believe it is, but I am sure that the noble Lord, who has been immensely successful in all fields of national endeavour, would never need to apply for this kind of grant.
I should like to say how much we all enjoyed the speech of the noble Lord, Lord Blackford. He made an eloquent appeal to us to consider the position of the working man against this increase of the remuneration for the Judges. The noble Lord is an eminent banker. I also dabbled in those quarters for a time, but the noble Lord has given a lifetime of service to banking, and I should think that if there are any Judges here (apart from the Lord Chancellor, who feels inhibited from speaking) they would gladly exchange their salaries for the remuneration of the average merchant banker. I offer that as a proposition to the noble Lord. When we learn that eminent bankers are, so to speak, pulling in their belts, then I think we shall have cause to realise that the crisis has become more grave than any of us had supposed.
LORD BLACKFORD: My Lords, banking is one of the "cushy" industries. I am talking about exporting industries, with which I am also connected. I am not a merchant banker, they themselves receive the earth.
THE EARL OF LONGFORD: I think we have contributed enough to human knowledge for the moment. I can only say to the noble Lord, about the 1931 Government, in the light of his very fine and greatly appreciated tribute to Sir Winston Churchill, that one of the most striking facts about the National Government of 1931 was that they would not touch Sir Winston Churchill at any price,

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and kept him out of office for eight years. I feel the noble Lord, Lord Boothby, will not have forgotten that point. So I do not think we need join in any particular tributes to that Administration this afternoon. Nevertheless, I should like to thank the noble Lord for all he said.
The noble and learned Viscount, Lord Dilhorne, reminded us that he himself had said that his Government would do all they could, and I am glad that he feels we have lived up to his ideas. He asked me how much all this would cost, and whether it was true that what would appear to be a gross expense of £163,000, would boil down to a net figure of £40,000 to £50,000. Taking everything into account—the increased salaries, the additional High Court Judges, the clerks and the pensions—I am told that the gross addition to expenditure would be of the order of £300,000. As the noble and learned Viscount will appreciate, I have not in the time available been able to work it out, and I do not think anybody could on the spur of the moment say how much that would be net, but I think it is in the order of £80,000. At any rate, it is of that character.
I do not think I can attempt to add to what the noble and learned Viscount said, because he speaks with such immense authority in this field. He indicated that he himself had no interest in this matter, and he doubted whether the Lord Chancellor would in fact have an interest by April 1, when the Bill comes into operation. I would humbly submit, as a layman among these legal luminaries, that one of them has an interest, and the fact that the noble and learned Viscount felt able to speak and the Lord Chancellor did not, and bearing in mind that both are of equal integrity, suggests that perhaps between them they are agreed who is more likely next April to be the Lord Chancellor.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

INTERNATIONAL MONETARY FUND BILL
3.28 p.m.
Order of the Day for the Second Reading read.
LORD SHEPHERD: My Lords, I beg to move that this Bill be read a second time. I do not wish to detain the House unnecessarily over the details of the Bill or the Executive Director's Report, which can be found in Command Paper 2675. I am sure the House will agree that this document sets out the subject with great clarity, taking into account its very complicated ramifications. The Bill is simple; it consists of one clause. The House will see that it empowers the payment to the International Monetary Fund of £175 million as our subscription, which represents an increase of 25 per cent. on our present quota and subscription.
I think the greatest significance of this Bill lies in the fact that it is yet another step by this country in international cooperation. It is interesting to note that the International Monetary Fund now consists of 103 nations. The noble Lord, Lord Blackford, in his remarks, referred to the serious times of the 1930s. Certainly they were times of gravity, but I am quite sure that those who watch international trade would see a significant difference between conditions then and now. In those days we had what might be called international financial anarchy. To-day, instead of competition between nations, and countries taking particular actions in their own interests without any regard to others, we have these 103 nations who have come together to see whether, by discussion and by agreement, they can find some way of stabilising and developing world trade.
I am quite sure the House will be interested not so much in the Bill itself but in how the Government see the present situation in world liquidity. The position of the United Kingdom has been for some time that while there is no shortage of liquidity as yet, there are several indications that a shortage might arise. Mr. Maudling, when he was Chancellor of the Exchequer, was among the first to bring this to the attention of the world at the meeting of the International Monetary Fund in 1962, when he also contributed some ideas towards a solution. But the world was not then convinced, and I fear is not yet fully convinced, that action is necessary. Since then, the indications that more liquidity may he needed and that some changes in the system may be required have become clearer to us and also to some of our

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friends, as has also the increased urgency; but there does not appear to be universal agreement on this problem. No statistical proof is possible in these matters, but trends and broad relationships are discernible and it seems clear to us, and indeed to many others, that if world trade is to go on growing without inhibition on this account, some special measures to increase liquidity will be required.
I think a distinction should be drawn here. The actual financing of trade which is done through the commercial banks and the like by the traders themselves is one thing; liquidity, about which we are now talking, is needed by the Governments to finance the swings in their overall balance of payments which arise from the fact that in practice countries can seldom keep in balance on external account. Liquidity provides the element of flexibility and allows time for the imbalance to be corrected without recourse to harmful measures. I am quite sure we should all agree that the situation being what it is, it would be wrong for nations now to take unilateral action. These balance of payments swings are growing larger as trade expands and capital movements become less restricted and are likely to last longer, because domestic considerations, as well as the international obligations to which I have referred, make Governments far more hesitant than they used to be over taking the more violent and unneighbourly measures which often have the quickest effect on a deficit.
There are two further pointers of more immediacy. It now seems likely that the growth in world trade may slow down a little next year. Paradoxically, perhaps, at first sight, this does not, in our view, make the need for providing for a further increase in liquidity less urgent: rather the reverse. In the first place trade will still be expanding, if not so fast; and in the second place it is not the volume of trade itself which the liquidity finances, but rather the increasing swings in balances of payments; and it would be extremely unfortunate if a less favourable trade position were to be further worsened through the inhibiting effect of a lack of international liquidity upon national policies of growth and expansion. The second pointer is, of course, the considerable success the
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United States authorities are achieving in reducing their balance of payments deficit. This is already reducing the outflow of dollars from the United States which has provided a very large proportion of the supply of new liquidity to the world for many years.
The American measures have another aspect which I am sure will be of interest to the House, and I should like to spend a few moments on that, if I may. This is the effect on the United Kingdom's own balance-of-payments position. President Johnson's programme included four main measures: the extension of the interest equalisation tax; the request to banks to limit their long and short term lending abroad; the voluntary limitation upon overseas investment by American corporations; and, lastly, the appeal to American corporations operating abroad to increase their remittances home. It is still too early to make an accurate assessment of the effects of this programme upon the United Kingdom. However, the figure for inward direct investment in the United Kingdom for the first quarter of this year was substantially lower than the average quarterly rate of last year, namely £13 million, excluding oil, as compared with £45 million. This is likely to have been caused in part by the response of American corporations with United Kingdom subsidiaries to the United States Administration's request for an increase in their remittance home of profits which might otherwise have been invested here. We believe that this reduction in investment is likely to have been temporary, and preliminary evidence suggests that outward remittances from the United Kingdom may have dropped back to a more normal level in the second quarter.
Nor do we feel any great cause for alarm at the United States programme in general, the reasons for which we entirely understand and with which we sympathise. The American banks have been asked to take the present position of the United Kingdom into consideration when they play their part, and noble Lords may also have noticed from the American President's original statement that he wished to avoid "beggar thy neighbour" effects.
To return to my main theme of liquidity. Agreement was reached last year both in the "Group of Ten" industrial countries which are members of

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the International Monetary Fund's borrowing scheme, and also in the Fund, that quotas should be generally increased; and when the Executive Board came to work this out in detail 25 per cent. was found to be the figure commanding almost universal support. We ourselves would have seen advantage in a higher figure than 25 per cent. for the general increase. But others favoured less because they did not, and do not, agree with our analysis of a likely liquidity shortage, and to press for more would have aggravated the problem of finding ways to reduce the effect of the obligation to pay in gold one quarter of the subscription associated with any quota increase.
This obligation can, in fact, go some way to offset the increase in liquidity which quota increases are designed to provide, and it hits particularly hard the reserve centres—the United States and ourselves—to whom many other member countries holding dollars and sterling naturally turn in order to buy the gold they need to pay their own subscriptions. The Command Paper shows that a way was in fact devised and agreed for providing relief from the gold subscriptions impact. This, as I am sure noble Lords who have read it will agree, although very clearly presented, is an arrangement of extraordinary complexity. If my right honourable friend the Chancellor could ask for the sympathy of the House and receive it, I am quite sure that I can get it for the asking, because this is a very complex matter.
But, perhaps more to the point, in the case of the United Kingdom this can in effect be spread over five years. We are spreading over five years the burden of paying our own gold subscription of some £44 million, and this should relieve us for quite a number of years of the greater part of a further approximately equivalent burden of selling gold to other Fund members who need it for paying their own subscriptions. As is explained in the Explanatory Memorandum to the Bill, which also recounts the history of the United Kingdom quota, the three-quarters of our subscription which is payable in sterling has no immediate effect upon us at all. We played a prominent part in bringing these quota increases about and we welcome them as a very useful first step towards reinforcing the world liquidity position and as providing
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a more secure base upon which the international discussions can continue.
The international discussions continue, and will continue, and the main questions under examination now are what further provision should be made for increasing the supply of liquidity when occasion demands, and what changes should be made in the international monetary system. Another result of the deliberations of the Group of Ten last year, besides their support for the Fund quota increase, was the setting up by them of a group of experts from their ten countries under the chairmanship of Signor Ossola of the Bank of Italy. The task of this group was to study possible ways of providing more owned reserves. I use the phrase "owned reserves" as distinct from credit facilities, the other half of the liquidity spectrum which is already being somewhat reinforced by the Fund quota increase.
The Chancellor of the Exchequer is announcing to-day that the ten countries have decided that this report should be published on August 10. I understand it is a technical analysis of the various possibilities. I do not expect that we shall find in it references to all the well-known plans for solving the liquidity problem associated with the names of well-known leading economists, but I think that the group have made a thorough study of all the arrangements which were thrown up both in their discussions and in the Group of Ten's earlier discussions last year and which seemed to hold out any prospects of being negotiable. It will also confirm what we already know, that there is a wide divergence of view on these matters.
We recognise that it cannot be any longer regarded as entirely satisfactory to depend indefinitely for owned reserves on the limited and uncertain amount of new gold produced in the world and on the supply of reserve currencies which must derive from deficits in the balance of payments of the two reserve centres. We shall not, therefore, hesitate to look for more rational means of organising the world liquidity system. There is, however, no basic agreement on the nature or the consequences of the remedies. It would not help to achieve success in the continuing international discussions, for Government spokesmen to adopt rigid positions about our own views or to analyse too closely or to criticise the

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position of other countries. The Chancellor of the Exchequer is extremely conscious of this and of the abundance of plans and solutions that now lie in the field. He recognises that if some agreement can be reached on certain basic issues, technical means of implementing the agreement will be available in plenty. It is for those reasons that he has not—and he still takes this view—publicly propounded a detailed solution of his own. He has, however, been in close touch with several of his opposite numbers in other countries, particularly France and the United States, and he has endeavoured, and will continue to endeavour, to search out any possibility of common ground.
The United States has taken a recent initiative by announcing its readiness to attend a world monetary conference and to try to carry the discussions further. Mr. Fowler, the Secretary of the United States Treasury, was careful to say that
"a reasonable certainty of measurable progress through prior agreement on basic points"
ought to precede any meeting, and Her Majesty's Government thoroughly agree with him. It may be noted that insistence on some prior agreement was one of the elements in the French comment on this initiative which was widely reported, and perhaps somewhat exaggerated, as a rejection of the American proposal.
For reasons I have already explained I do not want to go too closely into the details of our own position. We do not shrink from having a basic discussion about the rôle of the reserve currencies, the possibilities of future development and to what extent, if any, the reserve currencies may need to be supplemented by other international units or drawing rights or whatever else may prove to command the greatest measure of common agreement among the nations. And this discussion is bound to involve a discussion of the future rôle of the International Monetary Fund. Her Majesty's Government believe, and I think noble Lords opposite will agree, that the International Monetary Fund has proved a very great success. It has proved flexible and pliant in meeting changing world needs. We think that the International Monetary Fund has deservedly established its central position in the world's payments system and has shown itself ready and capable of adapt
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ing its policies and practices to changing requirements. We therefore approach any discussion about the system with a strong and reasoned preference for reaching a solution which is built upon or is clearly linked with the Fund.
Quite apart from the disadvantage of setting up a second quite separate centre of influence, the international payments system is a field where the confidence of the participants is vital, and this progress towards reasoned change can be made only by agreement. The Government have, therefore, to negotiate patiently, flexibly, but with persistence, towards an agreement to build up on the best parts of the existing system. The next step is a meeting in August of the Group of Ten and thereafter the Annual Meeting of the International Monetary Fund in Washington at the end of September. It will be the aim of Her Majesty's Government to assist in these discussions in every possible way.
In conclusion, may I add my tribute—and I am sure the whole House will join me in doing so—to M. Schweitzer, the Head of the International Monetary Fund, and to all his staff who have given such tremendous help, not only to ourselves but to many of the smaller nations who have come in need. They have deserved well of our support and I hope that we shall continue to give it. I beg to move.
Moved, That the Bill be now read 2ª.
—(Lord Shepherd.)
3.50 p.m.
THE EARL OF DUNDEE: My Lords, this is a very small Bill about a very big subject. It will do a little good, but it is pitifully inadequate to meet the requirements of trade in the Free World. I think it would be wrong to blame Her Majesty's Government for the insufficiency of this measure, because I have no doubt that they have tried, and will try, to do more.
I think that most British Governments have been much more alive than others to the need for greater liquidity, and we have managed to get some improvements made in the system, some of them multilateral and some unilateral. In 1959, we had an increase of 50 per cent. in the quotas of the International Monetary Fund, and later, under Mr. Maudling, we had special unilateral arrangements

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with the United States and with Switzerland; and we also had what is called the General Agreement to Borrow among ten of the leading trading countries of the world. But we have always had to contend against a massive deadweight of inertia, indifference and incomprehension, often combined with short-sighted economic nationalism. The situation has not been improved by the attitude of some of the Central Banks of the world, who have an obstinate fear that better international liquidity will mean more inflation and more improvidence in national spending. They are often inclined to think that individual nations should behave like thrifty and industrious apprentices operating on a financial shoestring, gradually accumulating a little more of the surplus every year and carefully balancing their accounts.
When we talk about this subject collectively, we all agree at once that it would be a mathematical impossibility for all trading countries to have a surplus in their balance of payments at the same time, and that if there were a rule that all trading accounts in the world must exactly balance, and if that could be enforced, then trade would be almost stagnant. But when individual countries consider their own position from their own point of view, they still go on talking as if these impossible, or at least extremely undesirable, economic objectives were the height of economic virtue.
Until last year, the United States of America had had an adverse balance of payments for six years, averaging 3,500 million dollars each year. At the beginning of last year their accumulated adverse balance of payments was no less than 21,000 billion dollars—to the great benefit of the rest of the world, and without any visible adverse effects on the buoyant, booming prosperity of the United States. Now, in the last year, the United States have been taking steps to correct their balance of payments, and they have been congratulated by the financial authorities of the world for taking what is regarded as a most praiseworthy action. But how have they done it? By reducing their investments abroad and by reducing their imports. Is that going to help world trade? On the contrary, it is so likely to lead to a severe depression in world trade that I think that is a reason why the American Government has now agreed with the
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Chancellor of the Exchequer to have urgent discussions in the immediate future on this subject of international liquidity.
If your Lordships take our own humble little problem, our trifling little deficit of £745 million last year, and if you will look at the recent Report of the O.E.C.D., you will see that that is made up as to about half by £370 million in British investments overseas. Of the other half, I think that more than £200 million consists in the cost of defending the Free World by unrequited exports—something which is not done by any other countries, whose financial authorities are now criticising us, except the United States. The remainder of the deficit is more than made up by the cost of stockpiling and importing material for domestic investment, in order to achieve the national I economic growth target of 4 per cent., which was achieved last year, but which has now been reduced to 3½ per cent., a figure that will probably not be achieved in 1966.
Contrast that £745 million with our gross national product of more than £25,000 million and our foreign investments of over £11,000 million. Supposing there were a prosperous small tradesman who had a turnover of £25,000 a year and a portfolio of investments amounting to £11,000 outside his own business, which would probably be worth £100,000 or more, would you not consider it really ridiculous if he had thought himself bound to start cutting down his production and raising prices to his customers because he had an overdraft of £745 at the bank? That is what we are doing internationally. The reason is that there is not enough liquidity internationally to provide a sensible base for world trade.
On this Bill I am not going to discuss the merits of any of the measures, such as the import surcharge (we may discuss that to-morrow) which have been taken. But I would say that measures like an import surcharge are, in effect, the penalty which the rest of the world has to pay for not agreeing to a sensible policy of international liquidity. When we cut down credit and pursue disinflationary policies, when we stop lending money and restrict imports, all other countries with whom we trade tell us that we are un-neighbourly. They say "We cannot prosper unless you take our

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imports, and we must have your capital in order to develop. You are doing a most un-neighbourly thing." But when we do invest our money in their country, and when we do take their imports, all their financial authorities say You are most improvident. We have no longer any confidence in sterling."
We understand that the noble Lord, Lord Shepherd, cannot tell us much about any international discussions which we hope are soon to take place on this subject, in August and September. But how much more liquidity do we want? The noble Lord implied what I was going to say, that we must go to these discussions ready to agree to any solution which we find to be practicable, even though it may not necessarily be ideal. I do not know whether or not it will be a waste of time to talk about the world price of gold, because I do not know for how long the American Government consider themselves bound by the pledge—I think the most misguided pledge—which they gave a few years ago, that the price of gold would not be raised. Ideally, it would probably be much more sensible that we should arrange our world monetary affairs without having to dig a whole lot of metal out of the earth and put it into the vaults of a whole lot of banks. But so long as human beings insist on using this particular metallic substance as a credit base, it cannot perform its function properly if it is artificially undervalued to the extent of about one-half, as it is now.
In order to do its job properly the price of gold ought to be doubled, and, with great respect to our American friends and others, I must say that the reasons given against doing that appear to me to be intellectually contemptible. One reason was that it would help South Africa and Russia, which are both wicked countries. Is it not rather absurd to hamstring the whole of international trade in order to avoid paying a little more for the exports of two countries of whose internal policies we disapprove? The other reason was that, in the opinion of some people, this would involve a devaluation of the dollar. Of course it would do nothing of the kind. To raise the price of gold to its true natural level would mean an alteration, not in relation to the dollar, but in relation to money all
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over the world. It is no more devaluation than a rise in the price in rubber or wheat could be.
What has happened is that all currencies have already been devalued 50 per cent. in relation to gold, but this is not officially recognised. The fact that it is not recognised is a great hindrance to the use of gold in fulfilling its functions as an international credit base. Whether we can do anything or not about gold, we must get more credit liquidity as well, as the noble Lord, Lord Shepherd, said, preferably through the International Monetary Fund. It should be done either by creating some entirely new unit of international currency or perhaps by increasing the quotas of members of the International Monetary Fund—not one every five or six years, but regularly every year in order to build up a vastly greater quantity of reserves.
It has been calculated that in 1938 the total amount of liquid reserves in the world was just about 100 per cent. of the total amount of world imports. In 1963 the proportion of all the liquid reserves in the world, both individually and collectively held, was only 45 per cent. of the total amount of world imports. If you were going to redress the balance you would need to increase liquid monetary reserves in the world by no less than 77,000 million dollars. In this Bill they are increased by just over 4,000 million dollars, from about 16,000 million in the International Monetary Fund to just over 20,000 million. That is the measure of the insufficiency of what we are doing now.
If we want to encourage economic growth, if we want to avoid a trade depression in the world, we must do vastly more than what is contained in this Bill. I hope the Government will appreciate that. And let me say to them that they have every possible motive for putting their view very strongly indeed at these international conferences. Do not let them be humble about it, because the consequences of not getting more liquidity will be very serious, not only to this country but to the Government in power. I am always inclined to take an optimistic view, but if nothing is done to increase the present amount of liquidity, I think that there is likely to be a world slump next year and the following year which might be equal to that of 1931. In the

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Election of 1931 the strength of the Labour Party in the House of Commons was reduced to 50 seats. That means a loss of 260 seats in the House of Commons. But if we can prevent the slump from taking place, I think they may easily get away with a loss of only 100 seats—which would mean that everybody, both here and in other countries, would be very much happier all round.

OVERSEAS DEVELOPMENT
4.5 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD WALSTON): My Lords, think it may be be convenient if, with your Lordships' permission, I now repeat a Statement which has been made in another place by my right honourable friend the Minister of Overseas Development on the White Paper on Overseas Development entitled the The Work of the New Ministry. My right honourable friend said in another place on July 20 that she intended to lay before it a White Paper on the work of the Department. This has been placed in the Printed Paper Office to-day.
Her Statement says:
"This is not a moment at which it would be right to announce plans for a significant increase in the aid programme. At a time when we are taking steps to restrain public expenditure and when we must have particular regard to our balance of payments there are limits to the amount of aid we can provide. This makes it all the more important to ensure that our aid is well managed and provided in the most effective forms. The White Paper is designed to inform the House how I intend to achieve this. Our purpose is to help the poorer countries to tackle the problems of development and indebtedness. These problems have if anything, become more acute in recent years. The commitment to give aid for overseas development is therefore a long-term one.
"The White Paper starts with a discussion of the motive and objectives of our aid policy, followed by an analysis of the economic progress of the developing nations. This makes no attempt to minimise the grave tasks
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facing these countries, to which I have referred, nor does it underestimate what has been achieved in recent years through their own efforts in co-operation with the industrial countries and international agencies. I trust that this analysis will lead us to the conclusion that we must not shrink from accepting our share of responsibility.
" In Chapter VII of the White Paper I have indicated the main guide lines which we propose to adopt in our future aid policies. In Chapter VIII our new policy on interest-free loans is explained. In Chapter XI to XIII I have dealt in some detail with technical assistance, to which I attach special importance. Since the formation of the Ministry we have systematically reviewed our operations in technical assistance, and as a result I have some important new initiatives to announce. These relate in particular to the recruitment of British men and women for key positions overseas and to high-level training in this country of specialists in development and administration. I will not lengthen this Statement by going into detail.
"I conclude as I began, by pointing out that we are publishing this White Paper at a time when we ourselves are experiencing serious financial difficulties and are taking important measures to correct them. I am sure that the House will agree that, however much these difficulties must limit what we can do at the moment, our preoccupation with them should not allow us to forget our responsibilities in overseas aid, which forms an increasingly important element in international relations to-day."
LORD CARRINGTON: My Lords, I suppose I am grateful to the noble Lord for that Statement. I realise that the noble Lord is not responsible, but I must tell him and noble Lords opposite that never in my experience have I heard a Statement that took so long to say so little. I should have thought that it would be perfectly possible merely to have got up and said, "There is a White Paper in the Printed Paper Office ". I have no idea whether what is in the White Paper is good or bad, but I suspect that it is nothing, otherwise we should have been told so this afternoon.
LORD BYERS: My Lords, is the noble Lord aware that there are three clichés and four bromides missing?
THE EARL OF DUNDEE: My Lords, could the noble Lord tell us whether any of these interest-free loans have been approved and whether he thinks any are likely to be approved in the next twelve months? Can he say what the estimated amount of our aid is to be next year?
LORD WALSTON: My Lords, there are many things I should like to answer, particularly the comments made by the noble Lord, Lord Carrington, whose experience must be very much less than mine—though I did not think so—if he has never before heard so little said in such a lengthy way. I could point out examples which I think he would agree disprove that statement. With regard to the noble Earl's question, I cannot tell him offhand whether any interest-free loans have as yet been approved. I rather think they have, but there certainly will be a good many in the relatively near future that will be approved. As for the estimated expenditure during the coming financial year, I am afraid I cannot give the noble Earl that answer. That has not yet been decided upon. It comes into the whole ambit of the national expenditure plan.
THE EARL OF DUNDEE: My Lords, will it be much less than the previous figure of £160 million?
LORD WALSTON: My Lords, speaking from memory, the figure is not £160 million but £189 million—
THE EARL OF DUNDEE: Yes, my Lords, but we did not spend it all.
LORD WALSTON: —which has been approved for 1964–65. I should hope, and I say this quite advisedly, that it would not be less than that, because, important though national expansion is—we all agree with that—we must not forget that aid to overseas countries is of international importance. It is not purely an eleemosynary activity which is designed solely to help other countries; it is of assistance to ourselves and to the world in general. I hope that our financial situation is not so stringent, and I believe it is not so stringent, that we shall have actually to reduce the amount given.

THE QUEEN'S AWARD TO INDUSTRY
4.12 p.m.
THE EARL OF LONGFORD: My Lords, with permission I should like to repeat a Statement which my right honourable friend the Prime Minister has just made in another place about The Queen's Awards to Industry. The Prime Minister's words were as follows:—
"The House will recall that on the 4th February I announced the setting up of a Committee, under the Chairmanship of His Royal Highness The Prince Philip, Duke of Edinburgh, to work out a scheme for making Awards by Her Majesty The Queen to industrial units for outstanding achievement in increasing exports or in technological innovation.
The Committee's report will be published and copies available in the Vote Office this afternoon.
The Committee's recommendations are accepted by the Government in full. I would like on behalf of the Government, and I am sure of the whole House, to thank His Royal Highness and the members of his Committee for undertaking this task and for their admirable report.
The Award is to be known as 'The Queen's Award to Industry ', and Her Majesty has graciously consented to the Awards' being announced each year on Her birthday. The first Awards will therefore be announced on the 21st April, 1966. The Committee recommend that there should be a single Award to mark industrial efficiency within the fields of export and technological achievement. The criteria for the Award are listed in the report. Any branch of industry, including agriculture and horticulture, will be entitled to apply.
The Award is to be represented by an emblem which holders will be entitled to display in a wide variety of ways.
I shall be responsible for advising Her Majesty on Awards. In this, as the report recommends, I shall be assisted by a small Committee composed of members from both within and outside the Government service which will draw upon advice from outside its membership as necessary.
The purpose of this new scheme is twofold: to reward and to stimulate. I hope that the Award will encourage industry in its efforts to achieve the improvements in exports and the technological advance on which our national future so much depends."
My Lords, that concludes the Statement of the Prime Minister.
LORD ERROLL OF HALE: My Lords, may I thank the noble Earl for so kindly reading out the Statement which has just been made in another place. I am sure that noble Lords in all parts of the House will wish to join with me in expressing our pleasure that Her Majesty has so graciously consented to the Awards' being announced each year on Her birthday. We should like to echo what the noble Earl has said about what His Royal Highness, the Duke of Edinburgh, has done by being Chairman of this Committee, contributing from his own expert information and knowledge about industry and technological advance to the successful outcome of the work of this Committee.
I have only had a short while in which to look at the report, but that enables me to ask three questions which I hope the noble Earl will be able to answer. First of all, what is an "industrial unit" in this context? Is it to be the main company or an operating subsidiary, and are industrial units in this country which are owned by foreign companies eligible to apply? Secondly, who does the applying? Late in the Statement we were told:
"Any branch of industry, including agriculture and horticulture, will be entitled to apply."
Does this mean that only trade associations and collective bodies are to apply, or does it mean the individual units in a particular industry? Thirdly, and finally, it was said in the Statement:
"The award is to be represented by an emblem which holders will be entitled to display …"
Will this emblem be displayed in perpetuity or will it be for a limited term of years? Also, what happens when the holder of an emblem merges with another firm which is not the holder of an emblem, or is taken over by a firm not itself the holder of one of these coveted emblems?
THE EARL OF LONGFORD: My Lords, in the short space of time available to him, the noble Lord seems to have been able to ask a number of questions which I may or may not be able to answer in the short space of time available to me. So I will do the best I can. A "unit" means any body or group from an individual upwards. In other words, an individual, a one-man business, can count as a unit if it breaks into the export market or, no doubt, shows technological advance. Then the noble Lord asked whether a trade association or the individual unit would have to apply. I understand that it is the individual unit. Finally, the noble Lord asked how long one would be allowed to display the emblem, and my understanding there is that it will be for a period of years. As to what happens if the unit is taken over in the meanwhile, I am afraid that the noble Lord will have to put down a Question and then I will give him the Answer.
LORD BYERS: My Lords, may I, on behalf of my colleagues, welcome the Statement which has been made by the Government? May I ask the noble Earl whether, in view of the urgency of improving our efficiency and our exports, consideration has been given to making these Awards twice a year instead of annually?
THE EARL OF LONGFORD: My Lords, I cannot say whether that matter has been considered. I think that the decision to make the Awards on Her Majesty's birthday must be regarded as definite, and it would surprise me if the Committee had not considered the question of making them more often. But since the noble Lord has raised the matter, it can, of course, be brought to their attention.

INTERNATIONAL MONETARY FUND BILL
4.18 p.m.
Debate on Second Reading resumed.
LORD GLADWYN: My Lords, nobody can doubt the limited utility of this Bill, and I am quite sure that there will be no objection to it in this House any more than there was when it was discussed the other day in another place. As I understand it, the total amount of

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the proposed 25 per cent. increase in our quota in the International Monetary Fund is approximately £175 million, of which £44 million will be payable in gold, the remainder being really a bookkeeping transaction, and the effect of the gold payment being mitigated or cushioned by ingenious arrangements which seem to have the effect of spreading it over a period of years.
In return for this increase in our quota, our drawing rights are apparently—though I am not quite certain about this—increased by no less than £218 million. If that is so, of course, the net effect of the whole transaction is advantageous to us, more especially in the difficult period which we are now going through. But more than that, as has been said already this afternoon, it is a definite if limited increase in that so-called liquidity which everybody recognises as essential if a world depression, with all its catastrophic economic and political effects, is to be avoided.
This arrangement does not, however, in any way solve the looming problem which, as I have recently said, circles around our economic horizon like a great thunderstorm, and the solution of which is obviously getting increasingly necessary. Here there are, as I see it, two distinct problems, though of course they are to some extent related. They are the provision of adequate funds to finance international trade, in the first place; and the defence of the pound sterling, in the second. On the second point I need not dwell at length, beyond saying that if anybody thinks that we can defend the present value of the pound when our real reserves are practically at zero; when our hidden reserves, mainly in public and private investments (even if they could all be realised) are largely balanced by the huge sterling balances which are at the disposal of non-nationals of this country; when we have already borrowed, I believe, something like £800 million; and when our balance of payments is still in substantial deficit; without an enormous national effort—and an unpleasant one, too—and probably a very considerable reduction in expenditure on armaments, then I can only suggest he should have his head examined. Our only real card, my Lords—and I think it is a really good one—is that, since the last thing anyone wants is for us to go "bust", we can
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count on an immense amount of good will, and thus buy time more cheaply, during which we can endeavour to put our own house in order.
On the first point, which is the one that concerns us now, of course, I am a little puzzled to know why the Motion on this very subject, which has been set down by the noble Lord, Lord Boothby, on the Order Paper for so many months, has not yet been taken. It seems to me that, in addition to the noble Lord, there are many of your Lordships who could contribute profitably to this debate. Indeed, I think that the whole subject ought, if possible, to be disentangled from the undergrowth of technical argument which has surrounded it for so long, and brought out into the light of day, as it were, so that the ordinary citizen may appreciate the grave political issues which underlie it and are responsible for the fact that international agreement on how to settle it has not yet been reached.
It is true that, if it were only a question of avoiding the final absurdity, the reductio ad absurdum—that is to say, arrival at a point at which international trade ceases except for barter deals, everybody wanting to have a surplus on trading account and no one being able to obtain credit with which to finance a deficit—any of the solutions and plans so far produced would do. For anything would presumably be better than a collapse of the whole capitalistic system. This, no doubt, is what was implied when, in a recent dialogue organised by the Federal Trust, the celebrated Professor Triffin (who is, of course, an American of Belgian origin) and the equally celebrated M. Jacques Rueff, of France, agreed that, rather than have nothing, they would prefer, each of them, to have the system recommended by the other.
The real point, as I see it, is that some of the systems now suggested would undoubtedly favour one or more of the industrialised nations of the West more than others, and some would be less likely than others to benefit the unfortunate developing nations, as they are called, too. So that, as I see it, is what the present crisis is now really about; and, to be quite specific, it is largely a struggle between those who, up to now, have provided the so-called reserve currencies of the world—namely, the

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dollar and the pound—and those who perforce agreed to the continuance of the 1946 Bretton Woods system when they had hardly any gold and were practically "broke", but now have much more gold even than America, and in addition represent a community which accounts for a considerably greater proportion of world trade than any other Power or group of Powers. I refer, of course, to the European Economic Community, the present members of which held in 1948 only 4·5 per cent. of the Free World gold reserves but now hold 35·5 per cent. the share of the United States of America having dropped during the same period from no less than 70 per cent. to 22 per cent. My Lords, these are remarkable and highly significant figures.
The lead here, naturally, is being taken by the French, since, apart from anything else, the last thing the Germans want to do is to irritate the Americans; but the struggle would have been bound to develop, de Gaulle or no de Gaulle. Put in another way, there really is no inherent reason why the European countries should carry on indefinitely with the so-called gold exchange standard, thus soaking up dollars which represent the deficit on the balance of payments of America—in other words, that they should indefinitely finance this deficit—even though such a process might be well designed in itself to provide an answer, and perhaps an adequate answer, to the present liquidity crisis. This is not just wickedness on their part, my Lords; it is not just nationalism rampant, and all that, as has sometimes been suggested; I think it is an almost inevitable reaction. Because, if they simply did nothing they would certaintly over the years become part of an American economic conglomeration, or whatever you like to call it, in much the same way as California now comes under the jurisdiction of the Federal Reserve Bank of the United States and Scotland comes under the jurisdiction of the Bank of England.
If you look at the problem quite objectively you might well come to the conclusion that this would indeed be the best plan. It would certainly be the best way to form the well-known Atlantic Community, which we say we all want and which I think we all really do want. But, unfortunately, this is where you
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inevitably come up against the famous spirit of nationalism—namely, the desire of at any rate the larger European nations to preserve their individuality, or their identity, or their personality, whatever you choose to call it; or, if they cannot do that, at any rate to preserve some kind of European personality. And this is entirely comprehensible, though it is probably true that, things being as they are, none of the European States can really "go it alone", and that, if it came to a real show-down, they could hardly stand out all by themselves, save perhaps only France, which is self-supporting, but even then only as a result of a terrible drop in the general standard of living. It may therefore be that, if the Americans really get fed up and reduce all their commitments—God forbid!—and the dollar becomes a scarce currency once again, the Americans can, if they want to, force the issue, so to speak; but this, I think, would be only as the result of great distress all round and possibly the emergence in Europe of heaven knows what, but certainly quite sinister, political forces.
So, very broadly speaking, I should say that there are two main schools of thought. There are those who, like M. Rueff, are in favour of letting nature take her course and simply doubling—I dare say even he would not mind actually trebling—the price of gold and thus at one blow enormously increasing the credit available for financing overdrafts and also, as the noble Earl, Lord Dundee, pointed out enormously increasing the value of the huge gold reserves of France, to say nothing of course of Russia and South Africa, though I do not think that this need weigh with us unduly. Nor would it necessitate the formation of any new international body to determine credit policy collectively. Thus it would be entirely in accordance with the nationalistic principles and, in so far as the European Economic Community may now be said to exist, it would not appear to do anything save reinforce the general bargaining power of that huge trading block, either. The difficulty of course is that the Americans are violently opposed to the idea, though it is true that it was effectively their solution about 33 years ago, and it does not find favour in the City of London. Incidentally, it is only in the last few days it has definitely been

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ruled out by Her Majesty's Government. Even what seems to be the French official plan for a "Composite Reserve Unit" which would, as it were, supplement the reserve currencies and give Europe a much greater say in management—even that has very great political connotations.
On the other hand, most of the other plans seem to postulate a sort of World Authority where decisions would be taken by a majority vote, and, no doubt, a majority vote in which we should no longer, with the Americans, find ourselves in a majority. This at the moment at any rate is not a conception likely to be acceptable either in Europe or in America. So, on balance, I think the general idea of a "Composite Reserve Unit", which would somehow provide for increased credit for the sorely tried developing countries, might, in principle be the best line of approach. But if we are to back up the French on this—and here I revert to my King Charles's head—it ought to be on condition that they make it easier, or at least less difficult, for us to join the Common Market. If we ever do so, there is no doubt that our troubles in this respect will be largely ended; for a combination of sterling—the whole sterling area, to say nothing of the unparalleled and unique financial facilities of the London Market—with the great Continental currencies would indeed represent a financial power equal to the dollar; and the way would then be open for the construction of an Atlantic Community on two pillars, which also commends itself, as I have often suggested, on grounds of politics and defence.
So, my Lords, I repeat that when we consider this grave and overshadowing problem it must be with our eyes wide open to the political consequences of any attitude that we may take up. It may well be that the Government are quite aware of that; but it is certainly true, to say the least, that they do not give that impression. In introducing the present Bill in another place the Chancellor of the Exchequer—and I believe I am in order in quoting him—said that he did not feel that he wished:
"to join the band of protagonists who are taking up fixed lines in a field where there are so many issues".
That is not exactly an elegant phrase, but I think your Lordships can see what he meant.
LORD SHEPHERD: My Lords, if the noble Lord reads my speech he will see that that is also what I said.
LORD GLADWYN: My Lords, I am afraid I do not think that the phrase gained in elegance by being repeated I here. The Chancellor of the Exchequer said earlier—and this was also made clear by the noble Lord, Lord Shepherd—that he would not "shrink" from having a discussion on
"the role of the reserved currencies and the extent (if any) they need to be supplemented by any other acceptable international unit or drawing right."
But that is as far as he got. Caution, which may indeed be dictated by our present financial plight, could hardly go further than that. If we really knew what we wanted, perhaps we might do better. But that is the moral of all my speeches.
4.34 p.m.
LORD BOOTHBY: My Lords, I am grateful to the noble Lord, Lord Gladwyn, for the kind remarks he made about my Motion, which has been standing on the Order Paper for many months, and which nobody has touched with the end of a barge pole. I think I know the reason why; but I shall not give it. I should have liked to move the Motion weeks ago; but better late than never! I was slightly encouraged by the speech of the noble Lord, Lord Shepherd, who made it totally clear, by implication, that he, as well as all your Lordships, regards this Bill as totally inadequate to meet the requirements of the present international monetary situation. We all know it to be so. The Bill is a fractional step in the right direction; but it will have no real or vital effect upon the dangerous situation which is coming upon us. This is a problem of immense difficulty and complexity. We know of its existence; we have known of it since the war. No one has found the answer. The few who, from time to time, have thought they had, have disagreed violently with each other.
No-one knows this better than the Prime Minister, himself. In what I regard as the greatest speech he has ever made, to the Economic Club of New York, he said:
"If the volume, however defined, of monetary liquidity does not keep pace with the increase in trade, we do face the problem I

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have mentioned, of the world industrial machine seizing up through a shortage of lubrication. Secondly, I think it is a fact that in international monetary relationships we are in the same relatively primitive stage that national financial systems were in before the great revolution in the use of credit.
"It is not merely that we lack the means of matching the volume of liquidity to the requirements of world trade, without the continuous export of crisis and deflation from one currency area to another: we urgently need to find the means of supplementing world liquidity arrangements with purchasing power to facilitate the financing of approved development plans, without plunging either importing or supplying countries into balance of payments difficulties.
"This problem is urgent. There is too much at stake for it to be decided by reference to national pride or attachment to any particular plan. Even more so is it true to say there is too much at stake for the problem of world liquidity to become a part of the small change of any undeclared conflict for leadership and power within the western alliance. It is not only monetary institutions that are involved, nor yet our freedom to develop wider and warmer exchanges of goods between nations. What is at stake is the prosperity of ordinary men, women, and children all over the world."
He went on to say:
"It will be our responses to the challenge of economic interdependence which will decide whether generations still unborn will pour upon us their blessings or their curses."
That was a remarkable statement to make especially to a New York financial audience.
But my noble friend Lord Baillieu, whose knowledge of international trade is almost unsurpassed, took very much the same view a week or two later, in an almost equally remarkable letter to The Times. He said:
"To-day there is in the making a developing crisis of liquidity, with its manifold repercussions on trade, on employment and human welfare, which bodes ill for the future, and there is the need for some corrective action to meet present balance of payments difficulties It would be far better, however, if measures other than those which threaten permanent prejudice to the future climate of investment opinion could be used.
"The great need is the preservation, and indeed the extension, of the flow of trade and investment between nations, with an international monetary system devised and managed to facilitate this to the full. Only if policies of powerful and highly influential governments are directed to this end will sound economic conditions be developed and proper standards of living established and preserved.
"We have yet to learn in this age"—
and this is the most important passage—
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"that the time span of change—be it in politics or in social or economic affairs—is continually shortening.
"Capital is proverbially a 'shy bird' and the time, in which we are free to take healing action, may not be so long as some choose to think."
I think that is profoundly true. But it does not stop even there. Last, but by no means least, we have the recent observation of Mr. Dillon, in the United States, that the greatest challenge ahead is to work out changes in the international monetary system; and the warning of Mr. McChesney Martin, the Chairman of the U.S. Federal Reserve Board, that he saw "disquieting similarities" between current economic developments and the situation which culminated in the greatest economic crash known to history between 1929 and 1931. And those who have any knowledge of Mr. Martin will know that he is not a man who speaks out of turn, or without good reason.
My Lords, it seems to me that the danger is that the expansion of world trade will soon be threatened—in fact, is already threatened—by a serious shortage of international money, the volume of which will rise at a much slower rate than the needs of world production and trade demand. The problem is to find enough international money to deal with this situation and at the same time to impose, at international level, some discipline on the domestic policies of the countries which are members of the International Monetary Fund. The difficulty is the impingement upon national sovereignty; now alas! more rampant than ever before, because nations are even more reluctant to give up sovereignty in the economic field than in the field of defence.
World trade has expanded four times, in terms of money, since the war. The credit base has only doubled. There are, at this moment 25,000 million dollar American short-term engagements—I am talking in terms of dollars—and 12,000 million in sterling balances, against only 14,000 million in gold held by the United States and 2,500 million in Britain. We ourselves at this moment are attempting, and have been ever since the war, to act as one of the two principal bankers of the world, with liquid assets which can only be described as derisory. If this goes

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on indefinitely, it can, in my judgment, lead only to another almighty crash.
It all stems, of course, from the Bretton Woods Agreement. I have already spoken to your Lordships on this subject, and I will not bore you with it again; but I am on the record. I moved the rejection of the Bretton Woods Agreement in the House of Commons, and got nearly 100 Members to support me, on seven grounds. First, it put the onus of restoring a balance of payments not upon the creditor but upon the debtor nations. Second, it failed to provide adequate liquid reserves for the Free World. Third, it fixed exchange rates, within far too narrow limits, in a world that was still in chaos. Fourth, it committed us to convertibility long before we could possibly hope to carry out that commitment. Fifth, it fixed the price of gold at a ludicrously low level—and here I think that I carry a number of noble Lords with me. Sixth, it was inflexible; and seventh, and finally, that uncoordinated monetary policies, nondiscriminatory multilateral trade and fixed exchange rates cannot, in fact, be made to mix.
My Lords, this led, alas! to hitter argument, in public and in private, between myself and the greatest economist we have produced since Robert Malthus—the late Lord Keynes. He said that we had to have the American Loan on the best terms we could get; and that was it. He said—and Heaven knows it was true!—that he had tried his hardest to get adequate international monetary reserves behind the I.M.F., and he added (this was in private) that he himself was not happy about fixing the price of gold at that particular moment of time. In the end, he was defeated, and I would say brutally defeated, by Mr. Harry Dexter White. I believe, and shall continue to believe to the end of my life, that it broke his heart.
The question is, what is to be done now? I have never deviated in my own views, which are that the I.M.F. should be expanded and given the power to create international credit. I said to your Lordships in March, 1961, that it should be developed into an International Central Bank for the national Central Banks, equipped, like them, with powers of credit creation and contraction. I still believe this to be the right solution. But there is, at present, a fatal snag, which was pointed
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out by the noble Lord, Lord Gladwyn: that no one can yet agree about the method of doing it. Worse still, the degree of confidence for the international co-operation and pooling of national sovereignty in the economic field which would undoubtedly be necessary does not exist at the present time. The breach between Paris and Washington, as the noble Lord, Lord Gladwyn, well knows, is at the moment total. The New York Times recently remarked:
"International monetary co-operation of any kind seems to thrive only under the gun of a crisis."
That brings me to my last point, gold, which has been raised by the noble Earl Lord Dundee, and also by the noble Lord Lord Gladwyn. Sir Winston Churchill has been unjustly accused of taking us back to the gold standard, with all the dire consequences that followed, in 1925. That policy was already decided by the then Governor of the Bank of England, Mr. Montagu Norman, with Baldwin, and with Snowden, before he took office as Chancellor of the Exchequer. I subsequently became Sir Winston Churchill's Parliamentary Private Secretary, and I know that he never liked it; in fact, instinctively he recoiled from it. He once said to me, characteristically, after a conference in the Treasury, "I wish they were Admirals or Generals, I can speak their own language, and I can sink them if necessary. But after a while, when I am talking to bankers and economists, they begin to talk Persian; and then they sink me instead; and I think this a great misfortune for this country." He was right.
I have in my hand a letter from Sir Winston Churchill, written in February, 1932, from Chicago; and because I think that justice should be done to Sir Winston in this matter. I will quote from it:
"I have gone the whole hog against gold. To hell with it! It has been used as a vile trap to destroy us."
My Lords, because we went back on the wrong parity of exchange, at the wrong time, to a rigid gold standard, and without any continuous or effective international co-operation between central banks, that was quite true. Gold was used as a vile trap to destroy us; and we did have, for fifteen bitter years, unemployment figures which ranged between 1½ million and 3 million people, without a break or let-off.

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It can be argued that gold itself is a myth. We dig it out of the ground, as the noble Lord, Lord Gladwyn, said, at enormous cost, and transport it all over the world; and we then re-bury it in the vaults of banks all over the world. No-one ever sees a gold block; and if anyone did, he would not recognise it as such. I saw one the other day, and it did not look in the least like gold. Nevertheless, it is the most formidable myth the world has ever known. It has lasted for a couple of thousand years; and in my judgment it will continue for many years to come, and for one simple reason: it is the only medium of international exchange which, in the final analysis, is trusted by all, by everybody. That is the answer to the gold question, and I think we have to tackle it.
I agree with the noble Earl, Lord Dundee, that the attitude of France, as was also said by the noble Lord, Lord Gladwyn, is of crucial importance. I do not believe that it is as adamant as many people have tried to make out. There was an extremely interesting interview the other day between Professor Triffin—who has been referred to—and Mr. Rau. I will quote one question and answer, because I think they are of great importance. The question was:
"You, Professor Triffin, I believe interpreted President de Gaulle's speech in February rather differently from most people—that the President does not endorse a return to the gold standard?"
The Professor replied:
"Absolutely, yet I have no doubt about my interpretation. In fact it was confirmed by M. Giscard d'Estaing when he spoke at the Sorbonne, and then only two weeks ago I appeared with him and M. Rueff on a French television programme: he confirmed what I had said—that de Gaulle had never endorsed a return to the pure gold standard such as Rueff suggests. De Gaulle left room in his speech for an international credit superstructure which however would no longer be based on the dollar alone …"
Those are the operative words, because, as the noble Lord, Lord Gladwyn, knows better than anyone else, it is total dependence on the dollar that President de Gaulle is determined to avoid; and I think that there is some justification for it. Professor Triffin continued:
"One of the possibilities would be the famous French proposal for a collective reserve unit."
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My Lords, in order to avoid a world recession, we need a breathing space of at least three years in which to devise an international monetary system that will meet the requirements of the modern world. There is only one way to do it—and here I agree entirely with my noble friend Lord Dundee: that is, to raise the price of gold. If we were to combine with the Common Market countries to declare a doubling of the price of gold, all the Americans would be able to do would be, first, to fall in line, and then to talk. This is the compromise solution to which I myself have been driven. Although I make no claim to be an economist (the nearest I got to it was when I had the honour of sponsoring the most distinguished economist in this country, my noble friend Lord Kahn, the other day), I have given more thought to this problem since the war than to any other.
The noble Earl, Lord Dundee, mentioned the possible benefits to the economies of South Africa and the Soviet Union of a rise in the price of gold. What is that by comparison with the miseries that could be caused by a genuine world recession? It is an argument that should not be considered, in my judgment, for a single moment.
Meanwhile, on the home front, it seems to me that Her Majesty's Government could do much to restore confidence in this country abroad by reimposing import controls, which are legal, instead of an import charge, which is illegal; by reducing current expenditure—not expenditure in 1966 and in 1967, but current expenditure, and not least expenditure on armaments—which in our present position we cannot afford; and by encouraging investment in productive industry, not only in companies which operate exclusively in this country, but also in those which are earning abroad money that we most desperately need. I have said over and over again that any attempt to solve the balance-of-payments problem by repressing industrial investment, and with it the modernisation of industry, is a policy of madness. Increased productivity is essential for our survival.
It is all very well for the Prime Minister to chide Mr. Heath, as he did yesterday, for very properly giving instructions that the question of the control of imports should be studied. He was perfectly

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right to do so. The Prime Minister did chide him, and Mr. Heath admitted that he did it. That was right. What the Prime Minister should have done when he came into office was to say to the people studying this problem: "You had better buck up!" He should have sent them a minute headed "Action this day", in red ink. And the controls should now be in operation. As your Lordships know, we are now importing, recklessly and wholesale, all kinds of unnecessary luxury goods for which there is no justification; and which we cannot really afford. If your Lordships go around the West End of London—and not only of London but of provincial cities—you will see the number of luxury goods, foodstuffs and other goods, which are now being brought into this country and which, for the time being, ought to be kept out.
I have kept your Lordships too long, and I know it. I have done so because I am worried. All the evidence points, in my view, to the imminence of a classical credit collapse and liquidity crisis. No matter what the so-called experts say, money, or the lack of it, is now doing the real talking. Falling commodity prices and markets. Japan in trouble. Australia in trouble. India, worst of all. Even Western Europe showing every sign of impending recession. Both Britain and America, as the noble Earl, Lord Dundee, said, trying to get control of their payments deficits by depriving the rest of the world of credits upon which its prosperity ultimately depends. The warning lights are flashing all over the world.
It seems to me that Her Majesty's Government either cannot or will not see this. I have seen it happen before, and in Parliament. I have seen a Labour Government brought crashing to ruin, because Snowden did not know how to deal with the crisis and because they continued that relentless and ruthless deflation under his guidance. I have seen Hitler brought to power because Schacht did know how to deal with the crisis. I have seen the entire British economy saved from utter wreckage by an enforced devaluation which a so-called "National Government" was formed to prevent. Thank God, they did not do it! They were kicked off in the nick of time. Well
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we all know that they were no good; but at least they did not manage to smash the economy for good, as was their original intention.
If I am asked to choose between continuous deflation and reflation, I have no doubt what the answer is. I rate the welfare of the workers of the world well above the convenience of international bankers, who, as the noble Lord, Lord Blackford, has already told us this afternoon, are doing quite nicely. We still have the chance to give a lead.
I want to say something rather carefully, and not perhaps altogether wisely; but sometimes I find myself a little disturbed about what seems to me to be the abject subservience of this Government to the Government of the United States. I do not think that that is the best way to deal with the situation; nor do I think that it is the best way to deal with President Lyndon Johnson, who is a tough boy, but one of the shrewdest politicians in the world, who knows probably better than anyone else what can and what cannot be done in politics. I do not think that the Government should absolutely and completely acquiesce, without question, in every decision by the United States Government, and in every field. They should go there and argue. The President is a good man to argue with, and a tough one, and he might beat them in an argument. But I do not think that we should grovel, to the extent we are now doing, to the United States of America. We have a real chance to give a lead; and, if we do not take that chance, it may well be that the generation still unborn will, as the Prime Minister suggested in New York, pour upon us their curses.
4.58 p.m.
LORD GRANTCHESTER: My Lords, we have commenced a debate on an admittedly complicated subject, much wider than anything contained in the Bill before us. Something has been done to unravel some of the complexities of the subject, and this is all to the good. I think, as did the noble Lord who has just sat down, that the discussions could usefully be continued, for those who have spoken agree on some points with each other and disagree on others.
I have listened to university professors when lecturing express surprise that politicians meddle with the problem of an

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international monetary mechanism which, because of its technical character, they consider should be left to experts to fashion. However, experts agree no more than do politicians on this subject. But in these days Government do rely increasingly upon experts in many technical fields. During the 19th century and up to 1914 Governments were content to exercise supervision and to require honest dealing by those who were authorised to issue currency, rather than to be directly involved. But under the strain of widespread wars standards were abandoned and Governments resorted to what was euphemistically called "flexibility" in monetary management.
So a new weapon was added to the armoury of Governments for use in the struggle for power and pretence. And a sorry story it makes and one of which the European States cannot be proud. Some have cheated more than others. The worst offenders, the Germans in the two decades immediately following the two wars, provoked such a reaction that to-day the German people are perhaps more on guard than any other people against this social cancer, as The Times recently stigmatised inflation, because they suffered the worst from monetary manipulation. To-day we have a situation in which more and more there is, as one Liberal speaker expressed it last week, a smell of economic disaster in the air. As inflation progresses in this country from a steady 3½ per cent. per annum to what looks like being double that this year, the gravity of the situation should be apparent to all.
After two years' study by an international governmental committee, on which most of the so-called progressive nations were represented, we have this Bill which, as more than one speaker has emphasised, does not touch fundamentals. Nor has it any immediate relevance even to the limited problem of liquidity, for the committee's recommendation to increase the resources of the Fund was as a precaution against a situation which might arise at some future date. It would not be right to regard this Bill as making any contribution of substance to the dangerous position in which we find ourselves in this country at the moment.
I am afraid that in the minds of many "liquidity" is often confused with
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"capital". The explanation of the noble Lord, Lord Shepherd, was most lucid, if I may say so with respect, but if one reads the debate in another place I think one finds there were a number of Members who thought they were talking about capital for development rather than liquidity. As noble Lords well know, liquidity is only important in relation to a country's surplus or deficit on its external account of trading and investment. Furthermore, the I.M.F. can really be of assistance only where imbalances are temporary and not due to continuing and heavy capital movements. This is clearly set out in the I.M.F. rules.
With these explanations and reservations, perhaps I may briefly summarise the position as it appears to me. First, the present system, the so-called gold exchange standard, is now generally regarded as unsatisfactory. It could, in any case, only continue, as the noble Lord. Lord Boothby, said, so long as some countries in surplus were willing to finance countries in deficit, accepting the national currency of the deficit country as security for so doing. Of course, if this went on sufficiently long there would be such an accumulation of, say, dollars, for example, if the U.S. was the deficit country, that they would not hold their value. On what would appear to be reasonable grounds to-day, the surplus countries appear to be determined no longer to finance the deficits of the United States and the United Kingdom, thus placing a limit to the amounts of the reserve currencies they are willing to hold.
Secondly, it would be common sense to start any reform from the basis of the system at present in operation, rather than to try to impose a completely new system all at once. Gradual change may involve the introduction of some form of reserve, such as a composite unit based on "stable and freely convertible currencies"—this is important—or increased holdings in gold, which as the noble Lord, Lord Boothby, said (and I agree with him) would probably involve a change in the price of gold, and, I believe, should do so. But if it does, this increase in the price of gold must be arranged in such a way that this does not become a big inflationary operation. A new composite unit or increased holdings in gold would be in substitution, to a greater or lesser extent, for the existing reserve currencies—

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namely, dollars and sterling. Strictly speaking, dollars can no longer be considered to comply with the condition I just mentioned of being "freely convertible", as they are hedged in by restrictions under political understandings, if not agreements. This applies particularly to the dollars held in the reserves of Germany.
Sterling is under continuous pressure, I would say, not solely financial, but more due to a lack of confidence engendered by the Government; and confidence is as important as, or even more important than, physical reserves. Perhaps, if I may so suggest, the greatest mistake which was made by the present Government was their belief that internal actions had no repercussions upon our balance of payments. This revealed a simplicity which in days of great wealth might have charmed, but in days of strain could only be destructive of confidence; and confidence, once it is lost, is difficult to regain.
Thirdly, the I.M.F. have never said that at the present time an increase in international liquidity was necessary. On the contrary, some maintain that there is too much liquidity, and that it is because of this situation that certain countries tend to disregard the need to exercise monetary discipline.
Fourthly, this Bill is a concession to those who claim that, should the volume of international trade increase, and should countries now running a deficit—that is, the United States and Britain—establish equilibrium, a shortage of liquidity could develop. But the war in Vietnam, if it continues, may well affect the declared intention of the United States to reduce its deficit. So it would not appear that there is any danger of a real shortage of liquidity developing in the immediate future.
This Bill is also a concession to those who would like to see reserves under international control rather than under national control. The Bill will diminish our national reserves. I understand from what he said that the Chancellor of the Exchequer estimates that we might lose £80 million of gold by paying our £44 million gold deposit and by probable sales of sterling by other countries to purchase gold to find their increased deposits with the I.M.F. Even if this gold is re-deposited in London while
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actual payments are spread over a period of years, I do not think it can have quite the same effect, but I should not like to be dogmatic. I do not believe it is quite the same thing as holding the gold in our reserves. The currency deposit carries a gold guarantee which, of course, imposes upon us a potential liability which has not so far been mentioned. I hope I have not misunderstood the position. If I have no doubt the Minister responsible will correct me later. I am also not quite sure, nor was my noble friend Lord Gladwyn, whether the additional drawing rights of £218 million, which the Chancellor of the Exchequer mentioned are unconditional drawing rights, or whether the right to draw a part of it is subject to conditions. I cannot believe that we have an immediate unconditional right to draw £218 million when the payments of the deposit are spread over a term of years.
Fifthly, and lastly, we must resolve, as I think we are all agreed, to create a generally acceptable reformed international monetary system, but the purpose of my introductory remarks was to emphasise that this is not only a question of protecting central and other banks who hold existing reserve currencies or who may hold new forms of reserves. We must say, and make it clear, that no reform will be acceptable to our people unless it enables real "backing" to be placed behind the currencies with which they are issued, so that they have again an honest value. So far this aspect of the problem has been avoided in international discussions. It is avoided in this Bill, and the increased volume of money circulating in this country appears to show that the present Government are unable, or unwilling, to face up to the exigencies of monetary discipline, for which the I.M.F. calls, in addition to the passing of this Bill.
5.14 p.m.
LORD SHERFIELD: My Lords, it seems that there is pretty general agreement that this Bill is a useful step; that in present circumstances it does not go far enough; that it is urgent that further measures of the kind should be taken, and before the Americans bring their external account into balance; and that it is a matter of great difficulty to reach international agreement on the next development—for there are almost as many plans

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as there are pundits, and the various plans tend to be caught up in considerations not only of international interest but of national prestige.
On the latter aspect, there has been in the past some competition between the United Kingdom and the United States as to the precise measures to be followed in setting up an international monetary system—a competition healthy enough, no doubt, but not always conducive to early action. It has been intermittently true ever since the 1940's when, as the noble Lord, Lord Boothby, has reminded us, Lord Keynes proposed a monetary unit called BANCOR and Mr. Harry White, Under-Secretary to the American Treasury, countered with another monetary unit called ISCOR.
In spite of close collaboration in the work of the International Monetary Fund and in international financial arrangements of all kinds, this competition has continued intermittently up to a recent meeting of the I.M.F. and the International Bank, I think in 1963, when proposals more far-reaching than those now proposed were put forward by the then Chancellor of the Exchequer, and were met by quite a different proposal from the then Under-Secretary to the American Treasury. In consequence, no additional measures were then possible. Since that time, noble Lords may be aware that a great deal of study has been given to these matters in the United States, and especially by both Parties in the United States Congress, leading to a number of important reports. The consensus seems to be emerging there of a policy similar to that which is being advocated by many authorities in this country and, I think, supported by the Government, in particular that any further measures should be closely meshed into the existing mechanism of the International Monetary Fund. In view of this, the auspices are, I hope, more favourable for a concerted Anglo-American approach in the forthcoming international negotiations.
I do not find myself in agreement with the noble Lord, Lord Boothby, on this point, and I do not suppose he would expect me to find myself in agreement with him. But I myself am of the opinion that as the negotiations upon which we are now about to embark are likely to be of considerable difficulty, it is very
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desirable that Her Majesty's Government and the United States Government should be agreed about the general programme which they intend to advocate, and should march arm in arm through this particular international labyrinth.
I wish to make only one more point. It is about the price of gold, and it has nothing to do with the arguments for or against this step; it is a purely practical consideration. I think it would be unwise to underrate the determination of the present United States Administration not to depart from the present gold price, and I consider, therefore, that any negotiated and agreed solution in the next stage will have to be sought on other lines.
5.18 p.m.
LORD HAWKE: My Lords, I intervene for only a minute. May I humbly congratulate my noble friend Lord Dundee for a speech very much after my own heart? I have seldom heard a better one on this subject. I intervene chiefly because I do not think sufficient emphasis has been placed on the strain on liquidity caused by the ever-increasing quantity of capital moving about the world. I think that oil money in particular is increasing the whole time, and this is very often owned by countries who find the greatest difficulty in spending it in the short term. We want to try to do something about that, because that puts a great strain on liquidity, and capital is frightened out of one country into another.
I have always been a protagonist of raising the price of gold, but the Americans seem to have the obsession that to raise the price of gold means devaluing the dollar. I remember for many years I received numerous speeches which Senator Fulbright sent to me, and I once had the temerity to retaliate by sending him one of mine on this subject. He had the kindness to reply, and the burden of his reply was that the United States would never devalue the dollar. Of course, it is the most utter nonsense to say that raising the price of gold is devaluing the dollar, and the more we emphasise that the whole time the better. This Bill is certainly useful.
LORD BOOTHBY: If the noble Lord will forgive me, it was President Roosevelt himself who raised the price of gold, in defiance of the whole of the rest of

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the world, and stopped the major recession in 1933. It was the Americans who did that.
LORD HAWKE: I am sure the noble Lord will make that point to the Americans.
LORD BOOTHBY: I have.
LORD HAWKE: I have very often agreed with the noble Lord, Lord Boothby, when he speaks on this particular subject, but I must say that to-day I thought he took a quite unnecessarily gloomy and frightening view of the whole situation. I do not think the world situation is anything like it was in 1931. At the moment we have high wages and a considerable balance of purchasing power in all the industrial countries of the world, including Europe. I recommend the noble Lord to go for a walk anywhere near Victoria at the moment. He will find it absolutely packed with Frenchmen, all presumably spending their surplus wages. In America, the Administration has had the courage and insight to reduce personal taxation. That is leading to great consumption, and, of course, war which is scaling up in the Far East is blowing off a lot of commodities into nothing the whole time.
We want, as the next thing, an international conference to produce a better system all round, but it must take cognisance of the world's commodities. It is not much use producing these liquidity solutions which are of great importance to the more sophisticated countries unless you can do something about the more unfortunate countries which are in a state of deep penury. The more they grow in order to try to get a little more money, the less they get for it, and the danger is that they will become bankrupt. Therefore I welcome this Bill as a first step towards what I hope is a more enlightened look in the world.
5.23 p.m.
LORD SHEPHERD: My Lords, I am quite sure we can claim to have had an interesting debate. The noble Lord, Lord Gladwyn, complained, and I think perhaps, having listened to this afternoon's debate, with some justification, that we had not been able to have the Motion of the noble Lord, Lord Boothby, before us. As the House well knows, there are
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a limited number of Wednesdays which are available for general discussions and we always have a great deal of competition for subjects. I had some discussions with the noble Lord, Lord Boothby, many weeks ago and I informed him that this Bill was likely to arise in this Session. We both took the view that this would be the right opportunity for this discussion, although I think it would be readily admitted that our debate on liquidity has in fact gone a great deal wider than the terms of this Bill. But let us not complain about that.
There are five points which have arisen in this debate. May I say to the noble Lord, Lord Hawke, that I very much appreciated his more optimistic attitude towards the problem than that of the noble Lord, Lord Boothby; but I will come to that in a moment. I think everyone agreed that this is a useful Bill. Also there was the feeling—and I think it was shared everywhere—that the 25 per cent. increase is perhaps inadequate, considering the possible needs that may arise, although again I would remind the House that there is a conflict of opinion. There are some who think there is already too much liquidity in the world and there are others—and we are among them—who think we may well have to increase it. I think we should remember that 103 countries are going to increase, or are expected to increase, their quota by the figure of 25 per cent., and I understand this will mean that the resources of the International Monetary Fund will be increased by these quota adjustments by 5,000 million dollars, a fairly sizeable figure. In view of the fact that the drawing rights will be increased by 125 per cent. of this sum, this means that there will be 6,250 million dollars more which members will be eligible to draw within the International Monetary Fund.
I think I should have mentioned, when moving this Bill, although this particular point is not affected by the Bill, that there are sixteen countries which are invited to accept the recommendations of the Directors of the International Monetary Fund that their own quotas should be additionally uplifted in view of their own capability to meet that quota. So there is not just this 25 per cent. general increase in quota here; we have the extra moneys coming in from these 16 other countries.

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Again, I think everyone agreed that there should be further discussions. This is certainly recognised by the United States of America and ourselves, and I think by most of the European countries—some a little more than others. We will do our best in this matter. We must try to seek an agreement. It has already been said, time and time again this afternoon, that we have many suggestions and proposals; many diverse, some quite contrary and contradictory to the others. I think we should avoid trying to take up a national position in this matter—taking up a position with one country or another group of countries. What we must seek is international co-operation rather than trying to attach ourselves to a particular bloc. That is one of the reasons why my right honourable friend the Chancellor of the Exchequer has been careful not to align himself directly with one particular group or another, or to stand fast on any particular proposal.
I am sorry the noble Lord, Lord Gladwyn, thought we were a little negligent in this matter, but we thought that in view of all the proposals which now exist, one further proposal from us might not make a great deal of useful contribution, and there is something to be said for trying to get other countries to consider the existing proposals and to see whether we can find common ground and then achieve agreement.
I would end by making one comment. I hope that whilst the countries of the world will recognise the dangers that confront us, and particularly the dangers which confront this country, we shall not accept the view that ultimately, and unless there is a major change, we are going to confront the world slump conditions of 1930. In 1930. we knew very little. We did not have the knowledge and experience which is now made available to us by the Directors and staff of the International Monetary Fund and many other organisations. We have learned a great deal. I do not believe that those conditions exist to-day. They could come if noble Lords continually talk as they have spoken this afternoon, of a major slump inevitably arising next year. I think this is utterly wrong. I do not believe it is so, and I think it would be wrong for it to go out from this House that this is possible. But let
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us recognise that there are difficulties and there are possible dangers unless we take the necessary action.
My right honourable friend the Prime Minister spoke about this matter and the noble Lord, Lord Boothby, mentioned his words this afternoon. This is not only known and experienced in this country; it is recognised in many other countries and, my Lords, I believe there is a will and there will be a way out. But it will take time. I think that although we still have time we should press on persistently and flexibly, and in the end I believe good reason will prevail and we shall be able to establish an international monetary system which will be a service not only to the rich and powerful countries which need its support but the developing countries which look anxiously to the future. It is only within this international monetary organisation that the world in fact can prosper and develop. I now ask your Lordships to give the Bill a Second Reading.
On Question, Bill read 2ª; Committee negatived.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 22), Bill read 3ª, and passed.

GAS (BORROWING POWERS) BILL
5.30 p.m.
Order of the Day for the Second Reading read.
LORD HOBSON: My Lords, I beg to move that the Gas (Borrowing Powers) Bill be read a second time. This Bill is largely concerned with the provision of finance. Although it is not a Money Bill in the strict sense of being certified as such by the Speaker, may I suggest that in the circumstances the House agrees to the proposal that the Committee stage be negatived and that the remaining stages of the Bill be taken forthwith, as indicated in the italicised Order on the Order Paper. I trust that this course will be agreeable to your Lordships.
My Lords, this small but important Bill raises the borrowing powers of the gas industry from its existing limit of £650 million to a new initial limit of £900 million with provision for the Minister to increase this by an Order, requiring Affirmative Resolution, to a sum not exceeding £1,200 million. These are large sums, but, as

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I hope to show, the increase is no more than is commensurate with the change in the scale of operations of the gas industry.
Your Lordships will no doubt have seen the brochure The Growing Gas Industry, which has been prepared and published by the Gas Council. The document outlines the industry's case for additional borrowing powers. It gives a concise account of the recent rapid changes in the fortunes of the industry, of the bright prospects now before it, and of the industry's plans to meet the challenge of the future. The task is a big one. In the space of a very few years the increase in the use of gas has rapidly gained momentum to reach the point where what used to be regarded as the growth in demand in ten years is now experienced virtually in a single year. The industry now expects that by the end of this decade gas sales will be more than half as much again as they were last year—an annual rate of growth of about 7½ per cent. per year. After a period of several years when sales showed little movement either way, gas has in a very short space of time got rid of the aura of an old-established industry struggling against the odds to keep pace with developments in other fuels, and has instead impressed the popular imagination as a growth industry in the van of the country's technological advance. This sudden transition, for which those in the industry have worked with devotion and foresight, has been due to two major and interdependent developments—a technical breakthrough in ways of making gas from new and cheaper sources of the materials for gas making, and the marketing of new, efficient and attractive appliances to meet the growing demand for higher standards of heating comfort in the home.
Although Gas Boards are increasing their sales to industry, the greater part of the revival in demand is attributable to the householder. Annual sales of gas room-heaters have recently been not far short of one million. In addition many more homes are being centrally heated by gas and sales of warm air units and central heating installations are already well over 100,000 a year. The industry expects to continue to gain an important share of the growing demand for higher
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heating standards in the home and in factories and offices. As much of the additional demand is for space heating, it will arise mainly in the winter months and the winter peak demand is consequently expected to increase at a faster rate—10 per cent. per year—than yearly sales. It is this growth in peak demand which determines the rate of expansion of production and distribution capacity and which is largely responsible for the substantial investment requirements of the industry.
The new processes for producing gas from oil have many advantages. They are particularly suitable for meeting the new winter load. Capital costs are relatively low and there is a potential flexibility in operation which should enable them to adapt output more easily than hitherto to fluctuations in demand. There are substantial increases in productivity to be obtained. A typical large new plant is highly automated and requires only a few skilled men to supervise its running. Gas can be produced at a new works only two years after the placing of an order for the plant.
Perhaps the greatest merit of these new processes, however, lies in features which have yet to bear their full fruits. The new plants, drawing on a variety of feedstocks, produce non-toxic gases which are often of higher heat content than present-day town gas and certainly at higher pressures. The gas industry is modernising its distribution system to take full advantage of these new developments. High pressure distribution of richer gases will increase the capacity of existing mains which can then also be used to store as well as to carry gas. The new production processes therefore complement the technical advances in the storage and distribution of gases, advances which are essential if the best use is to be made of any large-scale supplies of natural gas that may become available in the future. Noble Lords will be familiar with one potential new development, the storage of gas underground, from our recent debates on the Gas Bill, which was introduced by my noble friend Lord Champion.
Richer gases, whether from existing feedstocks or from new sources, would probably go in the first instance to industrial consumers, but research is going forward into all the problems connected

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with the general conversion of the public supply of gas to richer gases, including the alterations necessary to consumers' appliances. The gas industry has every intention of supplying richer gases to the householder as and when it becomes technically possible and economically advantageous to do so. There are many uncertainties, and these developments in the distribution of richer gases may be a long way off, but the industry's plans are designed to provide sufficient flexibility to allow further technological discoveries and further changes in the sources of supply to be absorbed as smoothly as possible. The gas industry has been quick to realise and to exploit the potential of recent developments, and the Government believe that not only must its initiative be applauded but also that it should remain as free as possible, within the broad framework of fuel policy and the National Plan, to further the advance of the industry by the realisation of the benefits of cheaper materials and cheaper processes.
In the present and foreseeable state of knowledge of methods of gas making, it is inevitable that the use of coal should decline if the gas industry is to survive and flourish. Gas from coal at present can cost nearly twice as much as gas from oil-based plants. The Gas Council and the Area Boards seem likely, as a result of the Minister's request to consider measures to help the coal industry this year, to use some 300,000 tons more coal in 1965–66 than was expected at the beginning of the year. This is partly a reflection of the increased demand for gas, and though it will help the coal industry, it is not expected to have any significant effect on the financial prospects of the gas industry. Looking further ahead, the Minister is encouraging the efforts of the Gas Council in its research into finding new and economical methods of making gas from coal. Success in this difficult field, however, may prove elusive and may in any event be a very long way off.
It is not only in its rate of growth that the gas industry will be one of those leading the way to the greater prosperity for which we are planning. Productivity has increased sharply over the last few years and further gains are expected as a result of the modernisation now in progress. On its own conservative basis of
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estimating productivity, the industry expects an increase of 25 per cent. over the next five years, but alternative methods of calculation such as those used in the National Plan would put the increase at more than twice as much as this.
The programme of modernisation and expansion to meet this rapidly rising demand has, not surprisingly, led to a sharp increase in the rate of investment. A few years ago the industry was investing at the rate of about £50 million a year. The industry's brochure estimates that investment is now expected to rise from about £117 million this year to an average of about £140 million a year at the end of the 'sixties. In the period from April 1, 1965, to December 31, 1970, total investment is estimated at £780 million, of which £320 million is for gas production and £460 million for distribution and other purposes. The industry's total capital needs, including £50 million additional working capital, are estimated at £830 million, of which some £430 million, or 52 per cent., is expected to come from internal resources, leaving £400 million to be met by new borrowing. As a result, the industry's borrowing powers need to be extended much earlier than had been envisaged even a short time ago. The additional £400 million new borrowing would raise the total borrowing from £585 million at March 31, 1965, to £985 million by December, 1970. The present limit of £650 million is expected to be reached before the end of this year.
The Bill sets an initial limit of £900 million to ensure that, on present expectations, Parliament will have an opportunity in about three years' time of reviewing developments in the gas industry. Thereafter, the Bill proposes a final limit of £1,200 million, some £200 million above the estimate of £985 million of total borrowing required on present plans. The reasons for this margin and the size of the initial and final limits have been fully discussed in another place. I need say here only that the Government accept the gas industry's case for allowing for a margin of the size proposed in view of all the uncertainties about the rapidity with which the industry may grow in the immediate future; and the possibility of North Sea gas is not the only unknown factor to

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take into account. The Minister has also given the assurance that he would not be prepared to authorise any more borrowing than the industry could prove that it needed, and with the many Parliamentary occasions on which the fortunes of the gas industry could be reviewed, other than on the presentation of a Borrowing Powers Order or Bill, it cannot be said that the establishment of the proposed limits would deprive Parliament of proper control over the industry's borrowings. I think that is made adequately clear in the Bill.
The gas industry, therefore, over the next five years expects to expand rapidly and to use a considerable volume of resources, half of which will be financed from its own funds, in order to achieve this. With these large sums at stake, the industry's financial prospects must be sound. The record of the last three years is encouraging. During this time the average revenue per therm from gas sales has risen only a little, despite increasing costs, and the industry as a whole has made good progress towards, and expects to meet, the agreed financial objective of earning 10·2 per cent. gross return on net assets employed during the five years ended March, 1967, although some Boards are not so well placed as others. In its present estimates the industry is quite rightly providing for a higher rate of return in the years ahead.
Investment in gas, therefore, is expected to pay its way by earning a proper return, sufficient to cover the charges on capital and to provide a substantial contribution to the resources needed for expansion. There are uncertain as well as exciting prospects ahead, but the Gas Council and the Area Gas Boards are demonstrating their ability for combining a flair for innovation with prudent financial management, and I am sure that your Lordships will join with me in commending the proposals in the Bill and the prospective developments in the gas industry on which they are based and which I have illustrated. My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2ª.—(Lord Hobson.)
5.45 p.m.
THE EARL OF DUNDEE: My Lords, when the Gas Council and the Electricity Council were first set up, some years ago, it was expected that the use of electricity would gradually displace the use of gas for a great many purposes. But that has not happened. What has happened is that both industries have expanded enormously, and the increasing use of gas, both for domestic and other purposes, requires a great deal more finance, as is provided for in this Bill. We entirely agree with the Bill, which is a simple one, and except for one small point, of which I have given notice, I cannot see that there is any justification for prolonging the discussion about it, although in another place it was discussed for no less than four and a half hours. Perhaps they are more gas-prone there than we are.
The only point on which I gave notice to the noble Lord concerns subsection (2) of Clause 1, which first provides that any order by the Minister authorising increased expenditure over the amount specified up to £1,200 million shall be subject to an Affirmative Resolution in the House of Commons. That is quite easy to understand. But then it goes on to provide
"and so much of Section 71(3) of the Gas Act, 1948 as provides that orders under that Act shall be subject to annulment in pursuance of a resolution of either House of Parliament shall not apply".
That is to say, the right of your Lordships' House to annul, under the Negative Resolution procedure, any orders arising under the 1948 Act appears to be repealed. I should like to know what is the justification for doing that.
5.48 p.m.
LORD BLYTON: My Lords, this Bill is introduced to raise the borrowing limits of the Gas Council for capital expenditure to enable it to meet its forward plans and development. In discussing this Bill we are bound to ask what effect the forward programmes will have on the other nationalised industries which are in the energy market. Do we go on importing fuel, closing our pits, leaving our indigenous fuel in the ground, and further add to our balance-of-payments difficulties? After years of argument by many of us who spoke from the Front Bench in another place, in Opposition, on the Labour Party's policy of 200 million

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tons of coal in an increasing energy market, and on an integrated fuel and power policy, I hope that this policy has not been abandoned by the Government. We fought for ten years for an integrated fuel policy.
I may be told about the Energy Advisory Council, and I want to be perfectly frank. I cannot see a policy of integration in the energy industries coming from this Council. I cannot see how we can expect a policy of this character when each Chairman, of coal, oil, electricity and gas, will be fighting for his own industry on the basis, "I'm all right, and to the Devil with the consequences upon the other sectors of the energy industries," especially if they are all competitors in the energy field.
This is an appropriate moment for me to question the effect that new gas-making processes are having on the coal industry. I was ten years on the Select Committee on Nationalised Industries, and in the Session 1960–61 the Coal Board told us, when we examined the gas industry, that they believed that gas could be made in large-scale Lurgi plants at a delivered cost to the Gas Board of 8¼d. to 8½d. per therm. The Board proposed, and it was agreed, that fresh details of this Lurgi process should be worked out and carried out jointly by the Coal Board and the Gas Council. In the Report we submittted to the House of Commons in July, 1961, the Committee welcomed this decision, and in considering the relative merits of Lurgi and imported methane we said in our Report:
"Your Committee agree that it would be prudent to see whether the two schemes are enabling the industry to expand before proceeding in one direction or another."
The then Minister of Power, Mr. Richard Wood, ignored this advice, and authorised the Gas Council to proceed with the importation of Saharan methane on November 3, 1961, before the joint study on Lurgi was completed. Further, he told the House of Commons that this decision would not prejudice the building of a large-scale Lurgi plant, yet the effect of this decision was to render the study of the Lurgi plant useless.
On November 28, 1961, the Parliamentary Secretary to the Minister of Power told the Commons that the imported methane, reformed to town gas,
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would cost 8¼d. a therm. The Report of the Lurgi Study Group confirmed the view expressed by the National Coal Board to the Select Committee, that a large-scale Lurgi plant could produce gas enriched to town gas standard at 8¼d. per therm. There was therefore no economic advantage in the imported methane scheme. These imports of foreign methane most certainly aggravate our balance-of-payments difficulties, and a very substantial part of the operations, including field cost of gas, is in foreign hands. This is all the more distressing when Lurgi gas could have been produced at the same cost.
The Minister of Power in 1961 told the Commons that in the year 1965–66, as a result of importing methane, about 100,000 tons of gas-making coal previously allowed in the industry's development plans would not be needed. Yet the gas industry contracted to import 350 million therms per annum, which on current yield of gas per ton of coal is equivalent to 4½million tons of coal per annum. Now we know as a result of a Question in the Commons on March 31 of this year, and a reply by the Minister of State to the Board "of Trade, that the annual foreign exchange costs of imports of North African methane will involve this country in an expenditure of £7 million per annum. All the long-term forecasts given over the years to the Coal Board of how much coal will be needed have been rashly over-estimated. As recently as 1958 the Gas Council estimated that it would need 27 million tons of coal in 1965–66. It looks like being about 17 million now. Estimates for 1970 at one time looked like being as high as 30 million tons. Now the figure is as low as 9 to 10 millions. On June 2 last year, the noble Lord, Lord Erroll of Hale, who was then the Minister of Power, told the Commons that the gas industry would require 14 million tons in 1969. We now know that even that figure does not stand.
It was on these long-term estimates that the coal industry based its plans, invested millions of pounds in pits, bought plant and machinery, recruited and trained workers, built colliery villages and encouraged the supplying industries to expand. The coal industry cannot turn coal on and off like a tap. It takes eight to ten years to sink and equip a colliery

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before the first ton of coal is mined. All this is now to be scrapped; pits are to be closed, involving difficult and social economic problems for whole communities—all because of the too-rapid move from coal. The imported methane project, in my opinion, is a scandal, and those responsible for making that decision in the middle of investigations by the Study Group should be brought to account. I consider that the Select Committee on Nationalised Industries should investigate this matter and challenge those responsible for the waste of public money involved and the added burden to the balance of payments, creating a completely unnecessary burden upon the economy.
The result of the liquid methane project has been that millions of pounds have been spent, both at home and abroad, without any advantage to the gas consumer. I hope that the Government are not going to allow the gas industry to take credit for making a profit which can be achieved only by failing to give due return on investment which has been made for the gas industry by another nationalised industry. Clearly, two courses are open to the nation. The first is to support the Gas Council's hurried abandonment of coal in favour of fuels—feedstocks which cost Britain valuable foreign currency. Such a course would, in effect, throw away public money, which, acting on the figures supplied by the Gas Boards themselves, the Coal Board have invested in gas coal pits. The second course is for the Gas Boards to slow down their move away from coal without swerving from their path towards greater technical efficiency. In this way the nation would obtain some return on the millions of pounds which have been spent by one nationalised industry in support of another.
As I have said before, we have always argued that in an increasing energy market coal could provide a base load of around 200 million tons to meet the energy needs of the country. There are rumours, and even a statement in the Sun, by Geoffrey Goodman, that the Government intend to cut back the coal industry to 175 million tons. If this is correct, it means that to meet our energy requirements other fuels will have to be imported. This state of affairs I regard as
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serious. Our greatest difficulty today is in trying to achieve a balance of payments, and in increasing our exports to meet the cost of our imports. Where are we to get the huge amount of foreign exchange to meet this added importation of fuel if the coal industry is cut down to 175 million or 160 million tons? It is estimated that it will add £80 million a year to our import bill. To-day, oil imports are something like £500 million a year, and as there are also re-exports one can never get down to the true figures. So, as we cut back the use of coal, we increase the country's balance-of-payments difficulties. In my opinion, this is real economic folly and most certainly not in the national interest.
In our energy policy we have fought for a base-load of coal of about 200 million tons. The Government only recently announced a figure of about 190 million to 200 million tons, but now there are rumours that in an economic White Paper on Planning, to be published in September, the coal industry is to be further cut back to 175 million tons. I warn the Government, as an ardent supporter of them, that the present trends in both production and consumption, unless arrested, will even destroy such stated aims. This is a direct question that I put to the Government, especially to the Ministers responsible for planning. Is there really a serious and genuine intention to stabilise coal's share of the energy market at levels which we ourselves have suggested in the past?
I am not alone in being possessed of a strong suspicion that the industry is being allowed to drift until such time that it will not have the men or the capacity to fulfil even the amended target of 190 million to 200 million, or even 175 million tons. We have always known over the years in which I spoke from the Opposition Front Bench for the Labour Party that there were powerful forces pressing for a cutback in coal production. This needs to be said, because the longer the present drift is allowed to continue the more difficult it will be to arrest.
The most serious feature that we face is the rate at which men are voluntarily leaving our mines. In the last twelve weeks voluntary leaving has averaged 1,000 men a week. The figure for 1964 was 10,000 up on 1963, and in the first

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twenty-one weeks of this year manpower in our pits has dropped by over 13,000 —and that is at a rate of 30,000 men per year. In the main, the men who are leaving are the young men, men under 40, and this most certainly affects the quality of the remaining labour force. There is a serious unbalance of manpower at many of our mines. Productivity increases have been seriously impeded in the most efficient pits and coalfields, making others uneconomic and increasing the losses in those already in difficulties.
The stark truth is that there is a crisis of confidence in the future of mining. Recruitment is merely confined to the mining communities with a tradition of mining employment. Our manpower has dropped by 250,000 since 1958. Hundreds of pits have been closed. Intensive rationalisation measures have been adopted, with their effects upon the nature and availability of jobs. The cumulative effect of all these changes has shaken confidence in job security in the industry, and little is being done to restore it. In fact, if we cut back to 175 million tons the position will be further aggravated. It is said that that will dear out 140,000 men from our pits.
I am sorry to say that in recent years judgment of the viability of the mining industry has been based upon short-term market considerations which prevail at the present time, completely ignoring the long-term needs assessed against available resources. The repeated advocacy in a large section of the community that coalmining is a dying industry, that it must give way to other forms of energy, is in a large measure responsible for our existing manpower problem; and continuing this attitude is responsible too for impeding the advance of productivity, thus holding back the viability of this industry.
My Lords, I worked underground in the mines for 32 years, and I have no desire that men should go down to the bowels of the earth to get coal for a moment longer than is socially necessary. But, meanwhile, we must have stability; we must know what is the intended size of this industry. The smaller the industry gets, the more dependent the nation becomes on imported fuels with costs affecting our balance of payments; and the smaller
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it is the less viable and competitive it becomes, because of its fixed charges. The present situation, compelling a smaller industry by the play of anarchic market forces, and the present uncertainty are ruinous. The nation, the Government at least, owe it to this industry to make clear their plans without further delay.
According to the N.E.D.C. Report, based on a 4 per cent, increase each year in total national output, in the next fifteen years we shall need no less than 165 million tons of coal or coal equivalent more than we are using now. Even if coal production continues at about 200 million tons, the consumption of other fuels will have to double in the next fifteen years, and most of these other fuels will have to be imported. Can this nation, which had a deficit of £800 million in its balance of payments in 1964, afford to import between 6 and 7 per cent, more oil every year? We hear every day about the difficulty of pushing up British exports, but we shall have to sell far more goods abroad to pay for the extra imports of oil and other fuels. I know it is argued that industrialists should go for the cheapest fuel that can be got at any moment. Conversion to oil, which is cheaper in a company's own accounts, may not, however, be cheaper in terms of the nation's bookkeeping. How can imported fuels on the scale suggested be cheaper, if their purchase adds to our balance of payments problems?
I believe, and I say this honestly to your Lordships, that in the national interest a healthy British coal industry is the best protection our industrialists and other fuel users can have against rises in world energy prices, which are sure to increase when oil and other fuels have a real grip on British markets. Therefore, it is in the interests of the nation—and this is my plea—that the coal industry, on the basis of the progress it has made and is still making in production per man, should be given time—time to allow the growth in energy to catch up with the present surplus of fuels; time to get on with its policy of concentrating on the more efficient mines, and time to push on with its mechanisation and new technical developments. To give it that time, it needs help in the few years ahead to sell around 200 million tons; and nothing should be done

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now to impair its ability to produce that amount of coal when it is needed, as I believe it will surely be needed before long. France, Germany, the U.S.A. and Russia have recognised that their national interests are best served by fortifying their coal industries, and it will be a national calamity if we do not do likewise. Given temporary help, coal should be efficient enough to compete on national terms with its rivals, and sell about 200 millions a year on its commercial merits.
This Bill, my Lords, with its forward plans linking the Gas Council to oil, will have disastrous effects on County Durham, Scotland and South Wales, which are gas-coal producing counties. There is great anxiety in these areas, especially in my own county of Durham. We all recognise that uneconomic pits will have to go, and we recognise that a redeployment of men will have to take place. But, unlike the past, it is now essential that, when pits will have to close in these gas-coal producing counties, industries should be brought to the areas before a closure takes place. Whilst younger men will migrate, men over 55 years of age, men like light-rate compensation men and sick men who do light jobs, will have to be catered for at the closing of the pits, as jobs of this kind will be already filled in the receiving areas. In the past, many of these men have just been left with no alternative employment. The importance of looking at book-keeping from a national point of view is clear. If large-scale conversions to oil, because it is cheaper, result in men drawing unemployment pay and National Assistance, how can oil be cheaper for the country as a whole?
My Lords, I have spoken at some length on this Bill; and, while I recognise that the present Minister cannot unscramble the omelette of the La Conche Agreement on liquid methane which the Tories left us with, he can as Minister see to it that coal gets its rightful place in the economy, and that the integrated fuel policy for which we have all fought over the years now becomes a reality, and that redundant men are given work. Otherwise, the mining community will consider that we have broken our pledge to them. It is to this urgent task that I ask the Government to give their consideration, and let us know how far it is
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intended to make our economy dependent on an imported fuel, to the detriment of our own indigenous industry. I have raised these matters to-day as the increased borrowing powers of the Gas Council to meet future plans are to have such a serious effect on our own indigenous industry, and the Government's future plans, which are said to cut back further our own national industry of coalmining, will have such a calamitous effect upon our people. I hope, therefore, that the Government will take note that this whole situation, which we have studied over the years, ought to be based on the policy for which we have always argued.
6.14 p.m.
LORD HOBSON: My Lords, I propose to answer both the points that have been raised by the noble Earl, Lord Dundee, and I shall feel constrained to answer at a little length the speech made by my noble friend Lord Blyton. First, with regard to the noble Earl, Lord Dundee, I entirely agree with him that no one would have anticipated that gas would come to the forefront in the manner in which it has done, particularly with regard to space-heating. It really is an amazing achievement. We were all aware of what was happening in electricity, for obvious reasons which I need not go into—chiefly industrial demand and, of course, space-heating, a considerable amount of which is done by electricity, too. But because of the tremendous growth of this industry we must have this Bill, to provide this considerable sum, rising up to £1,200 million, for extra capital for development of the gas industry. It is a marvellous achievement, and the Gas Council and the whole industry deserve the thanks of the nation for what they have achieved. It really is a first-class organisation, and this afternoon there has not been a single criticism of the industry as such, or, indeed, of their need for capital to develop the industry.
To come now to the point of which the noble Earl, Lord Dundee, was good enough to give me notice (which I appreciate very much indeed), as to what are the powers with regard to the Affirmative Resolution, I have been at some pains to find out what the exact position is. We are not departing from anything that has been done before and under previous

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Administrations. For instance, the practice of establishing an initial financial limit, increasable by Order and subject to an Affirmative Resolution, was established by the Electricity (Borrowing Powers) Act 1959. I do not propose to read the section. That would be rather delaying your Lordships' House at a late hour. Another precedent is in the previous Gas (Borrowing Powers) Act, which has precisely the same clause in it. Therefore, there has been no departure; and I can give the assurance that there is no intention on the part of the present Government to undermine the power of either House in this connection. In other words, to put it in a simple phrase, it is indeed the status quo ante—and I am sure that the noble Earl, having supported this arrangement in the previous Acts under a Conservative Administration, will hardly criticise us for following suit.
I want now to come to my noble friend Lord Blyton. First, I must say that we all realise the lifetime of service which he has given to the mining industry. If any one of us wants to know anything about mining in detail, we always go to my noble friend Lord Blyton. We appreciate his past fight for the welfare of the miners and the improvement of their conditions, and I also realise the tremendous work he did on the Committee of Nationalised Industries when he was in another place. But I must cross swords with him on one or two points which he raised in his speech. It is perfectly true that France and Germany are modernising their coal industries in precisely the same way as ourselves; but it is equally true that France is using natural gas; it is equally true that Germany is developing atomic power; and it is equally true that Germany is taking gas from the Groningen natural gas fields for its industry. So we start off there with the three great industrial nations of Western Europe on a par, because we are all doing precisely the same thing.
As to the idea that we are ignoring the claims of the coal industry for supplies of coal for the gas industry, this really is not true, because, as I said in my speech, the use of coal by the gas industry this year is likely to be 300,000 tons greater than had been expected. Therefore, there has not been any deliberate cutting down of the amount
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of coal which is required for the industry. Nobody is more aware than I am of the social consequences of closing down pits. I was brought up in the Yorkshire coalfield—on the fringe of it, just South of Leeds. I know the upheaval involved. I know there are compact communities with their own social life and, in many cases, their own culture. Therefore, one can appreciate the sense of hardship they must feel when pits are being closed down. But, really, we cannot, in the face of the economics involved—and I should be wrong to give any assurance that we can—go on continually using coal for the purposes of gas making.
I propose to give the reasons why, and I think they will be seen to be quite simple, really, when I quote prices. For instance, gas made from naphtha costs 6d. to 8d. a therm and from imported natural gas 8½d. a therm. Liquefied petroleum gas can be bought for from 6½d. to 8d. a therm and refinery gas for 6d. a therm. Gas produced from coal by conventional carbonisation costs from 12d. to 14d. a therm. Really, these are formidable figures.
LORD BLYTON: I am not talking about the old conventional way of getting gas. I was dealing with the Lurgi plant.
LORD HOBSON: I anticipated that the noble Lord would deal with this aspect: I made the point in my own speech. We have said that if any development takes place for producing gas from coal more cheaply than by other methods we shall be only too pleased to use coal and to help the coal industry. In view of the figures I have given, however, to insist on using coal would penalise our industries and households to an unreasonable extent.
The noble Lord raised the question of Lurgi. I have been at some pains to find out what the real prospects are; but I must be brutal. I will give the reasons why. So far as the Lurgi process is concerned, it is not economic and, so far as can be seen at present, has no future. That had better be understood straight away. What is the position? A Study Group was set up to look into the Lurgi process. It was set up jointly by the gas and coal industries, and it was calculated that the cost per therm would be 9·6d. in a large-scale plant

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This is higher than for gas produced from the new oil-based processes, and the plants themselves are costly. The imported methane is needed almost entirely for enrichment. The Lurgi process produces a gas of low heat value, technically called "lean" gas; and it must be enriched. If we are to give the housewife higher quality and non-toxic gas and move towards the supply of richer gas at higher pressures for industry—and nobody knows better than the noble Lord, Lord Blyton, the amount of gas that is used in the steel-making industry, for instance—it is essential that the developments now taking place in the gas industry should go forward.
When we come to the question of the cut in the coal industry, the Government have not decided to cut the coal industry down to 170 million tons. The Government have, however, agreed with the Coal Board that on present trends the market for the coal industry in 1970 is likely to fall, and steps are being taken to deal with the problem to which this gives rise in the coal industry. Here again, as the noble Lord knows well (and I am sure he will admit it from his knowledge) there is continual consultation between the National Coal Board and the Government, whichever Government may be in power. Let us be partial; let us be political—the noble Lord knows that a Party such as the Labour Party, which was almost founded by the mining industry, whose pioneers came from that industry, are not going to desert their friends and be harsh in their treatment of them. One does not do things like that; and I should be the last to do it.
But the fact is that we cannot get over it. We have to consider development taking place, for example, electricity, with the use of atomic power. An announcement was made only three weeks ago in your Lordships' House about a breakthrough (I hate to use that word) in the atomic energy field by which we are to have higher pressures and higher steam temperatures for the use of atomic energy and in the use of supplies of electricity. These are things that no Government can ignore. It is perfectly true that coal is indigenous. We cannot export coal as much as we used to because of the factors operating in other countries, but Her Majesty's Government will consider
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any development that can take place in the coal industry scientifically or any new processes that can be produced.
So far as our future fuel policy is concerned the noble Lord, with respect, answered his own question; because he stated categorically that a statement of the fuel policy would probably be made in late autumn. I am sure that all the factors that my noble friend, Lord Blyton, has raised will be taken into consideration, but I should be misleading the House, and misleading my noble friend Lord Blyton, if I were to say that coal will be a prime necessity in gas-making in the future. I think I have proved the case. I say, with respect and humility, that the figures as given with respect to the new feedstocks for making coal make this clear beyond peradventure. It is impossible to put the clock back. We cannot do it. I will give the noble Lord this point: that it is true that methane is imported from abroad. It comes largely from the Sahara; but it will interest the noble Lord to know that we are hoping that there are prospects of considerable quantities of natural gas in the North Sea, in our section of the Continental Shelf; and we are developing and not ignoring this kind of interest. There is also the prospect of development of natural gas from Nigeria.
LORD BLYTON: I do not object to finding gas in the North Sea because that does not affect the balance-of-payments problem.
LORD HOBSON: I do not think that this will affect the balance-of-payments problem in the long haul, because it is coming from the sterling area; and secondly (and this is a more important reason) because of the fact that if you are going to increase the price of the prime raw material—which in these cases is gas—for certain industrial processes, the cost of the exports is going to be of such a character that you will price yourself out of the market. The fact is, and we cannot repeat it too often, that the profitability in terms of gas and converting raw materials is more lucrative than exporting the basic raw materials. This is historically true. The noble Lord will find it if he looks up the statistics, past and present.
But I appreciate the position when pits are closing down. One cannot help feeling it. The industry and the unions concerned

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have been very realistic about the situation. I want to assure the noble Lord—though I am sure that, in his heart, he knows it—that the present Government will do everything in their power to alleviate any form of wholesale closing-down of pits that would bring hardship to the milling communities. As the noble Lord himself stated, nobody wants people to go into the bowels of the earth and to hew coal if, as a result of lower prices of prime fuels and power supplies, we can become more competitive. And as a result of this there is more likelihood of the development not only of small factories but of very large and important factories on the North-East coast.
On Question, Bill read 2ª: Committee negatived.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 22), Bill read 3ª, and passed.

PUBLIC WORKS LOANS BILL
6.28 p.m.
Order of the Day for the Second Reading read.
LORD BESWICK: My Lords, I rise to move the Second Reading of this Bill. The Bill has two purposes. One is to provide a fund for the Loan Commissioners for lending to local authorities. The second simplifies the loaning procedure. The sum provided in Clause 1 is £500 million. It is expected that this will be adequate to enable the Board to meet the requirements of the local authorities within the limits laid down and the percentages already stated, until well within the next financial year. After that period, of course, Parliament will have the opportunity to look again at the situation and make further provisions suitable to the situation then obtaining and in the light of the experience gained by the operation of this Bill.
There is also provision for an amount up to another £50 million to enable the Loan Commissioners to enter into commitments for loans which will, in practice, be taken up after the expiration of the present Act. This follows the provisions of the previous Act, although the amount involved in this Bill is somewhat smaller.
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Clause 2 dispenses with the previous obligation on the borrowing authority to execute a written mortgage before money is advanced. The new procedure, as I think will be agreed, will save both time and labour. Loans which are to be secured on revenues will be made by virtue of a simple agreement on the terms between the Loan Commissioners and the borrowing authority. On the handing over of the money, the loan will be secured automatically on the authority's revenues.
Clause 3 provides a convenient procedure for the recovery of stamp duty in respect of these loans. This Bill is really concerned with establishing machinery, and rather more efficient machinery than previously existed. Both sides will, I think, approve this machinery, although I know that a number of my noble friends would like to see the machine more fully utilised and a greater proportion of local government finance raised in this way. However, I can say that much has been done. The borrowing limits now enable local authorities to get the first £100,000 of their requirements from the Board, as against the previous limit of £50,000. In this way, some of the smaller authorities will be able to raise all their requirements. Larger authorities will be able to get up to 30 per cent. of their borrowing within a year on capital requirements if this figure is greater than the £100,000 limit. In regions in Northern and North-West England, and in Scotland and Wales, local authorities will be able to go to the Board for 40 per cent. of their requirements.
All this, I think, should be helpful and, as I have said, Parliament will be able to review the situation in about a year's time. As can be seen, like the Bill that we have just been considering, this Bill is largely concerned with the provision of finance. Though not a Money Bill, in the strict sense of being certified by the Speaker, I think that in the circumstances the House may well agree that the Committee stage should be negatived and that the remaining stages of the Bill taken as indicated on the Order Paper. In the meantime, I beg to move the Second Reading of this Bill.
Moved, That the Bill be now read 2ª.—(Lord Beswick.)
6.32 p.m.
THE EARL OF DUNDEE: My Lords, we welcome this Bill, which generally carries out what was envisaged by the White Paper of the previous Government two years ago. It was then estimated, in paragraph 18 of the White Paper, that the call on the Exchequer would amount to £200 million in the first year, rising by about £100 million each year to £500 million in the fourth year. In the previous paragraph it was proposed that each local authority should be allowed to meet the first £50,000 of its long-term borrowing needs from the Board in the first year of the arrangements, and the White Paper went on to say that it might be possible subsequently to raise that sum to £100,000. This has now been done.
As for the figure of 40 per cent. mentioned by the noble Lord, Lord Beswick, the intention in the White Paper was that in the first year local authorities should be allowed to obtain 20 per cent. of their long-term borrowing needs, and that thereafter the amount should be increased by 10 per cent. each year, until a maximum of 50 per cent. was achieved in the fourth year. Now an alternative plan, which I think is an improvement, has been decided by the present Chancellor. Instead of going up to 50 per cent., we shall go up to 40 per cent. for the areas which are most in need of this kind of assistance—that is, in Scotland and in the North of England.
The whole basis of this Public Works Loan Board borrowing by local authorities is a form of indirect subsidy which allows them to get money a little more cheaply than on the open market. It also helps the smaller authorities who might have difficulty in borrowing at all. I think that the Government have struck the right balance, and I see no reason to detain your Lordships further on this Bill, of which we entirely approve.
On Question, Bill read 2ª: Committee negatived.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 22), Bill read 3ª, and passed.

SEVERN BRIDGE TOLLS BILL
House in Committee (on Recommitment) (according to Order).
House resumed: Bill reported without Amendment; Report received.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 22):
LORD SHEPHERD: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Severn Bridge Tolls Bill, has consented to place Her interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purposes of the Bill.
LORD BESWICK: My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3ª.—(Lord Beswick.)
On Question, Bill read 3ª, and passed.

COMMONS REGISTRATION BILL [H.L.]
6.35 p.m.
Order of the Day read for the consideration of Commons Amendments.

COMMONS AMENDMENTS
[The references are to Bill [101] as first printed for the House of Commons]
Clause 1, page 1, line 11, leave out paragraph (c) and insert—
("(c) persons claiming to be or found to be owners of such land or becoming the owners thereof by virtue of this Act;")
Clause 4, page 3, line 6, leave out ("if the land") and insert ("which")
Clause 4, page 3, line 9, leave out ("so registered") and insert ("registered under this section")
Clause 5, page 3, line 34, leave out subsection (2)
Page 4, line 8, leave out ("or") and insert ("and to any person")
Page 4, line 8, line 23, at end insert—
("(9) A registration authority shall take such steps as may be prescribed for informing the public of any objection which they have noted on the register under this section and of the times and places where copies of the relevant entries in the register may be inspected.
(10) Where regulations under this Act require copies of any entries in a register to be sent by the registration authority to another local authority they may require that other authority to make the copies available for inspection in such manner as may be prescribed.")
Clause 8, page 5, line 30, leave out third ("the") and insert ("that")
Clause 8, page 5, line 34, leave out first ("the") and insert ("that")
Clause 8, page 5, line 44, leave out ("it") and insert ("the land")
After Clause 8, insert the following new Clause—
Protection of unclaimed common land
". Where the registration under section 4 of this Act of any land as common land has become final but no person is registered under this Act or the Land Registration Acts 1925 and 1936 as the owner of the land, then, until the land is vested under any provision hereafter made by Parliament, any local authority in whose area the land or part of the land is situated may take such steps for the protection of the land against unlawful interference as could be taken by an owner in possession of the land, and may (without prejudice to any power exercisable apart from this section) institute proceedings for any offence committed in respect of the land.")
Clause 10, page 6, line 15, leave out from ("prescribed") to end of line 18
Clause 10, page 6, line 29, leave out subsection (4) and insert—
("(4) The Minister shall, before dealing with any application under this section, send copies thereof to the registration authority and to such other local authorities as may be prescribed, and shall inform those authorities whether he has granted or refused the application; and those authorities shall take such steps as may be prescribed for informing the public of the application and its grant or refusal.")
Clause 12, page 7, line 18, after ("are") insert ("varied or")
Clause 14, page 7, line 40, leave out from ("number") to end of line 41
Page 8, line 4, at end insert—
("(3) When the registration of such a right has become final the right shall accordingly he exercisable in relation to animals not exceeding the number or numbers registered or such other number or numbers as Parliament may hereafter determine.")
Clause 16, page 9, line 25, after first ("order") insert ("but subject to any modifications specified in the direction")
Clause 18, page 10, line 28, leave out from ("act") to ("ecclesiastical") in line 29 and insert ("with respect to any land or rights belonging to an")
Clause 18, page 10, line 31, leave out ("preventing the making of") and insert ("treating")
Clause 18, page 10, line 32, leave out ("except where objection is made") and insert ("as an objection")
Clause 21, page 11, leave out lines 31 to 33
LORD MITCHISON: My Lords, in moving that these Amendments be now considered, I would remind you that they are Amendments to a Bill which originated in your Lordships' House. I hope your Lordships will give leave for these Amendments to be considered en bloc. They raise a few substantial points, while some of them are drafting Amend
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ments. I will mention the substantial points and indicate their character, and if any noble Lord requires further information, I will, of course, do my best to give it.
The first substantial point is in the first Amendment. It is a provision for registering ownership arising from a claim to owner or the registration of persons found to be owners or whose ownership is established by this legislation. It seems to me that the point is raised, both here and in another place, without disturbing the position of the Land Registry. The second point (I am taking them in the order on the Order Paper) is in Amendment No. 10, which is about the protection of unclaimed common land. When we considered the Bill at an earlier stage it was pointed out that there were difficulties about people coming on to land and doing damage during the period when there might be no one in a position to protect the common rights and other rights concerned. This gives any local authority in whose area the land or part of it is situated powers to protect the common, as regards criminal proceedings. There was a suggestion here, which has received most careful consideration, that it might be possible to extend this protection to civil actions; but on looking into the matter it proved impossible to deal with questions of trespass and the like, which are civil proceedings, because of the position of the owner of the common lying low, if I may so put it, or being unknown at the moment.
Amendments Nos. 14 and 15 deal with the question which was referred to frequently below as quantification—put shortly, the question of the number of beasts which any complainant might be entitled to put on the common. The matter has for the moment been dealt with in this way, registering a number or numbers, as the Royal Commission suggested, but leaving it open at a further stage to revise the figure registered. That is the meaning of the last line
"…such other number or numbers as Parliament may hereafter determine."
It has now been agreed with the National Farmers' Union that this is the right way of tackling the problem. I do not think that it is in any sense their Amendment, but it evoked a good deal of discussion elsewhere. Amendment No. 16 deals

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with costs, which also was raised in this House. In general, costs are to be county court costs, but there is power by virtue of this Amendment to give directions for a higher scale of costs in cases where it might be appropriate.
The last point is perhaps of less importance, but I will mention it. By virtue of Amendment No. 20, some lines are left out because the Law Society pointed out that in substance they might apply to cases which would be quite different from those to which they were intended to apply, and interested bodies, such as the Commons, Open Spaces and Footpaths Preservation Society, were unable to suggest any cases in which they would apply as regards commons. Accordingly these words are omitted. It is almost a drafting Amendment.
There is one other type of Amendment that I should mention before I sit down. Amendments Nos. 4, 5 and 6 to Clause 5 and Amendment No. 12 to Clause 10 are designed to cover publicity arrangements. Perhaps I need not go into them in detail, unless I am asked about them. I think I can fairly and properly describe all the other Amendments as Amendments of a drafting character. With that and any further explanation that may be called for, I hope that your Lordships will feel that these are reasonable Amendments arrived at after full discussion in another place and meeting the views of the various interests concerned and the views expressed by honourable Members and right honourable Members below on both sides.
Now that this Bill comes back to your Lordships' House, I still feel that it is only the first step towards dealing with commons. What is done under this first step, still more what may fall to be done by way of preparation and shaping of legislation for the second step, will largely depend on the co-operation of the local authorities, particularly local authorities of the first grade (if I may so put it), and also of other local authorities. I feel sure that there is no great bone of contention between us in this matter, but a common interest in the preservation of the amenities and uses of the country before these amenities and uses are too interfered with by development, not only of motor cars but of modern life gener
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ally. The complexity of modern life is clashing with the old institutions which are part of the country, but it is in this case not so much the institution as the purposes of the institution that deserve our protection. I feel certain that I can appeal to noble Lords opposite as well as to my noble friends to do what they can personally—and it should be a very great deal—to see that the purposes of this and succeeding legislation are fully and zestfully carried out. If we do not act now, if we wait any longer, we may well be too late.
Moved, That the Commons Amendments be now considered.—(Lord Mitchison.)
On Question, Motion agreed to.
LORD MITCHISON: My Lords, I beg to move that this House agrees with the Commons in the said Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Mitchison)
THE LORD CHANCELLOR (LORD GARDINER): My Lords, assuming that your Lordships agree that the Amendments should be taken together, the Question is: That this House doth agree with the Commons in the said Amendments?
6.48 p.m.
EARL FERRERS: My Lords, the noble Lord, Lord Mitchison, is always generous in his description of Bills and the Amendments to them, and we are grateful to him this evening for the details which he has given us with regard to the Amendments put forward in another place. This is a new Bill, touching new ground, and it must have given a great deal of anxiety to the people in the noble Lord's Department who had to prepare it and cover all eventualities. We are extremely grateful for the time which I know the noble Lord himself has given to this Bill and I only hope that, now it is about to become an Act, the Bill will work with the success with which the noble Lord hopes it will work.
LORD MOLSON: My Lords, I should like to express my appreciation of what the Government have done. Several of the important Amendments which have been carried in another place deal with matters which were raised in this House first. I would point out that the first one dealt with a matter which I not only raised but pressed very much on Report.

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I pointed out to the noble Lord on that occasion that my Amendment was taking almost exactly the words which he himself had used in reply to the noble Lord, Lord Chorley, on this matter. I am extremely glad, though I was not able to persuade the Parliamentary draftsmen, that an Amendment has been brought in, although it is in a different form, dealing with the matter of claims to ownership, because it really was obscure in the original draft of the Bill, when paragraphs (a) and (b) dealt with definitive title and paragraph (c) was not dealing with it.
I should especially like to express my appreciation of the new clause dealing with the protection of unclaimed common land. This was a matter which we came to refer to as the lacuna. The noble Lord promised me that he would see that a clause was devised in order to give protection. I am sorry that it does not include civil protection and gives only criminal protection, but I am sure that the Government, and particularly the Parliamentary Secretary, have done their best to meet us upon this matter.
We also emphasised very much the great importance of publicity if the necessary claims were to be made, because, under this Bill, if they are not made in time they are extinguished for ever. I think we can claim that in your Lordships' House we raised nearly all the points of substance, and if it was only in another place that the Amendments were finally moved and accepted it is none the less satisfactory to us to find that they have now been accepted and are being incorporated in the Bill. I hope, therefore, that your Lordships will accept the Amendments which have been made by another place.
LORD MITCHISON: My Lords, may I, with any necessary leave, thank your Lordships for the careful attention that has been given to this Bill. I think we have a common cause in the matter. I was once told, "No names, no pack drill", but I might perhaps be allowed to say how much we were indebted to the suggestions of the noble Lord, Lord Molson, in this matter. He spoke, I think, for the Commons, Open Spaces and Footpaths Preservation Society, and the work of that Society—now, I think, celebrating its centenary—has really been singular and valuable to the whole
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country and those who live in it. Therefore, the thanks that I offer to your Lordships on both sides of the House are very sincere. One does not get into a subject of this kind without developing a certain enthusiasm for it, and I am extremely glad personally that the Bill has been passed. This is a difficult matter, and this is, after all, only a preliminary Bill. I am glad, however, that it has met with general approval and has, on the whole, reconciled the views of noble Lords here with those of Members of another place.
On Question, Motion agreed to.

REDUNDANCY PAYMENTS BILL
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 Lindgren.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 1 agreed to.
Clause 2:
General exclusions from right to redundancy payment.
2.—
(2) Except as provided by section 10 of this Act, an employee shall not be entitled to a redundancy payment by reason of dismissal where his employer, being entitled to terminate his contract of employment without notice by reason of the employee's conduct, terminates it either—

(a) without notice, or

(b) by giving shorter notice than that which, in the absence of such conduct, the employer would be required to give to terminate the contract, or

(c) by giving notice (not being such shorter notice as is mentioned in paragraph (b) of this subsection) which includes, or is accompanied by, a statement in writing that the employer would, by reason of the employee's conduct, be entitled to terminate the contract without notice.

LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (2), to leave out all words after "dismissal" and insert:
"for such conduct as would entitle the employer to terminate his contract of employment without notice, whether the employee is dismissed with or without notice, and whether

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any notice given is that which in the absence of such conduct the employer would be required to give to terminate the contract."
The noble Lord said: I beg to move the Amendment standing in my name. It does not look as if in this House we are going to be of quite so much use on this Bill as we were on the last one; nevertheless, I think we should try to be of some use by drawing attention to some of the points of practical difficulty in its application. This Amendment is one which arises out of an Amendment made in another place in order to meet suggestions by the Opposition. In meeting these suggestions, I am not quite certain that some new difficulty has not been created.
The position, as I see it, is this. Here we are dealing with the exclusions from the right to redundancy payment. The first exclusion is that where a man is dismissed for misconduct (I am using colloquial language) without notice, he is not entitled to a redundancy payment. Where he is dismissed for misconduct with shorter notice than would normally be given under the Statute—where the employer, for example, says, "You go at the end of the week"—in that case, again, he is not entitled to redundancy payment. In another place it was represented that it might be convenient, possibly for both parties, and there might be no particular trouble, if the employer were to say: "All right. You are out; but you may stay until the end of your normal period of notice". This, as the Committee know, would be four weeks in the case of someone who had worked for over five years, and two weeks in the case of someone who had worked for over two years.
In another place, the Amendment in subsection (2) was introduced to enable a man to be dismissed with full normal notice, provided only that the notice then included, or was accompanied by, a statement in writing that the employer would by reason of the employee's conduct be entitled to terminate the contract without notice. The reason for that, I understand, was that there was a strong desire not to create any administrative confusion in this matter: that either you went on normal notice, in which case prima facie you were entitled to redundancy payment, or you went on the spot, when prima facie you were not entitled to redundancy payment.
I wonder if it is quite right to tie down to the question whether or not this evidence is provided. After all, it is rather an act of grace on the part of the employer to say: "All right. You work out your notice, but you will have to go after that". It seems rather unfair that he should have to make the redundancy payment, nevertheless, despite the man's misconduct, despite the fact that he could have been dismissed on the spot, and merely because he has acted in this way and has omitted, maybe through ignorance, to give, together with the notice, this statement in writing. The purpose of this Amendment is merely to try to avoid the requirement that this statement in writing must be given. I move it because it seems to be a little unfair to make this requirement, and, as I understand it (I may be wrong about this), so to speak, cancel the exclusion from the redundancy payment simply because of what may be a pure administrative slip in a factory or elsewhere. I beg to move.
Amendment moved—
Page 2, line 22, leave out from ("dismissal") to end of subsection (2), and insert the said words.—(Lord Drumalbyn.)
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD LINDGREN): I could not claim that on the Second Reading of this Bill the Opposition were given adequate replies on the number of points that they raised. That was due entirely to the extremely late hour, for this House, at least, when we had that discussion. Therefore, subject to your Lordships being prepared to bear with me and not being too bored, I propose to deal more fully with the Amendments that are going to be moved to-night, including this one, because most of the points of real substance that were raised during the Second Reading debate have been quite properly brought out in the Amendments on the Marshalled List.
I hope to be able to persuade the noble Lord that this Amendment is unnecessary, because the Bill already provides for all the possibilities when the employer dismisses the employee for misconduct. The purpose of subsection (2) of this clause is to make it clear beyond doubt that an employee rightly dismissed for misconduct (except when he is already under notice, in which case he will be dealt with under Clause 10) is not entitled

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to a redundancy payment, irrespective of whether there may also be redundancy at the time. These matters are dealt with, as the noble Lord has suggested, under paragraphs (a), (b) and (c) in this subsection. They deal respectively with the situations where the employer dismisses a man without notice (which is in paragraph (a)), dismisses with less notice than he would have been required to give if the worker had not misbehaved (which is in paragraph (b)), or lets the worker work out his full notice to which he would otherwise have been entitled, or even more than that, despite his misconduct (which is in paragraph (c)). That is the paragraph with which the noble Lord has specifically dealt this evening. So far, the Bill and the noble Lord's Amendment differ only in presentation.
It would not be true to say that, under the subsection as it stands, the employer who allows the worker some notice, or his normal notice, is in any way prejudicing his position or exposing himself to the possibility of a reference to the tribunal by so doing. It will, of course, be open to the employee who is dismissed for alleged misconduct to appeal to the tribunal on the grounds that he did not in fact commit misconduct, and that the real reason for his dismissal was redundancy. But the employee can do this whether he was allowed notice or whether he was not—that would make no difference to the position.
There is one extra requirement in the Bill under paragraph (c) which does not, appear in the Amendment we are discussing—namely, the requirement on the employer, when he allows the employee to work out his full notice, to give the worker a written statement making it clear that, because of the employee's misconduct, the employer was entitled to dismiss him without notice. This requirement is necessary so that if the case goes to a tribunal there will be a record available that the allegation of serious misconduct was in fact made at the time of the notice. Without such a provision, it might be difficult for the tribunal to establish what had happened. For example, while the employer would claim that there had been misconduct and that therefore no payment was due, the employee might contest this and point to the fact in support of his argument that he was given normal notice. This requirement is, therefore, a
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necessary protection for the parties. But these cases will, of course, be
rare, and it is not, therefore, an onerous requirement on the employer to give a written notice in such circumstances. Indeed, in view of the importance of the transaction, it is a very reasonable one. This is the only difference between the present provision in the Bill and the noble Lord's Amendment. I hope he will agree that the difference represents a necessary protection, not least for employers themselves, and in the circumstances I hope that he will withdraw his Amendment.
The noble Lord mentioned the case of an employer who forgets that there is a requirement under the Bill for notice to be served on a worker whom he has dismissed for misconduct. But the number of employers who have no office staff is very few indeed—as few as the number of workers who are likely to be dismissed in these circumstances. In most organisations where redundancy is likely to arise there is a fairly large staff department. All the ramifications of Industrial Injuries, National Insurance, Pay-as-You-Earn, and all the rest of it, make a staff department and a personnel manager an essential part of modern business, and in those circumstances I do not feel that this provision is likely to be onerous on the employers. In fact, it is for the employer's protection, and to enable him to justify, or to give evidence of, facts which arose perhaps three weeks, a month, or, if it is a long-service employee, six weeks before, and of which memories of circumstances might be blurred at the time the matter goes to the tribunal.
LORD DRUMALBYN: I am very much obliged to the noble Lord for his explanation of the reason for this. Of course, this Bill applies not only to those organisations which have staff who can look after matters of this kind; it applies also right down to the employer who employs only one person, even to a person who employs one domestic servant. So it will not be as straightforward as the noble Lord suggested in all circumstances. I should have liked, had it been possible, that this should not be an absolute requirement, but should only be taken, as other things in the Bill are taken, as prima facie evidence by the court. But I quite see the difficulty here. One of my reasons for raising this question is that I think the more publicity

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that can be given to this, and the more it can be brought to the attention of trade associations and the rest, the better. If this is to be a requirement, it is as well that everybody should know it. I hope that as much publicity will be given to it as possible, and in that hope I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
7.8 p.m.
VISCOUNT FALMOUTH VISCOUNT FALMOUTH moved, after Clause 2, to insert the following new clause:
Redundancy payment may be varied
". Notwithstanding the provisions of this Part of this Act, in any case in which a tribunal, on an application being made to them in that behalf by an employer, are satisfied that an employee who is entitled to a redundancy payment under this Act has received an offer of suitable employment the acceptance of which by him would not result in any loss of earnings nor necessitate the payment by him of any expenses, the tribunal shall, after taking into account all the relevant circumstances, make such determination as to the amount of the redundancy payment to which the employee is entitled as seems to the tribunal to be just and equitable ".
The noble Viscount said: I must first apologise to the Committee for not being present at the Second Reading of this Bill, which was so well described as a landmark. I have a personal interest in the Bill, both as an employer and as one who is closely connected with an employers' association. In moving this Amendment, I take into account the general principles of the Bill which were so well received in your Lordships' House on Second Reading, and must attract the support of all good employers. But there are important points which I think require the attention of the Committee.
I move the addition of this new clause, on the grounds that the full redundancy payment should not be made where suitable alternative employment is provided with another employer, and where the employee does not suffer any loss of earnings or expenses in moving house and home. The need for the mobility of labour has always been emphasised by all Governments, and I would submit that the redundancy payments are intended, in part, to compensate particularly the younger man for the inevitable costs of
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movement from one part of the country to another where there are fresh jobs available. As the redundancy payment depends on length of service, part of the payment is intended—and very rightly so, in my opinion—to compensate for what one might call the loss of expectation arising from long service. Nevertheless, I think I should make the point, that if part—and I say advisedly "if"—of the redundancy payment is to cover loss of earnings or expenses incurred in moving home, that part of the payment must surely be restricted to cases where these factors apply.
It would seem, therefore, that if the mobility of labour is to be encouraged by this Bill, where an employee has the opportunity to move, perhaps far away to another job, suffering loss of earnings and incurring expenses, he should get the full amount of the redundancy payment; but if he has the opportunity to accept suitable employment which does not involve him in any expense or loss of earnings, the amount of redundancy payment should be limited to the long service element and be determined by the tribunal which is being set up under the Bill. I beg to move.
Amendment moved—
After Clause 2, insert the said new clause.—(Viscount Falmouth.)
VISCOUNT FALKLAND: I support this Amendment. As I said on Second Reading, I think the tribunal should decide the amount of a redundancy payment when there is no expense of residential transfer. I cannot see that a payment intended to encourage mobility of labour will serve this purpose unless it is paid only in respect of this. I still think it is human nature to get the greatest advantage from a redundancy payment, and residential change is likely to be avoided, if possible, or at least deferred. The general principle of redundancy payments will have the support of good employers, but I think there are points of detail which require change before the Bill reaches the Statute Book.
LORD LINDGREN: In spite of the plausible manner in which the noble Viscount, Lord Falmouth, has moved this Amendment and the noble Viscount, Lord Falkland, has supported it, I cannot advise your Lordships to accept it. It

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would destroy the basic principle of the Bill which, as the noble Viscount said, has been widely accepted by both sides of industry during our consultations and has indeed received wide support in Parliament, the Press, and throughout the country. This principle is that workers must be entitled to a legal guarantee of compensation on redundancy and that this should relate to the loss of security built up in the job, as measured by length of service put in with the employer, as well as loss of earnings. Without such a guarantee, the Government believe that the scheme could not make the necessary impact on the attitudes of workers towards desirable industrial and economic changes.
If this new clause were accepted, an employee would never know in advance of redundancy what compensation he was to get or, indeed, if he would get anything at all. The provision suggested in the Amendment assumes that the only things for which a redundant worker ought to be compensated—assuming he finds fresh work—are direct loss of earnings or increased expenses. But there are many other factors involved. First, the worker has to abandon a familiar working environment round which he may have built much of his life, and start again in a different setting with different workmates. That is something which no worker can be expected to welcome, and the older one gets the less one welcomes it. Then there is the loss of security. Because of the general operation of the "last in, first out" rule, the longer the worker has been in his existing job, the more security against dismissal he has built up. Once he moves to another job, he is back at "square one" and liable to be among the first to be dismissed if there is redundancy.
Even though a worker finds suitable work with comparable earnings, he may well lose in other respects because of his reduced seniority; for instance, in such matters as pension rights, entitlement to sick pay and holiday pay.
Even if it were possible to measure all these things precisely in monetary terms, the sort of provision envisaged in the Amendment would be quite impracticable. It envisages a separate determination by the tribunal—with no rules to guide them—for all workers who receive offers of suitable employment not involving
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direct financial loss, and whose employers choose to take the matter up. Any arrangement on these lines would produce an impossible amount of litigation, and widespread anomalies, and injustices as between workers with one employer and workers with another. The new clause is concerned with offers of suitable alternative work, but it pays no regard to when that work materialises, whether immediately or after the worker has suffered a spell of unemployment. Nor does the clause say anything about what is to happen if the new job folds up within a short period. If the object of the Amendment is to fit the compensation to the hardship suffered after redundancy, it obviously ought to have regard to these factors, in particular, to how long the worker remains unemployed before starting fresh work.
However, one has only to think of the need to have regard to any unemployment to see how completely inappropriate is a scheme of lump-sum compensation for that purpose. Reducing hardship during unemployment is the function of unemployment benefit under the National Insurance scheme; and this is precisely the trouble. The noble Viscount's approach is, I say with respect, mixing the two things up. It is trying to make redundancy compensation do the job that unemployment benefit ought to do. The noble Viscount wants the amount of compensation to reflect the hardship the worker may encounter after he becomes redundant; and a spell of unemployment would be a major element in such hardship. But this must be dealt with through unemployment benefit; and, as your Lordships know, the Government have that matter under review at the present time. We have always regarded better provision through unemployment benefit as complementary to the present Bill.
I am quite sure the principle in the Bill is right. Redundancy compensation should relate to length of service in the job and should not be conditioned on what happens to the worker afterwards. This has always been the principle behind the "golden handshake" for managerial staff who become redundant. Nobody has ever suggested that compensation to a company executive should be reduced because he had found himself an opening with another firm, and it would be quite

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wrong to apply such a principle to workers generally. The Bill follows the practice under existing voluntary redundancy schemes which provide for lump-sum compensation related to length of service.
I therefore trust that the noble Viscount will be satisfied with the explanation that I have given and will not press the Amendment.
7.19 p.m.
LORD DRUMALBYN: If I may say so, I think my noble friends have been feeling their way towards something which I know has troubled a good many of us. It is all very well to have a "by and large" scheme of this kind, but you really cannot claim then that you are giving compensation in respect of redundancy where what happens on redundancy will be so different as between one person and another. This is a basic difficulty and it is not overcome in any way. Indeed, it is accentuated by unemployment benefit, because, while one man may go direct from one job to another without incurring any expense and, as the Amendment says, without any loss of earnings—and possibly even with greater earnings—another man, who has served for exactly the same time, may remain out of a job for a long period and may have to move somewhere else. In a sense that is not justice. It is not fair, as between one and the other, that they should receive exactly the same compensation.
We understand the terms of the Bill, and the question raised by the Amendment—and it is a fundamental one to the Bill—is whether it would have been possible to draft the Bill in such a way that one part of the element of redundancy, as the Amendment suggests, would be related to length of service in time, and the other part, also based on years of service but taking into account what happened to the person afterwards related to the degree of hardship in the individual case. Of course that would not be easy for the tribunals, but I should have thought some guidance of a general character could be given to the tribunals, and that before very long standards would be worked out to deal with this particular aspect.
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I cannot advise my noble friends to press this Amendment, because clearly it is too late at this stage to make such a fundamental alteration to the Bill. I have every sympathy with them, however, in drawing attention to this very great difficulty of dealing fairly between two people in identical circumstances, both of whom will get the same redundancy payment but one of whom seems to need it and the other does not. This is the basic difficulty. I am glad that they have drawn attention to it. I am afraid that it is too late to do anything, but perhaps one of these days something may be done about it.
LORD LINDGREN: I am grateful to the noble Lord for having extended the discussion a little, because it gives me the opportunity to say this. Nothing is fair in this world between two individuals in apparently the same set of circumstances. There may be two workers who have been working for the same employer for the same length of time, and hardship arises when they become redundant. If one worker was fortunate enough to have had no family sickness he may have a nest-egg tucked away in the Co-op., or in war savings, or something like that. The other fellow, in exactly the same conditions, may have had a couple of kiddies ill for a long while, and may have spent a lot of money, in spite of the Health Service, in trying to get them back to health. Or he may have suffered considerable hardship because his wife is incapacitated and he has had to pay for someone to come in and help with the children. As soon as you get outside the general principle with which the Bill is concerned—that is, that where a worker has provided continuous service over a long period of time and then becomes redundant he is entitled to redundancy payment—and try to do something more, you get into all sorts of situations which, in the end, would come down to having a means test.
I would make this point—and I hope that the noble Lord will not think I am trying to bring in class warfare. If a business executive is declared redundant, the board of directors give him £5,000, or three years' salary, or twelve months' salary; and nobody calls it a question of hardship. The real hardship, very

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often, is that if a worker misbehaves himself, as we were discussing on a previous Amendment, he gets the sack, but if a business executive misbehaves himself it becomes incompatibility of temperament and he is given a year's salary. Where is the relationship of hardship in the two cases?
LORD DRUMALBYN: The trouble is that these "golden handshakes" are not standardised. The noble Lord is not introducing a Bill to standardise "golden handshakes". He is introducing a Bill to standardise redundancy payments, and this is the whole difficulty involved, owing to the different circumstances between people with very much the same length of service with the same employer and so on.
LORD LINDGREN: If you have been with a firm twenty years, even a "copper handshake" is more welcome than nothing.
VISCOUNT FALMOUTH: I am very grateful to noble Lords for having brought out these points in this discussion which perhaps were not fully brought out on Second Reading. I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
Clause 3:
Dismissal by employer
3.—
(2) An employee shall not be taken for the purposes of this Part of this Act to be dismissed by his employer if his contract of employment is renewed, or he is re-engaged by the same employer under a new contract of employment, and—

(a) in a case where the provisions of the contract as renewed, or of the new contract, as the case may be, as to the capacity and place in which he is employed, and as to the other terms and conditions of his employment, do not differ from the corresponding provisions of the previous contract, the renewal or re-engagement takes effect immediately on the ending of his employment under the previous contract, or

(b) in any other case, the renewal or re-engagement is in pursuance of an offer in writing made by his employer before the ending of his employment under the previous contract, and takes effect either immediately on the ending of that employment or after an interval of not more than four weeks thereafter.

7.26 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (2), to leave out paragraph (a) and the words "in any other case," at the beginning of paragraph (b). The noble Lord said: There are two cases here and the effect of this Amendment is to remove one of them. The first case is where the dismissal takes place and then, before the period of notice elapses, the man is given another contract to come into effect immediately on the ending of his first contract. In that case the consequences follow that there is no redundancy payment that can be claimed. In the other case, which is the one which, under the Amendment, is left as the only case, there is a period of four weeks after expiry of the notice during which the employer may renew the contract—"an offer in writing made by his employer".
There are several difficulties about the first case that I am seeking to leave out. Let me take this one to start with. It may be that the employee himself does not want to take his redundancy payment. He may have received an offer of employment a day or so after his notice expired, and he may want to go back, and he does not want to take his redundancy payment; he wants this to be regarded as continuous employment throughout. He does not envisage the possibility of his becoming redundant at a later time and he wants it to run right through. There is a technical difficulty, as I see it, here. It may be subsequently discovered that he has not taken his redundancy payment when his employment does come to an end, and he will then be debarred from getting it, if that time occurs more than six months after his failure to claim his redundancy payment. He may lose it altogether. If the noble Lord looks at Clause 9(2) that seems to be the effect.
Then there is the whole question of temporary closures. This was argued in another place and I need not go into it in detail. Where there is temporary closure, undoubtedly the normal thing would be to lay off people; but it has not always been done in that way in the past, and I think it would be a good thing if the noble Lord were to make it clear that this is the way it will have to be done in the future if this clause is to remain part of the Bill. It is very important. That old habit of paying people off, having a temporary closure and then re-engaging

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them will expose the employer to having to make redundancy payments. Therefore the only way in which ho can deal with that kind of situation in the future is to lay the men off, and, if the lay-off is not too long then there is continuity of employment.
There is the third case I should also like to mention, namely, the question of run-down, possibly with staggered discharges. Here, in the case of, say, a cut—quite a large reduction in the number of people employed—the employer may not know at the time when he gives notice which of the men, or how many of them, he is actually going to take on again. In such a case I think it would have been the practice in the past normally to give the lot notice and then re-engage those he wanted to take on again. This, at any rate, is one way of doing it. If this clause remains as it is, I suppose that instead of doing that he would have to lay them all off until he had made up his mind. I am not at all sure. That is the case one had in mind.
I quite appreciate that the Bill is drafted with the object of encouraging employers to make up their minds as soon as possible on this matter, and to plan as far ahead as possible, but that cannot always be done. If an employer had not decided which of the men he was going to keep on and which he would have to release, it might well be that, although a man was taken on again, merely because the contract had not continued from the point where it had left off without any interval at all, the redundancy payment would become payable. That is in spite of the fact that the man was going on working for the same employer, in spite of the fact that he had suffered no loss, and in spite of the fact that he might never become redundant at all after that and would get his pension in the end. It seems odd. I should have thought that it would be better to have only the one case and to give a four weeks' interval. That is why I have put down the Amendment, and would ask the noble Lord to explain the position of the Government upon it. I beg to move.
Amendment moved—
Page 4, line 3, leave out from beginning to ("the") in line 11.—(Lord Drumalbyn.)
LORD LINDGREN: I most gladly give the best explanation I can of the clause. In doing so, I must advise your Lordships not to accept the Amendment, and I hope to persuade the noble Lord that it was not necessary for him to move it. Let me first of all make clear what the effect of the Amendment would be. Subsection (2) of Clause 3 deals with cases where a worker's existing contract is terminated by his employer, but before the termination takes effect the employer offers to reengage the worker and the worker accepts re-engagement. This situation might arise where after the worker has been given notice, the situation changes and the employer finds that he can keep the worker on, either in his old job or in an alternative job. Paragraph (a) of the subsection says that where in these circumstances the terms of the new contract which the worker accepts are the same as the terms of his previous contract, then the re-engagement must take effect immediately if the worker is not to be treated as redundant. Paragraph (b) says that where the terms of the new contract are different from those of the previous contract, the worker will not be treated as dismissed provided the re-engagement takes place within four weeks.
The effect of the Amendment would be that this four weeks' grace would be allowed in the first case—that is, where the terms of the new contract are the same as those of the old—as well as in the second case, where the new contract is different. But these two cases are essentially different. The first case is where, in effect, the worker is re-started in his old job. But keeping a worker without work for up to four weeks and then re-starting him in the same job is really, as the noble Lord himself suggested, lay-off and has always been considered to be lay-off. It should not involve any termination of the worker's contract. When a worker is laid off, his contract is not terminated. It is right that, if an employer intends to keep a worker idle for a short period, he should not be encouraged or allowed to terminate the contract for that purpose. What he should do is to lay the worker off. We have ensured in Clauses 5 to 7 that if he does lay men off for periods of less than four weeks he will not be obliged to make payments under this Bill, and that is his guarantee. His proper course in the

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circumstances we are discussing is to lay the worker off, and thus avail himself of the protection of the clauses relating to lay-off.
I should like to make it clear that where the subsection talks about re-engagement taking effect immediately on the ending of the worker's employment under his previous contract, this does not necessarily mean that the worker must actually start work on the day following the expiry of his previous contract. It means that his new contract must begin to run from that time. He does not have to be at work. He may be laid off for some time, provided always that his new contract allows for lay-off; and the situation as regards any entitlement to a redundancy payment would then be governed by the provisions of the Bill relating to lay-off in Clauses 5 to 7.
It may be said that under some contracts—for example, where employees are on a fixed salary—the employer has not got the right to lay people off without pay, and he could not therefore avail himself of the protection of Clauses 5 to 7. But the whole point of such contracts is that they give a certain guarantee of security against short-term fluctuations in the work. The effect of the Amendment would be that even where the employee has a contract of this kind, it would still be open to the employer to keep him idle for up to four weeks without incurring a redundancy payment. The employer could terminate the existing contract, and offer re-engagement on exactly the same terms as before, but starting only after an interval of up to four weeks. For all practical purposes, that would be a lay-off, despite the fact that the worker's contract is designed to safeguard him against such breaks in employment.
I suggest that the right course for an employer who wants to re-start a worker in the same job after a short interval is to lay him off, where the terms of the contract permit this, and the position would then be governed by the lay-off provisions in the Bill. The Amendment would permit what would in effect (though not in form) be a lay-off, even where the worker's contract did not permit lay-off. I must therefore advise your Lordships to reject the Amendment. But, rather than that we reject the
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Amendment, I hope that the noble Lord will in fact not press it.
LORD DRUMALBYN: I am grateful to the noble Lord for his explanation, and I certainly take the point that this would have the effect of enabling employers to, so to speak, provoke a gap in the continuity of employment without there actually being a gap from the point of view of a redundancy payment, but at any rate enabling them to lay men off and re-engage them "ad lib." I would agree that that is not desirable. The only point I should like to put is this. I am still not quite certain why it is necessary to include the provision that the contract of renewal should be identical in order to comply with paragraph (a). It might be a better contract of employment. Why must there be the provision that it must be identical? I do not quite understand that.
LORD LINDGREN: In those circumstances it would not. It is hardly redundancy if you get a rise; an improved contract would be a rise. It is a safeguard for the worker for re-engagement on the same terms and under the same conditions—not less than that. It could be more, and there might even be certain variations in conditions which would not really amount to a lessening of the value of the contract.
LORD DRUMALBYN: These are complicated provisions. I am grateful to the noble Lord for making them so clear. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 [Employee anticipating expiry of employer's notice]:
On Question, Whether Clause 4 shall stand part of the Bill?
7.41 p.m.
LORD DRUMALBYN: May I raise a point on this clause? The point I have in mind is in relation to the question of the run-down of a factory's work. Could the noble Lord make this clear to me, for I am not clear about the interpretation of this matter? As I understand it, the longer the notice of the run-down given, the better. One may have, for example, a decision to close a factory in a year's time and to reduce

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employment at, say, staggered three-monthly intervals. What this clause has to deal with is the employee's giving notice before the employer's notice expires. I take it that the intention here is to encourage planning; and as part of planning, if one is having a phased rundown, the employer has to be able to depend on the employee's remaining until his time comes to go I take it that the object of the clause is to encourage that. There is what is called the obligatory period, which is the period of normal notice. The idea here seems to be that the employee may be able to give notice of termination during the obligatory period, and there can then be an adjustment about his redundancy payments. That is reasonable, because he may get the offer of a job which will not stand open until his time comes to be discharged.
It is important to try to get clarification on this matter, because it is a difficult clause. I hope that my understanding is right; that a redundancy payment is not payable to an employee if he goes during a period of long notice, except during what is called the obligatory period, the period of statutory notice, the four weeks or two weeks before the time when he is scheduled to go. Then, within that period, he can give notice and some adjustment may in consequence be made in the redundancy payment. He will get the redundancy payment if he stays till the end of his notice, and can get a modified payment if he goes during the obligatory period. Is my interpretation of the matter correct?
LORD LINDGREN: I rather anticipated that the noble Lord might raise this point on Clause 4. If I understand the noble Lord aright, he has asked whether the provisions of Clause 4 (which protect the rights of workers who leave before their notice expires) should operate only during the "obligatory" period of notice, as this is defined in subsection (5) of Clause 4. The meaning of "obligatory period" can be illustrated by an example. supposing under his contract a worker is entitled to two weeks' notice, but his employer chooses to give him two additional weeks ex gratia, making a total of four. Then the last two weeks of the total four weeks' notice would be the obligatory period—that is the period to
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which the worker is entitled under his contract. It is necessary in the provisions in this clause to hold a balance between the interests of the worker, on the one hand, and those of the employer, on the other. The worker may have excellent reasons for wanting to leave before his notice expires—for example, he may have been offered a job elsewhere. On the other hand, the employer could be greatly inconvenienced by a worker leaving in advance of the expiry of his notice: if he were a key worker, for instance, the employment of other workers might depend on his staying on.
We have therefore thought it right in a case where the employer gives longer notice than he is strictly required to, that he should not be penalised for doing this, in the sense that his workers would have a right to leave at any time during the extended notice and still appeal to the tribunal for the whole or part of a redundancy payment. If the provisions in Clause 4 applied throughout notice, whether it was notice as required by the contract or ex gratia notice, we think the effect would be bound to be to discourage employers from giving their workers any more notice than they were required to by the terms of the contract. This would be most undesirable. As the noble Lord said, employers should be encouraged to give the longest possible notice of redundancy, and the value of long warning and notice in resettling the displaced workers has been repeatedly demonstrated in recent experience. I am sure therefore that it would not be desirable to extend the provisions of Clause 4 so that they applied throughout notice and not just during the obligatory period of the notice.
As the noble Lord has said, in present circumstances, where redundancy is likely to occur, the greater the length of notice, the better. This is so for two reasons, not only from the point of view of the employee, and his opportunities, but also because the Ministry of Labour are given time to put in experienced teams and, in consultation with the men, to make arrangements for other suitable employment.
Clause 4 agreed to.
Clause 5 [Lay-off and short-time]:
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (2), after "reason of" to insert

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"absence of or". The noble Lord said: This is a comparatively simple Amendment which I can explain quite easily. As subsection (2) of the clause stands, it says:
"Where by reason of a diminution in the work provided for an employee by his employer (being work of a kind which under his contract the employee is employed to do) the employee's remuneration for any week is less than half a week's pay (calculated in accordance with Schedule 2 to this Act), he shall for the purposes of this Part of this Act be taken to be kept on short-time for that week."
This, of course, is for the purpose of calculating short-time. Under the Amendment subsection (2) would read:
"Where by reason of absence of or a diminution in the work provided…"
and so on. Many contracts of employment provide for guaranteed minimum wages. The guarantee may be half or more, possibly three days at the normal rate of pay. That being so, it looks to me as if this clause would tend to debar people who have this kind of contract of a guaranteed minimum wage from taking advantage of the lay-off provision.
I realise that these guaranteed minimum payments are made in order to cater for "lay-offs" in industries which are rather liable to "lay-offs", and the noble Lord's answer may be that this is, as it were, part of the bargain. On the other hand, if "lay-offs" occur very frequently, quite obviously the employees will not relish having to live on what may be very much less than half of their wages. Although from the point of view of the calculation for the purpose of redundancy payments they will be getting half the normal wage, they will not be getting half the total earnings. I wondered whether there was not some reason to include provision for allowing people who are being kept for pretty long periods, or perhaps for too frequently recurring periods, on a guaranteed minimum wage, to have also the advantage of the lay-off provisions in the Bill. I beg to move.
Amendment moved—
Page 6, line 18, after ("of") insert ("absence of or").—(Lord Drumalbyn.)
7.52 p.m.
LORD LINDGREN: I rather assumed that the noble Lord's Amendment was directed at the case where an employee does no work at all during a particular week, but nevertheless gets some pay
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under a guaranteed-week agreement. Most of the guaranteed-week agreements are for half pay or more, but if the pay is less than half a week's pay, as defined in Schedule 2, we want the worker to be treated as being on short-time for the purposes of Clause 5. That means to say that a guaranteed-week payment which operates in many industries at many times should, at least for the purposes of the Bill, be for half a week's pay or more. If it is less than half a week's pay, then we want the case to be dealt with on a short-time basis.
May I say, first, that this situation is not likely to arise very often? It would be very rare for a guaranteed-week agreement to provide for less than half a week's pay—excluding overtime, of course—and still rarer for the situation to continue for four weeks or more. I think, however, that I can reassure the noble Lord, in that the effect which he wishes to achieve with this Amendment is already achieved by the subsection as drafted. I am advised (and I must rely on the advice I am given) that the word "diminution" in line 18 is wide enough to cover cases in which the employee is provided with no work at all during a week. In short, the total absence of work is an extreme case of "diminution".
LORD DRUMALBYN: That, I am hound to say, is rather an unexpected interpretation of "diminution." It is a a sort of dolce far niente. But I think the assurance which the noble Lord has given amply covers the point, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 agreed to.
Clause 7 [Supplementary provisions as to redundancy payments in respect of layoff or short-time]:
On Question, Whether Clause 7 shall stand part of the Bill?
LORD DRUMALBYN: May I ask the noble Lord how long he expects the tribunals to take to give a decision? The length of time is very important when considering the procedure under this clause for dealing with "lay-offs" and short-time, with the employee giving notice, and the employer giving a counter-notice that work is expected to resume shortly and last for at least thirteen weeks

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and so forth. There is quite a pile-up of time. Before the employee can give his notice, four weeks have to elapse; then there is a week in which the employer can give his counter-notice; then there are the four weeks which might elapse during which the short-time or lay-off might continue. Then there is the question of the tribunal giving its decision—taking into account the further four weeks—and then there are another three weeks in which the employee can actually serve his notice. I wrongly said "serve his notice" beforehand, and I should have said "gives notice of intention to claim". This is a very long period, and I think that a good deal depends here on how long it is expected that the tribunals will take to give a decision.
I wonder whether the noble Lord could also say exactly how he envisages that the test of whether an employee is to be eligible for redundancy payment will be conveyed to the tribunal. As I see it, in the normal way there would first have to be the four weeks, then a period of intention to claim, then the employer's counter-notice, and then he would have to wait for another four weeks before the case would even get near a tribunal in the usual way. It is a long time for the employee to be laid off or put on short-time, and I wonder what comfort the noble Lord can give on this point. I quite understand that in the early days a tribunal may be somewhat flooded, until it gets a rhythm of working and so forth, but it would be helpful if the noble Lord could give us some idea of the time involved.
LORD LINDGREN: We all hope that the numbers of these cases will not be excessive. It is hoped that the tribunals will not be unduly overworked, and that they will give their decision within a few weeks. But, of course, the rights of the worker, or of the employer, for that matter, will not be in any way affected by delay in the tribunal arriving at their decision. We hope that a decision will be arrived at in a few weeks, at the maximum.
LORD DRUMALBYN: It is not a question of the worker's rights being affected. The fact remains that the possibility of his getting a redundancy payment is quite a strong incentive for him to wait for the conclusion. I think
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this is the way that things are quite likely to work. If a man is laid off, he wants to know whether he is going to get the redundancy payment, and he will not go unless he is sure of it.
LORD LINDGREN: To put it in colloquial language, a bird in the hand is worth two in the bush. But if there is unemployment there is unemployment pay, so there is a certain amount of sustenance coming in. The tribunal's decision arises more in the difficult cases, and we are hoping that those will be comparatively few. But the obvious course is to get to the tribunal as quickly as possible.
Clause 7 agreed to.
Clauses 8 to 10 agreed to.
Clause 11 [Exemption orders]:
On Question, Whether Clause 11 shall stand part of the Bill?
7.59 p.m.
LORD DRUMALBYN:I have what I regard as a rather important point to raise on this clause. This is the clause which deals with exemption orders, where employers already have, or subsequently make, redundancy agreements of their own. The clause allows the Minister to make an order excluding the operation of Clause 1 of the Bill where an employer makes, or has made, an agreement for redundancy payment, if he—that is, the Minister—is satisfied that it ought not to apply. I should like to ask the noble Lord some questions on this.
First of all, may I ask him what will be the criteria—apart from willingness to submit differences as to entitlement to the tribunal, in accordance with subsection (3)(b) of this clause—on which the Minister will judge whether or not to exclude the operation of Clause 1? I take it that one obvious example is that the payments provided for in the agreement should be not less than those provided for in the Bill. Are there any others?
Secondly, may I ask him: what happens in the case of an existing agreement which is less advantageous to the employee than that provided for in the Bill? Is it the Government's intention that this Bill should supersede agreements that do not measure up to the standards laid down in the Bill, and that such agreements should be discontinued?

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Is this the Government's intention? Then, what consultation has there been with employees' organisations on this aspect? Does the noble Lord know whether any of them are likely to expect redundancy payments both under the Bill and under the private redundancy agreements which already exist? Here, I am talking, first of all, of those agreements whose benefits are not equal to the benefits in the Bill.
Then, thirdly, what happens if one of the parties (presumably the employees' organisation) refuses to join in the application for recognition of a private scheme which is better than a public one? Because the Minister cannot act on this at all unless it is—to quote the words of the Bill:
"…on the application of all the parties to the agreement…"
All the parties to an agreement—both sides of the industry involved—have to agree to such an approach, and I am asking what happens if one of the parties does not agree. Here, may I ask the noble Lord, is it expected that in such a case the employer should modify the private scheme, whether by agreement or not, so that the payments under the public scheme and the revised payments under the private scheme will equal the present payments under the private scheme?
One can quite easily envisage that this kind of arrangement could be made if there is in existence a fairly generous private scheme. What would happen in such a case would be that, while maintaining the total level of the private scheme, the employer would make up the benefits that he has to pay under the public scheme to those of the private scheme. Is that what the Government envisage should happen in a case of this kind, where the Government do not recognise the scheme, or where there is not such an application—or even where there is? Is this the sort of arrangement that the noble Lord envisages should be made?
As I see it, the employer will in any case have to pay his contributions: there is no exemption. And he will have to pay the redundancy payments under the Bill as well as continuing the private scheme. One can envisage that happening, but it does not seem very
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likely that employers would be willing to do that if the private scheme were already more generous than the new public scheme, the scheme in the Bill. I should have thought that the Minister might have taken powers to make regulations about this matter similar to the powers he has taken to make regulations under Clause 14, which deals with the exclusion or reduction of redundancy payments on account of pension rights, which is a different matter altogether.
There is one other question I should like to ask the noble Lord. Here we have the position, as I understand it (I cannot find anything in the Bill to the contrary), that, whether the Minister recognises the scheme or not, the employer has to continue making his redundancy payment contributions. The only benefit that he would get from recognition of the scheme, as I understand it, is that the Fund would pay the public share of the redundancy payment, up to the amounts that will be paid under the Bill—but no more—and the rest he would have to find himself. These are points on which I think it is very important the Government should at least express an opinion, and say whether they can give any guidance. Where there is an existing scheme, should that scheme be continued in addition to the public scheme and, if not, how should it be adjusted in order to take account of the public scheme? I hope that the noble Lord will be able to give us some enlightenment on this, because it is an important matter.
LORD LINDGREN: I made a note of most of the noble Lord's points, and I hope to be able to deal with them; but if I miss any then I hope he will intervene. As to the question of the criteria for exemption, the main safeguard will be the fact that the trade unions have agreed to it. In the case of this Bill, we are relying very largely on the agreement of the trade unions to the scheme. I had been prepared to deal a little more fully with this point on the Question, Whether Clause 14 shall stand part of the Bill?—where, as the noble Lord says, we in fact deal with the question of superannuations, in particular; but I think it is quite useful to deal with it here, and that it may be helpful if I explain the position now.

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All employers will be required to make lump-sum payments to redundant workers not less in amount than is required by the Bill. The only other payments which may reduce an employer's liability under the Bill will be superannuation payments in cases which will be prescribed by regulations under Clause 14. A great variety of payments for redundancy are provided in the private sector and the nationalised sector under existing schemes. They consist of ex gratia lump sum payments, continuing weekly payments, contingent on the man being unemployed, and, in some cases also an element of pension provision. Where payments under existing schemes are of precisely the same character as those required by the Bill, it would be reasonable to expect that the amount of payment under the Bill would be offset against the payment under the scheme. But it would not be possible to provide in the Bill a satisfactory legal definition of the kind of payments which could be offset which would be comprehensive enough to cover all varieties of payment and equitable as between employer and employee. If one were to attempt it, it might prove to be narrower and more restrictive in scope than would be desirable.
We consider it preferable that employers themselves should, where appropriate, provide in their schemes that payments under them will be in fulfilment of their liabilities under the Bill. This is a more flexible arrangement, and will avoid the many disputes and anomalies that might arise. The noble Lord did not suggest it in his speech, but it has been suggested that the trade unions might not be willing to give up the rights that their members already have under existing agreements and that they might insist on having them as well as the rights under the Bill. I would not expect this attitude to be taken where payments under existing schemes are precisely the same in character as the payments required by the Bill. But, in view of the great variety of existing schemes and the many conditions attaching to payment under them, I think it must be a matter for negotiation.
The Bill creates a new situation and existing agreements must be looked at in the light of it. It would be very difficult for the Bill to anticipate the
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results of these negotiations by saying precisely how the arrangements should be altered; and that, in effect, is what we should have to do. I hope that that explanation meets the main points raised by the noble Lord. He referred to the question of consultation. There was consultation with the trade unions during the compilation of the clause in the Bill.
LORD DRUMALBYN: I am grateful to the noble Lord. Of course, in his reply he has reverted to the point of the Amendment of my noble friend, because, if my memory serves me aright, in the coal industry you have this type of redundancy arrangement which is relative to the weeks of unemployment. It is tied to that, at least, for a certain period. So there you get a totally different kind of redundancy payment; and it may be that there will have to be some modifications, as the noble Lord said, of these agreements. I understand his point that where there is the same kind of redundancy payment as is provided for in the Bill, no doubt the redundancy schemes can be treated more or less as one and merged administratively. I do not know how publicity is going to be given to this, but a certain amount of education about it will have to be given. There are going to be points of difficulty, teething troubles, in regard to this Amendment and we want to smooth them out so far as possible.
LORD LINDGREN: The safeguard is in the main that there are existing redundancy schemes and that they are in industries which have a strong trade union tradition and in which employers have looked at the problems of redundancy ahead of the Government. They have shown the way for what the Government are now doing. This Bill makes a national standard; it is up to the trade unions, whether in the electricity, gas, coal or railways industries, which have existing redundancy agreements to renegotiate in the light of the Redundancy Payments Bill and of its effect on their schemes. It is far better that there should be negotiation between the employer and the employee in the light of this Bill, than that there should be any interference on the basis of the Bill. If I may put it colloquially, in these industries the employer is not likely to take advantage of the worker. There are strong and

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experienced trade union movements in them, trade union movements which have experience in negotiating redundancy agreements.
Clause 11 agreed to.
Clause 12 agreed to.
Clauses 13 to 26 agreed to.
Clause 27 [Contributions to fund]:
On Question, Whether Clause 27 shall stand part of the Bill?
8.15 p.m.
LORD DRUMALBYN: This clause provides for contributions to the Fund and for those contributions to be varied or revoked by a subsequent order under subsection (4). May I ask the intention under this particular clause? Of course, the contributions are, I understand, 5d. additional on the National Insurance stamp for men, and 2d. for women. What I feel is that there is a good deal of uncertainty of what the actual cost of the scheme is to be to start with. That is indicated by a later clause which has a fairly wide span of drawing possibilities to finance the Bill. How does the noble Lord envisage that these orders will be made, and in what circumstances? In the normal way, National Insurance contributions are varied only when changes in the National Insurance scheme are made; and one would not expect that the Government would, if I may use a colloquial expression, "mess about" with National Insurance stamps for this comparatively small amount of an extra penny or so. even though it would be required.
I think the noble Lord, if he would, ought to say a little about the finance of this scheme. We hope his estimates will turn out to be right, that it will not be necessary to alter the National Insurance stamp after the first year and that his present estimates will hold. But one never knows when National Insurance rates will have to be varied. Is it the intention, by and large, of the Government not to make variations except in line with National Insurance variations on this matter?
LORD LINDGREN: As the noble Lord has said, the payments intended at the commencement are 5d. a week for men and 2d. a week for women. Also, as he said, they will be included within the National Insurance contribution. The normal method is that a stamp is pur
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chased from the Post Office and stuck on the card. I believe that in these modern days many employers frank the cards. All those things will proceed as at present. The extra yield of the contribution is expected to be about £18 million per annum. This should be sufficient to cover the Fund's commitments for a substantial period ahead. Estimates of expenditure are, of course, open to a considerable margin of error and provision is made not only to vary the contribution in either direction but also, under Clause 35, for advances to be made from the Consolidated Fund to cover any temporary shortage.
It is not intended to vary these contributions unless it is absolutely necessary. It will be the intention to vary the surcharge if the income of the Fund is much greater or much less than is needed. Changes would be aligned with changes in the National Insurance contribution, as the noble Lord has suggested. We must hear in mind that all these additions to the contributions for social welfare, National Insurance and the rest impose a very heavy charge on industry in regard to administration and clerical organisation. Everything will be done to minimise any fluctuations and changes that might be necessary. Of course, there will not be variation other than within the National Insurance contribution.
Clause 27 agreed to.
Clauses 28 to 33 agreed to.
Clause 34 [References and appeals to tribunal relating; to payments out of fund]:
8.20 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (2), to add to paragraph (a):
"whether or not a payment has been made to the employee under subsection (2) of section 32 of this Act."
The noble Lord said: The clause states:
"Where any such claim or application is made or such prior notice is given—"
this is a reference to the tribunal—
"there shall be referred to a tribunal, in accordance with regulations made under Part III of this Act,—…any question as to the liability of the employer to pay the employer's payment."
My Amendment would add:
"whether or not a payment has been made to the employee under subsection (2) of section 32 of this Act."
Under Clause 32(2), the Minister may make a payment on the application of an employee if he is satisfied that a payment is due. Subsection (4) of that clause gives the employer the right to appeal if the rebate is reduced, but it is not clear that the employer may appeal against his liability where the Minister makes a payment, so to speak, on his behalf—because the employer has not made the payment—and then tries to claim the money back. It is not clear that an employer can appeal against the Minister's claiming back the money and can deny liability. The Amendment would make clear that there is a right of appeal against being "dunned" by the Minister for a payment which the employer feels that he does not owe.
If the employer succeeds, presumably the Fund would have to meet the payment made to the employee in error. I should like the Minister to tell me what would happen in such a case. This does not seem to have been provided for in the Bill. Will the Fund have to bear the expense of the Minister's error, or will the Minister reimburse the Fund under Clause 55 as expenses? I beg to move.
Amendment moved—
Page 29, line 20, at end insert the said words.—(Lord Drumalbyn.)
LORD LINDGREN: I hope to be able to reassure the noble Lord that the result which the Amendment would secure is already achieved by the Bill. The type of case to which the Amendment is directed is one in which the Minister has already made a guarantee payment to the worker out of the Fund because he is satisfied that the payment was due and the employee has been unable to obtain it from his employer. As I understand it, the Amendment seeks to put it beyond doubt that the fact that the Minister has already made a guarantee payment of this kind should not prevent an appeal to the tribunal on the question whether the employer was liable for the payment in the first place. I am advised that under the clause as it stands there is nothing to prevent an employer from making an appeal in these circumstances. The fact that the Minister was satisfied that the employer was liable and acted by making a payment himself would in no way prejudge the issue; any more than if the
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worker was dissatisfied with the amount paid by the Minister and appealed to the tribunal.
In the normal way, any question about the employer's liability would be cleared up before the Minister made any payment to the worker, usually by reference to the tribunal; but such a question could arise after the Minister had made a payment—for example, because the employer decided to contest the liability—or because fresh evidence had come to the attention of the Minister casting doubt on the worker's entitlement to the payment. If this happened, it would be open to the employer or the Minister to appeal to the tribunal, and the issue would not in any way be prejudged. The Amendment, therefore, does not add anything of substance to the clause. The noble Lord asked what would happen if the Minister paid in error. Of one thing we may be certain, he would have to chase for a long time before he got the money back. The Fund would have to stand the loss if the Minister paid in error.
LORD DRUMALBYN: I am obliged to the noble Lord for his explanation. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 34 agreed to.
Clauses 35 and 36 agreed to.
Clause 37 [Continuity of employment in case of strike]:
On Question, Whether the clause shall stand part of the Bill?
VISCOUNT FALMOUTH: As I understand it—I hope that the Minister will be able to throw some light on the matter—Clause 37 says that when an unofficial strike takes place in breach of a contract of employment, the continuity of service of an employee for the purposes of calculating redundancy payments is not broken. If this clause remains part of the Bill, I fear that it may be taken that unofficial strikes in breach of a contract of employment are counternanced by the Bill. We all know that all sections of industry speak against the follies of such strikes and the great harm done to the good industrial relations which we are trying earnestly by this Bill to improve.
The argument will be put forward that because an employee took part in an unofficial strike, without perhaps fully realising or considering the implications

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of his action, he should not be deprived of the right to redundancy payments, as he might have given years of most loyal service to his employer. That is a strong argument; but, equally, the employer is expected to carry on his business in a law-abiding and reasonable fashion. Should not an employee, in turn, be expected at law to exercise reasonable responsibility, knowing that by taking part in an unofficial strike as distinct from an official strike he would be breaking his continuity of service? I therefore think the clause should be deleted.
VISCOUNT FALKLAND: I wish to support the deletion of the clause. I think that the amendment to the Contracts of Employment Act, 1963, should be deferred until the Royal Commission has reported. I understand that their Report will include the question of contracts.
LORD LINDGREN: There has been a considerable amount of discussion about this clause, both in your Lordships' House and in another place. In a way, that is entirely right and proper, because the problem involved, taken at its widest, presents a difficulty. But, on looking at the whole content of the redundancy scheme, I think that any impartial observer would be bound to say that a disproportionate amount of time had been given to this comparatively minor aspect of it. And I think that, despite this, the debates held on it have been neither very constructive nor very conclusive; they have been conducted throughout on a narrow Amendment which makes no positive contribution to the solution of these difficulties.
I would direct your Lordships' attention to the precise effect of this Amendment. It amounts to saying that the previous Government were right when they introduced a penalty clause into the Contracts of Employment Act, under which any strike in breach of contract broke continuity of service and, furthermore, that this should be the pattern in the case of redundancy payments as well. I submit that these propositions are quite untenable. I will not detain your Lordships by recalling the arguments with which my colleagues and I opposed the original provision in the Contracts of Employment Act, but we thought then that it would do no good to industrial relations and we certainly have not qualified our
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view in the light of experience since the Act was passed. In the Second Reading debate on this Bill noble Lords accused my right honourable friend the Minister of Labour of inconsistency in, on the one hand, saying that he would be reluctant to propose major changes in the law relating to industrial relations before the Report of the Royal Commission on Trade Unions and, on the other hand, making this particular change. This is really a somewhat misleading account of the actual situation with regard to the law in this field.
The fact is that the general understanding of what constitutes a strike in breach of contract has been thrown into such uncertainty as to constitute in itself a serious and important change. This clause is largely necessary because of that change, which has made the penalty clause in the Contracts of Employment Act a much wider one than was ever intended. Since the decision in Rookes v. Barnard, it has been more than ever clear that a strike in breach of contract embraces far more than the kind of irresponsible action which employers and good trade unionists alike want to discourage. It is quite likely that the great majority of all strikes, official or not, responsible or not, could be held to be in breach of contract. It was certainly assumed at the time the Contracts of Employment Act was passed that, if workers gave due notice before going on strike, they would not be in breach of contract, but since Rookes v. Barnard great doubt has been cast on that proposition and a distinction between strikes in breach of contract and other strikes can no longer be assumed to depend on how much notice of the strike is given. The Trade Disputes Bill which we have discussed this week in this House in no way affects this.
In this position of complete uncertainty, it is wrong to retain the provision to which I have referred in the Contracts of Employment Act and, still more, to extend it to this Bill. I must confess that I am surprised that some noble Lords have thought that this sort of penalty clause is appropriate to this Bill. I do not think that such an approach has much regard to the realities of everyday industrial negotiation. It amounts to penalising all workers, it may be to the extent of several hundreds of pounds, at the time of redundancy, when relations in the firm

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are already tense, on account of a strike that happened five, ten or fifteen years before. It is easy to imagine the bitterness and resentment this could cause, particularly if workers had gone on strike, as they might well have done, on the instructions of their trade union. I suggest that it is unrealistic to think that the majority of employers would want to impose a penalty years after the event in this way.
The Amendment would also create considerable difficulty for employers. Most employers when they came to make redundancy payments would want to disregard strikes in the remote past. But the Redundancy Fund would not be able to do so. If it came to be known that a strike had taken place—and your Lordships will recall that the scheme will be administered through the offices of the Minister of Labour, who will often know about these things—a rebate could not be paid in respect of the period before continuity was broken. The employer would have to meet all pre-strike payments out of his own pocket. The Redundancy Fund carries only a twenty years' guarantee. I have been on strike only once in my life, and I am very proud that I went on strike in 1926 in support of the miners, but that is more than twenty years ago. But if a man had been on strike only nineteen years before, he would be liable to this penalty. To bring these matters up again in a difficult period makes it, as noble Lords who are associated with industry will know, easy for things to flare up when redundancy is in the air. Tension is high and to aggravate it by having a clause which penalises workers for having been on strike, whatever the reason, some long time ago is unnecessary. I hope that noble Lords will not press the Amendment.
LORD DRUMALBYN: I should like to support my noble friend's Amendment. As the noble Lord opposite knows, this is a matter on which we are bound to disagree, and I think that it would be wrong if we did not express our disagreement, as it has been expressed elsewhere. First of all, let us get one thing straight. There is no suggestion at all that every strike would be a break of continuity. I know that the noble Lord did not mean to convey this, but he did so accidentally in the course of
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his remarks. That is not the proposal. The suggestion is that the position should be left as it is in the Contracts of Employment Act, 1963. I think that I ought to remind your Lordships of exactly what that Act says. Paragraph 7(2) of Schedule 1 says:
"The continuity of an employee's period of employment is not broken by a week which does not count under this Schedule, and which begins after it has come into force—
this is not what happened fifteen years ago—
"if in that week or any part of that week the employee takes part in a strike except where the employee has, in taking part in the strike, broken his contract of employment".
What this clause does essentially is to leave out the words
"…except where the employee has, in taking part in the strike, broken his contract of employment".
LORD LINDGREN: I assume that the noble Lord appreciates that the breach of contract is completely changed by the Rookes v. Barnard case.
LORD DRUMALBYN: I was coming to that. I am afraid that I can deal with only one point at a time. The purpose of putting this into the Contracts of Employment Act was to try to get throughout industry a fresh respect for contract, which I think we all recognise is exceedingly important in the modern world. The noble Lord talks of the penalty clause. The penalty is that it breaks a period of employment from the point of view of the Contracts of Employment Act so far as the giving of notice is concerned. So far as this Bill is concerned it would, as the noble Lord has said, have broken the period in calculating the redundancy payment, and it might be quite serious. But this is something that people should think of at the time when they are thinking of breaking their contracts. I should have thought it was important that they should have this in mind when they consider, if you like to put it in a rather unmoral way, whether it is worth while to break their contracts or not. This is why we attach importance to this and feel that it should remain in the Bill.
But, again, at this stage we know what the consequences would have been if we had sought to oppose this clause—we should have lost three months while

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the Bill went back to the other place—and we on this side are just as anxious as noble Lords opposite to get this Bill going. Therefore, although we strongly dissent from noble Lords opposite, we do not think it is right to have a confrontation (I think that is the word) on this particular issue at the present time.
I would say only this further. As the noble and learned Lord the Lord Chancellor said, at the time there were any number of interpretations of the effect of Rookes v. Barnard. I do not think any of us here at the moment are lawyers (perhaps there is just one noble Lord), and we should not like to go into this point, but my recollection is that Rookes v. Barnard was not about actual strikes but about the threat to strike and intimidation. That is not just going on strike and the breaking of a contract. I have difficulty in seeing what Rookes v. Barnard has to do with it. However, having registered our strong dissent on this (as the noble Lord knows, we should have liked to take up a good deal more time with it, but I think we have taken up the minimum we possibly could), I would not advise my noble friends to persist in the Amendment, although I hope it will not be withdrawn.
On Question, Amendment negatived.
Clauses 38 to 45 agreed to.
Clause 46 [Procedure of tribunals]:
8.43 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (2), after paragraph (f) to insert:
"() for enabling appeals to be brought from a tribunal to the National Insurance Commissioner or a deputy Commissioner appointed by Her Majesty for the purposes of the National Insurance Act 1946. or to a tribunal presided over by the National Insurance Commissioner or a deputy Commissioner: and the said Commissioner or deputy Commissioner shall be deemed to have been appointed also for the purposes of this Act."
The noble Lord said: This is the last Amendment on the Marshalled List, and even although the noble Lord may not agree with it, I do not think it can be described as particularly contentious, especially as his noble friend Lord Blyton also expressed the view that it would be a good thing if we had some procedure in the Bill for appeal to a tribunal. I think the noble Lord, Lord Blyton, would have preferred some kind of appeal to an umpire.
It occurred to me, for reasons which the noble Lord will appreciate, that possibly the National Insurance Commissioner and his deputies could hear these appeals. There are advantages and disadvantages in such a system if there are to be appeals at all. The advantage is that the National Insurance Commissioners are there as an appeal body. Whether or not it is an advantage that they are already hearing appeals of a similar character, in the sense that they have to hear appeals on unemployment benefit (as to whether a person has left the job voluntarily or through misconduct, and so forth; and generally the question of entitlement to unemployment benefit), or whether it would be embarrassing to have appeals possibly from two directions, so to speak, one from the insurance side and the other from the redundancy side, I do not know. At any rate, I put down this Amendment because I felt there was some opinion that it would be a good idea to have an appeal, other than an appeal on law alone (for which I believe the Bill, in a rather cryptic way, already provides), of the same kind that already exists in regard to National Insurance. As the noble Lord said earlier, substantial sums, particularly to the people concerned, are involved, and it seems perhaps a little hard, whether it is the employer or the employee, that they should have to be content with one decision when they feel strongly that they have a good case. I beg to move.
Amendment moved—
Page 41, line 19, at end insert the said subsection.—(Lord Drumalbyn.)
LORD LINDGREN: I have listened with great interest to the arguments which the noble Lord has deployed in favour of this Amendment. I entirely agree with him as regards the potential importance of these tribunals. We see them as responsible bodies who will build up a valuable expertise in labour matters and provide a ready and accessible form of settling disputes. We recognise, too, that they will be concerned with a number of difficult issues and that there is a need for a system which makes for consistency as between decisions of individual tribunals. But we feel confident that the system of the Industrial Tribunals which we propose to use for purposes of the Bill, and to which much

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thought has been given, will satisfy these tests. Under this system, the Industrial Tribunals are required to give reasons for their decisions, and there is a right of appeal to the High Court (or, as the case may be, the Court of Session) on questions of law. We have carefully considered the need for any further appeal provision, but we believe that the chairmen and members of tribunals will have the necessary qualifications and experience to deal with disputes satisfactorily without this.
As well as chairmen selected from panels of persons with legal experience (appointed by the Lord Chancellor or the Lord President of the Court of Session), and members representative of both sides of industry, there is a President of Industrial Tribunals for England and Wales and Scotland respectively, each served by a central office. We think that this system will prove flexible enough to adjust to the build-up of a work-load which we cannot accurately estimate. We also believe that the existence of the Presidents to co-ordinate the work will make for consistency in tribunal decisions. We have had full consultation with both sides of industry on this form of organisation, and it has also been approved by the Council on Tribunals. A relevant point is that the volume of work and the number of tribunals will not be comparable with that of the local appeal tribunals under the National Insurance Scheme, on which the noble Lord has to some extent relied as a parallel. Those tribunals—of which there are over 200—dealt with some 36,000 cases in 1964. The work of the industrial tribunals will not be on a scale approaching anywhere near this.
The work of the industrial tribunals on redundancy cases will be similar in many ways to the work of the existing compensation appeal tribunals, which is to be transferred to the industrial tribunals under Clause 44 of the Bill. There is no right of appeal (except on questions of law) from the compensation appeal tribunals. We are satisfied on the best expert advice that the tribunals will function satisfactorily without appeals machinery on questions of fact, and that to introduce such machinery would be productive of more litigation without securing any significant advantages. I
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hope that, in view of this explanation, the noble Lord will not press his Amendment.
LORD DRUMALBYN: I thank the noble Lord for his full explanation. I quite understand the point of view. I personally should doubt whether one could expect to get the consistency in decisions and the building up of Case Law to cover the whole country without a sort of apex to the triangle. The noble Lord relies only on a base. Personally, I think there ought to be an apex, and I rather regret that he does not see his way to having an appeal tribunal on these matters. He said that people with the necessary qualifications and experience would be recruited. But the recruiting of such people is no guarantee that they will reach the right decisions. There will be some that get by which might be caught by an appeal court or tribunal, and I rather regret that there is not to be one. There it is. It is not provided for in the Bill, and we know how it is.
As this is the last Amendment, I should like to thank the noble Lord for the trouble he has taken in dealing with the points. I think our discussions have been of real value, and that when some of these remarks are read people will get a clearer idea of how the Bill will work. I am bound to say, however (I hope that I am not too much out of order in making this remark now: I do so to avoid making it later), that it is the most extraordinary procedure for a Chamber which is supposed to he, at the very least, a Revising Chamber, that it has no opportunity to revise even what it does itself, and has to carry the whole of this complicated Bill through its Committee stage, Report stage and Third Reading, all in one day, at a fairly late hour. It would not be human for us not to protest at this, and I do not think it was entirely necessary. I believe that it would have been possible, and possibly advantageous, to give us a little more time on this Bill, and I hope that the Government will manage their affairs rather better in the future.
Amendment, by leave, withdrawn.
Clause 46 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported without amendment; Report received.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 22):
LORD SHEPHERD: My Lords, I have it in Command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Redundancy Payments Bill, has consented to place her interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purposes of this Bill.
8.54 p.m.
LORD LINDGREN: My Lords, I beg to move that the Bill be now read a third time. This is a substantial and important Bill, which will take its place as a major contribution to our industrial and social legislation. It is both a humane measure and one that can help us to get on with two of the most urgent tasks facing our economy—learning to live with technological change and securing the most efficient deployment and use of scarce manpower resources. For these reasons the main principles of the Bill have already been widely welcomed, both inside and outside Parliament. We have already put in hand the administrative arrangements for launching the scheme at the earliest possible moment. My right honourable friend has said that we hope to do this by the end of the year. Before then there are several sets of regulations to be made and a good deal of other work necessary to prepare and publicise the scheme.
Before we part with this Bill I should like to say a brief word about its effect on labour mobility. It has been suggested in some quarters that one effect will be that workers will be less inclined to leave contracting firms and industries to seek work elsewhere, because they will want to hang on in the hopes of receiving compensation. Obviously, the Bill is not designed to give positive encouragement to voluntary movement of this kind. But I do not believe that it will prove a significant hindrance to movements of labour which are desirable from the point of view of the economy generally. The important thing to ensure is that workers are willing to move to other jobs when they have become surplus in their existing jobs, or when redundancy is in definite prospect.
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The experience of the many firms who already operate redundancy schemes has not been that such schemes make changes in labour complements more difficult to achieve. On the contrary, the schemes have been invaluable in carrying through the necessary changes. I have no doubt that the provisions of the Bill will similarly help forward the changes that have to be made in industry.
There has also been the suggestion that the expense of redundancy will cause employers to hang on to labour longer than they should. But I think the present funding arrangements, which provide for rebates of about 70 per cent. of payments from the Redundancy Fund, dispose pretty effectively of that point. My own conviction is that the Bill will go a long way towards creating a more co-operative attitude to the process of modernisation and more efficient deployment of labour with which we must urgently come to terms.
I commend the Bill to your Lordships, and thank noble Lords opposite for the assistance they have given in the Committee stage of the Bill.
Moved, That the Bill be now read 3ª.—(Lord Lindgren.)
LORD DRUMALBYN: My Lords, I had not intended to say anything else, but as the noble Lord has been good enough to say a word on Third Reading I should like to add what will be a very brief word indeed. All I should like to do is to welcome the Bill, and express the hope that it will fulfil the expectations which the noble Lord has mentioned. We wish the Bill well, and we hope that the Government will get it going with the least possible delay, and that it will have the effect of improving the general atmosphere in industry, of encouraging modernisation and generally increasing mobility and contributing to the economic welfare of this country.
On Question, Bill read 3ª, and passed.

BRITISH EQUIPMENT FOR AMERICAN PHANTOM AIRCRAFT
8.59 p.m.
THE EARL OF KINNOULL THE EARL OF KINNOULL rose to ask Her Majesty's Government, following the confirmation of the British order for American Phantom aircraft, whether they can now announce how many British

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aircraft manufacturers will be supplying equipment to these aircraft. The noble Earl said: My Lords, I feel that I must almost apologise to the House—all those who are left still in the House—for this being my second Unstarred Question within two days. The Question to-night on the Phantom aircraft was in fact postponed last week in order to have present to-night the considerable reinforcement or, perhaps I may say, the strike reinforcement, of my noble friend Lord Jellicoe, who, of course, has a wealth of background knowledge on the Phantom aircraft.
The question on the equipment to the Phantom aircraft really stems from the Government's Statement at the time of the cancellation of the TSR2 last April. The Government then undertook to see that as many British manufacturers as possible would be given a chance to submit a tender for supplying the equipment for the British order of some 300 American Phantom aircraft. If one hazards a guess that each aircraft will cost something in the region of £1 million and that the cost of each aircraft, if broken down in percentages, runs out at 35 per cent. for the airframe, 30 per cent. for the engine, and some 35 per cent. for the equipment—and perhaps the noble Lord would comment on these figures in his reply—the order at stake for the British manufacturers must be something approaching £100 million. On top of this must come the cost of spares, which I believe could well amount to a further 40 per cent. of the total cost of each aircraft. Thus the 130—odd British manufacturers competing to win some orders not only could well earn a large sum of money but could also save the country at the same time over £100 million worth of precious dollars.
Yet, my Lords, with all this information and background knowledge I was appalled to learn recently from a responsible aircraft manufacturing company that in the main the British manufacturers—and I do not include, of course, the Rolls-Royce Company with their Spey engine but the smaller companies—regard this Phantom aircraft order with a certain despair and apathy and are wondering whether winning a contract is really worth their while. This sounds incredible, but the reason is that the
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Phantom aircraft is a highly sophisticated aircraft and it naturally has highly sophisticated equipment. If the British companies do not have immediately available comparable equipment for which to tender, they feel it would be hardly worth their while going through all the processes of designing equipment to specification, testing it and eventually placing it for tender.
Besides all this extra expense, which I understand the Government are prepared to meet in the form of a 20 per cent. subsidy for successful tenders—and here again perhaps the noble Lord, Lord Shackleton, will confirm this—there is the problem of the delay of delivery. It could well be that the McDonnell Company would advise the British Government that if the delivery of this aircraft was wanted on time, say by 1969, they would not be able to wait for some of the British equipment to be specially designed and fitted. Yet a third problem which apparently may arise is that the American security will require a fairly extensive screening of any British technicians who wish to visit the McDonnell company, and this again can cause further delay.
All this paints a fairly gloomy picture, and I hope that the noble Lord, when he comes to reply, will have a more cheerful answer, for the aircraft industry is saying quite clearly at the present time, and I am sure the noble Lord is aware of this, that it cannot live without creative talent and that building other people's aircraft would eventually kill this talent. This industry is at present admired throughout the world for its skill and know—how, and if it ever loses its impetus it will also lose its advanced technical knowledge.
I should like to ask the noble Lord two specific questions regarding the Phantom aircraft. The first is about the cost of spares, for, as I have already stated, this may be as high as 40 per cent. of the total cost of the aircraft, or some £40 million. Will the cost of the American-supplied spares be on a fixed price basis, or will the cost be at the mercy of the American companies as to what they wish to charge? Secondly, when the aircraft goes into service, will the maintenance and support be entirely carried out by the British Support and Design Company, which I believe is working closely with the McDonnell

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Company in America at the moment, or will American technicians be required as well?
I hope I shall not be straying too far from the purpose of this Question if I say that many people believe there are important lessons to be learned from the Phantom order. One of the main lessons to be learned is that the aircraft industry is entitled to receive from the Government a specification of a military aircraft that the Government really want. Yet another lesson is that when the Government enter into a joint aircraft venture with another country, it is hoped that they will firmly declare at the outset what percentage of the project will be British-made, and not leave it to bargaining at a later stage.
My Lords, the question of the Phantom aircraft has been debated many times before, and mostly in a heated atmosphere, which I am sure will not be the case this evening. But I believe everybody recognises that this is a magnificent aircraft, and the purpose of my Question to-night is simply to find out how successful the British companies have been so far in their tendering for supplying equipment to this aircraft. I hope the noble Lord, when he replies, will have something heartening to tell the House on this matter.
9.7 p.m.
EARL JELLICOE: My Lords, my noble friend need make no apology for introducing, this subject to your Lordships even at this late hour. The Phantom will be an absolutely key aircraft for the Royal Air Force and the Royal Navy in the next decade or so; I cannot see how either Service will be able to do without it. The decisions which the Government take on it will, as my noble friend has said, intimately affect the British aircraft industry, especially on the engine and components side, and—this is of a different order of importance—I am glad that my noble friend has introduced this topic because I must confess to a certain personal interest in this particular aircraft. I disclaim that wealth of knowledge which my noble friend kindly but incorrectly attributed to me, but it just does happen to be the only aircraft in which I have flown really fast and fairly high personally. In view of this, I hope the noble Lord, when he replies, will be able to tell us much more
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than we have learned hitherto about the intentions of the Government.
There has been a great deal of speculation about this project lately, and I hope the noble Lord will be able to take this opportunity of scotching some, at least, of the wilder rumours we have read in the Press. As for the general setting, my colleagues and I do not claim that we should never place orders for military aircraft abroad, but we do feel that we should tread carefully. We shall not maintain a healthy aero-engine industry or a healthy avionics industry in this country unless it is based on a healthy airframe industry, and it is difficult to see how that can be maintained without some British orders for British military aircraft.
I hold that when we go shopping or co-operating abroad for military aircraft we should look first to Europe, and Western Europe as a whole. If in the last analysis we need to buy American military aircraft—and I would not and could not deny that there may be occasions when there is that need—we should aim to get something really solid in return, a really adequate quid pro quo. The obvious and direct quid pro quo, as my noble friend mentioned, is the incorporation in any such aircraft of the maximum amount of British manufactured equipment. I should have thought this would be an absolute condition of any substantial "buy" across the Atlantic, and across the exchanges, provided that the performance of the aircraft is not impaired, provided that its date of entry into service is not prejudiced, and provided that the cost of the resulting modifications is acceptable. I would assume that the noble Lord would accept this broad position, but can he tell us what the Government have done, and are doing, about it?
In this context, I should like to put two general questions to him. My first is to ask whether the Government have safeguarded these principles in their contractual arrangements with the Americans. Do our inter-Governmental agreements provide, or will they provide, for the fitting of British designed equipment when it is readily available? Or, alternatively, do they provide, or will they provide, that the main contractor, in this case the McDonnell Aircraft Company, will give preference to the fitting of British equipment manufactured under licence in

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this country? Can the noble Lord confirm that there is a firm understanding on those two points between the two Governments?
My second question is a corollary of my first. I understand (I may be wrong about this) that the British-engined Phantom should have a substantially better performance than the Americanengined Phantom. I also understand that the British engine, the Rolls Royce RB.25, has considerably more development potential than its American counterpart, the General Electric J.79. That being so, there seems an obvious case for the Americans to adopt the British variant for their later production models, possibly for the United States Air Force, and probably, I should have thought, for the United States Navy and for the Marine Corps. There is a lot at stake here commercially.
Each of these aircraft has two engines and a couple of these engines, quite apart from research and developments costs, cost something over a quarter of a million pounds plus. Thousands of these aircraft have been ordered for the United States Forces. The adoption of this engine by the United States Armed Forces, if only for the later production models, could in itself be very important. One hundred American aircraft fitted with this engine would mean £25 million plus in sterling for this country. It would not only be important in itself, but would also be important in doing perhaps more than anything else to open the door for the introduction of the Rolls Royce-engined Phantom into countries other than the United Kingdom and the United States. Can the noble Lord tell us what chance there is of persuading the Americans to adopt the Rolls Royce engine for their own Phantoms? Can he tell us what the Government have done to further what seems, to me at least, to be a great export opportunity for the British aero-engine industry?
I should like to turn to some more detailed matters. First of all, a word or two more about the engine. In all I have been saying up to now I have been assuming that the project for incorporating the Rolls-Royce engine into this aircraft was going ahead. That was certainly the case when I last knew something in detail about this project. It
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was certainly my opinion that, so far as the Royal Navy was concerned, this particular aspect of the project had to be proceeded with. As I understood it—and I should like to know whether this is still the position—the American-engined Phantom could not be satisfactorily operated from at least our smaller carriers. But we have recently seen rumours in the Press that this whole programme is likely to be abandoned, that the Royal Navy was to receive no Phantoms at all, and the Royal Air Force was going to receive only the American-engined Phantoms. The Ministry of Defence have dismissed these reports, I am glad to say, as purely speculative. I hope that this evening the noble Lord opposite will be able to go much further than that by telling us that these reports are in fact quite unfounded.
On June 30 he told us (I am referring to column 960 of Hansard) that he did not foresee any increase in cost of a kind which would affect the numbers ultimately to be decided upon by the Defence review. He was there referring to the possible escalation of the project of "engining" this aircraft with British engines. I hope he can confirm this evening that the programme itself is secure and also that the numbers within that programme are secure. I will not ask for precise details about numbers, although, given the American directness about numbers, I have always thought that our coyness about aircraft numbers was rather absurd. However, I hope that he will be able to give your Lordships and myself some general assurance both about the numbers of aircraft in this programme and about the programme itself, I know that this involves money, and I know that I may here be treading possibly on rather delicate ground, in view of the decision taken by the Parliamentary Labour Party yesterday about Defence economies. That perhaps makes it all the more important that we should have some assurance on this particular point.
I hope and trust that we may receive this assurance, because I can see no particular reason, in the quite imperfect state of my knowledge, why this particular programme for incorporating British engines in this aircraft should be endangered. There have been some technical difficulties—there are bound to be—over the marriage of the Spey to the Phantom.

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I understand that these difficulties have been overcome. I gather that the cooperation between the McDonnell Company and Rolls Royce has been excellent, as indeed has the co-operation between the managers of this programme across the Atlantic—the United States Bureau of Weapons and the Ministries of Defence and of Aviation. I gather, further, that Rolls Royce have met all the pretty tight dates in the development of these engines.
Finally, the noble Lord himself told us five weeks ago that we need not accept that the costs of this programme on the engine side are mounting excessively at the present time. That, I may add, is also my information. In view of this, I trust that the noble Lord can scotch these rumours that the programme for the Spey-engined Phantom is in any way threatened. As I see it, the Spey engine represents by far the most important piece of British equipment which can be married into this project.
Like my noble friend, however, I should like to know what other opportunities for the introduction of other British components into this aircraft there may be. Avionics (to use the jargon) represents a high proportion of the cost of any military aircraft. What British avionics will be incorporated into the Phantom project? Will there be a British-produced flight simulator? Or will there be a British-produced reconnaissance pod, of which we have read in the Press recently? What about the weapons system? Most of this, as I see it, must inevitably be American. A modern military aircraft is more or less built around its weapons system, and to tackle that at this fairly late stage in development is probably a dangerous thing to do. However, I should like to ask the noble Lord whether it is intended to incorporate a British weapons system into this aircraft and, more particularly, whether he believes that the Anglo-French A.J. 168, the air-to-surface missile which is under development, could, and should, be fitted to the Phantom.
There is also certain ancillary equipment. I assume that the noble Lord will be able to tell us that it is the intention to fit the British Martin Baker ejector seat into the aircraft. I take that to be axiomatic, as I think it is going into the American versions of the Phantom. I also trust that he can confirm that the
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tyres will be British, and that the wheels and brakes, if not of British design, will at least be of British manufacture. I know that these items may sound fairly small beer, especially at this hour of the night—indeed, they are rather small beer. But this sort of equipment has a fairly short life, and the aircraft itself has a fairly long life. Therefore, in the long run these items are quite important.
I have only one further question to put to the noble Lord. My noble friend touched on the question of the servicing and maintenance arrangements for the Phantoms for the Royal Air Force and the Royal Navy. I shall be interested to hear what the noble Lord has to say in reply to that point.
I should like to ventilate one further possibility with the noble Lord. A vast number of Phantoms will soon be in service with the United States armed forces. Presumably, a large number of these are likely to be deployed in Europe. Is there not a chance of securing for British firms the potentially important contracts for servicing these aircraft? Has this possibility been explored?
At the start of my brief contribution to this discussion I confessed to a certain personal interest in this project. But I should like, in conclusion, to make it clear that I am not asking the noble Lord for information about this project merely to satisfy my personal curiosity. I am asking for it—and I hope that he will be able to give us full and satisfactory answers—because I believe that the way in which the Government handle this project is very important indeed for the Royal Air Force, for the Royal Navy and for the British aircraft industry, and not least for the future pattern of British American co-operation in armaments production.
9.22 p.m.
THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON): My Lords, even if the noble Earl, Lord Kinnoull, was gloomy—I think quite unnecessarily gloomy; and he hoped that I should be able to allay his gloom—I agree entirely with him, as with the noble Earl, Lord Jellicoe, that this is a very important subject. It is very important that the Government should give as much information as they can. I hope to give rather more information than the previous Administration

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were wont to do on this sort of subject. Certain points were mentioned by the noble Earl where, fortunately or unfortunately, we are following the precedents set by our predecessors, but we hope even to put some of that right in the course of time. There is much to be said for giving as much information as one can.
Both the noble Earl, Lord Kinnoull, and the noble Earl, Lord Jellicoe, went rather outside the Question at certain points, and in the interests of good order in this House I do not propose to enter into a general debate on the aircraft industry. I would just say to the noble Earl, Lord Kinnoull, that if he wants to discuss this on another occasion we shall be glad to do so; but I do not think I can enter into questions about whether the aircraft industry has been given the right specifications. This is a much more complex subject, and I would not accept for one moment that they have not been given the right specifications. I repeat, for the record again, that the TSR 2, whose passing we all lament, and whose operational requirement never changed, was a good aircraft, but the cost got beyond our capacity to meet. That was the difficulty, and I must make that point clear.
For reasons which I hope will become obvious in the course of my answer, I cannot reply to the noble Earl's Question in precisely the form in which he asked it. My answer will be very much in the nature of a progress report. Your Lordships will appreciate that the building of an aircraft is a lengthy process, and not all decisions about its equipment need to be taken at the moment when the initial order is placed. Although, as noble Lords know, the initial order has been placed, certain decisions can follow that afterwards, even though the main configuration—to use the appropriate American jargon—we are now using is established.
First of all, let me deal with the point which the noble Earl, Lord Jellicoe, made, about what he described as the quid pro quo. I have always understood quid pro quo to be a question of selling other equipment in return for buying a foreign country's equipment. But in the context in which the noble Earl was using the expression, it was related to
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the amount of British equipment that can go into American aircraft which we are buying. I think I am correct in saying that that was his meaning. Here I am glad to say that under the agreement which we have entered into, up to 50 per cent. of the fly-away value of the whole aircraft can be of British manufacture, and we are certainly hoping that we shall be able to get up to that figure.
The noble Earl, Lord Kinnoull, gave a breakdown between equipment, engine and airframe. I think his broad division is near enough. I could quibble on a few percentages, but for convenience in this context we might as well say one-third each—perhaps a rather higher proportion on equipment. At the moment, about one-third, by value, of the equipment to be installed in both the Royal Naval and Royal Air Force Phantoms will, we hope, be of actual British design and manufacture—and I stress that this is British-designed as well as British-manufactured equipment. This proportion may well increase as time goes on. In addition, we hope that some of the American-designed equipment and components will be made in this country. If we are to discuss this, I think it would help your Lordships if I went into some detail, because it is important to get the detail in order to get the full flavour of what is happening.
I should like to deal, first of all, with the question of British-designed equipment. In this case we are taking an item which has been, or is being, developed in this country, possibly for a completely different aircraft, and adapting it to fit another aircraft—in this case the Phantom. In some cases the amount of adaptation—integration, I believe, is the term commonly used—may be small; in other cases large. Integration is the actual fitting of the equipment into the weapon system. Adaptation is not the end of the story, for this equipment has then to be installed in the Phantom, probably necessitating some changes in the detailed aircraft design; and then the aircraft has to undergo a period of test flying in order to prove that the equipment works satisfactorily in the aircraft, in conjunction with all the other equipment already in it. For we must not forget, my Lords, that the Phantom, as I think the noble Earl, Lord Jellicoe,

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said, is a highly complex weapon system; and a change in one part of it, however small, is almost certainly going to affect the performance of some other parts unless special precautions are taken.
All this design effort by the equipment supplier and the aircraft constructor, and the subsequent proving flying, is bound to cost money, and since it is highly skilled labour that is involved, the cost must inevitably be heavy. Your Lordships will therefore see that changes of design in the equipment for the aircraft are not to be entered into lightly. But this does not mean that there may not be good reasons for accepting the costs of such changes as are required to operate it under conditions which are not quite the same as those under which the Americans at present operate it.
A major example—and the noble Earl, Lord Jellicoe, is quite correct about this—is the engine. It is necessary to have more thrust, in order to enable the Phantim to be operated from some of our aircraft carriers which are smaller than the American carriers. The previous Government—and the noble Earl played a valuable part in this—decided that the Pratt and Whitney J.79 should be replaced by a developed version of the Rolls-Royce Spey—the engine which also powers the Buccaneer aircraft, as well as the B.A.C. 1–11 airliner. A programme to develop the Spey to the required power, a task which involves the addition of reheat, was begun last year, and I am glad to be able to say that it is proceeding well. Under the present programme the first Spey-powered Phantom is planned to begin its flight trials in June, 1966. The R.A.F. Phantoms do not need the Spey in order to perform the tasks that the R.A.F. require of them, but there are obvious advantages in keeping the R.A.F. version as similar as possible to the naval version. We are therefore planning at present to have the Spey in all our Phantoms, together with a starter unit made by Plessey and a fuel-flow meter made by Elliott.
Now I come to the point at which the noble Earl referred to certain remarks which I made in a debate on June 30, just before the agreement was signed. I must tell your Lordships that the cost of the Spey has increased considerably—for research, development and production. In this connection, let me also say that the
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present progress in the development programme, which has not yet passed beyond the bench-testing stage, is most satisfactory. The engine is producing a thrust greater than its design value, and the fuel consumption is well within the specified limits. But the present estimates—and I stress this—considerably exceed the estimates made when the noble Earl was himself in office. They were estimates which were considered by him and his colleagues to contain an adequate allowance for possible cost increase. I am not getting at the noble Earl here; I am merely stating a fact. We know these difficulties.
As a consequence of this, and in the light of the importance which must be paid to the cost of this aircraft, the engine programme is being kept under the most careful review; and I fear I cannot say more on this aspect beyond referring to the point the noble Earl made in relation to remarks I myself made in the earlier debate. There I did say that there were difficulties, but that they were not such as seriously to affect its viability. I was referring there to the aircraft as a whole: I was not referring, as he implied, specifically to the engine. I was being very careful about it at that particular moment, and was indicating that the future of the programme was not affected significantly by the increase in cost. But we have got to watch these costs, and it is for this reason that the engine programme is being kept under very careful review. As I said during the debate on the Motion moved by the noble Lord, Lord Thurlow, in accepting British equipment in our own American-built aircraft we must be careful not to get the worst of both worlds. I shall come on to other aspects of the Spey later.
A second reason for having British-designed equipment installed in our aircraft is that its performance is superior to, or as good as, that of the American equipment installed—I am talking about equipment generally—and that, while the latter (that is, the American equipment) may be adequate for our minimum needs, we are prepared to pay a premium in order to obtain the superior performance in the use of British equipment. This is a matter which calls for fine judgment. We have all the time to consider delivery schedules, for our Phantom construction

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programme is integrated with the programmes for the United States Services, and we have to be certain that all the necessary development and production can be done in time to catch the first production aircraft. Failure to do this would cause a hiatus on the aircraft production line, and thus inevitably cause us heavy additional costs. With these considerations in mind, present plans provide for the installation in the R.A.F. Phantoms of the navigation and attack system being developed by Ferranti, radio sets made by Plessey and Ultra and other electronic equipment made by Cossor. Some of these equipments may also go into the Royal Navy Phantoms.
The noble Earl has referred to other items of equipment. Again, I will try to pick these up. I believe he asked about the United Kingdom weapons, and said he meant to ask about the simulator and reccepods. I cannot remember whether he actually asked these questions.
EARL JELLICOE: My Lords, I can reassure the noble Lord. I did.
LORD SHACKLETON: I may say that I appreciate the willingness of the two noble Earl to give me information which has enabled me to give them information in exchange. It is our intention that the simulator shall be of British manufacture, again provided that it does not prove to be too expensive. We also intend to design and manufacture our own reconnaissance pod. As regards weapons, it is our intention to try to make provision for the carriage of many British stores. We still confirm the possibility of incorporating the AJ. 168 into the weapon system. We are hopeful that it may be possible to incorporate this.
There is also another category of British-designed equipment that we wish to have in American aircraft that we buy. This consists of items which the Americans have themselves installed in their own aircraft. In the case of the Phantom there is one such item, the Martin-Baker ejection seat, two of which are installed in each aircraft. I think I should like to take the opportunity of saying how very delighted we are that the Americans have made this choice and we are very happy that this company's long association with aircraft
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flown by our pilots as well as those of other countries will be continued. Those of your Lordships who are aware of the history of the Martin-Baker ejection seat will, I am sure, join with me in saying how delighted we are to see that Sir James Martin's great contribution was recognised in the Birthday Honours. There are many pilots who owe their lives to his design. This list does not necessarily exhaust all the British-designed items that will go into Phantoms. There are a number of items which do not have to be built into the aircraft during construction—I mentioned a few—but can be added afterwards. There are other items about which the final decision does not have to be made at the time the aircraft are ordered.
Quite apart from the question of British designed items, there is another field where we hope that there will be significant work for British industry, and that is in the manufacture of equipment, components and materials to American designs. Here there is no question of any expensive development programme, but the product must be identical with the American one so that we can integrate our own spares organisation with that of the United States armed forces and thus reduce our supply costs. Where British firms are invited at our request by the McDonnell Aircraft Corporation to tender for the delivery of items to American design, they will, of course, be in competition with American sub-contractors.
The decision whether or not a British bid shall be accepted will be based primarily on two criteria: will the offered delivery date match the aircraft production programme and does the price compare favourably with the price of the lowest American bid? Obviously, many of the competing American firms will already have produced some of these items for the Phantom. Their capital costs may well have been largely amortised, and their workers' experience will have cheapened considerably their production costs. This would naturally put our own manufacturers at a considerable disadvantage and, in order to overcome this, we have decided that a British bid will be accepted if the total cost—that is, the delivered price to McDonnell's—does not exceed the lowest American bid by more than a reasonable margin. The figure of 20 per cent. which the noble Earl gave is broadly correct, but I must

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emphasise that it is only one of several criteria to be taken into account in reaching a decision on a particular item. This premium is, of course, a special measure in somewhat exceptional circumstances.
We consider this arrangement a reasonable compromise between our desire, on the one hand, to obtain a large share of the aircraft for British industry and, on the other, to avoid having to pay too great a cost for it. The same condition will apply in the case of the C.130 aircraft. The United States Government has agreed also that no United States Customs or other duties will be payable on items of British manufacture imported into the United States for incorporation into our aircraft and that the provisions of the "Buy American" Act will not apply.
My Lords, the same general principles will also apply to British-designed items of equipment where the operational requirement is not paramount. In this case, however, I should make it plain that the premium must cover not only the delivered price of the item but also the appropriate research, development and production costs of installing and proving it in the aircraft. The competition for the supply of "Chinese copies" is now in progress, and up to the present time some 77 British firms, including our main aircraft constructors, have been, or are, in the process of being invited by McDonnell's to submit quotations for a great number of items for the Phantom. But until the closing dates for these competitions have passed and we can see the quotations which have been made, we shall not know the final results and be in a position to give a fuller answer to the noble Earl's question.
There were a number of other items which I should like to pick up: I wish to try to answer all the points raised by the noble Earl. He referred to wheels, brakes and tyres—and I agree that these are important. The design of the wheels, brakes and tyres for our Phantoms, which will be the same as used by the United States Navy, was put out to open competition and British firms were invited to tender. A technical assessment of these tenders proved an American design to be the best, and this has therefore been selected. However, we hope that it will be possible for this design to be manufactured under licence in this
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country. The noble Earl referred to the size of the Phantom order. Certainly there has been speculation in the Press on this subject. I am afraid that I am not in a position to give the final numbers. Obviously, any significant rise in cost is bound, depending on its amount, to affect consideration of the numbers of aircraft that we can afford. But in the first instance the number of Phantoms to be ordered will be determined by the outcome of the Defence review. In the meantime, we are conforming to American practice in ordering these aircraft by batches, rather than by one single large order. At the moment I do not think I can go beyond this. I stress that, in arriving at numbers, the decision and proposals will be related to the Defence review and the numbers that we think we shall need. Clearly at some point, if the cost became too excessive, it might affect the numbers we should buy. Plans for the in-service date I should mention still remain pretty well the same. We hope to introduce the Spey-engined Phantom into squadron service with the Royal Navy and the Royal Air Force during 1968–69.
My Lords, let me refer briefly to the possibility of the American use of the Spey in their Phantoms. Although we have not lost all hope of persuading the Americans to adopt the Spey in some of their Phantoms, I must admit that prospects are not too bright. It is not here a simple question of a quid pro quo, but an assessment by the Americans of their need in terms of cost effectiveness for the advantage that the Spey would undoubtedly confer, and this is particularly an aspect of the cost sensitivity study. There were some references also by both noble Earls to the service and maintenance side.
EARL JELLICOE: My Lords, is the noble Lord now leaving the question of engines?
LORD SHACKLETON: Yes.
EARL JELLICOE: He said that he would come back to it, but I should like to ask him a couple of questions. I am disappointed about what the noble Lord has to say about the expectation of America buying the British engine. I assume from what he has said that the Government will continue to bring

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pressure on the Americans in this respect.
But the point I wish to pick him up on is this. He said that the Spey programme was being kept under review by the Government because of cost increases. I do not wish to quarrel with this being kept under review, or with the contractual disciplines to which the noble Lord referred, but could he tell us whether the increase is mainly on the "R and D" side or on estimates for actual production costs of the engines? Secondly, can he tell us whether the order for the first production batch of these engines has been placed? Finally, when he referred to ordering by batches, it seemed to me that there is a danger that if we order by batches we are likely to increase the ultimate costs. Can the noble Lord say how that danger is being circumvented?
LORD SHACKLETON: My Lords, the noble Earl has asked me a lot of questions and I will try to answer them. The cost of the Spey has increased both in relation to research and development and in relation to unit costs. It is a very fine engine and we hope that it will be possible to sell it in other countries. We think that it is going to give a fine performance. The fact is that the cost has increased considerably, but I should prefer not to make more of that. Perhaps I should tell the noble Earl that if he based his estimated costs of the Spey engine on his memory, his memory was faulty, because he quoted a rather excessive figure on that occasion.
EARL JELLICOE: For two.
LORD SHACKLETON: Perhaps we shall leave the price factor at the moment, but I should be glad to go into this matter in more detail with him. I forget the noble Earl's other questions.
EARL JELLICOE: My Lords, they were two, and I apologise for being rather lengthy. The noble Lord said that the costs of the Spey engine were being kept under review, and I asked whether he could confirm that the order for the first production batch had been placed. It is my understanding that it ought to have been placed some little time ago, if dates were to be kept. The second question was: could he explain how he can reconcile ordering by batches with keeping costs down?
LORD SHACKLETON: My Lords, let me deal with the last question first. It is the American experience that ordering in batches is a good way of doing it. Obviously, this is a matter to which consideration has to be given, but I think it is fair to say that the manufacturers have some idea of the ultimate order given. Of course, there is always some element of risk. There is always the possibility that aircraft projects may be cancelled, as has happened in the past, either by the previous Government or by this one. The American system which we are following we find to be a satisfactory one. The basic order for the Phantom has only just been placed and, to the best of my knowledge, the order for the first batch of Speys has not been placed. On this I will let the noble Earl and, if he wishes, the House know.
On the question of service and maintenance, Hawker-Siddeley Aircraft have received a contract to learn all about Phantom in order that they may perform such post-design work as may be necessary in the course of time and also repair and maintenance work which is beyond the facilities of the Service. Ferranti will work in connection with Hawker-Siddeley on the electronic side and the weapon system in the aircraft. I think the noble Earl was concerned that a high proportion of HawkerSiddeley servicing staff would have to be American. Frankly, I do not know where he got this information from. The fact of the 'matter is that HawkerSiddeley's people are already in America for the purpose of getting all the knowledge and experience which will enable them to do all the future maintenance and servicing over here. I have inquired into this, so far as I can in the time, and that is my information.
The noble Earl also referred to security clearance, and this ties in with the question of co-operation by McDonnells. There is this question of delays in security clearance of United Kingdom personnel wishing to discuss classified matters with U.S. manufacturers. Your Lordships will appreciate that many aspects of the Phantom are naturally classified by the U.S. Government, and in order for U.K. personnel to obtain security clearance United States Government security procedures must be observed. But in order to facilitate the participation of British

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firms in the Phantom programme, the time taken to obtain clearance has been reduced, on average, to approximately one-third of the normal time. This could be informative, or it could not be, but I can assure the noble Earl that I have heard no complaints on this, and it is one of the matters to which attention was paid. That is why we were most gratified that there was this improvement in clearance.
I can now confirm the answer that I gave to the noble Earl on the Phantom. Although full engine contracts have not been placed, we have placed sufficient contract authority to enable the manufacturing programme to be maintained. In other words, we are well up with the game on the Spey.
I should like to take this opportunity of acknowledging the very ready cooperation in this matter—and, indeed, in the matter of installing other British equipment—that has been extended by the United States Government and the McDonnell Aircraft Corporation. We have on all occasions found the utmost willingness to meet us in our desire to obtain a large share for British industry. Having myself spoken to officers who have recently been over there, I know that they have been immensely impressed by the co-operation and willingness, indeed the keenness, of McDonnells to get British equipment into their aircraft. The challenge is now for British industry, and it is up to British industry to meet it.
THE EARL OF KINNOULL: My Lords, before the noble Lord sits down, can be answer a point that I made regarding the cost of repairs? I asked whether the American-supplied spares are on a fixed-cost basis or not.
LORD SHACKLETON: American-supplied spares will be related to the American Armed Forces' own system of support. There are two kinds (I do not want to go into too much detail), one called the Augmented Support System, run mainly by the manufacturers, and also the Co-operative Logistics Supply System. Under our agreement, we are entitled to participate in the Co-operative Logistics Supply System at the same prices as are paid by the American services.
EARL JELLICOE: My Lords, before the noble Lord finally sits down, I should like to thank him for the full information he has given to your Lordships on this matter. I think it has more than justified my noble friend's Question. I only wish that he had been able to scotch just a little further some of the rumours we have heard. However, he has done a great deal to reassure us on at least some of the points.
THE EARL OF KINNOULL: My Lords, perhaps I may associate myself with those remarks, and thank the noble Lord for his interesting reply.

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