Sitting of 11 February 1965

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
  Second Reading deferred till Tuesday next.
ORAL ANSWERS TO QUESTIONS
  DOMINICA

    Land, Cabrits
    Mr. Chapmanasked the Secretary of State for the Colonies why the publicly-owned land at Cabrits, Dominica, formerly an ancient naval station, is left in a derelict condition, with its historic buildings overgrown; how many acres it comprises; and what action he proposes to take to restore the land, reinstate the buildings as an ancient monument or seek some other productive use.
    The Under-Secretary of State for the Colonies (Mrs. Eirene White): The area of land known as Cabrits comprises approximately 250 acres in the northeast of Dominica, of which about 20 acres are used for forestry research work. The Dominica Government have been anxious to restore and maintain the 18th century fortifications situated there but have been unable to devote funds from available resources for this purpose. They have no immediate plans for developing the surrounding land.
    Mr. Chapman: Cannot the British Government offer some money? Is it not rather scandalous that we should have over 200 acres of potentially usable land just lying idle and unable to be approached except by penetrating semitropical jungle? Could we not find some productive use for it and restore the very
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    beautiful ancient buildings as relics of the eighteenth century?
    Mrs. White: As my hon. Friend knows, at the moment Dominica is a grant-aided territory. There are many demands there for development projects. Perhaps my hon. Friend will use some of his influence with his moneyed friends to provide some funds for this purpose.

    Regional Agricultural School
    Mr. Chapmanasked the Secretary of State for the Colonies what reply he is making to the request made by the Government of Dominica that, on the principle that regional institutions shall not be concentrated in any one territory but shall be dispersed among the islands, this island should be the site of a regional agricultural school on the lines of the former Eastern Caribbean Farm Institute.
    Mrs. White: A reply is still under consideration. The Eastern Caribbean Farm Institute in Trinidad still exists, and its facilities are available to the territories of this area. The Secretary of State has received no proposals from the Governments concerned that it should be replaced, and the question of where the replacement, if any, should be located is therefore premature.
    Mr. Chapman: As Barbados has the police training centre, Antigua has the teacher training centre, and St. Kitts has the regional technical college, is it not time that Dominica got something in this area? Is my hon. Friend aware that the poverty in this island is a disgrace to the British name, and that it is about time we did something more active to revive its economy and give it better facilities?
    Mrs. White: That may be so, but my hon. Friend realises that his Question refers specifically to a farm institute. Until we have had discussions with the other territories, which are equally involved in the question of a farm institute, it would be premature to give any decision on this question.

  COLONIAL TERRITORIES

    Financial and Economic Aid
    Mr. Peter Walkerasked the Secretary of State for the Colonies to what extent United Kingdom financial and

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    economic aid to the Colonial Territories will be increased during 1965.
    Mr. Snowasked the Secretary of State for the Colonies how much United Kingdom economic and financial assistance to Colonial Territories will be provided by 1965.
    Mrs. White: On present estimates, financial and economic aid to dependent territories in 1965–66 will amount to about £40·25 million as against some £38 million in 1964–65 to the same territories.
    Development aid in 1965–66 is expected to be some £3¼ million more than in 1964–65. Budgetary aid will be about £1 million less than in 1964–65 because of reduced requirements.
    Mr. Walker: Could the hon. Lady say how much of that is going towards current educational services in the Colonies, and will particular attention be given to this in the next two or three years?
    Mrs. White: Educational services comprise quite a large part of this, but I could not give a specific answer without a Question on the Paper.
    Mr. Snow: While thanking my hon. Friend for that reply, may I ask her whether she is aware of the great pleasure felt by all of those on this side of the House at the announcement made by the hon. Member for Kettering (Sir G. de Freitas) at the United Nations when he announced the contribution of £4 million to the technical aid programme which will give great benefit to these territories?
    Mrs. White: I am sure hon. Members on both sides of the House will be very glad indeed that we are making this considerably increased contribution to the Technical Assistance Fund of the United Nations.
    Mr. Cordle: Is the hon. Lady able to tell us what financial aid she is able to set aside for our worthy Gambians who this day week become independent, and will she tell us who will represent the Government at the celebrations?
    Mrs. White: As I think the hon. Member knows, announcements were made as to the aid to be offered to the Gambia up to July, 1967. The amount of development aid remains as previously stated. On budgetary aid, I think we may find that a little less will be required.
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    Her Majesty's Government will be represented by my hon. Friend the Minister of State, Commonwealth Relations Office.

    United States (Bases and Defence Agreements)
    Mr. Martenasked the Secretary of State for the Colonies how many United States bases there are on British colonial territory; and if he will list the Colonial Territories which are subject to some defence agreement with the United States of America.
    Mr. Snowasked the Secretary of State for the Colonies in which Colonial Territories there are United States bases; and in respect of which territories there are defence agreements with the United States of America.
    Mrs. White: Under defence agreements concluded in 1941 and 1961 the United States have a right to maintain naval or air bases in seven Colonial Territories, namely Antigua, Barbados, St. Lucia, Turks and Caicos Islands, Bermuda, Bahamas and British Guiana. These rights are not at present being exercised in British Guiana.
    There are no defence agreements with the United States affecting any other colony but in certain of them the United States enjoy facilities of a largely scientific character.
    Mr. Marten: While thanking the hon. Lady for that detailed reply and in view of the fact that the Secretary of State for the Colonies has in the past had a well-known implacable opposition to foreign bases on British territory, may I ask her for an assurance that no steps will be taken to abrogate these agreements?
    Mrs. White: The matter has not even been considered.
    Mr. Snow: Is my hon. Friend aware that many of us hope that she will watch most carefully the effect of this type of agreement and occupation, if I may use that word without being rude, on British institutions in these territories, which in many cases are very proud of retaining their own British characteristics?
    Mrs. White: I sympathise with those concerned, but we have received no representations from any of these territories which lead us to suppose that the present installations are not welcome.

    Commonwealth Secretariat
    Dame Joan Vickersasked the Secretary of State for the Colonies whether the territories in his Department will be allowed access to the proposed Commonwealth Secretariat.
    Mrs. White: The general objectives of the Commonwealth Secretariat, as defined in the communiqué issued by the Commonwealth Prime Ministers at the close of their 1964 meeting, was to strengthen co-operation between the independent Governments of the Commonwealth.
    Any contacts between British Colonial Territories and the Secretariat would be a matter for the British Government, who are responsible for their interests.
    Dame Joan Vickers: While thanking the hon. Lady for that reply, may I ask whether she realises that it may be difficult for some of the smaller dependent territories to become entirely independent in the future? Would it not be a good idea to consider how they might have contact with other parts of the Commonwealth through the Commonwealth Secretariat?
    Mrs. White: That would have to be considered by the Prime Ministers' Conference, which is being reconvened in June of this year.

  HONG KONG

    Water Supply
    Mr. Rankinasked the Secretary of State for the Colonies whether he will consult the Government of Hong Kong in order to expedite the laying of a pipeline from the mainland to Hong Kong island so that the periodic shortages in the water supply may be prevented.
    Mrs. White: The Lantau pipeline completed last year has much improved the water supply to Hong Kong Island. Under the vast Plover Cove scheme, an additional pipeline will link the island with the mainland, but we are advised by the Hong Kong Government that this part of the scheme will not be completed until 1968.
    Mr. Rankin: I welcome that reply as far as it goes, but is my hon. Friend
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    aware that when I was in Hong Kong in 1956 this deficiency was very serious indeed and Hong Kong was importing water from China? Is she further aware that in August this year, even with the pipeline, the shortage of water was still serious, despite the improvement which she has indicated? Would my hon. Friend consider paying a visit to Hong Kong to see some of these serious problems at first hand and also perhaps to help to stimulate the Government to greater activity?
    Mrs. White: A number of schemes for improving local resources are being carried out in addition to the Plover Cove scheme, and the new agreement with China to provide an additional 10,000 million gallons per annum from the Chinese mainland will come into effect on 1st March. I should be most happy to visit Hong Kong at any time my official duties permitted.
    Sir W. Teelingasked the Secretary of State for the Colonies what is now the position with regard to the daily supply of water in Hong Kong to private residents and to hotels; and whether, in view of the adverse publicity this has been given throughout the world, which has harmed the tourist trade, he will give the present situation the fullest publicity internationally and so help Hong Kong's tourist industry.
    Mrs. White: The Hong Kong Government announced on 20th January that the present 24-hour water supply will be maintained until next May when the summer rains may normally be expected to commence.
    The Hong Kong Government have given the widest publicity to the present situation and to the measures which are being taken to improve the Colony's water supply.
    I understand that the tourist traffic to Hong Kong increased by 26 per cent. in 1964.
    Sir W. Teeling: Does the hon. Lady realise that, although the hon. Member for Glasgow, Govan (Mr. Rankin) was not able to get a bath last August, things are now perfectly all right.
    Mr. Rankin: On a point of order. Do I infer from what the hon. Gentleman said that he is making a personal accusation against me? Is that in order?
    Mr. Speaker: It is no good asking me what the hon. Member infers. It appeared to me that it was an expression of sympathy.
    Mrs. White: In any event, I should like to confirm what the hon. Member for Brighton, Pavilion (Sir W. Teeling) said. The situation is now very much improved.

    Urban Council
    Mr. Rankinasked the Secretary of State for the Colonies what action he proposes to take in regard to the request presented to him by the Hong Kong Civic Association that the urban council should be expanded into a House of Representatives with additional powers.
    Mrs. White: No such request has been submitted to my right hon. Friend.
    Mr. Rankin: Does my hon. Friend realise that the need for some form of popular representation and expression is growing very rapidly in Hong Kong? Is she aware that that is due to the fact that the Chinese population, which is, by a long chalk, the largest section of the whole population, has only one selected representative, that the Indian population, which is very small indeed, has one representative and that the Portuguese population, which is almost negligible, also has one representative? This parity of representation is anachronistic in the present population distribution in Hong Kong. Will my hon. Friend see what she can do to improve the situation?
    Mrs. White: As I think my hon. Friend knows, there will be an addition of four unofficial members to the urban council on 1st April next, two nominated and two elected. Also, there are proposals for an extension of the franchise which are now being studied by a working party set up by the Governor.
    Mr. Paget: Would my hon. Friend agree that in Hong Kong for water and other things we depend on there being a régime which is acceptable to the Chinese Government? While the British Government are acceptable to the Chinese, no form of Honk Kong democracy would be.
    Mrs. White: Considerations of that nature have to be kept in mind.

    Journalists (Deportation)
    Sir W. Teelingasked the Secretary of State for the Colonies why five Chinese journalists, who had been in Hong Kong since they left China in 1949, were suddenly arrested last summer; whether this was the result of their Press activities; how long they were detained and why; why they were deported to Formosa; and to what extent their activities were connected with the opium haul, made near the Communist border, reported on 7th February.
    Mrs. White: A number of persons, six of whom could be described as journalists, were arrested in July and September, 1964. They were, in fact. Kuo-Min-Tang Intelligence agents. They were detained for nine to twelve weeks and then deported to Taiwan. Their arrest and deportation had no connection with their activities as journalists or with the recent seizure of narcotics in the New Territories.
    Sir W. Teeling: Does the hon. Lady realise that her Answer will give great satisfaction to people who feel that there might have been something connected with these journalists' Press reports about what was happening in Communist China? Will she also bear in mind that some of us are very worried about the fact that these men had to be kept in detention for so long without any definite accusation being brought against them?
    Mrs. White: We dislike keeping anybody in detention, but we are deeply concerned about the use of Hong Kong as a base for such activities.
    Mr. A. Royle: Will the hon. Lady say what steps the Government have taken to protest to the Government of Taiwan at the use they are making of the British Colony of Hong Kong for their intelligence activities?
    Mrs. White: The hon. Member will know that we do not recognise the authorities in Formosa. Therefore, we cannot make or receive any representations.

  GIBRALTAR

    Spanish Frontier Restrictions
    Mr. Wallasked the Secretary of State for the Colonies what restrictions are now being enforced on the frontier between Gibraltar and Spain.
    Mr. Dodds-Parkerasked the Secretary of State for the Colonies what is the present state of the blockade of Gibraltar by the Spanish authorities.
    Mrs. White: Travellers entering or leaving the Spanish customs post at La Linea are subject to long delays and to exceptional searches of baggage, vehicles and other formalities. In some cases duties which are apparently new are being charged on goods taken across the frontier in either direction.
    There has been no relaxation of these unreasonable restrictions and delays, and indeed they have been intensified. The export of all commodities from Spain to Gibraltar, except foodstuffs, is now restricted and the Spanish authorities on the frontier are refusing to recognise the validity of Gibraltar driving licences. Foreign nationals resident in the Campo area of Spain who have hitherto used their passports to cross the frontier to work in Gibraltar have been prohibited from doing so.
    Mr. Wall: However much the attitude of Her Majesty's Government towards the Spanish Government may have contributed to this dispute, may I ask the hon. Lady whether she will assure the House that Her Majesty's Government will do everything possible to protect our fellow citizens in Gibraltar from what is rapidly becoming a persecution?
    Mrs. White: The hon. Gentleman will be aware that similar action was taken in 1954 under the previous Administration. We are, of course, determined to do everything possible to sustain the Gibraltarians in this situation.
    Mr. Dodds-Parker: Will the hon. Lady point out to the relevant Socialist authorities that the resurrection of this vendetta has, in the opinion of the overwhelming majority of people in this country and in Spain, led to a deterioration in trade between the two countries
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    and to the discomfort and dismay of the loyal and friendly population on both sides of the frontier?
    Mrs. White: We certainly wish the present situation to be brought to an end in a reasonable manner. We believe that this is possible. But, as the hon. Member will appreciate, we cannot talk about any matters which may need further discussion under duress.
    Mr. Michael Foot: Does not my hon. Friend think that this would be a very good moment for Her Majesty's loyal Opposition to stop licking Franco's boots?
    Mr. Sandys: While fully supporting the strongest protest which the Government are, no doubt, making to the Spanish Government, may I ask whether the hon. Lady can say what measures of any kind the Government have taken during their term of office to improve relations with Spain?
    Mrs. White: We have offered, through diplomatic channels, opportunities for consultation as soon as the present quite unreasonable restrictions are removed. Further questions on diplomatic matters should be addressed to my right hon. Friend the Foreign Secretary.
    Mr. Onslowasked the Secretary of State for the Colonies what reports he has received from the Governor of Gibraltar regarding the effect of recent Spanish actions on the frontier upon the economic life of the Colony; and whether he himself will make a visit to Gibraltar at the earliest possible opportunity.
    Mr. J. Ameryasked the Secretary of State for the Colonies if he will make a statement about the latest developments at the Gibraltar-Spanish frontier.
    Mr. William Hamiltonasked the Secretary of State for the Colonies what form of action he intends to take in answer to Spanish activities on the Gibraltar frontier; and whether he will make a statement on the situation.
    Mr. James Johnsonasked the Secretary of State for the Colonies if he will make a statement about the present situation in Gibraltar.
    Mrs. White: As I have just informed the House, fresh restrictions have been imposed quite recently.
    While it would be a mistake to exaggerate the result of these and earlier restrictions, there is no doubt that some sectors of Gibraltar's economy, particularly those dependent on the tourist industry, are being affected. Continuance of the restrictions would involve problems of economic readjustment. The senior Economic Adviser to the Colonial Office is at present in Gibraltar for consultations. As my right hon. Friend the Secretary of State for Foreign Affairs stated in a written reply on 1st February, Her Majesty's Government are fully aware of their obligations to protect the welfare of Gibraltar and the legitimate interests of its people. We have every intention of standing by these obligations.
    After consultation with the Governor I have arranged to fly to Gibraltar tomorrow so that I can present a firsthand report to my right hon. Friend when he returns from British Guiana next week.
    Mr. Onslow: While welcoming the news from the hon. Lady and wishing her a successful visit to Gibraltar, may I ask her for an assurance that when the Government get around to taking some action, it will be constructive action and that she will not be deflected by those elements on her own side of the House whose only concern in this appears to be to try to make relations between London and Madrid worse than they have been for many years?
    Mrs. White: I have already assured the House that we have every intention of standing by the people of Gibraltar. As far as my own Department is concerned, that is our main concern.
    Mr. Amery: Is the hon. Lady aware that we welcome her decision to go to Gibraltar, all the more as we have been rather concerned at the apparent inability of the Government to get the position improved? Will she assure the House that she will tell the Governor, the Chief Minister and the people of Gibraltar that they have with them the solidarity not only of the Government but of every political party in this country? Will she consult the Governor and Sir Joshua Hassan as to what measures to take and will she undertake
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    to report to the House in a statement on her return?
    Mrs. White: I am going there after consultation with the Governor. I shall naturally consult him, the Chief Minister and other authorities, including the naval authorities in Gibraltar. If it is desired, no doubt we can arrange some statement later.
    Mr. Amery: Will the hon. Lady arrange for such a statement?
    Mrs. White: As far as it lies within my power, yes.
    Mr. Hamilton: Can my hon. Friend confirm the report that school children are being stopped on the frontier and searched by Spanish Customs officials? Will she give an undertaking that the positive measures which the Government intend to take if these provocations do not cease will not include the supplying of frigates to Spain, as was suggested by the Opposition some while ago? Will she also make an appeal, if the provocations do not cease, to tourists to cancel their holidays in Spain?
    Mr. Speaker: Perhaps the hon. Member would phrase that Question in some other way. It is not in order to ask a Minister to confirm or deny a report unless she is responsible for it.
    Mr. Hamilton: Is it the case that Customs officials of the Spanish authorities are stopping and searching British school children?
    Sir F. Bennett: Using frigates to do so?
    Mrs. White: I understand that there has been an interference with the transport of school children. The fact that some of the reports in the newspapers have been somewhat exaggerated is one of the reasons why I wish personally to go to Gibraltar to see what is happening. I would point out, with respect to my hon. Friend, that the supply of frigates is not a matter for the Colonial Office.
    Mr. Johnson: I wish my hon. Friend every success. Can she tell us a little more about what is happening to British subjects living over the border? What is this transit camp in which we are placing some of our people on the way? Can she tell us a little more about that?
    Mrs. White: As the House will have heard, it is true that persons who were living on the Spanish side of the border without residence permits have been made to cross into Gibraltar if they wish to continue to work there. Temporary arrangements have been made for their accommodation, and this again is one of the things that I shall see for myself, to decide whether these arrangements are satisfactory, or whether improvements should be made.
    Sir Rolf Dudley Williams: While congratulating the hon. Lady on the stout way in which she is standing up for the rights of Gibraltarians, may I ask whether she would agree that the situation has been greatly exacerbated by the foolishness of the Prime Minister? What steps have been taken to raise this matter in the United Nations? We are spending a vast sum of money on this organisation. Do the Government think that there is no point in raising it there?
    Mrs. White: Possibly the hon. Gentleman is not aware that the cause of a good deal of this trouble in the way in which our predecessors in Government handled Gibraltar's Constitution last year. Had this been done with greater diplomatic success, these troubles might never have arisen.
    As regards the United Nations, the question of Gibraltar was discussed last year. We desire to have consultations with the Spanish Government, and we have expressed our willingness to have those consultations at such time as the present restrictions have been entirely brought to an end.
    Mr. Speaker: Mr. Sandys, to ask the next Question.
    Mr. Amery rose—
    Hon. Members: Sit down.
    Mr. Speaker: What is the trouble? I am asking for an explanation of the noise made by the right hon. Gentleman.
    Mr. Amery: I thought that the hon. Lady raised a rather important point, and I wanted to pursue it.
    Mr. Speaker: I am afraid that that happens sometimes. Mr. Sandys, to ask Question No. 13.

    Senior Economic Adviser (Report)
    Mr. George Jegerasked the Secretary of State for the Colonies whether he has received the report of his senior economic adviser on Gibraltar; and whether he will make a statement on the action he proposes to take.
    Mrs. White: A draft report is likely to be available very shortly. It will be presented to the Gibraltar Government. On receipt of their views my right hon. Friend will consider what action should be taken by the United Kingdom Government. As soon as Gibraltar's needs are established she can rely on us to consider urgently and with the utmost sympathy what help we can give.
    Mr. Jeger: I thank my hon. Friend for that reply. Will she bear in mind that any steps which she takes to help Gibraltar will now receive the united support of the whole House? Will she bear in mind that this is in contradistinction to the situation of May, 1954? When Her Majesty the Queen visited Gibraltar, the Spaniards closed their consulate there and imposed the restrictions which now exist and have been intensified.
    Mrs. White: I am sure that in the present circumstances we are all determined to do everything we can for the people of Gibraltar.

    Hospitals (Supplies)
    Mr. George Jegerasked the Secretary of State for the Colonies what arrangements he has made to ensure that the hospitals of Gibraltar are kept fully supplied with necessities, including oxygen, now being denied to them by the Spanish blockade.
    Mrs. White: The Governor has reported that due to the prompt action of the Gibraltar authorities and help from the naval dockyard the position is satisfactory. Future supplies of oxygen and other necessities have been assured.

    Spain (British Tourists)
    Mr. Wingfield Digbyasked the Secretary of State for the Colonies if he will consult the Secretary of State for Foreign Affairs about the restriction of

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    British tourists to Spain, except through Gibraltar.
    Mrs. White: The hon. Member will appreciate that specific questions on matters relating to Spain are for my right hon. Friend the Foreign Secretary. We are in close consultation and my hon. Friend the Minister of State hopes to catch your eye, Mr. Speaker, later today on the Motion for the Adjournment.
    Mr. Digby: Are we to understand that the Government, having got into this quarrel, will allow the diversion of British tourists to every point of entry except Gibraltar?
    Mrs. White: Not at all. That is certainly not our intention.
    Mr. H. Hynd: As this traffic across the frontier between Gibraltar and Spain is a two-way traffic, what is my hon. Friend doing by way of retaliation?
    Mrs. White: For the time being I see no reason why we should behave in such a childish way as the Spanish Government are behaving.

  ADEN

    Security
    Mr. Wallasked the Secretary of State for the Colonies if he will make a statement about the present security position in Aden.
    Mr. Fisherasked the Secretary of State for the Colonies what steps he proposes to take to eradicate terrorism in Aden.
    Mrs. White: The seriousness of the security situation in Aden has been evidenced most recently by the throwing of a grenade into a Services cinema on 29th January and by attempts to assassinate Special Branch officers.
    I am satisfied that the security authorities in Aden are doing everything possible to minimise the effects of the cowardly campaign being waged by the so-called National Liberation Front. Forty-eight members or sympathisers of this organisation are at present in detention, and new security measures that have been introduced provide especially for the protection of police officers and of areas used by the Services.
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    I am sure the House would like it to be known how much it appreciates the way in which the local security forces, especially the Police, are carrying out their difficult task.
    Mr. Wall: I echo the hon. Lady's congratulations to the local security forces. Can she say to what degree the National Liberation Front receives financial and other support from outside the territory and to what degree this terrorism is influenced by infiltration from the Yemen?
    Mrs. White: There is a Question later on the Order Paper about the first point raised by the hon. Gentleman. He is aware that there is infiltration from the Yemen. One cannot specify exactly how much.
    Mr. Fisher: Would the hon. Lady agree that the scale of terrorism in Aden has increased very alarmingly in recent weeks resulting, as she said, in the death of many British and Arab people and the wounding of many more? As these outrages are clearly inspired from the Republic of the Yemen and from Egypt, what representations have Her Majesty's Government made to the Government of Egypt to stop these outrages and with what results?
    Mrs. White: I do not think we should exaggerate the extent of the recent difficulties. It is quite true that there has been a number of incidents which we very deeply regret. But I repeat that I do not think we should exaggerate the increase in terrorist activities. We have made representations to the Egyptian Government and pointed out that this kind of behaviour makes it extremely difficult to maintain friendly relations, which we would very much wish to have with them.
    Mr. James Johnson: The Aden Legislative Council fears that any detainees sent outside the territory are subject to torture. Can my hon. Friend give an assurance that the 47 detainees inside the city at the moment will be kept for lawful trial inside the territory which we administer?
    Mrs. White: I should have notice of the Question. I do not wish to mislead the House in any way. To the best of my belief, the majority are in Aden itself, but I should like further notice before giving the details.
    Mr. Rankin: On a point of order. On reflection, Mr. Speaker, I beg to give notice that I wish to raise on the Adjournment the matters in Questions Nos. 4 and 5.
    Mr. Speaker: The notice is defective and also out of order. Its validity therefore is nil.
    Mr. Rankin: Further to that point of order. I understood from previous Rulings that notices of an Adjournment Motion could be served at any point after the Question had been tendered.
    Mr. Speaker: If that impression were ever given to the hon. Member, I hasten to cure it. In any event, the notice can relate only to one Question.
    Mr. Fisher: May we return to Question No. 8? With respect to the hon. Lady, is it right that she should seek to play down this matter and ask us not to exaggerate it? After all, British Service men have lost their lives, British children have lost their lives and an Arab police inspector has lost his life in Aden. Many people have been wounded. There have been innumerable incidents in the last few weeks. Should not the hon. Lady take this much more seriously? Is she aware that there is great feeling in Aden and in this country about it?
    Mrs. White: I sincerely assure the hon. Member that we are very deeply concerned about what has happened. All I am suggesting is that it would be unwise to give the impression that more has happened than has in fact been the case, and that the terrorists have been more successful than they have been. That would be casting a very strong reflection on the security forces in Aden, which I am sure the hon. Member would not wish. The facts are that there was the deeply tragic incident just before Christmas when a European girl was killed. There was also the equally regrettable incident at Christmas time when an Arab inspector of police was killed. Other persons have been injured, but there have been no other fatal casualties.
    Mr. Fisher: What about British Service men?
    Mrs. White: I am speaking of the most recent period. Deeply as we regret all these incidents and deeply as we sym-
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    pathise with those concerned and those living and serving in Aden, I do not think that we ought to give the impression that the terrorists have been so successful.
    Mr. J. Amery rose—
    Mr. Speaker: Mr. Fisher for Question No. 9.

    Terrorism
    Mr. Sandysasked the Secretary of State for the Colonies what information he has as to the foreign sources from which arms and training are being supplied to those who are carrying out attacks upon British and Federal troops in the Federation and bomb outrages in Aden.
    Mrs. White: The activities to which the right hon. Member refers are known to be the work of the so-called National Liberation Front which is armed and trained by the Egyptian Intelligence Service.
    Mr. Sandys: I am grateful to the hon. Lady for speaking so frankly. Does she realise that British people will not very much longer tolerate the maintenance of diplomatic relations with a Government which is actively organising civil war in our territories, and is stimulating the murder of our Service men and their families, and other people for whom we are responsible?
    Mrs. White: As I have told the House today, it has been made clear to the Egyptian Government that these activities make difficult the improvement in Anglo-U.A.R. relations, which we would welcome. We had hoped that, rather than stimulate terrorism, the U.A.R. Government might have shown some concern for the people of the South Arabian Federation and supported the current preparations for their orderly progress towards independence.
    Mr. Sandys: Is not that a very feeble thing to say, that it makes difficult the improvement of relations? I hope that the Government will adopt a much more virile attitude to this problem.
    Mrs. White: It is hardly for me to adopt a virile attitude. We would wish, as I am sure hon. Members on both sides would wish, to be on friendly terms

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    with the U.A.R. It is they who are making it very difficult for us to maintain friendly relations with them.

  BRITISH GUIANA

    Constitution
    Mr. Fisherasked the Secretary of State for the Colonies whether and when he will convene a conference to consider a constitution and a date for the independence of British Guiana.
    Mrs. White: My right hon. Friend is due to arrive in British Guiana tomorrow for a short visit. He wants to see the situation there for himself, and to make personal contact with the Premier and leaders of Guianese political parties.
    I would ask the hon. Member to await my right hon. Friend's return next week.
    Mr. Fisher: Provided that peace between the races in British Guiana continues, would the hon. Lady agree that there is no reason now to withhold independence from British Guiana and that it would be appropriate to hold a conference, perhaps this summer, with a view to independence towards the end of this year?
    Mrs. White: These are precisely the matters which my right hon. Friend has gone to British Guiana to study for himself. I think that it would be advisable to wait until he comes back.
    Mr. Fisher: Will he make a statement?
    Mrs. White: Certainly.
    Mr. Hugh Jenkins: Will my hon. Friend bear in mind that no independent Government which excluded the largest political party in British Guiana would for long be viable?
    Mrs. White: That, again, is something which my right hon. Friend is there to study and judge for himself.

  SOUTH ARABIA

    Constitutional Conference
    Mr. J. Ameryasked the Secretary of State for the Colonies when the proposed constitutional conference on the Federation of South Arabia is to take place; and whether he will make a statement.
    Mrs. White: The conference is due to begin on Tuesday, 2nd March, at Lancaster House. I have no doubt that my right hon. Friend will wish to inform hon. Members of the outcome of the conference as soon as it is ended.
    Mr. Amery: Can the hon. Lady say whether the compositions of the delegations have been agreed?
    Mrs. White: Not yet. The High Commissioner is still in consultation.

  BERMUDA

    Disturbances
    Mr. Bryant Godman Irvineasked the Secretary of State for the Colonies if he will make a statement about recent disturbances in Bermuda.
    Mr. James Johnsonasked the Secretary of State for the Colonies if he will make a statement upon the rioting of 3rd February in Hamilton, Bermuda, resulting in serious injuries to 17 workers and a British policeman, and causing the calling up of police reserves and the Territorial Army.
    Mrs. White: I would refer the hon. Members to the reply which I gave yesterday to the hon. Member for Surbiton (Mr. Fisher), to which I would add that since yesterday those who were striking in sympathy are returning to work and only the electrical workers are still on strike.
    Mr. Irvine: Is the hon. Lady aware that the way in which this matter has been handled has given widespread satisfaction?
    Mrs. White: I thank the hon. Member.
    Mr. Johnson: Is it not a fact that the Bermuda Electric Light Company denied the workers official recognition and would not allow them to have their own ballot, and used blacklegs? Will she guarantee that the workers in any of our Colonies are given the usual rights of association, as free men?
    Mrs. White: As was made clear in the reply that I gave yesterday, the labour adviser to my right hon. Friend is now in Bermuda. I am sure that he will try to see that proper practices are established on both sides of the industry.
    Sir F. Bennett: Will the hon. Lady take this opportunity to make it clear that in this incident—which we all regret—there was no element of racial tension, particularly as the island is enjoying happier race relations than for a long time past?
    Mrs. White: I am not aware of any such element.

  FIJI

    Australian Tariff Structure
    Mr. Bryant Godman Irvineasked the Secretary of State for the Colonies what representations he is making with a view to improving the unfavourable place Fiji occupies in the Australian tariff structure as a result of the Ottawa Conference of 1932.
    Mrs. White: None, Sir. This question was closely examined with the Australian Government a few years ago, but G.A.T.T. difficulties and the position of other Commonwealth countries precluded any worthwhile action. The situation has not changed since then.
    Mr. Irvine: Will the hon. Lady have another look at the situation? Is not she aware that the position today is very different from the one in which the island found itself in 1932? In these circumstances, ought not she to try to make representations on behalf of the industrial development of Fiji to see that it gets a better share of the Australian market?
    Mrs. White: This question may have to be considered as part of the far wider one of arrangements under G.A.T.T. for less developed countries.

  ECONOMIC AFFAIRS

    Regional Planning Boards
    Mr. Geoffrey Lloydasked the First Secretary of State and Secretary of State for Economic Affairs whether he will appoint independent and non-official members to the regional planning boards.
    The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown): No, Sir. The boards will consist of officials under the chairmanship of a representative of the Department of Economic Affairs. But the regional planning councils will have the
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    kind of membership the right hon. Gentleman has in mind.
    Mr. Lloyd: Will the right hon. Gentleman bear in mind that the fact that these boards are simply composed of his officials is causing some anxiety among local authorities throughout the country, and that in the West Midlands, where prosperity was brought to its highest pitch under the Conservative Government, there is additional anxiety that it will not be maintained under the present Government's policies? Does he agree that considerable reassurance would be given if he would allow independent members to sit on these boards?
    Mr. Brown: The right hon. Gentleman has got it all wrong once again. Local authorities are very glad that under the new Administration there will be machinery, for the first time, to provide that they can be brought into the area where planning decisions are made.
    Mr. William Clark: In considering these regional planning boards, will the right hon. Gentleman reconsider the membership of N.E.D.C. so as to allow the Chancellor of the Exchequer to be a member of it?
    Mr. William Hamilton: Will my right hon. Friend consider the appointment of Sir Roy Dobson to one of these boards?

    UNITED STATES SUBMARINES (POSEIDON MISSILE)
    Mr. Martenasked the Prime Minister if the agreement announced by one of his predecessors on 1st November, 1960, providing facilities for United States Polaris submarines will extend to cover the new missile Poseidon.
    The Prime Minister (Mr. Harold Wilson): The arrangement made with the United States Government covers the provision of facilities for missile-carrying submarines, and is not restricted to any particular mark of missile.
    Mr. Marten: I welcome this very firm statement that the increased weight of the American nuclear deterrent will receive the hospitality of the British shores, but can the Prime Minister say when this new weapon is likely to arrive? If he can give that date, will he consider forming a reception committee to give it a

    541
    welcome, comprising the 15 per cent. of his Government who were against the formation of the Holy Loch base?
    The Prime Minister: I have had no information yet from the United States Government as to when this is likely to arrive. The House will recognise that the rapid development of missile technology quickly makes a whole lot of arguments from the other side out of date.
    Mr. Emrys Hughes: In view of the fact that the arguments from the other side about the Polaris submarines are already obsolete, will my right hon. Friend consider stopping the construction of the new British naval base in Gare Loch, which is likely to cost £25 million, and make proposals to transfer that expenditure to housing, education and hospitals, where it is much more badly needed?
    The Prime Minister: I explained to the House in considerable detail our policy in relation not only to that base but to the whole nuclear question, in the debate on 16th and 17th December.

    IMMIGRATION AND EMIGRATION
    Sir D. Rentonasked the Prime Minister whether, in view of the over-urbanisation and over-population of Great Britain, Her Majesty's Government will take steps to reduce immigration from the Commonwealth and from foreign countries, to stimulate emigration and to consider afresh the implications of the high birth rate among people of all races resident in Great Britain.
    The Prime Minister: My right hon. Friend the Home Secretary made a statement last week about Commonwealth immigration. We have no present proposals for a change in policy regarding immigration from foreign countries, which is already closely controlled, nor have we any plans to stimulate emigration, which did in fact rise by 33 per cent. in 1963 compared with 1962.
    Sir D. Renton: Is the Prime Minister aware that only half the land surface of Great Britain remains farming land, and that another 1 million acres will be taken for development in the next 15 to 18 years?
    Mr. Manuel: Not in Scotland.
    Sir D. Renton: Has not the time come to make future long-term plans to achieve a proper balance between land and people, so that posterity will not resent our folly?
    The Prime Minister: Yes, Sir, but the proper way to plan between land and people is to tackle the problem of land and not the problem of people.
    Mr. Duffy: Is my right hon. Friend aware that in the opinion of many who are qualified to make this kind of assessment the most serious deficiency in the growth of the British economy in 1965 will be the shortage of manpower and the wasteful use of manpower?
    Sir D. Renton: Can the Prime Minister explain his answer to my supplementary question?
    The Prime Minister: Yes, Sir. What we need in this country is the most intelligent use of the land that we have. There are very large tracts of land which are not available to the British people as a whole. As I understood the right hon. and learned Member's original Question, he was raising the whole issue whether we could afford the present high birth rate. It is more important to plan the land than to plan the people or the birth rate.

    MULTILATERAL AND ATLANTIC NUCLEAR FORCES
    Mr. Zilliacusasked the Prime Minister whether, in view of the declaration by the Warsaw Alliance Powers on 20th January concerning the proposed multilateral and Atlantic nuclear forces, he will now propose to President Johnson that both these projects be withdrawn and priority given to the need for negotiations with the Soviet Union.
    The Prime Minister: No, Sir.
    Mr. Zilliacus: Does my right hon. Friend recall that on 23rd November he told the House that in any defence measure proposed by the Government it was paramount that it should not only not make disarmament more difficult but, so far as was possible, facilitate agreement, and that any defence policy which did not bear in itself the seeds of a

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    programme of disarmament was no longer appropriate? In view of the complete rejection of the A.N.F. on the same grounds as the M.L.F., and the statement by the Warsaw Powers that proceeding with this scheme would increase tension and lead to countermeasures, is it not time that my right hon. Friend dropped this proposal?
    The Prime Minister: I am grateful to my hon. Friend for the close study he has given to what I said in the House in November. If he will now give equal study to what was, I am afraid, a very lengthy speech which I made on 16th December, he will find the whole theme of our defence and foreign policy and our proposal for an A.N.F. is to stop substantial proliferation and spreading and acquisition of nuclear weapons.

    DEFENCE (CONSULTATION)
    Mr. Shinwellasked the Prime Minister what reply he has received from the Leader of the Opposition to the suggestion that matters relating to national defence should be the subject of consultation between the Government and Privy Councillors who are members of the Opposition.
    The Prime Minister: The right hon. Gentleman the Leader of the Opposition has now let me know that he would be very willing to meet me for a discussion on defence matters.
    Mr. Shinwell: Am I to understand from what my right hon. Friend has said that the conversations will be confined to the Leader of the Opposition and himself, and that the proposal that has been advocated by hon. Members on both sides of the House, and which is in the national interest, that there should be consultation on defence matters between both sides, has been rejected?
    The Prime Minister: That was not really raised in the proposal I made to the right hon. Gentleman the Leader of the Opposition. The arrangement is that we should meet first to discuss what changes could be made, what further consultations of a regular character—or possibly at infrequent intervals at the convenience of the right hon. Gentleman—what arrangements could be made for mutual discussion on defence problems.
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    The question mentioned by my right hon. Friend, taking it much wider, for bilateral talks between defence spokesmen on the two Front Benches, is something we can always consider again, but, quite frankly, no decision has been taken in favour of it yet.
    Sir Alec Douglas-Home: May I ask the Prime Minister—I hope he will agree —whether from time to time either my right hon. Friend the Member for Monmouth (Mr. Thorneycroft) may accompany me—[HON. MEMBERS: "No."]—or of course the Secretary of State for Defence accompany him? This may be thought right and convenient. I hope the right hon. Gentleman will agree, too, that these discussions should not be a matter for continuous Questions on the Order Paper asking how we are getting on. That would make a difficult matter even more so.
    The Prime Minister: It would be improper for me to try to regulate what Questions are put on the Order Paper. Regarding what the right hon. Gentleman has said, the position is quite clearly what he has in mind. Indeed, when the proposal was first made in the debate last December, I did say that the Leader of the Opposition and his defence spokesman or shadow Foreign Secretary—whoever might be appropriate in this connection—should meet their opposite numbers in the Government and discuss any problem of mutual interest in the field of defence. The talk to which I referred in my first Answer to my right hon. Friend the Member for Easington (Mr. Shinwell) was intended purely as a talk between the right hon. Gentleman and myself—a talk of a procedural character —to decide how these talks should take place in future.
    Mr. Shinwell: In view of what the Leader of the Opposition has just said, may I ask my right hon. Friend whether these conversations will be of a secret character and that what is conveyed to the Leader of the Opposition will be confined to him and not disseminated among his colleagues?
    The Prime Minister: There have always been talks between the Leader of the Opposition of the day and the Prime Minister of the day on very secret matters. As the House will know, because this

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    was reported to the House, 1 had a number of talks—not only with the right hon. Gentleman opposite, but with his predecessor—on questions affecting security, for example. These were always regarded as purely personal exchanges of opinion and not to be transmitted even to one's closest colleagues. So far as defence is concerned, right hon. Gentlemen opposite were, of course, until recently fully informed on all the most secret aspects of defence, weapons and the rest of it. We have long thought that it would be helpful, not only to the House as a whole but particularly to the defences of the country, if leading members of the Government and appropriate members of the Opposition were to discuss what was going on in the defence field on the basis that it would not inhibit either side from speaking freely—but with due discretion—in this House.

    ECONOMIC SITUATION
    Mr. Shinwellasked the Prime Minister what representations he has received from financial sources in the City of London on the nation's economic position; and what proposals they have made to him.
    The Prime Minister: My right hon. Friends and I have received representations and proposals from various sources about the economic situation. Some have been made public; others were confidential.
    Mr. Shinwell: Is my right hon. Friend aware that not everybody in the City of London looks with disfavour on Her Majesty's Government and that there are many persons in the City, leaders in finance and business, who are very anxious to enter into consultations with members of the Government on matters of mutual interest? Will my right hon. Friend encourage these persons, of whom no doubt he is aware, to meet the Government from time to time?
    The Prime Minister: Yes, Sir, it is certainly the case that we get very valuable informal advice from a number of very distinguished people in the City of London who are only too anxious to co-operate with any Government of any colour in this country. But, of course, I think that too much has been made in the past by the House of the word
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    "City". What I think is of fundamental importance, if we are to solve our problems in the industrial field, particularly in relation to exports, imports and technological innovations, is that we have the closest co-operation and the closest consultation with productive industry also, and this we are doing.
    Sir C. Osborne: Is the Prime Minister proposing to act on the advice given to him by the Governor of the Bank of England at a dinner where the Chancellor of the Exchequer was present, that there could be no real cure for the nation's economic position unless there was a severe cut in local government and Government expenditure? If the right hon. Gentleman is not going to take that advice, why not?
    The Prime Minister: I think that particular sentiment has been expressed with great vigour and authority by successive Governors at certainly every annual bankers' and merchants' dinner in October each year, and has been urged very strongly on successive Chancellors. So far as this year is concerned, my right hon. Friend will be announcing the Estimates in due course. The House will be well aware that the commitments and expenditure programmes entered into before we came to office for this year already show a high proportionate increase over last year, going far beyond any increase related to the increase in national production.
    Sir C. Osborne: All these things—
    Mr. Speaker: Order. I realise that it is a very wide question and that is one of the reasons why we must get on.

    MR. RAPACKI (CONVERSATIONS)
    Mr. Ridsdaleasked the Prime Minister whether he will make a statement about the conversations he had with Mr. Rapacki in December.
    The Prime Minister: I have nothing to add to the Answer given by my hon. Friend the Minister of State for Foreign Affairs to my hon. Friend the Member for Ashfield (Mr. Warbey) on 23rd December last.
    Mr. Ridsdale: Is the Prime Minister aware that several of his senior Ministers, and indeed the Secretary of State for Defence, have in the past spoken in

    547
    favour of a nuclear-free zone in Europe as advocated by Mr. Rapacki? Does he think that such an idea is at present a practical possibility?
    The Prime Minister: I hope that the whole House supports the idea of a nuclear-free zone not only in Central Europe but in other parts of the world. I think it important that Africa should be a nuclear-free zone. This would be a further contribution to any easement which will be achieved when we are able to get a non-proliferation agreement, but we have to proceed in agreement with our allies on this question and with others with whom we negotiate, and a relevant point is that in addition to the area in which nuclear missiles are at present found we must have some thought to the area at which nuclear missiles outside that area are pointed.
    Mr. Biggs-Davison: With all respect to M. Rapacki and Poland, is it not the case that there are great dangers in any partial disengagement plan? Should not any plan for disengagement in Europe include the withdrawal of Soviet forces to the U.S.S.R.?
    The Prime Minister: The hon. Gentleman is of course stressing some wide and long-term objective which I am sure the whole House would endorse. That does not mean that any lesser plan would be dangerous. Regarding proposals of this kind we have always made plain that there must be absolute equality on both sides of the dividing line so that there is no weakening or destruction of the balance of military power on each side. Certainly any plan of this kind could not be confined to Germany only. That would be quite unacceptable. It must also take account of the fact that at the present time Germany is at the receiving end—if that is the right phrase—is the target for a large number of missiles deployed not in the area covered by the Rapacki Plan, but further east.
    Mr. Mendelson: While accepting that the acid test of any such agreement would be that it should not worsen the strategic position of either East or West and that no such agreement would be possible on any other basis, would my right hon. Friend consider actively pursuing discussions with the Soviet Gov-
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    ernment and with other Governments concerned on the most recent model of the Rapacki Plan which has been improved and which is designed to take into consideration some of the points mentioned? Will he not be discouraged by the carping and negative criticism from hon. Members opposite who have always been opposed to these agreements?
    Mr. Wilson: As my hon. Friend says, there are a number of plans. There are two versions of the Rapacki Plan. There was the very constructive plan proposed by the then Opposition, known as the Gaitskell Plan, and, of course, last year, there was the Gomulka Plan, which was merely a freeze on existing missile delivery systems, or warheads, to prevent the situation getting worse until one can start to get some reductions in missiles there. I think that it was right to say, however, as I have said, that negotiations of this kind must raise wider issues, issues of the future unification of Germany, for example, and also the issues covered by the existence of medium-range missiles outside the Rapacki Plan area.

    QUESTIONS TO MINISTERS
    Sir D. Renton: On a point of order. There is a misprint on the Order Paper which needs to be corrected. In Question No. 35, 150,000 should read 550,000 May the record please be corrected?
    Mr. Speaker: I am obliged to the right hon. and learned Gentleman. I will ask that the matter be noted and corrected.

BUSINESS OF THE HOUSE
Sir Alec Douglas-Home: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord President of the Council (Mr. Herbert Bowden): Yes, Sir. The business for next week will be as follows:
MONDAY, 15TH FEBRUARY—Debate on a Motion to take note of the Report of the Departmental Committee on the Law on Sunday Observance (Command No. 2528).
TUESDAY, 16TH FEBRUARY—Second Reading of the Trade Disputes Bill, and the remaining stages of the Education (Scotland) Bill.
WEDNESDAY, 17TH FEBRUARY—Supply [6th Allotted Day]: Committee which, if the House agrees, will be taken formally.
Thereafter, on the Motion for the Adjournment of the House, a debate on the Manning of the Health Service, until about seven o'clock, and afterwards on the Home Secretary's decision on the Inquiry relating to Local Government Boundaries in Northampton.
THURSDAY, 18TH FEBRUARY—Second Reading of the Development of Inventions Bill, and of the Criminal Evidence Bill.
Motion on the Probation Officers and Clerks (Superannuation) (Amendment) Regulations.
FRIDAY, 19TH FEBRUARY—Private Members' Motions.
MONDAY, 22ND FEBRUARY—The proposed business will be: Debate on Northern Ireland, which will arise on the Motion for the Adjournment of the House.
I understand that at seven o'clock the Chairman of Ways and Means intends to put down opposed Private Business.
Sir Alec Douglas-Home: As there has been a suggestion of delay, may I ask when the Defence White Paper and the Vote on Account will be published?
Mr. Bowden: The date of the presentation of the Defence White Paper, 23rd February, has already been announced. There has been no delay, except in relation to a purely technical point involving the civil Vote on Account.
Mr. Kilfedder: In view of the great anxiety felt by workers in Short Brothers and Harland, and the fact that the Ulster Members were not given an opportunity of speaking in the recent aircraft debate, would the Leader of the House ask his right hon. Friend the Minister of Aviation whether he would make a statement about the future of Short Brothers as soon as possible?
Mr. Bowden: There is a debate on Northern Ireland on Monday, 22nd February. I will ask my right hon. Friend to note the point made.
Mr. Selwyn Lloyd: May I ask the Leader of the House whether he is aware that there are strong rumours that the Government are contemplating proposing a change in the arrangements for the control of the Palace of Westminster and that it has been said that there may be a statement made upon this matter next week? Would he realise that this is a matter for the House of Commons as a whole and agree that there should be consultations and discussions, and, possibly, a debate before any final decision is announced.
Mr. Bowden: The question of a change in the control of the Palace of Westminster is, of course, a matter for the House of Commons and for another place. I can give firm assurance that there will be consultations through the usual channels.
Mr. Francis Noel-Baker: My right hon. Friend will have seen a new Motion on the Order Paper dealing with the advertising of cigarettes, which has been signed by a number of our hon. Friends and will shortly be signed by a great many more, as evidence of the strong feeling on this subject. Could he say whether we shall have time to extend the very welcome television ban which my right hon. Friend the Minister of Health has introduced?
[That this House warmly congratulates the Minister of Health and other Ministers concerned on their decision to prohibit advertisements for cigarettes on commercial television; and urges Her Majesty's Government, in view of the proven dangers to health, including cancer, of cigarette smoking, to persuade and if necessary compel the newspaper, periodical, cinema and poster-site proprietors to follow this example.]
Mr. Bowden: I cannot add to the statement made by my right hon. Friend the Minister of Health on cigarette advertising.
Mr. Peyton: May I ask the Leader of the House whether he would make arrangements for the Ministry of Power to have an opportunity to make a statement next week explaining exactly what

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he meant in what he said about the coal industry outside the House during this week?
Mr. Bowden: I am fairly sure that there was a Written Answer on this Question, but I will draw it to my right hon. Friend's attention.
Mr. Peyton: The Leader of the House is obviously not aware that the Written Answer was a purely nebulous statement, meaning virtually nothing, and that the whole substance of what the right hon. Gentleman said was delivered outside the House. I am asking for an opportunity to be given to the Minister to explain what he meant.
Mr. Bowden: While the Answer may not have pleased the hon. Gentleman, there was, nevertheless, the Written Answer. I will draw this to my right hon. Friend's attention.
Mr. Powell: Has the attention of the Leader of the House been drawn to the existence on the Order Paper of a Motion for an early day referring to the right hon. Member for Wolverhampton, South-West (Mr. Powell)? Will he provide time for a debate upon this Motion, as such a debate could only be valuable to the economic and constitutional education of the party opposite?
[That this House deplores the statement made by the right hon. Gentleman the Member for Wolverhampton, South-West, in which he called for a policy of non-co-operation by industry with Her Majesty's Government, because such a policy would strike at the very roots of our democratic institutions and way of life.]
Mr. Bowden: I notice that the right hon. Gentleman asks for time. There will be opportunities, of course, for this subject to be debated on Supply in the near future.
Mr. Snow: With reference to the reply given by my hon. Friend about Short Brothers and the aircraft industry in general, may I ask whether his attention has been drawn to two Motions on the Order Paper dealing with a further matter concerning the aviation industry and the efficiency, if that is the right word, and competence of the previous Minister of Defence?
Mr. Bowden: I have read Sir Roy Dobson's statement with interest. I should think that the country has, too. As to the first of the two early-day Motions, we will consider whether any further action is necessary. I should think that the whole House, and certainly the country, will agree with Sir Roy Dobson's statement.
Mr. Maude: Leaving that on one side for the moment—[HON. MEMBERS: "Twerp."]—may I ask the Leader of the House whether he will find time for a debate on the Motion standing on the Order Paper in the names of my hon. and right hon. Friends and myself concerning discrepancies in the timing and, perhaps, questions as to the frankness of the Government, in relation to the signing of contracts for American aircraft, or whether he could arrange for the Government to issue a full White Paper giving the details?
Mr. Bowden: Had my right hon. Friend the Minister of Defence been given an opportunity to complete his speech, information on the C130 would have been available. [HON. MEMBERS: "Oh."] He is, nevertheless, answering a Question today. He is prepared to answer a further Question if the hon. Member will put it down for Monday of next week. May I, however, say that the review of the C130 in relation to the proposed HS802 was considered and a decision taken before the contract was signed.
Sir Alec Douglas-Home rose—
Mr. Speaker: As a servant of the House, I have a suspicion that we are getting outside the range of business matters. As we have work to do, we must confine ourselves, on the business statement, to matters concerning business.
Mr. Emrys Hughes: On a point of order. When the hon. Member for Stratford-on-Avon (Mr. Maude) was asking questions about American aviation, I distinctly heard him called a "twerp". May I ask, Mr. Speaker, whether this is an offensive Parliamentary expression? Should the language of the boardroom be allowed here?
Mr. Speaker: In the context in which the hon. Member heard it, I think that it was a sort of technical term of the aviation industry.
Sir Alec Douglas-Home: The supplementary question that I wish to ask has

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nothing to do with opinion expressed outside the House, but concerns our experience in the House only a few days ago, which will be within the recollection of the Leader of the House. Both the Minister of Aviation and the Secretary of State for Defence made speeches in the air debate. Both of them had the knowledge that the contract had been signed the night before. Neither of them mentioned it. Although the Secretary of State had only 29 minutes, he might have managed to give the information during that time. Does not the Leader of the House agree that on the face of it this appears to be a deliberate act of concealing information?
Mr. Hugh Jenkins: On a point of order. May I ask you, Mr. Speaker, whether what the Leader of the Opposition is saying is in order as relating to the business of the House?
Mr. Speaker: In the context of business, it is, because the right hon. Gentleman is urging the importance of discussing an early-day Motion.
Sir Alec Douglas-Home: If I may complete my question to the Leader of the House, does he not agree that both in the case mentioned by my hon. Friend, and in the case of the coal industry, when a report was given to the newspapers which differed in differing newspapers and differed from the Written Answer, this House has been treated, in this instance and in the case of the aircraft contracts, with scant respect?
Mr. Bowden: On the question of the air contracts, I have already said that if my right hon. Friend the Minister of Defence had been given the opportunity, he would have given the information. [HON. MEMBERS: "Oh."] I remind the House that out of the so-called 29 minutes, my right hon. Friend had something like 25 minutes. Four minutes were taken up with bogus points of order. The Opposition Chief Whip moved the Closure two minutes before ten o'clock.
Mr. Whitelaw: One minute.
Mr. Bowden: I am trying to be fair about this. I do not blame the hon. Gentleman. I have been in the same position, sitting in the seat which he now occupies, and one can look at the clock only obliquely and cannot really see when
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it is ten o'clock. The hon. Gentleman will have to sit on the Table to get a direct view.
I have, however, spoken this morning to my right hon. Friend the Minister of Defence about this matter and he gives me a firm assurance that he would have dealt with the question of the contract had he been given time.
Several Hon. Members rose—
Mr. Speaker: I want the help of the House about these business questions. We must not try to take them too far.
Sir Rolf Dudley Williams: On a point of order. I have today tabled a Motion, of which I have sent a copy to the Leader of the House. In view of the urgency with which the Motion requires to be discussed, I wonder whether it would be possible—I think that the Leader of the House will bear me out—
Mr. Speaker: Order. The hon. Member must be misunderstanding me. I do not want discussion of these factual matters at this time. We have not nearly finished with the business questions. We want to get on.
Mr. William Hamilton: May I make what I think would be a helpful suggestion relating to next week's business? My right hon. Friend the Leader of the House has announced that next Wednesday is to be a Supply day, which is in the gift of the Opposition, who have chosen as the subject the manning of the National Health Service. Could my right hon. Friend, through the usual channels, seek to persuade the Opposition to have another debate on aviation, when my right hon. Friend could make a statement about the contractual procedures that have been the subject of debate and which would give an opportunity for the "twerps" to do some homework?
Mr. Bowden: This is a matter for the Opposition. If they wish to have further talks through the usual channels, we will, of course, try to meet them.
Mr. Geoffrey Lloyd: In considering the arrangements for statements by Ministers at the end of Questions next week, will the Leader of the House bear in mind that the evasive tactics of the Minister of Power, in giving a Written Answer about an important question of

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policy with regard to coal, instead of an Oral Answer, which would have been more customary, and thus submitting himself to the questioning of the House, has placed us in difficulty today in discussing the Gas Bill, because we do not know whether he will allow the gas industry to continue to use oil?
Mr. Bowden: If a Question to a Minister is not reached, it is customary to answer it as a Written Answer.
Mr. Pavitt: In view of the three unusual circumstances this year, namely, that August Bank Holiday falls at the end of the month, that the Government have a large amount of important legislation, more than usual, to get through before that time, and that there is undue pressure on hon. Members' time in the House —will my right hon. Friend consider making an unusually early announcement about the Summer Recess, so that hon. Members can arrange their family holidays?
Mr. Bowden: I see the importance of this, but I would prefer to deal with Easter first.
Mr. Turton: Has the attention of the Leader of the House been drawn to early-day Motion No. 85? In view of the great urgency of this matter, as five Commonwealth citizens are under sentence of death, will the right hon. Gentleman arrange for an early debate, or for Her Majesty's Government to make a statement dealing with their representations to the Ghana Government on this matter?
[That this House invites Her Majesty's Government to express to the Government of Ghana their concern at the sentences passed on Mr. Adamafio, Mr. Adjei, Mr. Cofie Crabbe, Mr. Otchera and Mr. Manu, and to urge that sympathetic and immediate consideration be given to their sentences with a view to the commutation thereof, particularly having regard to the previous acquittal of some of them on charges on which they have now been convicted.]
Mr. Bowden: I have seen the Motion on the Order Paper. No doubt, there is a great deal of sympathy with the views expressed in it, but this is an internal matter for the Ghanaian Government. Nevertheless, my right hon. Friend the Secretary of State for
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Commonwealth Relations will have it drawn to his attention.
Mr. Ogden: Is my right hon. Friend aware that many hon. Members on this side of the House look forward to the debate on Northern Ireland? Will he tell a newcomer to this place what form the debate is likely to take technically?
Mr. Bowden: I understand that it is likely to take place on the Adjournment of the House. Therefore, anything goes.
Mr. Sandys: The Leader of the House implied in his earlier reply that if the Secretary of State for Defence had had time during the last 30 seconds of his speech he would have told the House about the contractual arrangements with the Americans for the purchase of aircraft. Since the Secretary of State's speech was a fully prepared typescript, will he be good enough to circulate to the House the remaining passage which the Secretary of State was unable to deliver?
Mr. Bowden: I will go further. If the right hon. Gentleman will put down a Question for Monday my right hon. Friend will reply to it.
Mr. Maxwell: Has my right hon. Friend observed the early-day Motion on Opposition and Members' pay? In view of the fact that the majority of hon. Members opposite have been misleading the public on this issue, would he consider making time available for that to be discussed?
[That this House regrets the actions and statements by Conservative Members seeking to exploit for party political purposes the recent increases in Members' salaries, despite the fact that the overwhelming majority of them have accepted the increases with alacrity and gratitude, and have ignored that the policy adopted by the House was based upon the initiative of the previous Government. which action was chivalrously endorsed by the present Leader of the Opposition in the statement he made in the House on 16th November, 1964.]
Mr. Bowden: This has been fully discussed on a Motion and on a decision of the House, against which there were no votes at all. Earlier, in the setting up of the Lawrence Committee, for which credit has been given to the

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former Prime Minister, the present Leader of the Opposition, a free discussion took place on that point and there was, I believe, no dissension.
Sir Rolf Dudley Williams: May I ask the Leader of the House whether he is aware that I have today tabled a Motion which proposes to bring the Murder (Abolition of Death Penalty) Bill back to the Floor of the House for discussion in Committee of the whole House? In view of the grave event yesterday, in which the police were concerned, will the Government provide an early opportunity for this Motion to be discussed, since it has wide support in the country and those of us who represent constituencies in which there are prisons are gravely disturbed at the passage the Bill is having in Standing Committee?
Mr. Bowden: The Government gave an opportunity for the Bill to be debated on the Floor of the House on Second Reading. The Bill has now gone upstairs for its Committee stage. We have had three meetings and three meetings only in Committee upstairs.
Hon. Members: Two.
Mr. Bowden: It cannot be said to be holding up other private Members' time. We must see how we proceed before taking a further decision.
Mr. Goodhew: On a point of order. Will the Leader of the House kindly check the information he just gave? Will he not confirm that this Committee has sat on only two occasions?
Mr. Speaker: It is not a point of order, on however many occasions the Committee has sat.
Mr. Zilliacus: In view of the widespread anxiety felt in the country about the dangerous situation which is developing in and around Vietnam, and in view of the Motion on the subject standing on the Order Paper in the names of 50 and more hon. Members and myself, would my right hon. Friend consider finding time at an early date for a debate on the situation in South-East Asia?
[That this House, realising that British policy in regard to Vietnam is based upon acceptance in principle of the 1954 Geneva Declaration, that United States policy springs from non-acceptance of
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that Declaration, and that therefore on this point the objectives of the two countries cannot be the same, expresses the urgent hope that the British Government will take an early initiative in order to bring about a cease-fire and a political settlement which is essential to the re-establishment of peace.]
Mr. Bowden: I cannot promise any time at the moment. I have noted that Motion. The Foreign Secretary made a statement on this on Monday and he is answering Questions again on Monday of next week, when, no doubt, further Questions will be put to him.
Mr. Ridsdale: May I press the Leader of the House to find time for a debate on the conduct of the Secretary of State for Defence in not disclosing the facts, particularly as the last few minutes of his speech contained incorrect facts about Japanese aircraft?
Hon. Members: Answer.
Mr. Mendelson: Reverting to the Motion referred to by the right hon. Member for Thirsk and Malton (Mr. Turton), in view of the fact that on past occasions Parliament has found an opportunity under its procedure to express its opinion when people have either been threatened with or under sentence of death, would my right hon. Friend give the House an assurance that an early opportunity will be found to raise the urgent matter of the five people who are under such sentence in Ghana?
Mr. Bowden: I have already said that there is no British Government responsibility here. This is an internal matter for the Ghanaian Government. There is, nevertheless, a great deal of sympathy for the views expressed. I think that at the moment we can do no other than promise to draw this matter to the attention of my right hon. Friend the Commonwealth Secretary.
Sir F. Bennett: Would the Leader of the House answer two questions? First, reverting to the request of the hon. Member for Manchester, Gorton (Mr. Zilliacus), would he do his best to meet that request since we would all like to see how a united party operates in action?
Secondly, since the Leader of the House may have noticed that there are no fewer than three Motions on the Order

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Paper, signed by hon. Members of all parties, on the question of integration, and since it seems to be the general wish that he should provide for an early debate on immigration, will he remember that if he grants this request he should make it a two-day debate so that plenty of time is available to enable all hon. Members opposite to explain their somersaults on this matter?
Mr. Bowden: My right hon. and learned Friend the Home Secretary, in his statement on immigration, dealt with evasion. This part of the matter is a difficult problem. When he is prepared to make a further statement, no doubt he will be here to do so. The question of the integration of immigrants is receiving immediate attention.
Mr. Loughlin: In giving his assurance to draw the attention of his right hon. Friend to the question of people under sentence of death, to which reference has been made, would my right hon. Friend impress upon him that this is a matter on which hon. Members on both sides of the House feel very strongly?
Mr. Bowden: Yes, Sir.
Mr. Iain Macleod: Referring to the question raised by my hon. Friend the Member for Exeter (Sir Rolf Dudley Williams), does the Leader of the House recognise that many hon. Members who, like myself, in principle hold the abolishionist view, also resent the fact that this Bill is being discussed upstairs? As it is becoming a farce to regard this as a Private Member's Bill—because it was in the Queen's speech, Government time was found for its Second Reading and the Government Whips decreed that it should go upstairs—could he see that the fullest consideration, including the rest of the Committee stage, takes place on the Floor of the House?
Mr. Bowden: I have already said that we should see how we go with the Bill. I thought that there had been three days in Committee but apparently I was wrong. I stand corrected. There have been two days. Nevertheless, let us see what happens in Committee before considering whether it should be brought on to the Floor of the House.
Mr. Chapman: Does my right hon. Friend remember that many hon. Mem-
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bers
bers on both sides of the House realise that we shall make good progress with business only if more and more Bills go to Committees upstairs?
Mr. Dance: Is the right hon. Gentleman aware that there is a Motion on the Order Paper, standing in the names of 40 of my hon. Friends and myself, referring to the punishment of armed criminals and that since that Motion was tabled crimes of violence have increased, culminating yesterday in brutal attacks on the police? Will the Leader of the House see that time is made available for this very important subject to be debated, before more people are murdered?
[That this House, concerned at the increase in crimes of violence, calls upon the Government to take steps to ensure that a realistic and deterrent punishment be imposed upon criminals who, whilst engaged in illegal activities, carry potentially lethal arms, whether or not the weapons are actually used.]
Mr. Bowden: My right hon. and learned Friend the Home Secretary is making a statement today.
Sir J. Rodgers: Is the Leader of the House able to find time to debate a Motion standing on the Order Paper in my name dealing with the premature publication of Ministerial statements? Is he aware that last week the Prime Minister's statement on the forthcoming Commonwealth Prime Ministers' meeting appeared almost word for word three hours earlier on the tape and in the Press, and that a similar thing happened in regard to his right hon. Friend the Minister of Housing and Local Government? Is this a new technique in government, or does it constitute an affront to the House?
[That this House takes note of the policy of the Prime Minister in regard to his public relations, which resulted in his recent statements being published in the Press and on the tape some hours before they were delivered to the House of Commons.]
Mr. Bowden: I have had a look at this matter. There is no departure from what has been the usual procedure. What happened was that the Prime Minister was to reply at the end of Questions on the question of the Commonwealth Prime Ministers' conference. The Press were notified that he would reply at the end

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of Question Time. It was not difficult for them to assume, therefore, that a Commonwealth conference was taking place.
Dame Irene Ward: Can the right hon. Gentleman find time to discuss the pros and cons of Government by review?
Hon. Members: Answer.
Dame Irene Ward: I said "government by review".
Mr. Bowden: I heard the hon. Lady. The answer is "No".
Mr. Eldon Griffiths: Would the Leader of the House give some thought to the increasing practice of Ministers reading speeches at a very high speed? [Laughter.] This is a very real problem, because as we move into more and more highly technical subjects, in both aviation and science, it is becoming increasingly difficult for hon. Members to follow the highly technical information which Ministers are putting before them. May I ask—
Mr. Speaker: Order. If the hon. Member wants to propose some change in our procedure there is a procedure by which he can ask for appropriate steps to be taken, but I do not think that this relates to next week's business.
Mr. Biggs-Davison: As the Motion of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), concerning the Ghana sentences, has received support just now from both sides of the House, will the Leader of the House reconsider what he said about the Government not being able to make a statement because of this being an internal matter? Did not the last Government make representations in South Africa about certain sentences? Will the Leader of the House consult his right hon. Friends, and so prevail upon them that a statement is made to the House?
Mr. Bowden: I have already said on two occasions that I would consult my right hon. Friend. I do not think that we help the position by continuing to debate it this afternoon.
Sir Ian Orr-Ewing: Will the right hon. Gentleman bear in mind that as Leader of the House he is Leader of the whole House, arid not just of the Government side? Does he not think that it would
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be more helpful to our debates if very important statements, which have to be very carefully considered and which have considerable repercussions on employment and balance of payments were made preferably on the day before the debate, or, if they are to be made during the debate, should be made in the opening speech and not left to the last 30 seconds, as this is very insulting to the House?
Mr. Bowden: I accept the point that where an important statement is to be made in a speech, it should be made slowly and factually so that the whole House can hear it. But I do not accept that when a Minister is making a statement, even at the end of a speech, and is interrupted by points of order and noise generally, he is responsible because the information is not conveyed.
Mr. Hugh Jenkins: As it seems to be the practice on this occasion for sponsors of various Motions to draw them to the attention of the Leader of the House, will my right hon. Friend, in taking note of all the other Motions, take note of Motion No. 64 for next week, bearing in mind that it is the subject of two Amendments, one of which has considerable support?
[That this House deplores the persistent rowdyism and barracking during the Debate on the Censure Motion on 2nd February and urges the House to be mindful of its reputation and to remember the example it should set to the nation in responsible debate.]
Mr. Bowden: There are 90 early-day Motions on the Order Paper, and this is No. 64. As far as I recall, it deals with rowdyism in the House, which I am sure every part of the House and every hon. Member regrets.
Mr. Maxwell-Hyslop: Would the right hon. Gentleman direct his attention to Motion No. 60, and consider its being placed with the business of the House for the coming week? It is concerned with the deplorable action of the Minister of Transport in refusing to receive a deputation from the Devon County Council and the Teignmouth Urban Council.
[That this House deplores the action of the Minister of Transport in refusing to receive a deputation from the two responsible local authorities, Devon County Council and Teignmouth Urban District

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Council, accompanied by the Member for the Tiverton Division, to discuss the action necessary to enable the redevelopment of the war-damaged centre of Teignmouth to proceed.]
Mr. Bowden: I understand that a deputation on this matter was received on 23rd September. There is no point in receiving a further deputation until something new can be said.
Mr. Steele: On a point of order, Mr. Speaker. Can you inform me whether, and when, we are to start the Orders of the Day?
Mr. Speaker: I am always filled with anxiety, but I know of no principle on which I can refuse to hear an hon. Member who rises at this time. Much responsibility rests on those hon. Members who do rise not to abuse the occasion.
Mr. Edward M. Taylor: Would the Leader of the House allow some time in the near future for a short discussion of Motion No. 84, dealing with the vital question of the motor industry in Scotland? In considering this, would he bear in mind that, up to date, not one minute of Parliamentary time has been allowed for discussion of Scotland's industrial problems, even though many of the Government's Measures have had a very severe effect on Scotland's economic position?
[That this House recognises that the establishing of two major motor manufacturing factories in Scotland's industrial belt in consequence of the actions of the previous administration has stimulated and diversified the Scottish economy and has made a substantial contribution to solving that nation's unemployment problem; and expresses the hope that the needs of Scotland and the desirability of consolidating firmly the motor industry in Scotland will be fully taken into account in any negotiations between the Government and the Ford Motor Company regarding the location of the company's proposed new factory.]
Mr. Bowden: If the hon. Member will speak to his right hon. Friends on the Front Bench, we can, I am sure, through the usual channels, arrange a full day's debate, on Supply, on Scotland's economic problems.
Mr. John Hynd: On a point of order, Mr. Speaker. Are there not adequate
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precedents over the last 20 years for bringing an end to questions on business?
Mr. Speaker: Yes, there are adequate precedents, but I know of no principle on which the Chair can, of its own notion, decide on these occasions that an hon. Member cannot address a question to the Leader of the House. Until an hon. Member does raise his question, I do not know what is in it—that is the trouble.
Mr. Strauss: On a point of order, Mr. Speaker. Do not supplementary questions that are addressed to the Leader of the House on these occasions follow exactly the same rules or the same precedents as apply to any supplementary question to any Answer given by the Prime Minister, and has it not frequently happened that the Speaker, when there have been an excessive number of supplementary questions addressed to the Leader of the House on business for the following weeks, has said, "We must get on with business. We have had enough supplementary questions", and has drawn that part of the proceedings to a close?
Mr. Speaker: I beg hon. Members to get on. I am sure that what the right hon. Gentleman says to me is right—I indicated in the last Parliament that I would do that. I do not want to do that—I would rather rely on the House to get on with its business.
Mr. William Yates: Will the Leader of the House consider a debate on Motion No. 80, if not next week then very soon afterwards? At this moment the Foreign Secretary is away in Brussels, and many hon. Members feel that before any discussions take place on the European Common Market the House would like to discuss our judicial, constitutional and economic relationships with the other members, and with other partners in the Commonwealth?
[That this House calls for a two-day debate, firstly, to reconsider the revision of the Statute of Westminster, secondly, to consider what should be its permanent relationship with all Commonwealth Parliaments, and, thirdly, whether it would wish to be part of a Permanent Commonwealth Assembly before Her Majesty's Government attempts to renegotiate Great Britain's irrevocable federal status within Europe.]
Mr. Bowden: I have noticed the Motion on the Order Paper, and will bear it in mind.
Mr. Woodburn: On a point of order, Mr. Speaker. Referring to the Ruling you have just given, would it not be possible, by putting down Motions, to raise enough business every Thursday to prevent the normal business of the House being carried through? Would you give careful consideration to this point, because it might frustrate the business of Parliament if a new method of sabotage of this kind could be used?
Mr. Speaker: Some point of the procedure is being abused nearly all the time. Before we get to the extreme situation the right hon. Gentleman contemplates, I have not the slightest doubt that the House will deal with it. I do wish that the House would get on now.
Mr. Kershaw: I hope that merely because I am late in rising I shall not be thought to be trying to sabotage the business of the House. Would the right hon. Gentleman bear in mind, in coming to a conclusion, that when the Secretary of State for Defence spoke the other day it was not a question of his not having the time to make a statement about the aircraft in question. He categorically stated—
Mr. Speaker: Order. I am sure that this is not on next week's business.

PRICES AND INCOMES (MACHINERY AND PROCEDURES)
The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown): The House will remember that on 16th December the Government joined representatives of trade unions and management in signing a Joint Statement of Intent on Productivity, Prices and Incomes. That Statement recorded agreement on the need to set up machinery, first, to keep under review the general movement of prices and of money incomes of all kinds; and, secondly, to examine particular cases in order to advise whether or not the behaviour of prices or of wages, salaries or other money incomes was in the national interest.
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I am glad now to be able to tell the House that after further consultations and after discussion in the National Economic Development Council we have reached agreement with the representatives of trade unions and of management on the machinery and procedures that are needed for these purposes.
The first task which I mentioned—that of keeping under review general movements in prices and incomes of all kinds—profits, wages, salaries, etc.—will be undertaken by the National Economic Development Council. The second task—that of examining particular cases—will be undertaken by a National Board for Prices and Incomes.
The Prime Minister has authorised me to inform the House that Her Majesty the Queen has been pleased to indicate that she would be prepared to approve that a Royal Commission be set up to discharge these duties. The National Incomes Commission will be dissolved at the same time.
The new Board will have a vitally important role to play, as its work develops, in making effective the whole policy for prices and incomes. I am confident not only that its recommendations will be accepted by the parties directly concerned, but that they will have, a growing influence on all who are responsible for settling the levels of prices and incomes.
Fuller particulars of these proposals are set out in a memorandum, prepared in agreement with the Trades Union Congress and with the employers' organisations, which is being published as a White Paper and is now available in the Vote Office. I understand that the Northern Ireland Government agree that the proposals in the White Paper should cover the whole United Kingdom.
The next stage will be, after further consultations and discussions in N.E.D.C., to formulate the norm and criteria which will guide the National Board for Prices and Incomes.
The discussions on these important questions of national policy have, as is right, been held with those organisations which are most generally representative of the interests of employers and of workers. We recognise, of course, that there are groups of workers and employers—many of them in the public

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sector—who have not been directly represented in those discussions. The responsible Ministers concerned are in touch with the main bodies concerned.
Mr. Heath: I am sure that the right hon. Gentleman will recognise that we would like carefully to study the White Paper which has been published before we give any indication of our views upon it. Meantime, may I ask him three main questions? First, is this machinery to operate voluntarily, as he has constantly emphasised that he would like it to do, or does the fact that the Queen is to set up a Royal Commission mean that there will be powers to summon witnesses and to take evidence on oath against their will if the Commission so decides?
Will he clarify that and tell us whether there will be satisfactory arrangements for safeguarding the security of information supplied to these bodies by trade unions and by employers? Will he confirm that, as this is a voluntary matter, he does not intend to introduce legislation for the control of wages, prices and dividends?
Secondly, will the First Secretary recognise, as I am sure he does, that the most important and most difficult stage is yet to come? In his statement he refers to the settlement of the norm and criteria. Who exactly is to settle them? His statement is rather vague on this. It says "formulate". Who is actually to fix the norm and criteria? Is it to be N.E.D.C., with the triple partnership, or is it to be he himself or the Government? We would like elucidation on this point.
Thirdly, will the First Secretary agree that the establishment of machinery of this kind does not in any way exonerate the Government from following proper economic policies which will lead to the stabilisation of the economy, nor does it in any way exonerate private firms from taking the necessary enterprise and initiative, because machinery of this kind must not be allowed to buttress the inefficient or act as a drag on the enterprising and the efficient?
Mr. Brown: I am sure that the whole House would wish me to thank the right hon. Gentleman for the help and support he is giving us, support which will be noted in quarters outside the House as well as inside it.
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As to whether the machinery is to operate voluntarily, the right hon. Gentleman will see in paragraphs 6 and 18 of the statement references to this. I make it absolutely plain that I wish, as does everybody else who has been associated with me—
Mr. Heath: There is no paragraph 18 in the statement.
Mr. Brown: It is at the bottom of page 4 of the White Paper, paragraph 18. I said "the White Paper".
Mr. Heath: No. The right hon. Gentleman said "statement".
Mr. Brown: That is not a tremendously important point. I meant the White Paper. We are dealing with a much bigger issue than the right hon. Gentleman seems to understand.
The right hon. Gentleman will see when he reads the White Paper that this is referred to specifically in paragraphs 6 and 18. I am making it plain that my desire, and that of everybody who has been associated with us in this exercise, and of all those who want it to succeed, is that it should operate on a voluntary basis and that all parties on both sides of industry as well as in the Government shall be willing and ready to participate fully and make themselves available and accept the decisions which are made. That is our wish. That is our intention.
The right hon. Gentleman will see that in both those paragraphs we have to say that, should it ever be proved, much to our regret, that the voluntary system would not work, the Government would have the duty, on behalf of the nation, of reconsidering the situation.
On the question of the privacy of information and of meetings, we make it absolutely plain that the divisions of the Board will decide for themselves whether they meet in public or in private. In any case where the disclosure of information would be against the commercial interests of those concerned, the information will be taken in private and will not be disclosed. This has been made clear to both sides of industry, and both sides of industry are happy with the assurances given.
The third question, as I took it, related to what the right hon. Gentleman called the next and most difficult stage. I remind the right hon. Gentleman that

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some of his right hon. and hon. Friends thought that the first stage was the most difficult. Most of them then thought that the stage I have now succeeded at arriving at would be the next most difficult stage. Each one is difficult, but the next stage of fixing the norm and criteria will be dealt with, as I made quite clear in my statement today, by discussions in the National Economic Development Council. That does not mean that other discussions will not go on.
When the right hon. Gentleman asks who fixes the norm and criteria, he asks a question which is not really the relevant one. As the original White Paper in December made clear—perhaps the right hon. Gentleman would like to go back and have a look at it—the statement of the national interest, which will be the background against which the Board will do its work, will be given to the Board by the Government. But that statement will be arrived at by the Government after discussions with all the interests concerned and after the fullest debate and discussions in the National Economic Development Council. The Government cannot at any stage in this duck their own responsibility, but at every stage, the next stage like the last two, I have every intention myself, and every hope, that we will conduct it by way of agreement and arrive at general views.
The right hon. Gentleman then asked me whether I appreciated that this did not exonerate the Government from following proper economic policies, to which the answer is that we have been able to get this particular agreement, which our predecessors were unable to get, precisely because we are doing just that. There must be some good reason to explain why we have got this agreement, but the Tories did not.
Then the right hon. Gentleman asked me whether I accepted that this did not exonerate private industry from behaving responsibly, too. The answer is, "Of course".
Mr. Grimond:I have not had the advantage of reading the White Paper yet. The First Secretary refers in his statement to a Royal Commission. Although I fully appreciate that he wants to get voluntary agreement, may we take it that, since a Royal Commission has, by its very nature, certain powers, these
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powers will be available to the new Board?
Secondly, no body in this country will be more grateful for anything that the First Secretary can do to stop a rise in prices than will the consumers. It appears that, so far, most of the conversations have taken place with the employers and the unions. Can the right hon. Gentleman assure us that the interests of consumers have been represented? Will he tell us how they will continue to be represented on these new bodies which are being set up?
Lastly, when the criteria are under discussion, surely one of the most important criteria should be productivity. Quite large increases in wages, salaries or profits may be justifiable if, at the same time, efficiency and productivity are increased.
Mr. Brown: I am much obliged to the right hon. Gentleman. I can only repeat that we are using the Royal Commission machinery because I think that that is the right way to do it, and, particularly, it is the right level at which to try to do it. But this is an area where, quite frankly, it is far better to proceed by agreement and consent, even if it does not work quite as firmly as otherwise one would like it to do, rather than try to force people. It is certainly my intention—and everyone knows this—to proceed in that way.
In the discussions which have got us this far, inevitably, for the most part, we have had to proceed on the basis of the Government acting as the consumer's representative, which, after all, is their ultimate duty. The agreements could only be negotiated with the special interests concerned, but on the National Economic Development Council there are independent members who also fulfil that function. On the Commission, when we get round to announcing the names, as I hope to do soon to the House, the right hon. Gentleman will see that I shall provide for people who are not representatives of special interests there, but who will be able to have the consumer's view in mind.
As to the criteria and productivity, yes. When one talks about establishing the norm and the criteria, one first discovers how to do it, and there will be some discussion about that. But one

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means very much that, unless all our incomes—I do not just mean wages—and prices stay within the total rise of our gross national product, the end, of course, is inflation, which is bad not only for consumers but for wage and salary earners as well. Obviously, therefore, this will be one of the principles by which we shall arrive at the definition of what are the norm and criteria to be observed.
Mr. Palmer: What will be the likely effect of this Royal Commission on the impartial and objective working of the arbitration and industrial conciliation machinery of the country?
Mr. Brown: It is not our intention to by-pass or interfere with them at all, but there must be somewhere, we think, where particular cases can be examined and where a general policy can be established. If we get this done, the work of these other bodies will thereby be advantaged.
Mr. Biffen: Will the right hon. Gentleman be under no doubt, first, that very many people regard the quest for an incomes policy as illusory and, indeed, undesirable? Secondly, what statistical machinery will the right hon. Gentleman use to determine whether or not his incomes policy is succeeding?
Mr. Brown: The hon. Gentleman is responsible for his own views. I think that the country will be very glad to hear that he and the right hon. Member for Wolverhampton, South-West (Mr. Powell) have the courage to say openly what many of their right hon. and hon. Friends try to indicate but try to avoid actually saying. If this is the view of the party opposite, very well; let it be known.
Mr. Biffen: Will the right hon. Gentleman answer my question?
Mr. Popplewell: Will my right hon. Friend take it that we on this side congratulate him on the way he has got this done in such a short time? We all appreciate that he has had great difficulty in building up the machinery and getting confidence on both sides of industry. He has now succeeded. This is the first step towards a realistic approach to meeting the needs of the nation's economy. There will be many
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difficulties, as he knows full well, before this co-operation can percolate down to the shop floor, but does my right hon. Friend realise that the nation is sure that he will carry forward the skill, energy and patience which he has shown so far? We are extremely grateful to him for what he has done.
Mr. Brown: I am much obliged to my hon. Friend. There will be many difficulties between here and the end. It took the Swedes, for example, who are much lauded in these matters, more than 20 years to bring their policy to fruition. We shall beat that. But what puzzles me is that, whereas outside the House it is a matter of all-party concern that we should succeed, only inside the House does it become a matter of party division.
Mr. Heath: When will the right hon. Gentleman learn that, if he has a genuine concern for the national interest and wants to secure agreement upon it, he does not help the process by insulting his opponents? When three serious questions are put to him about the contents of a statement, he might at least answer them soberly, not in the way he has done so far. If he can change his attitude, he will get a better result, because there is not party opposition on this but a desire to secure a sound incomes policy.
When the right hon. Gentleman talks about the real explanation of what happened in the past, does not he realise that he has reached exactly the position we were in a year ago, in January, 1964, when the National Incomes Commission had been established? The employers had made their offer of price machinery, the Chancellor had given his categorical undertaking in the White Paper to deal with profits through fiscal measures, but both the other items were turned down by the trade unions? That is the real explanation. The right hon. Gentleman has now secured agreement about it, and he at least might answer serious questions put to him without imputing dis-honourable motives to his opponents.
Mr. Brown: I am sure that I am. I am open to be taught how to behave, but I am equally sure that the right hon. Gentleman is not in a position to do it.
The right hon. Gentleman is absolutely wrong in what he says about the

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National Incomes Commission. If he will go back and read the first White Paper—perhaps he might try to do his homework, too—he will see that there is a world of difference. The National Incomes Commission was given the job of trying to state what the national interest was and, in fact, was given the job of looking only at incomes, which meant only wage settlements. There is the world of difference between that and the policy followed this time, the machinery achieved this time and the purposes given to it.
The reason why we are succeeding this time, the right hon. Gentleman should remind himself, is simply that the policy is wholly different, the machinery is different, and the purposes are different. This is why both sides of industry were willing to accept it this time, but were not last time.
Several Hon. Members rose—
Mr. Speaker: We shall find time to debate this when there is a Question before the House, but we cannot do so without one.

FIREARMS LEGISLATION
The Secretary of State for the Home Department (Sir Frank Soskice): With your permission, Mr. Speaker, I should like to make a statement about firearms legislation.
I announced on 21st January that I was examining the adequacy of the present legislation affecting firearms in consultation with chief officers of police. Our object has been to strike at the criminal, the potential criminal and the hooligan while limiting as much as possible the restrictions placed on the law-abiding citizen and the burden place on the police. The conclusions that the Government have reached are as follows:
First, we shall propose to Parliament that the maximum penalties under the Firearms Act, 1937, for the possession of a firearm without a necessary firearm certificate or during a period of disqualification shall be increased from the present maxima of three months' imprisonment and fines of £20 or £50 to maxima of six months and a £200 fine upon summary conviction, and three years' imprisonment and an unlimited fine upon conviction on indictment. I am also re-
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viewing the penalties under certain related provisions, such as making a false statement to obtain a firearm certificate.
Secondly, the Government have considered carefully the possibility of extending to shotguns the firearms certificate procedure, but have decided against it. There are probably at least 500,000 shotguns in legitimate use throughout the country and the burden which certification would put on the police and the users would not be justified by the benefits that would result. Instead, we shall propose to Parliament that it should be made an offence with maximum penalties of six months and £200 on summary conviction and five years and an unlimited fine upon conviction on indictment to have any loaded firearm, other than an air weapon, in a public place without lawful authority or reasonable excuse. I believe that this should deter criminals and hooligans from carrying loaded guns—which is the real danger.
Thirdly, in order to deal with criminals and potential criminals who carry concealed weapons, especially when travelling in cars, the Government propose to ask for a new power for the police to stop, search and detain persons in public places on reasonable suspicion that they are in unlawful possession of a firearm. The use by the police of this power would be closely supervised, and we are satisfied that it is required to prevent a rise in armed hooliganism and the use of firearms by criminals.
Fourthly, as the weapons used are, in the main, stolen or illegally imported, I am re-examining the provisions of the 1937 Act relating to the registration of firearms dealers with a view to widening their scope and to increasing the control exercised over matters such as security of premises.
Fifthly, I have it in mind, in the period immediately before new penalties come into effect, to arrange a further amnesty so as to encourage those who have firearms for which they have no real use to surrender them to the police.
I am confident that these measures would help the police in their fight against violent crime, and I am arranging for the necessary legislation to be drafted.
Sir E. Boyle: We shall, naturally, wish to study the right hon. and learned Gentleman's statement. Will he take it

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from me that we on this side of the House —and, I am sure, public opinion generally —will welcome these measures, which will help the police in their fight against violent crime? Will he also accept that I am sure that this is equally true of those who take the retentionist and those who take the abolitionist standpoint on the Murder (Abolition of Death Penalty) Bill, which we are discussing upstairs? Will he further bear in mind that we particularly welcome the increase of the maximum penalties under the Firearms Act and the announcement about an amnesty?
The right hon. and learned Gentleman proposes that it should be an offence to have any loaded firearm, except for air weapons, in public places without lawful authority. Can he tell us more about how he thinks the words "lawful authority" or "reasonable excuse" in this context can be defined?
The right hon. and learned Gentleman also proposes new power for the police to stop persons in public places. While we accept the necessity for that power, does not the right hon. and learned Gentleman agree about the importance of assuring opinion generally that it will be adequately supervised and exercised in a manner acceptable to public opinion as a whole?
Sir F. Soskice: I am very grateful to the right hon. Gentleman for what he has said. A "lawful occasion" for the carriage of a firearm will be one, for example, when it is being carried for a necessary purpose of some sort by a person who has an appropriate firearms certificate. Obviously, the phrase will have to be carefully defined in legislation. Obviously, also, there is a personal liberty aspect of the power of police search. I can assure the House that I myself and the police authorities generally will be most careful in the way in which this power is exercised.
Sir D. Renton: I, too, welcome the statement, but is the Home Secretary aware that there are some airguns which are very dangerous indeed and are capable of killing? Will he reconsider his decision to exempt them from this new procedure?
Is the right hon. and learned Gentleman further aware that at the moment
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many shotgun revenue licences contain advice on the back on how to kill game effectively? What is really needed, however, is advice which will alert young people of the penalties they can incur under the Air Guns and Shotguns Act, 1962. That advice should be printed on every licence.
As I made the television appeal in connection with the most successful amnesty so far, may I suggest to the right hon. and learned Gentleman that he himself should appear on television and make an appeal to the public? I believe that such action does have some effect.
Sir F. Soskice: I will certainly bear in mind the suggestions of the right hon. and learned Member for Huntingdonshire (Sir D. Renton). At present, my view is that the Air Guns and Shotguns Act imposes sufficient penalties and contains adequate restrictions for the public safety, but I will certainly consider what he has said. I am grateful for his suggestions.
Mr. Deedes: Is it proposed that the House shall have an opportunity of discussing the right hon. and learned Gentleman's statement, in view of the very close public concern felt in these matters? If there is a possibility of such a discussion, would it be possible for it to take place before the conclusion of proceedings on the Murder (Abolition of Dealth Penalty) Bill, which has some relationship to the Home Secretary's announcement?
Sir F. Soskice: I have no doubt that consultations can take place through the usual channels about possible discussion in advance of the Second Reading of the Bill, which will be introduced in due course. I do not necessarily accept that there is a close connection between the two Bills.
Mr. Weitzman: On behalf of this side of the House, I should like to congratulate my right hon. and learned Friend on the expedition with which he has acted in a matter where inquiry and attention were long overdue. May I press upon him, however, the question of an inquiry into the security of premises of dealers in firearms and suggest to him that it is a vital question that needs attention with expedition?
Sir F. Soskice: The sources from which arms can be obtained for unlawful purposes are a matter of the greatest importance. As I said in my statement, I propose to deal with the security of premises of dealers and sources of that kind and do all I can to dry up sources of supply, particularly through the amnesty.
Mr. Bessell: My right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) and my hon. Friends welcome the Home Secretary's statement. May we know when the necessary legislation is likely to be introduced? On the question of "lawful authority" or "reasonable excuse", may we assume that guns carried Ix sporting purposes will come under the heading of "lawful authority" or "reasonable excuse"?
Sir F. Soskice: I cannot, at the moment, go beyond saying that the Government regard the proposed legislation as a matter of very high priority and that steps will be taken to introduce the Bill as soon as possible. The words "lawful authority" would include the normal uses to which shotguns are put by peaceful persons.
Mr. W. T. Williams: I thank my right hon. and learned Friend for his statement, but is he aware that one of the difficulties presented by possession of firearms by criminals is the comparative ease with which it is possible to obtain a certificate? Will he, therefore, consider the possibility of tightening up the provisions under which licences for firearms are given and ensure that, once a certi-
578
ficate has been given, the course of the firearm subject to it is followed so that it does not escape through this channel into criminal hands?
Sir F. Soskice: Under the provisions of the Firearms Act, 1937, there is adequate power to ensure that certificates are granted only in proper cases. Certainly, the greatest care will be exercised to see that, where there is any suspicion that the applicant may he unsuitable, he will not receive a certificate.
It is obviously difficult to devise a method by which the career of a firearm can be followed, but the regulations I propose to make affecting dealers will, as far as they can, ensure that particulars are taken of sales, and so on. We shall thereby go some way towards keeping track of these weapons.
Sir E. Boyle: Will the Home Secretary bear in mind that we on this side of the House think that it is of the highest importance' that legislation should be introduced in this Session on this subject? If there is to be a long delay before the legislation is introduced this Session, will he bear in mind that we think that the Government should provide facilities for a debate on this highly important subject, which is attracting so much concern?
Sir F. Soskice: I am fully conscious of and I share the right hon. Gentleman's feelings as to the urgency of the introduction of the legislation.
Several Hon. Members rose—
Mr. Speaker: The Clerk will now proceed to read the Orders of the Day.

ORDERS OF THE DAY

  GAS BILL
  Order for Second Reading read.
  4.42 p.m.
  The Minister of Power (Mr. Frederick Lee): I beg to move, That the Bill be now read a Second time.
  Through a very wide range of our industries, new techniques are evolving, and the structure of many of these industries has to change in order to take care of the new processes by which they manufacture their goods. This applies in the energy industries as well as in other manufacturing industries. We believe that the gas industry has evolved a new dispensation under which the 1948 provisions in some respects are not applicable.
  The Bill has two separate but interconnected purposes. The first is to make certain changes in the structure of the gas industry which was established by the Gas Act, 1948. The second is to provide the opportunity for the gas industry to develop the large-scale storage of gas in suitable underground strata.
  The need for this legislation stems from the technological changes which are taking place in the gas industry. When the industry was nationalised in 1948 there was a large number of separate gas undertakings providing gas from over a thousand local gas works. As the late Hugh Gaitskell said, when introducing the nationalisation Bill:
  "gas is a local service, and we think that to a great extent it should be decentralised."—[OFFICIAL REPORT, 10th February, 1948; Vol. 447, c. 228.]
  The organisation chosen for the industry—12 area boards responsible for both production and distribution in their own areas and a Gas Council mainly advisory and federal in character—reflected this position and was well adapted to the tasks then facing the industry, which were integration of production and distribution on an area basis. This process of integration has been vigorously pursued and has enabled the boards to reduce the number of works to fewer than 300 at present.
  During the last few years technological advance in the industry has been very rapid. New processes have been
  580
  developed or are in course of development which can produce gas at a considerably reduced cost; some of these are the result of the gas industry's own research, others have been developed by private industry. New techniques have enabled the gas industry to draw upon completely new sources of supply, and in October last year the first cargo of Algerian methane arrived in the Thames, a most notable achievement in gas transportation.
  The industry is just beginning to get the first benefits of what has so far been done, and further technological change is in prospect. New or improved processes of producing and transporting gas will no doubt be developed and, above all, there is the possibility of natural gas being found under the North Sea. It cannot, of course, be assumed that any gas will be found there or that, if it were, the amounts would be significant in relation to our fuel supplies. But the chance of a major discovery of natural gas does exist and, if it were realised, it would have a major impact on our fuel economy as a whole and on the gas industry in particular.
  Some of these developments are still within the capacity of individual area boards. But others are or would be on a scale transcending the needs of one board. The imports of natural gas from Algeria supply a number of boards, as would a major find of gas in the North Sea. Underground storages of the kind which the industry seeks to develop are also likely to be of a capacity greater than that needed by any one Board.
  The scope for integration and coordination is no longer, therefore, limited to the area of one board, and while the industry has managed within its present organisation to carry out one joint scheme—the Algerian methane scheme—for the supply of gas to a number of boards, the organisation is not really suitable nor was it designed for this kind of activity.
  It is these changes in the gas industry and the prospect of others in the future which have led the Government to introduce the Bill before the House. Both management and workers have shown a very commendable desire to take advantage of the opportunities for modernising this old-established industry. The Bill will help them to do so in two ways. It will provide an organisation which will

  581
  enable the industry to take full advantage of new developments and it will provide the opportunity for the gas industry to use a method of gas storage which is widely used abroad, but has not so far been developed here.
  The need for legislation on these matters was put forward by the Select Committee on the Nationalised Industries nearly four years ago, in its Report on the gas industry. It is almost 20 years since a report on the gas industry of comparable importance was made; this was the Heyworth Report and, just as that Report formed the basis for the organisation chosen in the 1948 Act, so the Select Committee's Report is the basis of this present legislation which seeks to modify that Act.
  The Select Committee considered that technological advance had brought the gas industry to a position not envisaged in the Gas Act of 1948. Whereas the emphasis of that Act was on the independence of area boards, it seemed to the Committee that technologically the emphasis was now on their interdependence. In the Committee's view, the present structure of the industry was not suitable for the development of the large-scale production and distribution facilities, on a national rather than an area board basis—the kind of change which we are discussing—which seemed to them to hold out the best prospect of reducing costs of gas production and supply.
  To meet this new situation the Committee proposed that either the Gas Council should be given powers to manufacture gas and supply it to the area boards, or, as the Committee itself preferred, a thirteenth board should be established responsible for large-scale production and distribution.
  The Government agree with the Committee's view that the structure of the industry needs to be brought up to date, but consider that the first of the alternative solutions considered by the Select Committee, namely, to extend the powers of the Gas Council, would best meet the needs of the industry. This was also the view of the previous Government as the Minister's predecessor explained last year to the Select Committee.
  We believe that this solution will enable the right balance to be struck between centralised and local supply.
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  Not all the technical developments which are taking place point in the direction of production and distribution on a scale transcending the needs of individual boards. Indeed, some of the processes of gas production which have been developed since the Select Committee carried out its examination of the industry, are well suited to the needs of individual boards.
  As new developments take place the balance of advantage between central and local supply may from time to time change, and our aim is to provide the industry with a structure which will enable it to select whichever method is the most advantageous to the users of gas. This, the Government believe, can best be achieved by giving a strengthened Gas Council powers not supplanting but complementing those of the area boards and a general responsibility for promoting co-ordinated development of gas supplies. This involves the minimum change in the existing structure which, I believe, has a very great deal to its credit and it is the solution preferred by the industry itself.
  The Select Committee also examined the other matter dealt with in the Bill, namely, underground storage of gas in natural porous strata, and drew attention to its potential importance to the industry and the need to provide new statutory powers if it was to be developed. This is, as the Committee then pointed out, one particular example of the way in which the economics of gas supply can be improved by the use of new techniques—new at least in this country—operating normally on a scale larger than that required to meet the needs of individual boards.
  This form of gas storage has not so far been used in this country but it is widely used abroad. Indeed, in the United States, where it was introduced at the end of the First World War, there are now well over 200 underground storages in use. Canada, also, has developed these storages and since the end of the Second World War European countries have made increasing use of them. The nearest examples are the French storages at Beynes and Lussagnet and the two German storages near Hamburg and Hanover.

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  The essential requirement for this form of storage is a layer of porous rock usually shaped like a dome and covered by an impermeable layer of rock through which the gas cannot penetrate. These conditions can be found either in depleted oil or gas fields or in water bearing rocks called aquifers. The gas, when injected through boreholes drilled into the porous layer, is stored in the rock pores, displacing in the case of an aquifer the water previously held there. In other words, the gas is stored in the ground in the same way as it would be in a natural gas field and we are so to speak imitating a natural phenomenom.
  I would emphasise that, because in this country, although it is a new conception, we are, in fact, trying to do what nature itself does, as it were, to replace gas in its own natural evironment, and this, I believe, is one of the greatest guarantees for the nation. It is not any sort of hare-brained idea. It is something, whether we like it or not, which nature has been doing for many thousands of years.
  In suitable conditions, very large quantities of gas, measured in thousands of millions of cubic feet, can be injected into the porous rock. This, of course, is on a quite different scale from the traditional method of storing gas in gasholders whose capacity is measured in a few million cubic feet and its development in this country would provide the gas industry with a new method of meeting seasonal variations in the demand for gas. In summer, when the demand falls, gas can be stored in the underground storage, to be withdrawn in winter to help meet the increase in demand and provide greater security of supplies.
  We are all familiar with the winter load problems of the electricity industry, but I do not think that it is generally appreciated that the gas industry has a precisely similar problem. Indeed the amount of gas used in the winter months is already 50 per cent. higher than in summer and this seasonal difference is increasing as the gas industry makes a greater contribution to heating, especially in the home.
  Mr. Robert Sheldon: I was wondering whether the natural gas has a smell which is as dis-
  584
  advantageous as that of manufactured gas and, if so, how this would affect it if it were stored.
  Mr. Lee: My hon. Friend has raised a point of very considerable importance. I will deal with it as I go along.
  The gas industry has been able to use this natural advantage of being able to store gas to even out short-term variations in demand. Underground storage will enable the industry to make the maximum use of its ability to store its product, and provide for longer term seasonal variations in demand. Underground storage would be particularly suitable for the storage of natural gas which is now arriving from Algeria. This has a high calorific value, which enhances its value as a reserve, and is non-toxic and does not pollute water. These are points which I am sure my hon. Friend had in mind. If given the powers sought in the Bill, the gas industry plans to use underground storage for natural gas and for other gases which have similar characteristics or can be treated to make them suitable.
  The value of underground storage as a means of meeting seasonal demands has been recognised for a long time in other countries and the United Kingdom is one of the few large users of gas which has not so far developed this form of storage. Last year the Gas Committee of the Economic Commission for Europe arranged, at the invitation of the French gas industry, a symposium in Paris to discuss modern methods of gas storage. Nineteen countries took part and much of the discussion was concerned with underground storage in porous strata.
  Those countries which have already developed this storage were quite certain that it has proved of great benefit to their gas industries and they intend to bring into use additional storages wherever suitable conditions can be found. Therefore, it is quite clear from that symposium and the discussions which then took place in Paris that this is one part of gas technology in which the United Kingdom is behind other countries.
  This is not because the gas industry has failed to recognise the importance of underground storage. The Gas Council has been prospecting for possible sites for a number of years and in 1961 presented a Private Bill which would have given

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  the necessary statutory powers to develop an aquifer-type storage at Winchester.
  Those of us who were then Members of the House will remember that the Bill met with substantial opposition. A number of Members felt that the Private Bill procedure was not appropriate for this new development. I felt at the time that they were well justified in taking that view. The Bill was withdrawn and the then Minister of Power decided to initiate a full examination of the problems raised by the underground storage of gas in this country.
  As a result of that examination the previous Government accepted that the opportunity for the development of underground storage in this country should be provided by public legislation, and early last year my predecessor informed the Select Committee on Nationalised Industries that it was intended to provide for underground storage of gas by the gas industry in the legislation which would be required to amend the structure of the industry.
  We, also, are convinced that legislation on underground storage is needed arid that this should take the form of public and not private legislation. Only public legislation can provide the safeguards and controls which the Government consider are the essential prerequisites for this new development.
  That gas can be stored safely in underground strata has been established in the many storages which are now operating abroad. The geological conditions which are necessary for the storage to be feasible and safe and the methods of operation are well known. We are not here dealing with a novel and untried development. But it is new in this country and it is very understandable that those faced with the prospect of having gas put under their land should be anxious about the possible risks involved. The essence of safe practice lies in carrying out the operation in the right conditions and in the right way. If the site selected for an underground storage satisfies the necessary geological requirements and the storage is operated in accordance with well-established practice, the Government are confident that underground gas storage will not endanger the public.
  The main purpose of the legislation is, therefore, to provide a system of control and supervision which will ensure that
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  underground storage is only allowed to be developed and operated in conditions which do not involve risk of danger to people, property or water resources. Its further purpose is to facilitate this development where it is safe and advantageous.
  Colonel C. G. Lancaster: The right hon. Gentleman has been dealing with natural storage under porous strata. Will he say something about manmade storage underground? I am sure that he is aware of the developments which the French have been making in North Africa. They are probably applicable to this country.
  Mr. Lee: We read of these developments, but I doubt whether they are applicable to the Bill. The principle of underground storage has long been accepted by the French, but we are not making provision for that within the scope of the Bill. It is one of those things which probably will happen in future in Britain as well as in France.
  Colonel Lancaster: It is being considered at this moment. It is not something which will happen in the dim future. It is a method of storage which is possibly equally applicable to the natural method, with which the right hon. Gentleman has been dealing. I wonder whether the right hon. Gentleman would like to develop that point, because it is something that we should consider in conjunction with the Bill.
  Mr. Lee: I understand the hon. and gallant Gentleman's point. All that I am saying is that we are not legislating for it within the Bill. That matter can be developed in Committee, but for the moment it is not in the Bill.
  The changes in the organisation of the industry are dealt with in Part I of the Bill. Clause 1 empowers the Gas Council to manufacture, acquire and supply gas to the area boards and gives the Council the duty of promoting and assisting the co-ordinated development of efficient and economical gas supplies on a countrywide basis. When the Council exercises its new powers it will be subject to obligations similar to those already imposed on the area boards under the Gas Act, 1948.
  The Council will be required to act in accordance with capital development programmes submitted to and approved by

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  the Minister; to promote the welfare, health and safety of its employees; and to comply with the same minimum standard of financial performance as is imposed on the area boards in the 1948 Act. The Council will also be able to supply gas direct to a consumer, but in each case the Minister's consent will be required and given only after consultation with the board in whose area the consumer is situated.
  Clause 2 enables the Minister to appoint three additional members to the Council. This is not obligatory. It gives the Council the opportunity to appoint, if necessary, three additional members. At present, the Council consists of a chairman and deputy chairman and the chairmen of the 12 area gas boards. If the Council is to be given new functions, some increase in that part of the membership which is free of the responsibility of running an area board is probably necessary. The area board chairmen will still provide the majority of the membership and the Council will retain the federal character which it was intended to have when the 1948 Act was passed.
  Clause 3 deals with rating. Under rating legislation the area gas boards are rated not on individual gasworks or other operational assets, but by a formula under which the liability to rates of each board is determined by the amount of gas sold in its area. The Gas Council, since it has not so far had operational powers, is not included in this formula.
  The Clause will bring into the formula any operational assets which the Council may occupy in exercise of its new powers to manufacture and supply gas. The purpose is to ensure that the total liability to rates of the industry does not alter because a particular function, which, if carried out by an area board, would have been covered by the rating formula, is instead performed by the Gas Council.
  I turn to the provisions in Part II on underground storage. The basis of the Government's proposals for the control of the development of underground storage is provided by Clause 4. This prohibits a gas authority, which for this purpose means the Gas Council or an area gas board, from storing gas in natural porous strata underground unless it first obtains a storage authorisation order from the Minister.
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  This gives the Minister an overriding control on any proposal by the industry to develop this form of storage. In exercising it, the Minister has a statutory obligation to have regard to the safety of the public and the protection of water supply. These considerations will also apply when the Minister decides whether the kind of gas proposed for storage is suitable.
  Schedule 2 of the Bill sets out the procedure which must be followed when a gas authority seeks a storage authorisation order from the Minister. This gives to everyone who may be affected by the proposal the opportunity to express his views and have them considered. The application must be advertised and everyone concerned must be notified.
  If at this stage objections are made, the Minister must hold a public inquiry into the application—and may, indeed, do so even if there are no objections—unless the objections are trivial or frivolous or the objectors choose to be heard instead at a less formal hearing. If, after considering the report of an inquiry, the Minister decides to grant the proposed order, and the affected local authorities or other public bodies specified in the Schedule maintain their objections to the proposal, the order will be subject to special Parliamentary procedure.
  Clause 27 of the Bill amends this procedure so as to enable petitions of general objection to a proposed order to be automatically referred to a joint committee of both Houses unless either House resolves to the contrary. Without this amendment, it would be necessary for either this House or the other place to resolve to refer any such petition to a joint Committee before it could be considered there.
  I turn again to the central theme of safety control. The Minister's control will continue, after an authorisation order has been issued, throughout the life of the storage. Clause 16 of the Bill empowers the Minister to impose conditions on the development and operation of the storage in the interests of safety and the protection of water resources. He will be able, if necessary, to stop the gas authority injecting gas or to require the withdrawal of gas. If he decides that it is not safe to allow the storage of gas

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  to continue, he can, under Clause 18, order the storage to be taken out of operation.
  Clause 19 provides for the appointment of inspectors with powers to carry out inspections and tests, and Clause 17 for the reporting and investigation of accidents.
  I hope that the House will agree that these provisions of the Bill establish a comprehensive system of control of underground storage, and we believe it right and sensible to do so. But it is to be hoped that this care in providing for all eventualities, however remote, will not be taken as implying that this form of storage is full of risks and dangers. We believe that it is unlikely that the provisions for dealing with accidents and unsafe conditions will ever need to be invoked.
  I am sure that the House will agree with me in saying that as this is a new departure we want to impress on everybody that it is not a question of believing that there is any risk in this proposal. We want to get the balance right as between making quite certain of the safety of the project and not frightening people into believing that all these safeguards are essential and will ever be invoked.
  So far, I have mentioned provisions for ensuring that an underground storage is developed and operated safely by the gas authority. It is also necessary to ensure that the actions of other people do not infringe safety. We have looked at the matter from the viewpoint of the industry. We have to ensure that actions outside the industry do not infringe safety. For example, mining, quarrying or other excavations, if they went deep enough, might jeopardise the gastightness of the storage.
  Therefore, Clause 5 of the Bill enables the Minister to control these operations both in the gas storage itself and in a surrounding area, described by the Bill as the protective area. The extent of the protective area and the depths at which the control operates will be specified in the authorisation order. Control will only apply to operations going down to a considerable depth and will not otherwise affect the use of land in the storage or protective areas.
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  Where, however, it is proposed to penerate below this depth, the Minister's consent will first have to be obtained. If this is refused or granted only with restrictive conditions, the gas authority will pay compensation under Clause 8 for expenditure on works which are thereby made abortive and for any loss or damage caused by the Minister's decision.
  Having outlined the way in which the Bill controls underground storage in the interests of safety, I should now mention how it will facilitate its development where it is safe for it to go ahead. To develop an underground storage, the gas industry will need to acquire some land—for boreholes and plant—and the right to store gas under a more extensive area. The amount of surface land required will not be large and the gas industry, like other statutory undertakers, already has statutory powers to acquire land and rights to lay gas pipes, if necessary by compulsory purchase.
  Existing legislation would not, however, enable the gas industry to acquire compulsorily rights to store gas under land which it did not own. The porous strata in which gas could be stored might extend under an area of several square miles and it would be unnecessary and usually undesirable that the industry should have to acquire the whole of the surface land above the storage.
  Clause 12 of the Bill therefore enables a gas authority to purchase compulsorily rights to store gas in land where these rights cannot be acquired by negotiation. The gas authority will be able to apply to the Minister for the confirmation of a compulsory purchase order under the same procedure which applies when land is compulsorily acquired. This provides the opportunity for the making of objections and their hearing before a decision is reached on whether the order should be confirmed.
  Compensation for the compulsory acquisition of these rights will be payable by the gas authority, and where the amount cannot be agreed by negotiation it will be determined by the Lands Tribunal or, in the case of Scotland, by an official arbiter in accordance with the principles which apply when land is compulsorily acquired. These enable people with an interest in the land to claim in

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  respect both of any market value of the rights acquired, assessed in accordance with the rules laid down in the Land Compensation Act, 1961, and of any depreciation in the value of their land caused by severance or injurious affection.
  Although the use for gas storage of the strata lying some hundreds of feet below will not of itself affect the occupation of the surface, and experience abroad should reassure people that land need not be affected simply because it is to have gas beneath it, the Government have thought it right to enable compensation to be claimed for such depreciation if it occurs. The Bill therefore allows such claims to be made either when the right to store gas is acquired or, under Clause 7, at the time the storage authorisation order is made.
  Clause 14 deals with another aspect of compensation, namely, compensation for any personal injury or damage to property caused by the gas in, or escaping from, the underground storage or the connected boreholes. As I said previously, the Government are satisfied that this form of storage can be safely developed and operated, and the Bill provides the safeguards which I have outlined to ensure that safety. But the use of natural strata in this country for gas storage is new, and the Government have, therefore, decided that the gas industry should be absolutely liable, as provided in Clause 14, towards anyone who, because of it, suffers injury or damage to himself or his property, except where this is caused by that person's own fault or that of his servant or agent.
  Mr. Peter Bessell: I wonder whether the right hon. Gentleman would agree that it is important to emphasise that experience overseas has shown that the underground storage of gas is safer than storage above ground. I mention this point because I am afraid that, because of the provisions of the Bill, there is some danger that the public might fear that this is a dangerous method of storage.
  Mr. Lee: The hon. Gentleman's intervention is most useful. It is the fact that it is far and away safer for gas to be stored underground than stored in gas holders on the surface. Furthermore, one must remember the huge capital investment which will be required to build gas-
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  holders to hold the quantity of gas comparable to that which we shall store underground. In addition, of course, there is the unsightliness of gas holders. It is much safer, and far more economical, to store gas underground than to increase the number of gasholders to that required to hold a comparable amount of gas.
  Dealing with the effect on water supplies, special provision for compensation is made for any loss or pollution of water supplies caused by the development or operation of an underground storage. With the safeguards which the Bill provides—particularly the provision in Clause 4, which allows the Minister to authorise only such kinds of gases which are suitable having regard to the safety of the public and the need to protect water supplies—there is no reason why underground gas storage should harm water resources. But, clearly, the Bill should provide for such a contingency, and Clause 15 accordingly sets out the steps to be taken by a gas authority to compensate anyone who is deprived of a source of water to which he was entitled at the time the storage was authorised.
  Mention should be made of the provisions to assist the proving of potential sites. Normally, such investigations will take place by agreement with the landowner concerned, but, where this cannot be obtained, the proving of a potentially valuable underground storage might well be prevented. Under existing Statutes—and I refer to the Water Act, 1948, and the Open-Cast Coal Act, 1958—there are precedents for enabling rights of entry on to land to be granted for the purpose of survey and trial borings in default of agreement, and the Government propose that similar powers should be exercisable by the Minister of Power where this is essential for the prospecting and proving of underground storage sites.
  The procedure proposed under Schedule 6 will enable the landowners concerned to make representations to the Minister before rights are granted, will require notice to be given before entry on the land, and will provide for the payment of compensation for any damage or disturbance.
  Hon. Members on both sides of the House, whatever may be their views on issues such as nationalisation, are agreed that these industries must be allowed to

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  operate with the maximum of efficiency. I believe that this legislation will help the gas industry to achieve this aim and to improve its services to the public.
  Looking back on the industry as it was five or six years ago, and then reflecting on its present position, I believe that it is a great story of men who grasped new possibilities and new ideas, who were determined to improve and to modernise the industry within which they were employed, and in the case of managements which they controlled, and I think that hon. Members on both sides will appreciate the forward-looking way in which they have tackled these problems. I believe that we owe them our congratulations for the way in which they have gone ahead, and for the initiative they have displayed in these important matters.
  I am sure that in asking the House to give the Bill a Second Reading the House would want me to convey to everyone in the industry our congratulations on what they have done, and our good wishes for the future, in the belief that by providing this new facility for storage we will enable them to make an even greater contribution to meet the demands for energy in this country.
  5.26 p.m.
  Mr. John Peyton: It is very agreeable on this occasion to be able to offer the congratulations of my right hon. and hon. Friends and myself to the right hon. Gentleman on having introduced what we believe to be a forward-looking and sensible Measure. It is one of which I have some prior knowledge, as I was at the Ministry of Power, but nevertheless I recognise that it is not always possible for Ministers to get a place for Bills in their programme, and I cordially congratulate the right hon. Gentleman on the success that he has had here. He will not be surprised when I tell him that my congratulations are even more sincere because I feel that any legislation of this kind which is introduced at least puts down in the queue some very much less reputable candidates for the attention of the House.
  I am comforted today by the fact that I enjoy the support of two ex-Ministers of Power, my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd), and my right hon.
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  Friend the Member for Bridlington (Mr. Wood), both of whom while at the Ministry of Power associated themselves closely with the gas industry and rendered it some distinguished service.
  As the right hon. Gentleman said, the Bill is concerned with fitting into our fuel economy a very important development affecting the gas industry, a development which we all hope will enhance the efficiency of the industry, but it follows from that that the other industries for which the right hon. Gentleman is responsible will be affected, and I hope, therefore, that I shall not trespass at all in saying a few words about some of the other industries.
  I am sorry that the cordiality which might otherwise be the dominant word in today's proceedings is somewhat overshadowed by what the right hon. Gentleman said outside the House on Tuesday. I do not in any way criticise him for having held a Press conference. It is very desirable that the public should have every opportunity to understand these complicated problems. It is desirable, therefore, that the Press in their turn should be given every opportunity, too, but equally it is important that the House of Commons should be treated with can-dour and given the fullest chance of examining important statements of policy when they are made.
  The Minister is reported as having said the other day that the Government could not guarantee a market for X million tons of coal, which presupposes an energy policy at which we have not yet arrived. That was reported in the Telegraph of 10th February. We are rather concerned to know to know when the right hon. Gentleman thinks we will arrive at a fuel policy of that kind, and what is going to happen in the interim. Would we be right in assuming that it is the Government's intention to continue now with what was said when we were in office not to be a policy at all? I exempt the right hon. Gentleman from this charge, but many of his colleagues, when sitting on this Bench, were very fond of levelling at my right hon. Friend and myself the charge that we did not have a fuel policy. Yet we now find ourselves confronted by a Government who are continuing exactly what we were doing—except, we are told, that in about two years' time, when the Energy Advisory Council has been deliberating

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  over a period—and that Council is made up of a strange conflict of views—we shall have visited upon us a new fuel policy, assuming always that the right hon. Gentleman and his friends stay where they are, which I very much doubt. We are very anxious to know what will happen in the interval. Are we right in assuming that competition wil prevail?
  Mr. Lee: The hon. Gentleman is not right in assuming that it will take two years to evolve a fuel policy. We hope to be able to report long before that, and then go on to make the thing practicable.
  Mr. Peyton: I am obliged to the right hon. Gentleman. We shall watch his progress with a good deal of interest. He must not forget that we had all been led to suppose that the party opposite had ready a series of policies. I believe that the words they used were "ready to swing into instant action". Now we are hearing the right hon. Gentleman talk of years elapsing before the policy can first be germinated and then given practical expression. That is somewhat surprising, although less surprising after our experience of the last three months.
  The right hon. Gentleman did not help his cause the other day. He has obviously been misunderstood by some of his hearers. The Guardian reports him as having said:
  "What I can't say is that the Government cannot do anything to stop people who want to convert from one fuel to another."
  The Daily Telegraph reported him as saying:
  "I cannot say that the Government will do anything to stop people who want to convert from one fuel to another."
  If, as I hope, the second version is the correct one—in other words, that the right hon. Gentleman would not seek to stop people who wished to convert—we are going to continue at least a measure of competition, which we believe is the only effective safeguard for the customer.
  There was also a report of the Minister's having said:
  "We will do everything we can to give coal a really good break in those areas for which we are responsible."
  First, we want to know what that means. Can it mean anything save discrimination, and is it not the thin end of the wedge?
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  It would appear to us that if this remark means anything at all it means that Government Departments and organisations under their influence or control will have their freedom of choice fettered. Is this right? If it is, we believe that the right hon. Gentleman is wrong in making such a decision.
  Mr. Lee: Is the hon. Member saying that when he and his hon. Friends were at the Ministry there was never any attempt to assist the coal industry?
  Mr. Peyton: I am not saying anything of the kind. I am asking what the right hon. Gentleman meant when he said that he would give coal a really good break. Is he going to embark on a policy of discrimination against other fuels?
  He will have seen, without drawing much comfort from them, the comments in The Times leader, headed "The Easy Way Out", and saying:
  "The Minister of Power has encouraged the Coal Board to maintain output without mentioning the cost. This must not become a guarantee."
  On the same day the Financial Times said:
  "But if serious damage to the economy is to be avoided the National Coal Board must shortly begin either to pay its way or reduce its size."
  I find this conclusion very difficult to resist, but whatever the right hon. Gentleman meant on those occasions I ask him to seek an early opportunity to explain in full to the House what his policy is, even in this interim stage. The right hon. Gentleman laughs. Does he suggest that when a major development of this kind takes place it is unreasonable not to consider other fuels which will be affected by it?
  I am aware of the right hon. Gentleman's reported statement that he does not intend to hold back the gas industry from substituting methane, oil and natural gas for its traditional raw materials. This statement is wholly welcome. I congratulate the right hon. Gentleman on making it and hope that he will have the courage to sustain it when in battle with some of his more reactionary colleagues.
  The background to the Bill is one of quite extraordinary and dramatic progress by an industry which, about ten years ago, many people supposed to be a spent force. Like the Minister, I want

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  to refer to the Report of the Select Committe—a body which has an astonishing influence on these fuel problems and whose deliberations have again and again proved of the highest service. Governments of both parties are broadly following the recommendations made by that Committee.
  I also agree with the Minister that those responsible, both on the Gas Council and on the area boards, are to be warmly congratulated on the progress that has been made. I am grateful to the Minister for having made it quite clear that these sentiments will be widely shared on both sides of the House. It is only right, however, that I should remind him that much of this progress was made under Conservative Ministers, and I hope that we shall not hear any more, from those less fair-minded of his hon. Friends, the fatuous suggestion that, somehow or other, Conservative Ministers have been prejudiced against nationalised industries. Here is one that has made astonishing progress under Conservative rule, and I hope that hon. Members opposite will remember that.
  We have to bear in mind the developments which have taken place—the immense reduction in the number of plants, to which the Minister properly referred, the arrival of Lurgi, followed by methane, and the new oil-based processes. We have over the horizon the possibility of a large find of gas under the North Sea and perhaps the purchase at a reasonable price of gas from Holland. It is also right to mention the fact that the design and efficiency of gas-using appliances has been vastly improved. This in itself amounts to a revolution, which has come at a very good time for the industry.
  The House knows that the growth of the industry is very considerable at the moment. The present growth rate is about 7 per cent. per annum, and it is constantly increasing. If we want any further ground for hope we have only to look at the sales of appliances. Let me give a few examples. In December of last year the sales of central heating equipment were up by 22 per cent.; those of space heaters by 13 per cent.; of gas cookers by 14 per cent.; of refrigerators by 45 per cent. and of water heaters by 19 per cent., over the same period in 1963. This all bodes well for the future.
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  The gas industry's success has been backed by a powerful advertising campaign. I appreciate that at one stage, when he first came to the Department, the Minister may have had in mind—if one is not embroiled in the struggle in industry one may think this—whether advertising is unnecessary and expensive. I believe, however, that the really vigorous campaign in which the gas industry has engaged has played a marked part in—this horrible word keeps creeping in—creating the new image that the industry now enjoys in the public eye. I hope that the Minister will be very careful before making any intervention in these matters and will leave these responsible industries to use their own discretion where advertising is concerned.
  As the right hon. Gentleman has pointed out, and properly so, the Bill gives the Gas Council powers to manufacture, acquire and supply gas. It is now vitally necessary that the industry should no longer be fragmented. I entirely endorse what he said, that the scope for advance by the industry is now no longer within the area of a single board. That is indisputable, and I am sure that what the right hon. Gentleman now proposes is right. The increasing activity at the centre has also made it necessary to strengthen the Gas Council itself by the appointment of additional members. I was interested to hear the Minister say that about 50 per cent. More gas is now used in the winter months. This underlines the very powerful argument for the introduction of underground storage.
  As the right hon. Gentleman has frankly recognised, this is quite a new development in this country. I hope I shall not be misunderstood when I say that in this country new developments are not always welcomed with open arms by an enthusiastic public. Some sections of public opinion are often to be found among those who resist change. Please do not let us have any nasty remarks bout "conservatism". I am referring to people who are "conservative" with a very small "c" and are to be found at least as frequently on the benches opposite as on this side of the House.
  I wish to put this point seriously to the Minister. It was the intention of the last

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  Government to publish a White Paper at the same time as the Bill was introduced. I am not certain that a White Paper would be the right thing to publish. It may be that some informal document, in more ordinary language than one normally finds in a White Paper, would be better. I will not now mount my favourite "hobby horse", but I hope that the right hon. Gentleman will not disregard this suggestion. It is not made from any desire on my part, or the party for whom I speak, to make difficulties. I am simply saying that this is a new development and I think it would be very useful to the Minister and to the Government if the right hon. Gentleman took every opportunity to give a simple explanation of what it means. I am sure that he would lose nothing by doing so.
  The ordinary mortal has very little idea of what a storage is. Some diagrammatic explanation of this would be helpful. It would also be helpful if some information could be given of what are the Minister's ideas about the quantity and type of gas to be stored. There should certainly be information about safety precautions. I am quite satisfied that everything the Minister said about safety precautions being more than adequate is justified. I am absolutely with the right hon. Gentleman on this. I think, therefore, that he would be making a mistake in not explaining this as clearly as he can to as wide a public as possible. He should explain also that water supplies—a tender subject—are adequately protected. To those who are interested in the land, it should be explained that the use of land will be interfered with to a far less extent than anybody might support at first sight.
  The right hon. Gentleman said, and I propose to adopt his phrase, that what the gas industry would be doing in respect of gas storage would be imitating a natural phenomenon. That is a very good phrase to use, and I suggest that it be given the widest possible currency in a suitably brief, intelligible document written for the consumption of ordinary mortals and not those who are the recipients of Government literature. They have quite a different taste in language and different standards from ordinary mortals. I do not want the right hon. Gentleman to think that when I
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  talk of the Government literature I am talking about official language. It is on quite a non-partisan basis. Very official language would hardly serve the purpose I have in mind. A brief, clear document of the kind I have described would serve the purpose of the Government and the industry well.
  I shall be grateful if the Parliamentary Secretary would say something about Clause 4(1) where there occurs the phrase
  "… such kinds of gas … as … are in the opinion of the Minister, suitable. …"
  We can, of course, discuss this during the Committee stage, but it would be helpful if the hon. Gentleman would give the House some indication of what is in the mind of the Minister about the types of gas he considers suitable, and whether, as the toxic content of gas diminishes—as it will over the years—his view, or the official view, is likely to change about those gases suitable for underground storage. Clause 4(3) states that the Minister or the gas authority
  "… shall have regard to the safety of the public and the protection of water resources."
  This seems to me to be a slightly vague provision. It places an important duty on the Minister which is fundamental to the whole operation and I should be grateful if, at his convenience, the right hon. Gentleman would consider the point to see whether the words are sufficiently precise. It would, it seems to me, be a difficult task for any court to say whether that duty had been adequately discharged. Such points as controlled operations, compensation, the actual detailed provisions for safety and matters such as compulsory purchase may well be left for discussion during the Committee stage. In such a Bill as this there will, of course, be points which my hon. Friends and myself will wish to put to the Ministers and I am quite certain that they will do their best to answer.
  There is one last point I wish to raise with the hon. Gentleman on the question of cost. I am not certain what is likely to evolve regarding the capital requirements of the industry. May I ask what is always a burning question: is the industry likely, either for reasons arising under this Bill or for other reasons, to require greater borrowing powers in the foreseeable future than are at present authorised by Parliament? It would be interesting to have that information.

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  As I said at the start of my speech—and I do not think there is any need to prolong it further—I welcome the Bill, I think that it is a sensible, forward-looking Measure. I only make one qualification, that the Government have not seen fit—I am sure they can remedy this—to take every step possible to reassure the public that all that is being done is the imitation of a natural phenomenon, not the production of some fearful, new and quite strange hazard. If the right hon. Gentleman would give that point consideration, I should be most grateful. With that, on behalf of my hon. and right hon. Friends, I would give the Bill a cordial welcome, and repeat, if they are not too embarrassing to him, my congratulations to the right hon. Gentleman in having gained his way with his colleagues and having secured for this industry the right to go forward on what is obviously a sensible and progressive path.
  5.52 p.m.
  Mr. Arthur Palmer: I think the House will agree that this Bill falls naturally into two distinct parts. In fact, one could almost say it is two Bills, in a sense, joined in the marriage of convenience. The major part of the Bill, in terms of words, is devoted to underground storage, which is a complicated and detailed matter in the legislative sense because property rights and safety issues are involved. Here I agree with the hon. Gentleman the Member for Yeovil (Mr. Peyton) that in the technical or technological sense this is a relatively simple matter, but it is important to explain this to the public. I think it is remarkable that in a country of our industrial antiquity underground storage should be so novel, but there has been much experience in this matter overseas and we can learn from it.
  I would also agree with the hon. Gentleman that most of the points on that part of the Bill were Committee points, and I am sure that they will be examined in detail when the Bill goes upstairs. I want instead to direct attention to the first part of the Bill, which is short in words but which makes some changes in the organisation of the industry. It extends tie powers, the duties, the responsibilities and, indeed, the membership of the Gas Council. It seems to me that the changes proposed are too moderate. I must say that I am a little disappointed.
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  I suspect that this is precisely the same Bill that hon. and right hon. Gentlemen opposite would have introduced had they been on this side of the House, which fortunately they are not. It is, I am afraid, very much a Bill out of the Departmental pigeon-hole, and the speech of the hon. Member for Yeovil confirmed me in that view. I regret this, and I shall try to explain why. I think that the weakness of the gas industry, for a long time now, has been the lack of any strong independent national direction in matters of genuine national concern.
  The Gas Council is not a genuine federal council because it has no reserved powers, but it is a confederal council, and a confederal council is not an effective executive instrument. I have two reasons for saying that. First of all, the Report of the Select Committee. I was a member of the Select Committee on Nationalised Industries for four years until 1959. Unfortunately—at least, I think that it was unfortunate—because I was not a Member of the House, I was not a member of the Select Committee between 1959 and 1964, but I have now rejoined that hard-working body, so I can speak with some modest knowledge of its activities.
  The Select Committee concluded that a council consisting of a chairman and vice-chairman and made up with 12 chairmen of 12 area boards was not sound for directing a large-scale industry such as gas. They thought that there was a tendency for area chairmen to speak with two voices; that they were men who in the everyday administration of the industry were concerned, quite rightly, with their own local affairs. They had then to come to the centre and battle with each other in an attempt to devise some kind of national policy. The Select Committee said that this was not a good arrangement and recommended that it should be changed. That seems to me the first argument for a change in the central direction of the gas industry—the Report of the Select Committee. I do not think that this Bill makes a sufficiently radical change as the Select Committee wanted and suggested.
  My second reason for arguing that the Bill is weak on change is my fairly considerable personal experience in the electricity supply industry. It is this form of organisation which from 1958 has been

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  imposed on the electricity supply industry. It did not exist originally. The original 1947 form of organisation had some faults, but I think that to force this confederal organisation on the electricity industry has been a mistake, although it is true it has been mitigated a little by the existence of the Central Electricity Generating Board. The argument used in 1958 when we had the second post-war Electricity Bill was that this confederal "council" form of organisation had worked well for gas and therefore it was a good thing to bring it in to electricity.
  I am not sure that it has worked all that well in electricity and there are many people in that industry who think so. But, later on, the Select Committee, quite independently came to the conclusion that that form of organisation was not, after all, working at all well for the gas industry. I know that it is difficult in any large-scale industrial organisation to hold a fair balance between excessive centralisation on the one hand and excessive decentralisation on the other. But, at any rate as far as the nationalised fuel and power industries are concerned, we have had the advantage of two independent inquiries. It is true that they took place some years ago, but, in their day, they were most important independent inquiries. There was the Fleck Report on the coal industry and the Herbert Report on the electricity supply industry.
  In my view both those Reports came about as close to a sensible answer on this question of the proper balance between centralisation and decentralisation in large-scale industrial organisations as could be found. If I may summarise their recommendations, both inquiries, starting from different points of view, thought that it was right to decentralise matters which were purely of local concern especially where there could be competition and emulation between component parts. But where there were matters of all-round national concern, of national finance and national responsibility, it was important to centralise under independent management. Centralised independent management was also important, so that there could be power at the centre to check the performance of the local units. It is never sufficient simply to decentralise and leave it to the decentralised organisations.
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  There must be some independent power at the centre to check actual performance and to see that things are done as they should be.
  The hon. Member for Yeovil referred to my hon. Friends who had complained about the lack of enthusiasm of Conservative Ministers for nationalised industries. I have never complained. When I take part in debates, as I do from time to time, outside the House on the subject of the merits of public ownership as against private ownership, I often quote in aid the speeches of Conservative Ministers, particularly the two distinguished ex-Ministers of Fuel and Power who are present, the right hon. Member for Bridlington (Mr. Wood) and the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd), to show how, when speaking objectively and impartially as Ministers of the Crown, they get very near to the truth of the success of nationalisation, and that it is only when they are on the party platform that they depart from accuracy. I should like to tell the hon. Member for Yeovil that in one or two speeches from the Dispatch Box he was already beginning to qualify for my quotation book on the excellence of public ownership in practice, but then his fuel and power career as a Parliamentary Secretary was cut short by the events of last October.
  Mr. Peyton: The hon. Gentleman must not misconstrue me too much. I have always said that nationalisation is a bad idea. I still maintain that view. It worsens every problem of management and I condemn it utterly. However, I still say that Conservative Governments have had to live with nationalised industries and have done so with great success and to mutual advantage.
  Mr. Palmer: I quite appreciate that the hon. Gentleman must adjust his point of view—I understand the circumstances—but that confirms my belief that, when speaking objectively as Ministers, he and his right hon. Friends have at times become almost enthusiasts, at any rate in the administrative sense, for the industries over which temporarily they have had control.
  I now want to say something about hon. Gentlemen opposite which is equally fair but of a very different nature. As thinkers and reformers in the development of public ownership, they have been utter

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  failures during the period they were in office. They always tried to see public ownership in terms of private ownership, or what they imagine to be private ownership working according to some kind of perfect theory. They have failed to see that public ownership on a large scale brings about a revolution which creates its own unique opportunities for improving the rationalisation and efficiency of given industries.
  I had hoped that in his Bill my right hon. Friend would break away from all this and would give the gas industry an independent leadership worthy of its very great opportunities. He has not done so. There may be other legislation to come, but I am disappointed so far. He has simply taken power to add three extra members to the Gas Council. He does not seem to be too sure either when he is to appoint them, and in this I think that the Bill is rather weak. The Gas Council remains with its limitations and with all its inadequacy.
  It is proposed to give this confederal Gas Council power to act as a wholesaler when in fact it is made up by a joining together of retailers. A sounder way of approaching it would have been to take the final recommendation of the Select Committee and create for the wholesale side of the gas industry, an independent authority, rather in the way which exists in electricity supply industry in spite of the addition of the Electricity Council. Administratively that would have been much sounder. My right hon. Friend should have been bolder.
  I have a second disappointment. It is that there is nothing in the Bill to indicate that the gas industry is a branch of the general fuel and power industry, the energy industry of the nation. There is nothing in the Bill as such to require the gas industry to co-operate with the electricity, coal, oil, and nuclear fission industries in promoting overall national fuel and power efficiency. I was not present on 8th December when we debated the Gas (Borrowing Powers) Order—I was abroad on Parliamentary business—but I have read the speeches. I think that it was the hon. Member for Yeovil who referred to the idea of a national fuel and power policy as putting the independent fuel and power industries into a "strait-jacket".
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  That is a vulgarisation of what is meant by a fuel and power policy, an energy policy. What is meant is to take advantage of the common national ownership of coal, gas and electricity to see what sensible economies can be made to promote overall national efficiency while at the same time preserving consumer choice and reasonable technical competition. It is taking the argument to the extreme to say that a fuel policy means abolishing consumer choice. It is perfectly possible for these industries to combine together in cooperation and understanding in the general interests of the country while preserving consumer choice and technical competition.
  Something may be done to this end in consultations through the new Energy Advisory Committee in which my right hon. Friend proposes to get co-operation among the national leaders of the fuel and power industries. But this body may suffer from the disadvantage—which in principle is the disadvantage of the Gas Council—that it is a bringing together of men who have to do the job every day and who may reach agreement on the basis, "If you do not interfere with what I am doing, I will not interfere with what you are doing." They will all go away happy, but the net result of the proceedings will be precisely nil. This is always the weakness of an advisory committee of performers, but we shall see what happens in the light of experience.
  At any rate. there should be some general national understanding. The hon. Member for Yeovil referred to the coal target. The gas industry's demand for coal will obviously fall in the years ahead, but, on the other hand, the coal demands of the electricity supply industry are likely to increase. Bearing in mind the planned increase in the national product of 25 per cent. by 1970, which means an enormous growth in the national demand for energy, I should have thought that, with one demand moving in one direction and one in the other and allowing for a three or four primary fuel economy, it would be possible to find a fairly steady place for coal which would give that industry some kind of stability. There could be a national fuel and power policy on a basis which would give the coal industry the

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  stability which it deserves and which it has the right to demand, and at the same time in economic terms would permit a proper balance with the newer fuel sources but of course that argument assumes a steady and high rate of growth in the national product.
  Locally there should be much closer co-operation and consultation between the gas industry, the solid fuel industry and the electricity industry to promote regional plans to mutual advantage; each in its place on a basis of understanding and without necessarily having to be imposed from above. Surely in these days the fuel and power industries have reached the point when they should be able to organise things so that would-be consumers can get impartial and objective advice on the relative merits of the various fuels. They should be able to co-operate locally in this way so that, without disturbing consumer choice, they are able to give together impartial advice through, say, energy advice centres. This would be to the advantage and economy of the fuel industries and the country in general.
  I have made two criticisms of the Bill but I wish it well in its technical proposals. Although I was brought up and trained as an electrical power engineer—and have, therefore, a slight inborn bias against gas—I also wish the gas industry well. I recall in my youth being told that gas was not much good, except, perhaps, for committing suicide.
  Mr. Peyton: In case the hon. Gentleman has any intentions on those lines I would inform his that gas is becoming less and less useful for that purpose.
  Mr. Palmer: I assure the hon. Gentleman that I have no such inclinations—none whatever. I was never more alive.
  One must admire the energy and determination with which the gas industry has, by technical innovation and leadership, established a brand new place for itself. That will help to stimulate electricity especially, for the electricity industry must now have new ideas which perhaps it has lacked recently because of over-complacency. Nevertheless, I hope that my right hon. Friend will bring forward something far more revolutionary by way of legislation for the gas industry next time.
  6.13 p.m.
  Mr. Geoffrey Lloyd: I was extremely interested in the observations of the hon. Member for Bristol, Central (Mr. Palmer) on the organisational principles, more particularly since he seemed to approve so much of those which were laid down and suggested by the Fleck Committee on the Coal Industry and the Herbert Committee on the Electricity Supply Industry, both of which were appointed when I was Minister. I hope, however, that he will excuse me if I do not follow him into that sphere because to do so would take up too much time and detract from my purpose, which is to join my hon. Friend the Member for Yeovil (Mr. Peyton) in welcoming the Bill.
  This is, to all intents and purposes, a Conservative Bill. The Minister is fortunate that the preparatory work was done by his predecessor. The Bill sets up the gas industry for its new career. It sets it up organisationally because it must have greater powers at the centre for buying and suplying gas. It also deals with the important question of underground storage which, as hon. Members know, is becoming more important year by year because now that we have got to the point when gas consumption is increasing, it increases much more in the winter than in the summer, for it is primarily a heat supplying industry.
  It sets the industry up for its new career, a career which results from the wonderful transformation that has taken place in the industry in recent years. It has changed from an old-fashioned Victorian industry based on an old-fashioned carbonisation process into one of the most highly technological industries in the country, to the point where it has become virtually a branch of the chemical industry.
  It is one of the success stories of Conservative Government during the last 13 years in the nationalisation sphere. Years ago consumption of gas was static. We found that it increased by about 1 per cent. in one year, by about 3 per cent. in the next and so on. The year before last I think the consumption was 5 per cent. up on the previous year while last year it was 7 per cent. up on the year before. I am told that last January it was 9 per cent. up on the previous January, even outpacing the electricity industry, as the hon. Member for Bristol,

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  Central will no doubt have noticed with interest.
  The same can be said of prices. In the South-East and the Midlands, the area which I represent, consumers were delighted to have a reduction in gas prices. This was a considerable achievement and the industry has been earning good surpluses in recent times. How has all this come about? This achievement is important in itself not only because it is one of the most important major fuel industries in the country but because it has an additional interest, for here we have an example of an old-fashioned industry modernising itself, exactly what all parties want to see the whole country doing successfully for the modernisation of Britain.
  Are there any lessons for the country in this in the larger sphere? There are, and one of the reasons why I am addressing the House today is that I was the Minister during the critical phase when the industry began to change from the old-fashioned one it was and took the first decisive steps towards its modern position. In the early fifties, when I became Minister—and this is a point all hon. Members may not appreciate—the industry was going through some very dark days indeed. There was an atmosphere of despair and these were the times when there were annual increases in coal prices and when the price of coking coal to the gas industry was disproportionately increased.
  I want to be fair to the coal industry and I should make it clear that that industry also had its difficulties in that coking coal was scarce and difficult to get. The mines were old and many of the seams narrow. However, from the point of view of the gas industry as customers of the Coal Board, it saw itself in a position of constantly mounting prices for its essential raw material. One year the gas industry had to absorb an increase of £18 million in increased cost of its coking coal from the Coal Board.
  The industry made an effort to co-operate with the Coal Board to see if there was any hope for it in the supply of coking coal and for moderate prices. The gas industry came away in a mood of desperation. It felt that the Coal Board regarded it as a captive market. There was nowhere else for the industry to go and it felt that it would be dragged
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  all the time and unable to resist whatever was proposed by its supplier. It was from that mood of desperation that the then chairman of the Gas Council came to me and asked whether, as Minister, I would back the industry in a variety of new efforts to free itself from dependence on coal, even if that meant going over to oil firing. I said "Yes".
  As the Minister said and as the hon. Member for Bristol, Central as an electrician agreed, albeit grudgingly, perhaps, this was the atmosphere of almost desperation out of which the new energy and enterprise of the Gas Council and the gas industry was formed. Thereupon, work was started in four main directions. The first was the attempt for the total gasification of coal
  We are all very sorry that the attempt has not succeeded. We watched it with great hope for some years and, of course, the research chemists did a considerable job in that they succeeded in getting gas by the total gasification of non-coking coals. Alas, it is not possible to present that process as one that can be at all competitive with the total gasification of oil. It is a great disappointment, but those concerned made a good try, and I am glad that they are still going on with the work because in the unexpected ways of research we can always hope for a breakthrough.
  The other was the search for natural gas in the United Kingdom. That was something that those in the industry were well advised to do. They did not succeed, but no one can blame them on that score. We must realise that in public as in private industry we must be enterprising. We cannot bring off everything we try, but must, overall, try to achieve success.
  That brings me to the subject of methane. I was very much concerned with the early beginnings of the methane effort. I co-operated with the Gas Council at that time in sending officials to America to study the beginnings of that work. I will not go into all the details of this immense and complicated enterprise, but here, again, the gas industry deserves the highest credit for the way in which it has approached this extremely daring conception, and in bringing to fruition this method of importing the gas at minus 270°—for

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  the first time in the world, I think—and feeding it into our gas system, in October of last year—
  Mr. Bernard Braine: In my constituency.
  Mr. Lloyd: In my hon. Friend's constituency, I am glad to say.
  The methane scheme, although it has been a great success, has been eclipsed by the new oil gasification process. I remember seeing in Sydenham the Oney-Gegi process in 1953. That was soon eclipsed by the I.C.I. process for the production of gas. That, in turn, has been succeeded by and complemented by the Gas Council's own process, worked out by its own research people in Birmingham, on which it is very much to be congratulated. This is a dramatic breakthrough in gas making, in that the capital expenditure is only one-eighth, the physical space required is only about one-ninth and there is a very considerable reduction in the cost of the gas supplied.
  It is just as well to remember that while the success of this process is assured, the harvest has not yet been fully gathered in any way. Although the process is successful, the new plants are only now beginning to come into operation in considerable numbers, so we can look forward with great optimism to the progress of the industry.
  When we look further ahead we see an even more stimulating prospect, and I am glad that the hon. Gentleman opposite swept aside the ridiculous nonsense talked by his colleagues about the North Sea during the election campaign. The electorate was told that our party had given the rights to their private-enterprise friends and their class-conscious supporters, and the party opposite gave the impression that when it came to power all this would be swept aside, the existing licences disallowed, and so on. We were relieved, but not altogether surprised, when, in the midst of the hundred days, the information was quietly slipped out that the licences had been agreed. That fact carries with it the implication, which is quite true, that a very fine business deal was done by the last Government in the setting-up of North Sea oil exploration.
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  That exploration is going on. We cannot be sure it will succeed. Even if it did not but if we could do a deal with the Dutch, who have one of the greatest natural gas reservoirs in the world—or, even more, if both eventualities came about—there is a tremendous and fascinating future for the industry. It would mean that instead of the industry supplying only 6 per cent. of our national energy needs it could reach between 28 and 30 per cent., and would play a major rôle in the supply of natural energy, as it does in the United States. I also assume, although the industry would be doubtful about giving this assurance, that there would be very considerable reductions in price to the consumer.
  All this wonderful development, which has now reached a point at which we have this even more stimulating prospect for the future, has come about not only under Conservative Governments but under Conservative fuel and power policy. I would say that an essential condition of these developments has been freedom of choice for the consumer and freedom of choice for the industry with regard to its own feedstock. I ask the House and the country whether it is reasonable to suppose that these developments would have occurred under Socialist Governments and Socialist policy—
  Mr. Palmer: I think I am right in saying that the right hon. Gentleman was the Minister of Fuel and Power, as the office was then, when the nuclear power programme, or the first instalment of it, was decided on by the Government. Is it not true that that programme was to a great extent imposed on the electrical power industry, though the industry was, for economic reasons, not too anxious to go ahead with it?
  Mr. Lloyd: I would not have said "imposed," but I will take the hon. Gentleman up and use what he says as an illustration of my argument, which is that it is very difficult to forecast long in advance the country's fuel position. I can well remember that when I was the Minister the kind of figure of coal output being talked about was not 200 million tons but 220 million tons—some people even spoke of 240 million tons. I suggest that if we had

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  had a Socialist-controlled policy inspired by anything like the principles contained in the speeches members of the party opposite have been making over the years, this industry might well have been tied to coal in a way not to its own interests or those of the country—
  Mr. Palmer: I was seeking to take the right hon. Gentleman's point that the fuel industries must be able to choose their own feedstock, as he calls it. I say that the electricity industry was not given that freedom but had pushed on it by a Conservative Government an over-large nuclear power programme.
  Mr. Lloyd: I am sorry if the hon. Gentleman wants me to take up a permanent hostility to the nuclear power programme, because I think that it will be one of the most important basic suppliers of electricity. In support of my point, I must say that in that great classic document of the party opposite entitled "Twelve Wasted Years" we find the statement:
  "Again, in spite of representations from the coal industry, the gas industry is being allowed to go ahead with the production of gas from oil."
  That shows the attitude of the party opposite in this matter.
  That is why my hon. Friend the Member for Yeovil and others of us on this side were made so anxious by the Press conference held recently by the Minister in which there was an actual reference to whether or not the gas industry should be allowed to use oil or would be forced to use coal. That was why we were so anxious when a statement was not made to the House, and we would like an assurance from the Minister to clear up the doubt generated by that conference, that he will, in fact, allow the gas industry to use the feedstock it needs, and to proceed on its development by the use of oil.
  I conclude by taking up one point made by the hon. Member for Bristol, Central. He talked about hon. Members on this side saying things to the credit of the nationalised industries when they were Ministers. He will have observed that this afternoon my hon. Friends and I have come forward to give full credit to the gas industry even though we are not now Ministers but are in Opposition.
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  This point should be noticed in the House and in the country. We are prepared to give credit to a nationalised industry. We want the nationalised industries to succeed. We ask one thing from hon. Members opposite, that they should reciprocate and genuinely want private enterprise to succeed. They should stop proceeding with the Steel Bill, which is poisoning the whole public atmosphere on this question.
  6.30 p.m.
  Mr. Christopher Norwood: I want, first, to comment on some of the points made by the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) before I speak more directly to the Bill. It is absurd for anyone to pretend that the changes which have taken place in the gas industry are a reflection of wise Conservative administration—which they are not—or that very similar changes would not have taken place under a Labour Government. The right hon. Gentleman had the honesty to admit that the basic reason for the development and improved condition of the gas industry is its shift to the use of oil. No Government in this country of either complexion could claim the credit for the tremendous change in relative prices that there has been between coal and oil since the time when the right hon. Gentleman was Minister of Fuel and Power, as the office was then called.
  Mr. Nicholas Ridley: Has the hon. Gentleman looked back at past debates on the gas industry and seen the very virulent attacks which spokesmen from the Opposition Front Bench made upon the whole project of substituting other forms of feedstock for coal? How can he make that statement if he has read those debates? He will find that those debates bear out what I say.
  Mr. Norwood: This is a misconception. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) has made this mistake. The technical developments which take place in the fuel industries are little influenced by the words which are used in a debate in the House. Some speeches made may be well-informed—some not. I am not very interested in what was said many years ago and in different circumstances. I am interested

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  in what is said now. I am interested in a claim which seems to me to be patently untrue. Such a notion will be seen by people outside the House, certainly by people who work in the fuel industries, to be a misconception. I say that with a fair measure of confidence.
  I have noticed already in the debate a certain difficulty of position among Opposition Members. On the one hand, the hon. Member for Yeovil (Mr. Peyton) said that he does not like the idea of nationalisation. He said it complicates the problem of management. It makes it almost impossible, I think he said. I do not remember his precise words. On the other hand, the right hon. Member for Sutton Coldfield spoke with what can only be described as affection of an industry over which he was once Minister and in which he has retained a very substantial interest.
  Mr. Geoffrey Lloyd: The hon. Gentleman is right in thinking that nobody who has been Minister can fail to have—affection is not a bad word—for industries in which he has worked. That must apply also to the electricity industry, and above all to the coal industry, because of the miners. I should not like him to think that there is any difference between my hon. Friend the Member for Yeovil (Mr. Peyton) and myself in our detestation of nationalisation and our belief that this is a wrong principle of industrial organisation.
  Mr. Norwood: I was not attempting to suggest that the right hon. Gentleman and the hon. Member for Yeovil hold different views. Their views are probably the same in every particular. I do not know. Most hon. Members opposite appear to me to have two suits of clothes. The right hon. Gentleman has confirmed that he has two suits. At one moment, talking about an individual industry, he says that we can talk about it without the platform approach. The next moment he is denigrating the idea of nationalisation.
  I do not believe that there could have been the rationalisation which has occurred in the gas industry had it remained under a multiplicity of separate authorities. It is hard to believe that this rationalisation could have happened in
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  those circumstances. If we want the evidence, we are now debating a Bill which by common admission has the support of the Opposition as well as of the Government. The Bill is designed to strengthen the central powers, so far as they exist, and, if anything, to make the centre more powerful.
  On the other hand, people are saying that the idea of nationalisation is not good. Yet they accept the principle that there should be a strong central authority. I shall come to that later. My hon. Friend the Member for Bristol, Central (Mr. Palmer) raised a very interesting point on this, with which I do not wholly agree.
  My basic point is that the fundamental reason for the success of the gas industry is tied up with its ability to move to a low cost supply of fuel. It is not just that oil prices have moved in favour of users of oil. It is that the particular types of oil which the gas industry has found itself able to use, described as the naphthas, are not marketable in Northern and western Europe to the full extent of refinery production. On the whole, the gas industry has obviously taken a very practical decision here, because from what those of us who have studied this question can see about the situation it seems as though going five or 10 years ahead we can look to a surplus of refinery capacity in what is described by the oil companies often enough as the eastern hemisphere, but at least in the northern and western portions of Europe, and that this fraction will be in abundant and cheap supply.
  I was profoundly distressed when I heard the right hon. Member for Sutton Coldfield speak about the North Sea discoveries as if they are already a reality and something on which we can plan. This is an absolute disaster. For illustration, I turn to the question raised by my hon. Friend the Member for Bristol, Central. He pointed out to the right hon. Gentleman that the decision, which now must look rather like an error—this is not necessarily a criticism; it may have looked like the right decision at the time—to go in for a big nuclear programme has placed the most appalling financial burden on the electricity supply industry. Yet people were carried away with the marvellous technology we seemed to be breaking into, with the new techniques,

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  the new science, the new technology, peopled largely by young, excited, interesting men who believed in what they were doing and believed that they were on the verge of a new revolution.
  We can say in all fairness that people in all branches of the fuel industry were mistaken in this—not just the Minister and the Ministry but other fuel industries as well. They thought that nuclear electricity would become competitive. They thought too far ahead. They were guilty of wishful thinking. If we can learn anything from this illustration, it is that we should by no means take the discovery of gas in the North Sea as a certainty, still less accept the idea that it would be economic as against manufactured gas from naphtha in centres near where it is to be used.
  I do not share the views of my hon. Friend the Member for Bristol, Central about organisation. On the whole, it seems to me that a very sensible decision has been taken about the powers to be given to the Gas Council in the form of organisation. If we have to give credit for that to hon. Members opposite, I suppose we have to give credit. They can be right on occasions, I suppose. They obviously were about this. I do not accept my hon. Friend's general strictures, although they were fairly mild. It appears to me that this is a perfectly reasonable way of doing things.
  Unfortunately, it is not true, as my hon. Friend observed, that the form of organisation in the electricity industry is the same. It is precisely because the sponsors of the Bill rejected the temptation to follow the advice of the Select Committee to set up a gas generating board, or a thirteenth board, that I regard the Bill as a thoroughly commendable Measure. Had they done that, they would have reached the situation which we now have in electricity supply where, in effect, we have an industry with two heads.
  It is all very well to say that the nominal head of the industry is the Electricity Council, that this is the so-called confederate body and on it all the boards are represented, some more than others. But it is also true that, by its very nature, the producing authority exerts great power in one way of another in its dealings with area boards and, for that matter, with its own individual consumers such as they are. Inevitably, we have grow-
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  ing up two different sorts of view in the two organisations. This is to be regretted, and I regard it as a form of organisation not to be repeated. I am delighted that in this Bill the temptation to follow the advice of the Select Committee has been avoided and my right hon. Friends have gone ahead with extending the powers of the Gas Council.
  It has been said, particularly by people in the gas industry, that one day it may be desired to extend the powers still further. If so, we have here, it seems to me, a convenient way of doing it. By the appointment of additional members to the Gas Council, the Council will have a more independent existence at Council level than it did before. I am sorry that my hon. Friend is not here, but it seems to me that in this case, contrary to the view which he expressed, the whole balance of advantage lies with the drafters rather than with the critics. I may be wrong, but my own experience convinces me that I am not.
  The other point I have to make about the Bill is more technical though, in a way, much more important. I do not know how many storages the gas industry proposes to introduce. From references to the fact that the storage is more than sufficient for an individual board, I assume that there will be only a few, in which case it may not be a point of the utmost importance. Nevertheless, I have been struck by the enormous difficulty which the industry will have to face if it runs up against objections. It is all very well for us here, and for people in the fuel industry, to say that it is difficult for a rational person to object, particularly if the gas stored is not made from coal, is non-carbonisation gas, that nothing is likely to go wrong, that it is a perfectly natural process, and so on. We can say these things, but the question is whether people locally will believe them.
  No one can have sat in the House for more than even a few weeks without being impressed by the tremendous efforts people make to avoid having high voltage pylon lines put across the countryside, although they remain extremely disinterested if the lines are to run 10 or 15 miles from their own constituencies. There are sometimes appalling conflicts almost between neighbours, between one village and another, with one parish council submitting proposals which would send the line right through the area of

  619
  another. Very commendable, no doubt, as a way of serving one's electors, but the time which can be lost, the energy which can be wasted and the distortion which can be given to technical planning is quite appalling.
  It strikes me that the provisions of the Bill, while I well understand the principle of preserving the rights of the individual, may well give the Minister and the industry a hard path to tread. I do not wish to do more than be very mildly critical, but I believe that it offers a good deal too much scope for delay.
  Having made those observations, I am glad to note that the Bill will receive the general acceptance of the House, and I thank hon. and right hon. Members for their attention.
  6.44 p.m.
  Mr. Richard Wood: The hon. Member for Norwich, South (Mr. Norwood)—as did other hon. Members and the Minister himself—gave some attention to the original structure of the gas industry, decentralised as it was, and there has been a certain amount of discussion already this evening about several real or possible developments coming above the horizon which may probably lead to changes. I say "probably" for this reason. As I see them, the developments which have focussed our minds on the probability of change are these.
  First and foremost, there was the importation of liquefied methane from North Africa. Second, there was the possibility, which existed in some minds, that the gas grid which was growing constantly within area board territory might develop further into a national grid or something more nearly a national grid in the future. Third, there is the possibility—I think that the hon. Member for Norwich, South was quite right in urging caution in our expectations about it—that there will be a find of gas under the North Sea. Fourth, there is the development, which, in part, is the subject of the Bill, of large natural underground storages.
  I do not believe that these developments, or any of them, could not be brought about under the present decentralised structure, but, naturally—I hope that I can say this without putting doubts in the minds of hon. Members
  620
  about my attitude—I feel that they could be much more easily brought to fruition as a result of some measure of centralisation. There are arguments on both sides. There is the one expressed by the hon. Member for Bristol, Central (Mr. Palmer), and the contrary argument which has been expressed by the Minister and his hon. Friend the Member for Norwich, South. These are arguments for and against such centralisation taking the form of some kind of gas generating board. I have myself always found that the arguments against such a solution were much more convincing that those in favour, and I join with the hon. Member for Norwich, South in being thoroughly glad that it is not this proposal which has found its way into the Bill but the proposal for a strengthened Gas Council with wider powers.
  Now, a few words about the issue of competition, which has reecived a good deal of attention this afternoon. My predecessors and I always followed the policy of competition both between the primary and the secondary fuels, but I ought to make perfectly clear that the weight which was given to a number of considerations, strategic questions, social questions, the balance of payments and other economic reasons, combined to create a form of competition which was less pure, or, perhaps one might say, less impure, and certainly very different from the free-for-all which we were, I remember, endlessly and emptily accused of having made out objective.
  Naturally, I believe that there was a very good reason for the modifications which were imposed on the completely free operation of competition, although I remember very well that many of the restrictions were always strenuously opposed. But, in general, it was my view then and it remains my view, just as it remains the view of my right hon. and hon. Friends, that the individual fuel and power industries should be encouraged to make the most of their individual intrinsic advantages.
  Thus, in the competition between gas and electricity, electricity has and, as far as I can see, always will have the great advantage over gas that it has become indispensable in most houses. On the other side, gas has the powerful advantage that, unlike electricity, it can be stored, and stored relatively cheaply and in great quantity.

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  This leads, as we all realise, to the immense importance of great natural storages which will contain, as the Minister pointed out, many times the capacity of the largest surface gas holder and will do so at comparatively little cost and virtually no damage to the beauty of the countryside. Therefore, if suitable storages can be found, it should be possible for the industry to take advantage of this great natural benefit to solve the problem of its peak load, which has been and is likely to remain, as far as I can see, most vexatious for its chief coimpetitor.
  The proposals in Part II of the Bill seem to me to have two main origins. The first is the private Bill introduced by the Gas Council in November, 1961. The second, which has not been much mentioned today, is the pattern of legislation set by the Pipelines Act, 1962. When the Gas Council introduced its Bill, this was the only course open to the industry—and, incidentally, it was the only means by which Parliament could express a view on the project. I was Minister at the time and had no hesitation in consenting to its introduction by the Gas Council.
  A number of factors arose however. There were the issues which had been raised during the previous year by the Bill promoted by the Esso Petroleum Company to lay pipelines from Fawley, north-east towards London and northwest to the Severn; and the Trunk Pipelines Bill which was introduced but withdrawn in 1961. Then there was the Government's decision on pipelines—this is relevant on this aspect of the Bill—to establish a new and public procedure for future pipeline development.
  There were also a great many natural apprehensions about this new development. I was glad that the Minister used the phrase "natural phenomenon". I also took the view that the apprehensions expressed at the time were ill founded and unnecessary. They were particularly great because the proposed storage happened to be not very far from the magnificent cathedral of Winchester and just about as close to a certain educational establishment there which made its views known in its usual vociferous manner.
  Consequently, because of these developments in legislative activity, and because of fears expressed at the time, the Gas Council offered to withdraw the
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  Bill in the early spring of 1962. Afterwards I made an inquiry as to what should be the right procedure and reached the conclusion that it would be right to introduce some procedure on the lines of this Bill, which itself closely follows the precedent of the procedure under the Pipelines Act.
  I hope that the Minister, who had something to do with the Pipelines Act, will not take it hard if, at this point, I express the confident hope that the behaviour of the present Opposition during the Committee stage of this Bill will be more responsible and constructive than the aimless, senseless and almost endless verbosity of hon. Members opposite during the Committee stage of the Pipelines Act, which was one of the parents of this Bill.
  I want to join with what hon. Members have said—certainly those who have spoken on this side of the House—in congratulating both the Gas Council and the area gas boards on the spirit in which they have tackled what I remember very well was a menacing situation when I went to the Ministry in 1959. My right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) has pointed out that this dangerous situation for the industry existed earlier in that decade and, therefore, virtually existed throughout the whole of the 1950s.
  At the end of the 1950s, gas still seemed to a great many people to be old fashioned. Although there were about 13 million consumers of gas, many were asking whether the industry would survive, at least in the form we knew it then. I remember talking about gas at the time fighting for its life although, knowing the industry's leaders as I came to know them, and the prospects of the industry, some of which were just coming over the horizon, I could not doubt that it would fight successfully.
  The expansion of the industry during the early years of this decade owes, I believe, a great deal first of all to the men and women working everywhere in it. I was given abundant testimony not only to their devotion to the industry but also to the immensely high morale that exists during the bitter cold weather two years ago when I made a number of visits to gas works and saw people who had worked non-stop for 36 hours and more at a stretch to keep the supplies going.

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  The expansion also depends—and this has been mentioned more today—on the willingness of the leaders of the industry, as they have shown only too clearly, to use modern methods, to experiment with new ideas and to get in on the ground floor of the latest scientific developments. That point was made very clearly by my right hon. Friend the Member for Sutton Coldfield.
  I turn now to the ideological aspect which has captured some attention in the debate. The hon. Member for Norwich, South spoke of the difficulty of the Opposition. I have found no difficulty in my position either today or as Minister of Power, when I was connected very closely with a number of nationalised industries. But it is always the case that, when my right hon. and hon. Friends give any justified praise to the conduct of a nationalised industry, some "bright spark"—if I may so refer to hon. Members opposite—gets up and points to our ideological difficulty.
  This does not worry me. It emphasises to my mind that those who make the criticism have a more limited view than they should of important questions. I have always felt that the Conservative Government could have been reproached effectively only if they had failed to create the conditions of greater efficiency in the nationalised industries. The state of the gas industry today, as my hon. Friend the Member for Yeovil (Mr. Peyton) pointed out, largely helps, I believe—although the hon. Member for Norwich, South will not agree—to substantiate the Conservative claim to have done a great deal for the nationalised industries. Paradoxically, whatever he says, I cannot help wondering if the state of the industry would be anything like so vigorous as it is today if, for the last 13 years, it had been under the charge of the party which nationalised it.
  I remember, for example, the reception given to the Government's announcement of the permission to the industry to import liquefied methane from North Africa. It was not exactly received with enthusiasm. Perhaps I may be forgiven for wondering whether a Socialist Government at that time would have reached a similar decision. I am convinced that that decision—although I
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  share the reservations about the scheme itself expressed by my right hon. Friend the Member for Sutton Coldfield—to move into a new field had an incalculable effect on the industry's morale and confidence in the future.
  We are entitled to our own opinions, but, whether or not other hon. Members share my view as to the progress of the gas industry during the last decade under a Socialist Administration, if we had been unfortunate enough to have one, the behaviour of the Government under the stresses and strains of the last 118 days has done absolutely nothing to lessen my scepticism of their willingness to modernise when there is any risk of consequential inconvenience or difficulty.
  Fortunately for the Government, in the shape of this Bill there is ready to hand a modernising Measure which is relatively painless and which can be of great value to the gas industry without any danger of direct or appreciable damage to either its suppliers or its competitors. I congratulate the Government on their fortunate legacy and on the speed of introducing the Bill, which I wish a comparatively smooth passage.
  However, my congratulations to the right hon. Gentleman will be complete only if, as I fervently hope, the introduction of the Bill means that he has persuaded the Cabinet to weigh the merits of the Gas Bill and the Steel Bill and has convinced his colleagues of the wisdom of introducing a Tory Bill which will improve the prospects of a nationalised industry and at the same time rejecting a Socialist Bill which, by nationalisation, will damage the prospects of the steel industry.
  7.3 p.m.
  Colonel C. G. Lancaster: Many of us took the opportunity when we last discussed the gas industry, before Christmas, to congratulate the Gas Council, as many of my hon. and right hon. Friends have done this afternoon, on the considerable technological advances which it has made in gas production. I therefore welcome the Bill, which gives facilities for taking advantage of these developments.
  I should like for a moment to refer to the Gas Council itself and to the attitude of the Select Committee on Nationalised Industries to the problem. I

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  was on the Select Committee which for rather more than a year had the opportunity to take evidence from the Chairman and Vice-Chairman of the Gas Council and from the area managers. It was, of course, an all-party committee which reached certain conclusions which were not hasty, but which were based largely on the quality of the men we saw. I say at once that we were immensely impressed with the high standard of the area general managers as well as of the Chairman and the Vice-Chairman of the Council itself; but although we were impressed with their high qualities, we concluded that they had the virtues of being men of independent views and so on and that to put them together would not necessarily make the best type of control in a changing world in which new developments were occurring and in which they had to take a centralised view as distinct from their decentralised view in the day-to-day management of their areas.
  I agree with the hon. Member for Bristol, Central (Mr. Palmer) that the Bill could have been improved in this regard. An additional degree of independence at the centre would have been an advantage. Three part-time members may be brought into the story and the Council is to have additional powers, but I still feel that the views of the Select Committee were right, and I am sorry that my right hon. Friend the Member for Bridlington (Mr. Wood) does not agree.
  I interrupted the right hon. Gentleman to make a suggestion to him, and, if I repeat it, it is only because I believe it warrants careful consideration. I must admit to some personal interest in this, for I have been connected with a private research concern for a great many years and I think that I know a little about this subject. The subject of man-made storage is now arising and is being investigated and several considerations bearing on man-made storage are as applicable to it as they are to natural storage—the possible effect on water measures, matters of security, disturbance and the like. These factors may not be so great, because the man-made storage would be the property of the Gas Council, but a number of considerations which apply to natural gas storage would also be applicable to man-made storage. On reflection, the right hon. Gentleman may
  626
  consider whether this is an appropriate moment to put his umbrella over the one as well as over the other.
  There is one matter which I should like to mention in connection with the exploration of the Continental Shelf. I am sorry that the Gas Council was not able to go in with British Petroleum and went in with an American company. I am sorry that it brushed aside the British contractors. It was offered help and co-operation, but it did not see its way to accept. I think that in the long run that will be found not to have been the wisest thing to do, but it is over and in the past and it is not much good crying about what has happened.
  I join with my right hon. Friend in wishing the right hon. Gentleman himself and the Gas Council well in this very big advance which they are making. The Bill generally is very useful and will go a long way to implementing and complementing the advances which have been made, and I wish it and the Gas Council every success.
  7.9 p.m.
  Rear-Admiral Morgan Giles: The whole subject of the storage of gas underground in this country, so far as it has gone, has had a rather chequered history. As my right hon. Friend the Member for Bridlington (Mr. Wood) has pointed out, about three years ago a Private Bill was introduced by which the Gas Council sought to obtain powers to pump gas into the sandstone layer below Chilcombe, which is in my constituency and a little to the east of the City of Winchester.
  There was an immediate outcry in Winchester, and the City Council produced a petition to the then Minister of Power. After considerable discussion, the 1961 Bill was withdrawn, and I believe that compensation was paid subsequently to the city council for the costs involved in preparing the petition.
  In view of what has gone before, it is very necessary to start with a clean slate and to have a look at the whole subject of gas storage underground with a completely open mind. I am perfectly clear that the Bill does not refer only to the Winchester area but seeks wide powers to store gas underground wherever the geological formation may be suitable.
  It must be agreed that the need for the underground storage of gas is real

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  and urgent. The use of gas both for domestic heating purposes and for industry is increasing enormously every year, as has been pointed out by many hon. and right hon. Members. To give only one statistic, the sale of gas space heaters has increased by 500 per cent. since 1951. Incidentally, that is an indication of the improvement in the standard of housing which the nation has come to enjoy during this period. Fortunately, this increased demand for gas coincides with the increased availability of supplies, particularly as a result of developments in the shipment of natural gas from abroad.
  With regard to the storage, and storage from season to season, which is the important point, of these increased supplies, it has been estimated that the Gas Council will need to store gas equivalent to 15,000 conventional gasometers costing about £500 million in capital cost. Half a dozen underground sites such as the one previously proposed near Winchester could store all that was required at no greater cost than about £20 million. I hope that I have said enough to show that the economic need for the underground storage of gas is proved beyond all possible doubt.
  The question arises, then, why did the previous Bill, the Gas Underground Storage (Chilcombe) Bill, come to such a sticky end? I assure the House that the petition which was presented against the Bill by the Winchester City Council was not the result of cussedness or obstructiveness. It was not presented with any desire to obstruct or delay developments which might be necessary for the general economic good of the country. The objections of the Council were only those which might be expected to be raised by any responsible local or civic authority anxious to preserve and maintain the interests of its inhabitants.
  Let us imagine the questions which must inevitably immediately spring to mind when a completely new technique is proposed for the storage of huge quantities underground of potentially explosive and unpleasant gas in a rural area or, even more so perhaps, in an urban area. What do people immediately ask themselves? They ask whether there is any possibility of a massive underground explosion, or any risk of fire. Is
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  there any risk of subsidence of the ground and possible danger to towns or buildings? Is there any risk of contamination of water supplies in any way? Is there any fear of the gas oozing out—and one can imagine it doing so if there were a geological fault—and spoiling crops or agriculture? Is there any chance that the amenities of the countryside will be spoilt by noise, smell, engineering works or ugly buildings? There are always very many people to leap to the defence of the amenities of the countryside in matters like this.
  From what I have been able to learn, I am personally of the opinion that the underground storage of gas is absolutely safe as far as human ingenuity can make it, and absolutely unobjectionable. As has been said by many hon. Members, underground storage should be cheaper and safer than the use of gasometers and it should also avoid the waste of valuable building land, which is in all too short supply. I believe that any fears or anxieties which may be held can be set at rest if sufficiently detailed and expert opinion can be obtained and sufficiently thorough experimental work can be done on the proposed storage sites.
  It is not too much to say that the success or failure of this Bill will depend on the extent to which the Minister and the Gas Council, as well as the area boards, can explain to the people in the areas concerned exactly what it is intended to do and exactly what the effect will be of the powers which Parliament is being asked to grant.
  Apart from the safety and amenity angle, and any strategic considerations, there is a host of questions concerning compensation, compulsory purchase, rates, the rights of local authorities and water boards, public inquiries, and so on. What it amounts to is that the task facing the Minister and the Gas Council is a gigantic educational process. In a matter like this, people can be led, but they cannot be driven.
  From such study as I have been able to make of the Bill—and it is a very long and complicated Bill—the important points seem to have been covered. I believe that it does give adequate protection to the rights of individuals and local authorities. But I am sure that hon. Members will agree that in a relatively unexplored field of

  629
  this sort it is not easy to foresee or to cover all possible eventualities by legislation. Clearly, a great deal will depend on the spirit in which the Government approach the problems involved. I am very grateful for what the Minister said, which showed that he understands this point.
  Both local authorities and individuals have it in their power to be difficult and obstructive in the implementation of a Measure like this, even after it has become law. For this to happen in Winchester or anywhere else would be very regrettable and very much to the disadvantage of the economy of the country.
  I therefore ask the Minister and the Gas Council to take heed of all local opinion in whatever areas they are contemplating storing gas underground and to consult fully and in detail at every stage, from the original planning onwards. That is where the previous Bill got off on the wrong foot. When it was presented it was more or less a case of a fait accompli and it was a great surprise to the inhabitants in the area concerned. I ask the Minister and the Gas Council not to proceed faster or further than public opinion can run. I hope that when the Parliamentary Secretary replies he will be able to give categorical assurances to the points which I have raised.
  7.18 p.m.
  Mr. Edwin Wainwright: 1 welcome the Bill, because I think it is essential for this country that gas should be stored underground. That may surprise some right hon. and hon. Members opposite, because I am a representative of the coal mining industry.
  We must always look rather sceptically at anything which has the support, as this Bill has, of right hon. Gentlemen opposite. I have always noticed that whenever it is possible to denigrate the mining industry right hon. and hon. Members are inclined to do it. The Bill will help the gas industry tremendously to compete against the mining industry, but we must appreciate that, whether it is necessary or cheaper, a greater contribution to the economy will be made if gas is stored underground.
  The Opposition were in power for over 13 years. Underground storage of gas
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  is nothing new. I know that a small Bill was introduced about three years ago, and the hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles) has mentioned a good deal of detail about it and why eventually it was withdrawn. If we are not careful we will allow public opinion on many occasions to prevent good projects going forward. Whether public opinion was right or wrong on the occasion in question, I am not certain, because I have not given the matter detailed study, but it was obvious that public opinion was dead against the expert opinion obtained by the Gas Council to the effect that the area was suitable for underground storage of gas.
  If the time arrives when it is decided that that area might be used and the Minister uses his powers, there will be tremendous criticism about his dictatorial attitude. It is, however, disturbing when one experiences the tremendous objections by the public from the narrow viewpoint of trying to preserve their area as something which is essential to them and treating the needs of the country as something which does not matter.
  I am not arguing for or against the use of the Winchester area for the underground storage of gas, but I impress upon the Minister, as I would upon any other Minister, to whichever party he belonged, that far too much time is taken to obtain and purchase land that is required quickly for the benefit of the nation. To take the example of roadways, one finds that a person can raise objections on three separate occasions when the building of a new road is planned. The same kind of arguments can be used at three different hearings. I hope that that kind of practice will not be allowed to operate in this instance. One hearing should be enough for the submission of objections that an individual or a group of individuals might have against the underground storage of gas.
  Rear-Admiral Morgan Giles: I should like to emphasise that what the people objected to on the occasion of the previous Bill was not what it was intended to do but the way in which it was presented. My point was that these things should be presented in a way that people would accept and would regard as reasonable.
  Mr. Wainwright: I agree with what the hon. and gallant Member says. It is,

  631
  however, easy to raise objections no matter how a Bill is presented. Possibly, there was a lack of communication. If a worth-while project is defeated by public opinion because it is wrongly presented the ultimate decision is bound to be wrong. As I have said, however, I am not arguing the pros and cons of whether the area in question was the right one.
  I should like to say a few words about the reason for the great move forward towards underground storage of gas. Obviously, over a period of years, there has been a switch from coal to oil. Whereas the present consumption of coal for the production of gas is about 20 million tons a year, within the next few years this figure will fall to 14 million tons and, depending upon the sources of gas supply, it is not impossible for the industry's demand for coal to disappear completely in the not too distant future.
  There are various sources of supply of gas. Not only does it come from the Sahara but Holland has offered to supply half of our gas requirements at a rather cheap rate. In addition, there is the important factor that after 15 months of research the Gas Council has suddenly found that gas can be obtained from light distillates more cheaply than by various other means.
  Sixty-five plants for the processing of light distillates are to be built within the next two or three years and a further 75 plants are envisaged by the mid-1970s. By the time those further 75 plants are built for the production of that kind of gas the coal industry will have lost its market for the gas industry. I do not know whether that is a good or a bad thing, but I notice that right hon. and hon. Members opposite always seem to look gleefully upon any project that will harm the coal industry.
  Mr. Peyton: I should like to get the record straight and say outright that there is no truth whatever in what the hon. Member is saying. It is fatuous.
  Mr. Wainwright: The hon. Member always gives the impression that he speaks on behalf of all his hon. Friends.
  Rear-Admiral Morgan Giles: He does.
  Mr. Wainwright: On this issue he does not, and one knows it. I do not criticise the hon. Member for Yeovil (Mr. Peyton), because he and I have taken part in many debates on issues concerning the nationalised industries, but what I have said is quite true and I can readily produce sufficient evidence to support what I say. On issues of this kind one has to be broadminded.
  I should like to know, if our efforts to produce gas from light distillates are successful, what will happen to the much-vaunted imports of liquefied gas from the Sahara. Was a contract entered into by the previous Government binding this country for 15 years to import 354 million therms of natural gas a year? If so, that is a great pity and there must have been lack of foresight even by the Gas Council. If that is true the nation will have a financial responsibility to bear. If the Gas Council has to do what the coal industry did it will have to bear the loss on that contract should one occur.
  The coal industry has carried out its responsibilities without any cost to the nation. When coal was imported it cost the industry between £70 and £72 million—the difference between the price of imported coal and the selling price in this country. Many other penalties have been imposed on this industry, and I hope that on this occasion any impact which the Bill has on the industry, as it must have, will be considered in a more kindly light than has been the case in the past.
  The coal industry has gone through a rather tortuous time since 1957. The National Coal Board has met its responsibilities with regard to unemployment by making certain, in consultation with the Ministry of Labour, that work was found for the majority of men who became redundant. This new method of producing gas will mean that some carbonising plants will have to be closed. The Government must ensure that men who become redundant from those plants are looked after. The Government must accept that responsibility, or make certain that the Gas Council accepts it, just as the National Coal Board accepted responsibility for finding employment for men who became redundant. If that is done, the men concerned will co-operate to the full extent with the Gas Council when these closures take place.

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  These new gas works will be a tremendous improvement on the existing ores. They will need only about one-ninth of the space required by the traditional gas producing plants and will cost about one-eighth of their price to build. Thus they will provide a tremendous impetus for the Gas Council to produce cheap fuel. The Government must bear in mind the effect which this cheap method of production will have on the coal industry. The nation should make some contribution to alleviate the blow which this industry will suffer. I hope that serious consideration will be given to the possible effects of the Bill on the coal industry.
  Oil and gas can be stored far more easily than coal. This method of storing gas underground could help to lessen the impact of a sudden demand for fuel. These underground reserves could be used when the demand for fuel exceeded the supply. I think, therefore, that the Government's policy should be to allow the coal industry to continue to produce the coal that is required to meet the country's fuel demands, and use gas and oil as buffers during times of shortage.
  I hope that everyone will remember the tremendous contribution which the coal industry has made to the economy of this country since the end of the war. It provided us with cheaper fuel than was supplied abroad. I hope that the Government will accept responsibility for the social consequences which might ensue from the closure of pits following an increase in the production of gas, so that the coal industry does not suffer as badly as it has done in the past.
  This is a useful Bill. There is nothing new in storing gas underground. We are probably the last country in the world to adopt this method. As far as I know, no accidents have been recorded abroad where gas has been stored, and there should, therefore, be no great objection to storing it in this country. I hope that the Gas Council will not run into difficulties in trying to carry out the proposals in the Bill, because I think that the underground storage of gas will make a great contribution to the betterment of our country.
  7.36 p.m.
  Mr. Bernard Braine: I have no quarrel with the purposes of the Bill. It is quite clear, from
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  everything that has been said, that it is a timely and sensible Measure. I am sure that everyone has welcomed the exciting technical advances which have been made by the gas industry and the contribution which it is making to the national economy. To the extent that the Bill provides a framework within which the industry can develop and expand, and thus better serve the nation. it is a good thing.
  I intervene—and I promise to be brief—not to criticise the essential purposes of the Bill, but to focus attention on a point of principle which touches the interests of my constituency. By a curious twist, the Bill contain a provision which, according to the advice that I have received, is likely to have an adverse and unfair effect upon my constituency, and, as far as I am aware, upon my constituency alone.
  The Explanatory and Financial Memorandum says that part of the purpose of Clause 3, which deals with the rating of Gas Council and gas board premises, is to clarify the application of the rating law to liquefied gas. Liquefied methane gas is brought into this country and turned into vapour gas for feeding into the national gas grid at a vast plant on Canvey Island in my constituency. Some reference to this has been made during the debate. The plant is operated by the North Thames Gas Board, and it is one of the latest and best of its kind in the world.
  It was here that the whole exciting methane gas project started. It is from here that before long about one-tenth of the gas consumed in Britain will come, perhaps even more later on. When completed, the project will cover about 70 acres, including valuable river frontage. It includes jetties, processing plant, and a large number of storage tanks.
  When the local authority—the Canvey Island Urban District Council—became aware of the magnitude of the scheme, it made representations to the Ministry of Housing and Local Government that this processing of liquid gas was a manufacturing process within the meaning of Section 11(4) of the Local Government Act, 1958, and the Council, as a rating authority, should therefore receive a substantial proportion of the rateable value as computed by the formula laid down in that Act. I shall telescope my argument

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  because I am aware that this is a constituency point and I do not wish to detain the House. Nevertheless, I think that I shall be able to show that it is a point of principle, and that the House ought to know about it before giving the Bill a Second Reading.
  The Ministry of Housing and Local Government replied last June saying that the point was also of concern to the Inland Revenue. It also stated that a working party on rating and valuation was reviewing the formula which governed the assessment of nationalised industries. Naturally, any local authority concerned about its rateable income would hardly be satisfied with this reply. The local authority accordingly made representations to the Urban District Councils Association and the local valuation officer. The latter passed the buck to the Solicitor for the Inland Revenue, and nothing more was heard.
  The Urban District Councils Association, however, took the matter up. It thought that the Canvey Council had a good point. It appeared from the replies the Association received that the Government's attitude was that the Council had a valid complaint on this score but that if that point was conceded it would have had the effect of increasing the rate income of Canvey to a great extent to the detriment of other authorities.
  If that is so, it seems to me to be a poor argument. Clearly the importation of liquid methane represents a very important contribution to gas production, which will bring enormous benefit to the national economy. This would not be possible if the plant had not been put on Canvey Island. I understand that it is the only plant of its kind in the country. It is Canvey that has provided the land, the facilities and the valuable water frontage necessary to bring in material which can be processed into gas to serve a large population.
  We are all constituency Members, and I hope that I carry other hon. Members with me in saying that, contrary to the general practice, the local authority will not be able to draw a rate revenue from industrial premises of this kind and that this is manifestly unfair. Clause 3 is specifically designed to prevent this local authority from getting the benefit that it
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  should. Clause 3(1) is quite specific. It says:
  "No premises occupied for operational purposes by the Gas Council shall be liable to be rated, or to be included in any rate, or in any valuation list or valuation roll."
  To make sure that there is no doubt about the methane plant on Canvey Island, subsection (7) expressly lays down that the liquefaction of gas and the evaporation of gas in a liquid state
  "do not of themselves constitute the manufacture of gas or the application of a process to gas".
  If the matter were left there it would be unsatisfactory and unfair, and the sole purpose of my intervention in this extremely interesting debate is to secure from the Minister tonight some clarification of the matter, and an assurance. I suggest that it is unfair to leave the matter where it is with a local authority and the community which that authority serves being deprived of a fair share of the gas rate of the North Thames Gas Board.
  If the land in question were being used by a private commercial concern the rateable value from the jetty alone would be considerable. Indeed, the Ministry of Housing and Local Government has already conceded to the Urban District Councils Association that the present gas rating formula does less than justice to Canvey Island and has indicated that the provision in the Bill is purely a holding operation pending the outcome of the working party review on gas rating. I ask the Minister to bear in mind the fact that another Government Department has said this.
  I seem to recall that when the question of the rating liability of area gas boards was discussed, in the Rating and Valuation Bill, 1957, the suggestion was made that where industrial gas from a steel company was purified the value of the premises concerned should be included in calculations for the benefit of the local authority concerned, and a promise was made that such points would be remembered when discussions took place between local authorities and nationalised industries. That promise is not fulfilled in the Bill. The House should, therefore, know that it is being asked to approve an anomalous and unsatisfactory provision. I trust, therefore, that the Minister will deal with the point and will be able to assure me that a

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  reform of the rating of gas undertakings will be carried out to ensure fair treatment to local authorities.
  I want to be fair. I know that this is a narrow point, and appreciate that the hon. Member cannot now be expected to give me an exact indication when the working party will report. I recognise that that is outwith the responsibility of his Ministry. But I should be obliged if he would give me an assurance that he and his right hon. Friend will do all that they can to ensure that the working party arrives at a just and fair solution of this problem as soon as possible.
  With those few words, I hope, in company with the rest of my hon. Friends, that the Bill gets a Second Reading, and I wish it well.
  7.47 p.m.
  Mr. Patrick Jenkin: I hope that my hon. Friend the Member for Essex, South-East (Mr. Braine) will forgive me if I do not pursue him down the somewhat tortuous paths along which he so skilfully led the House. I skipped Clause 3 entirely because it appeared to me to be a matter of very specialised concern. Listening to the speech made by the hon. Member for Dearne Valley (Mr. Wainwright), I was reminded that he and I will be touring coal board installations next week. I understand that the Whips have been kind enough to give us a dispensation, and I look forward to learning more from hint about the problems of the coal industry.
  I learnt something about the coal industry at an early stage in my career when I was conducted round some pits in South Wales, and the industry has always been a particular interest of mine. I look forward to learning more about it. The hon. Member for Dearne Valley and my hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan Giles) made courageous speeches—the one because the industry in which he has spent his life seems likely to suffer as a result of the growth and development o fthe industry and the other because his constituency is obviously affected by the proposals in Part II. If I do not follow what they said in their speeches I hope that they will forgive me.
  I welcome the opportunity on this occasion—in contradistinction to what
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  happened last week—of being able to support a Bill introduced by the present Government but placed on the stocks and prepared by the previous Government. I hope that we shall not have the same trouble that we had with that Bill. We have had former Ministers of Power addressing the House, beside other experts.
  For a short time I was Deputy Chairman of the Metropolitan District Committee of the North Thames Gas Consultative Council. In that capacity I again learned something of the problems and the exciting possibilities of the gas industry. I have been enormously impressed by the way in which it has succeeded, as I think was said by my hon. Friend the Member for Yeovil (Mr. Peyton), in creating a new image by its splendid advertising campaign and more particularly by the new appliances particularly those used for central heating which have made such an impact. One interesting point is that the advertising of high-speed gas has become so successful that one lady went into her local showroom and demanded that all her appliances should be replaced with appliances to enable her to use the new high-speed gas.
  Reference has been made to the importation of methane. This sprang from the initiative of the North Thames Gas Board under Sir David Milne-Watson, who was then its enterprising Chairman and who now has gone to pastures new. I pay tribute to him for the valuable work he did. I welcome the more competitive approach of the gas industry in recent years and the way in which it has successfully struggled to maintain, and now substantially to increase, its share of the fuel market. I was much amused, as no doubt were other hon. Members, by the clever advertisement which the industry put out at the time of the dispute about the pylons over the South Downs. It was a picture of an open field to show how a gas main had been put across country which had been entirely unspoilt. I had some sympathy with the criticism of the electricity authority which felt that this was hitting below the green belt.
  The technological advances of the industry in the last few years have brought about a need for structural reorganisation. One point seems to me to have been missed. There have been differences on

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  both sides of the House about whether there should be a centralised organisation or whether the existing pattern of a decentralised organisation should be allowed to continue, and a comparison has been made with the electricity industry. The point which seems to have been missed is that, inevitably, the structure of management organisation will be determined by the technical and the technological pattern of the industry, and the difference between the gas industry and the electricity industry particularly, which is being accentuated by developments over the last two or three years, made the pattern of one industry quite inappropriate for the other.
  In the electricity industry the pattern has been of constantly larger and larger units supplying wider and wider areas. With electricity generation, the scale of current and the size of the generators used are so large that a centralised generating authority is the only way in which a supply could properly be maintained and controlled. The gas industry, on the other hand—more particularly now that the Lurgi experiment has, unhappily, not fulfilled the possibilities which at one time appeared to be open to it, and the industry is being developed on an oil-based process—will essentially remain an industry of relatively small units serving much smaller areas compared with electricity. It seems to me to be appropriate that the production as well as the distribution and sales should be controlled by area boards. Therefore, it is right to have the decision embodied in the Bill that the Gas Council should be given the necessary authority and powers in order to take account of modern advance and not that a new thirteenth board should be set up to take over these matters.
  The hon. Member for Bristol, Central (Mr. Palmer) talked about the problems of centralisation and decentralisation. It has always appeared to me that any organisation which is alive and developing will go through a cycle of alternative centralisation and decentralisation. It is almost a form of breathing. An organisation which does this shows that it is alive. The moment that there is rigidity and ossification in an organisation, when there is no movement to decentralise authority if that becomes necessary and to centralise it again if, in turn, the discrepancy between the units
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  becomes too wide, then that organisation is dead.
  Underground storage seems to me a thoroughly desirable development. As has already been pointed out, the advantage of gas as a fuel is the fact that it can be stored, and the supply problem evened out over the peaks and drops which are inevitable in a business as seasonal as this one. Underground storage in such circumstances is a most valuable asset. If I raise some points regarding the Bill, it is not out of any dislike of the Measure—I welcome it—but because I feel that possibly the Minister might like to deal with them when he replies to the debate.
  My first point concerns the question of Ministerial responsibility. Throughout this Bill, with the possible exception of the provisions in the Third Schedule relating to control operations, it is only the Minister of Power who is responsible for the various stages. I can understand that this should be so and that it should be wanted by the industry. After all, the Minister of Power is the industry's Minister. He understands its problems and may be assumed to be sympathetic to the objectives of the industry. It seems to me, however, to carry a danger. If one looks at the Bill and particularly Clause 4(4), one finds some of the factors of which the Minister of Power—who is, of course, sympathetic to the Gas Council's objectives—has to take account—
  " … the desirability of preserving natural beauty, of conserving flora, fauna, and geological or physiographical features of special interest, and of protecting buildings and other objects of architectural or historic interest .. "
  I respectfully suggest to the Minister that these functions should not be performed by the Ministry of Power but either by the Ministry of Housing and Local Government or the Ministry of Land and Natural Resources. The analogy of the transmission lines going marching across the hills is not altogether an unreasonable one and not altogether a happy precedent. If the amenity planning side of the very difficult problems were in different hands from those concerned with the promotion of the technological advance, I think that people would have a greater confidence that the various processes, particularly processes of Ministerial decision, and other facets of the problem, were getting proper attention. Too often it is felt that in

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  these cases the Minister is prosecutor, judge and jury. I have an example of this in an entirely different sphere—I shall be out of order if I discuss it at too great a length—that of traffic in London. My right hon. Friend the Member for Wallasey (Mr. Marples) had these tremendous powers. As well as being the traffic man, he had to take account of all the amenity considerations. This has all been changed, and it is now under the Greater London Council where the responsibility for both aspects is dealt with by different committees. The concentration of these powers in one Ministry, with that Ministry itself being responsible for the promotion of the technological advance in the industry, seems to me to be not an altogether happy arrangement. I suggest that stage one, the preliminary stage of the investigation, should fall within the scope of the Ministry of Power and that stage two, after notices have been served on authorities, landowners and everyone else, should be dealt with by the Ministry of Housing and Local Government or the Ministry of Land and Natural Resources.
  What has happened to the technical advisory committee originally suggested as being necessary to advise the Minister on the difficult problems created by the Bill? The Gas Council has its experts who would put forward proposals to the Ministry and will use the best technical advice. Is the Minister satisfied that he has experts of comparable calibre to advise him on what is, for this country, a novel technical problem?
  If there is to be an advisory committee, it seems to me sensible and proper that it should be a statutory advisory committee and not some sort of unofficial ad hoc body. I hope that the Minister will say something about what localities other than the Winchester one—the Chilterns site—have been suggested for underground storage. In reply to a question in 1963, my right hon. Friend the Member for Bridlington (Mr. Wood), then Minister of Power, said:
  "Exploration is at present taking place within a broad belt of country between Stow-on-the-Wold and the Wash."—[OFFICIAL REPORT, 18th March, 1963; Vol. 674, c. 16.]
  That sounds more like a railway line which is about to be closed than a geological stratum. Are there other parts of the country where these underground storage sites will be found?
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  On the question of underground storage, there was a point raised by my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) about manmade cavities. I suggest that it is quite right that these should have been left out of this Bill. The problems are quite different. There are man-made cavities, particularly in salt mines, which are at present being used for the storage of materials and the problems do not apply in the same way as they do to the permeable strata in which gas is likely to be stored. If the Parliamentary Secretary could deal briefly with these points, I should be most grateful.
  A rather different point which has been left out of the Bill and, curiously enough, was left out of the earlier Act, the 1948 Act as well, is a definition of what is meant by gas. I was a member last year of a committee of the Association of British Chemical Manufacturers. It had to examine this point in response to a letter from the Board of Trade on an initiative of the Ministry of Power. I should, of course, declare an interest, as I worked for a firm concerned with this problem. The gas industry is very fond of saying that it is not a monopoly, that it competes with other forms of energy and that, in particular, a customer is free to decide whether he should use it or not, but to say that the gas industry is not a monopoly is only a half-truth, because in its sphere it is a monopoly, perhaps appropriately so as a public utility. Its monopoly position is created by Section 52 of the 1948 Act. It takes two forms. The first leg of the monopoly position is that no one else may supply gas without the consent of the appropriate area board, and the Gas Council is now brought into this prohibition by the Bill. The second leg is that the gas board may require other producers to sell to it. Rather strangely, this applies only to gas delivered in pipelines. It is fair to say therefore that the nationalised gas industry has a monopoly position in the supply of gas through pipelines.
  Mr. Palmer: Surely this was always the case before nationalisation. All gas undertakings, whether company or municiptal, had a territorial monopoly.
  Mr. Jenkin: That is quite right, but I come to the point of the effect of this today. Even in 1948, refinery operations

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  were still at an early stage in this country, and the petro-chemical industry hardly existed at all. The point which I wish to make is that, clearly, the gas industry which the 1948 Act was intended to cover—and should indeed be covered by that Act and by this Bill—was that which related to the provision of town gas. At that stage, industrial gases were delivered either in cylinders or perhaps in tankers and the provision of a piped supply hardly existed. But today, there are a great many chemicals which are delivered in a gaseous form and are transmitted by pipe-line. I can mention only some examples—the olefins produced by the cracking of hydrocarbons and ethylene and propylene, both used in plastics, and other chemicals, butadiene, used for dyeing and used in synthetic rubber, the liquefied petroleum gases, propane and butane. Hydrogen, is a gas and there are non-combustible gases, oxygen, nitrogen and carbon dioxide. Some have even suggested that superheated steam is a gas which technically could come within the provisions of this Act. Clearly it was never intended to apply to all these chemicals, but the area boards are today treating their position under the 1948 Act as if all these gases come within the scope of the Act and they are, in some cases, requiring that they be approached for consents to pipe these chemical raw materials and chemical teed stocks if they are taken from the chemical manufacturers to their customers.
  In practice, this is confined to the combustible gases because it would be too ridiculous to suggest that the gas board would be interested in nitrogen and steam. Of course, there are long-term agreements—20-year agreements—which the industry has entered into with the oil industry, providing for automatic consent, subject to a lot of conditions. That would appear to be not unreasonable, because the oil industry is a fuel industry—but the chemical industry is not a fuel industry. The chemical industry, so I understand, resents this intrusion by the area gas boards into their business. It was never intended that this should be so. This was made perfectly clear by a passage which I shall quote from the then Government spokesman in the House of Lords. Lord Chorley was pressed on this question and he said on 8th July, 1948:
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  "Before we adjourned, I was asked a number of questions … The first point which I would like to make in answer to the noble Lord, on the question of what sort of gases the Bill applies to, is that in our view it is sufficiently clear from the general tenor of the Bill that it applies to coal gas and not to the various types of industrial gases which the noble Viscount had in mind … I am ready to look at it again, and if any words can be provided to make that clear, by definition or otherwise we shall be glad to insert them."—[OFFICIAL REPORT, House of Lords, 8th July, 1948; Vol. 157, c. 648.]
  In that event, as hon. Members will be aware, no words were ever inserted and the passage remained as it is today, with the area gas boards claiming some sort of authority over the disposal of a large number of gaseous chemicals transmitted by pipeline, with which I would suggest they have nothing whatever to do.
  The point was recognised when the Continental Shelf Act was passed. Section 9 of that Act makes it clear that gases supplied for industrial purposes or even supplied as fuel in connection with industrial purposes are outside the scope of that Act. What I should like to suggest—perhaps the Parliamentary Secretary would give this the most careful consideration, with his right hon. Friend—is that this is an opportunity to bring the 1948 Act into line with the Continental Shelf Act. At the same time, he may also consider the Petroleum Production Act, 1934, which covered the same point. Still better, if possible, gas should be defined and it should not depend on the temperature or pressure at which it is transmitted. It could apply to gases combustible in air and perhaps should apply only to specific gases designated by Statutory Instrument. That would be the fairest and safest way to make clear for all concerned to what gases the prohibition in section 52 applies.
  I would submit that the technological advances in the petroleum and chemical industries in the last 12 to 15 years should not unwittingly create extensions of the statutory powers or the statutory monopoly set up by the 1948 Act. This was never intended, and indeed was expressly disclaimed, and the legislation has, to that extent, practical defects. I hope that the Government will be able to accept this and that they will move the necessary Amendments in Committee. If they do not, I and my hon.

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  Friends will have to consider whether this is something that we should do ourselves. I hope that from previous experience that the Parliamentary Secretary does not view that with too much gloom.
  I welcome the Bill. This seems to me to be an admirable and necessary advance for a modern, thriving gas industry. It has become in the course of the last ten years a technological, science-based industry right in the forefront of our modern industrial revolution. I and my hon. Friends hope that the gas industry will go forward, able to play a bigger and more important part in the provision of the nation's energy supplies.
  8.10 p.m.
  Mr. Peter Bessell: I do not propose to take up much time. I merely want to add from this bench my support, and that of my hon. Friends, for the Bill, which is another step forward in the history of this remarkable industry. I am very glad indeed to see that the Government have taken this action expeditiously, and I am sure that it will do a great deal to encourage this industry in its progress.
  It will be no surprise to Members of the Government to hear me say that the term "nationalisation" is anathema to me and to my party, and certainly we should not support any further measures of nationalisation, as they are well aware. But this industry has undoubtedly thrived under nationalisation, and I believe that in this case there were strong arguments for putting the industry under public ownership. The fact that it has thrived in the years since the 1948 Act is not only a tribute to the Labour Party, who were in Government at that time, but is also a tribute to the former Government, which had 13 years in office. I do not hesitate from this bench which, however it may be placed physically, can be described metaphorically as a cross-bench, to pay tribute to both major parties in the House for the considerable work which has been done by them to encourage the progress which this industry has made. Tonight we welcome a further measure in that direction.
  The industry is efficient. It has carried out its work remarkably well and has given outstanding service to the whole of the British public. It has the merit of being very largely a self-capitalised Indus-
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  try, and the amount of money which it has produced for its own capital development out of revenue should be an example to every other nationalised industry in this country. It has been progressive. There are exciting developments under way, which have been referred to at length by previous speakers. I shall say nothing about them except that we are as excited about them as is everyone else.
  Next, there is the contribution to the health of the nation which the gas industry has made. We have all recognised the need to encourage smokeless zones and to discourage the pollution of air, and in this respect the development of the gas industry as a means of heating has already made a remarkable contribution, and it must continue to do so.
  Perhaps the final point which every hon. Member and right hon. Member will appreciate is that of all nationalised industries this is perhaps the one about which we receive the fewest complaints from our constituents. That naturally commends it to all of us. I wish that the same could be said about some other nationalised industries, notably British Railways.
  Having said that, may I pass to one or two points in the Bill. Clause 1, which widens the powers of the Council and to some extent of the Minister, is, I believe, necessary. I can see no objection to it, and it appears that it is in line with the recommendations of the Select Committee. Clause 3 is welcome because it helps to clean up the position with regard to rating, although I confess that I have some sympathy with the hon. Member for Essex, South-East (Mr. Braine), who undoubtedly made a very strong point, which I hope the Minister will consider in his reply.
  Clause 4, dealing with underground storage, represents the bones of the Bill and is a most important step in the right direction. Not only does it represent a very wise use of land and natural resources, not only is it an entirely progressive step for the industry to take, but it is a very much safer and more satisfactory method of storing gas. It is unsightly to see large storage units above ground, and there is also the problem of maintenance, which can be very expensive, whereas maintenance below ground would be

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  negligible and provides a very large area of storage at the minimum capital cost. This aspect of the Bill can scarcely be subject to any criticism.
  The financial aspects are dealt with in Clause 30. It is clear that any additional funds will be provided, as at present, under Section 2 of the Electricity and Gas Act, 1963. I have only one word of caution to add. I notice in the Report of the Select Committee on Nationalised Industries, reading volume 1 of the Report of the Proceedings of the Committee, which was set up in November, 1960, that in paragraph 158, on page 37 of the evidence, the South-Western Board stated that self-financing had always been their first aim even at a time when they hoped for an expansion of sales. That is commendable and very much in line with my experience of this particularly efficient Board in the south-western area, and I hope that everything will be done by the Minister and the Government to encourage this attitude towards the finances of the industry, which was certainly encouraged by the previous Government. I hope that this attitude will continue.
  From this bench, and without reservation, I welcome the Bill. I believe that it will give considerable encouragement to an industry which hon. Members on all sides of the House recognise as an efficient and admirable industry in every way, and one which is rendering great service to the nation.
  8.17 p.m.
  Mr. Nicholas Ridley: We have had a very good debate on the Bill and many useful speeches have been made. We have had the benefit of one Liberal speech, three Socialist speeches and six Conservative speeches from the back benches, which I hope will be interpreted as a measure of the interest in the Bill. We have had the benefit of the presence of no fewer than four Ministers of Power, two ex, one existing and, in my opinion, one future. We have also had the benefit of the presence of the Minister of Technology for a very short time. I had hoped that he would intervene in the debate, because this is an industry in which technology is playing a very large part.
  I hope that my hon. Friend the Member for Essex, South-West (Mr. Braine) will
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  forgive me if I do not pursue his point about the rating of Canvey Island. I should like to hear what the Parliamentary Secretary has to say about that, and I am sure that we can follow the point in Committee, at great length if necessary, because it is clearly a point of great importance to the electorate at Canvey Island.
  May I start with a document which I was reading to get some background to the debate? I refer to the Ridley Report, which I was reading this weekend. I turned idly to the Gas Council's evidence in 1952 to the Committee bearing that name, and I read this:
  "Preliminary figures provided by the area Boards show an estimated coal requirement of 36·8 million tons by 1960."
  Later it stated:
  "… the coal requirement of the Gas Industry by 1965 would be 40·5 million tons".
  In fact, in 1960 the gas industry consumed 22 million tons and in 1965 it expects to consume 16½ million tons.
  These figures bring home more than anything else could how dangerous it is to rely on forecasts of this sort of thing. It shows fundamentally what can happen in the short space of eight or 13 years with a simple forecast of this nature. Incidentally, the same Report forecast a consumption of coal at home of 250 million tons this year. How that would gladden the heart of the noble Lord, Lord Robens, had it come true. However, it is not true and there can never be an excuse for trying to force events to conform to previous forecasts.
  I regret that the Minister of Power is not in his place. I am sorry that he was not with us on Tuesday after telling us about his plans for the coal industry and his views on this whole question of forecasting, which has been mentioned a good deal in the debate today. I thought that he might have done us the courtesy of allowing us to question him so that he could elucidate what he meant by his statement. He did not elucidate it this afternoon and, so far, he has provided no opportunity for us to question him about it. I hope that the Parliamentary Secretary will say something about it in view of the widespread worry evidenced by today's debate of what the statement meant and what is the real policy behind it.

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  I am glad that, as far as I can see, the Minister is not going to have a coordinated fuel policy. He talked about trying to get agreement by the autumn, and he went on to say, "Then we will go on to make the thing practicable after the autumn". That is looking a long way ahead and I doubt whether the Minister will be sitting on the Government Front Bench by then, so there is some relief to be felt by us about this whole question now.
  The Parliamentary Secretary to the Ministry of Power (Mr. John Morris): To take up the hon. Member's suggestion a little earlier, it is dangerous to make forecasts.
  Mr. Ridley: We will see how that one turns out.
  I am happy to foregive the Minister for his Advisory Committee because I can see that after all the pressure of talk from the other side it was necessary for him to produce something which looks like a committee charged with producing a fuel policy. But when the show is looked into, instead of having substance it becomes just a talking shop for the leaders of the fuel industries, which is something we can in no way complain about. In fact, we welcome it. I return to the Ridley Report on this subject, which stated on page 70:
  "The Minister of Fuel and Power has the statutory duty of generally controlling and co-ordinating fuel supplies and we see no reason why he should share it with any new authority."
  Nor do we. We see no reason why the Minister should delegate this original duty put on him or why any new arrangements are necessary.
  It seems to us from what we can glean from the Minister's statement that there has been no target set for the coal industry—at least, no target which would be underpinned by a Government guarantee. It would, in my opinion, clearly be wrong today to take any action which would try to fix a target, especially when one thinks of those far off shots I mentioned in regard to the coal industry in 1962. I believe that one can affect the supply of coal, but I have never understood how hon. Members opposite intend to affect the demand for it.
  The hon. Member for Bristol, Central (Mr. Palmer) talked about consumer choice and said that one could have a
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  fuel policy yet keep consumer choice. I do not believe that one can, because this would affect the demand. If consumers, for price, convenience or other reasons, choose a fuel other than that which one expects, the demand will change and it is inevitable that that must be reflected in the supply. I am sceptical as to what is meant by this whole argument.
  Mr. Palmer: Surely it is important that the consumers should have impartial advice on the merits of the various fuels, advice which at present they lack?
  Mr. Ridley: In any system of competition—and I appreciate that this is the difference between the two parties—it is inevitable that advertising must grow up to fulfil the function which the hon. Gentleman is looking for. Where one has, as in this case, two fuels, probably both nationalised, competing against each other, advertising is bound to be the answer because each can advertise its wares to the best advantage. However, I think that the hon. Member will agree that there are few examples in our commercial life where impartial advice as to which is the best product is given to or, indeed, is taken by consumers.
  I join with those who have congratulated the gas industry, its leaders and those who work in it for what they have achieved. It is currently supplying 6 per cent. of our energy, as my right hon. Friend the Member for Sutton Coldfield (Mr. Geoffrey Lloyd) pointed out, and I think that it will tend to grow in future. It is, therefore, of the greatest importance that we should debate it, and I congratulate the Government on having had two debates on the gas industry in the first 118 days.
  In the first debate the Minister said that it was not appropriate to discuss Sahara methane, Dutch natural gas, North Sea gas and oil derivatives at that time, but we have had a good debate on these subjects and they have been brought into all the themes of today's debate. I had hoped that the Minister would have said a little more about these matters because we would like to know how he thinks the various takes of feed stocks will go. We can only assume that it will not be long before we

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  have another Bill to increase the borrowing powers of the Gas Council. Perhaps on that occasion he will tell us more about the plans for the future. I do not know when the next Bill is likely to be brought forward and perhaps the Parliamentary Secretary will tell us something about this.
  The Gas Council has an extremely difficult period ahead because it must evaluate the chances of getting raw materials from all of these different sources and try to balance the advantages of one against the other and of one price against the other. There could possibly be a break-through in North Sea development, a successful arrangement made with the Dutch, in regard to laying a pipeline across the Channel, and a successful bargain made with them on price. On the other hand, if we are unlucky and do not find any gas in the North Sea we might be in a worse position vis-à-vis the Dutch afterwards. The Gas Council has an extremely difficult poker game to play in the future, and I am sure that we wish it the very greatest success.
  One of the difficulties of the Dutch scheme will be that the cost of laying a pipeline across the English Channel will require a very large volume of gas to pass through it if it is to be worth while, and to commit ourselves to this scheme will clearly prejudice our chances of getting cheaper gas if we find it in the North Sea. It will be very much harder if the Government in any way try to coerce the gas industry into sticking to agreed figures of coal production, or try in any way to alter the Council's determination to use what fuel it will.
  When the Minister spoke in our debate on the last borrowing Bill he seemed to harbour a lot of ill will for the oil industry. He then said:
  "… the time has come for the Government to set up a committee of experts to examine methods used by international oil companies in marketing their products."
  Later, he said:
  "I would tax very heavily fuel oil. …"— [OFFICIAL REPORT, 8th May, 1960; Vol. 619, c. 264-7.]
  That sort of unsupported allegation, that sort of attack on the oil industry, typified the speeches of right hon. and hon. Members opposite when they were in Opposition, and when, in this debate, I
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  heard hon. Members accusing this side of being prejudiced against nationalisation, I cannot help telling them that they have not been particularly trustworthy and friendly towards some private enterprise industries in the past. I do not think that there is any need for them to be, so to speak, suspicious of private enterprise, any more than my hon. Friends are suspicious of the existing nationalised industries.
  The argument between the two sides must be whether or not the principle of nationalisation should be extended, but these declarations, and points made in the other place, lead one to question whether the gas industry would have fared so well if the party opposite had been in office in those days. The hon. Member for Norwich, South (Mr. Norwood), who made a most interesting speech, questioned that, but I ask him to read what some members of the Labour Party then said about the gas industry's desire to take new forms of raw material.
  I am quite certain that the whole House will agree that the Gas Council must take a greater share in determining the policy in the industry, and the possibility of large-scale manufacture by the Lurgi process, the use of methane from all sources, and underground storage, make it essential that the Gas Council should have greater control over the operation of the industry as a whole.
  I congratulate the Select Committee on its analysis of the problem as long as four years ago, and the extremely good arguments it put forward. It might be said that it was the Select Committee's initiative that has finally brought this Bill before us. I particularly like the use of "interdependence" as a replacement for "independence" in its Report.
  We must all agree that the national plan is important and that local objections to new processes should be subordinate to the national importance. It is just one more example in this industry of the importance of getting the right scale, the right breadth into the industry for it to accommodate itself to new techniques and technology. It is interesting that hon. Members opposite should continue to tell us that only a nationalised industry can achieve this unified overall control, but that when private enterprise tries by takeover bids and by increasing its size to get

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  in the same sort of position as the Gas Council, we have it thrown at us that it is a monopoly, that it is a cartel, and the most shocking and dangerous thing.
  Hon. Members opposite cannot have it both ways. If they want centralised control, they must give up attacking private industry when it tries to achieve it—
  Mr. Palmer: The difference of principle is that in the one case there is public accountability and in the other there is not.
  Mr. Ridley: I suppose that the hon. Member means by that that it does not matter if a nationalised industry loses money; but it does matter if a private industry loses it.
  The arrangements whereby it was the North Thames Gas Board which started to import methane means, I suggest, that there is something peculiar about this. It should surely have been more of a national concern than a North Thames one that methane should have been imported in this way. I personally welcome the provisions in the Bill which increase the strength of the Council and also its powers to manufacture and sell gas.
  There was some debate between the hon. Members for Norwich, South and Bristol, Central about whether the Gas Council should have had power to manufacture and sell or whether the thirteenth board, so to speak, should have been brought into existence. My right hon. Friend the Member for Bridlington (Mr. Wood), who came down heavily on the side of the Council having power to manufacture and sell, put the argument at its very best. I agree entirely with what he said.
  The Select Committee was very hesitant about whether it was right to recommend a thirteenth board. The Committee ad, mitted in its Report the difficuly that if there were a thirteenth board it would eventually mean the transfer of gas generating assets from area boards to a generating board, with all the attendant difficulties of assessing their value and of book-keeping which this would have entailed. The House is more or less agreed that the Government have followed the right procedure in the Bill.
  I do not know quite whether it is right to increase the number of Council members by only three. This is one of
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  the points we should like to probe a little in Committee. It could well be that three is a slightly small number of extra members. There might be room for some part-time members, as there are on some of the other nationalised boards. We will want to be satisfied by the Government in Committee that they have the right structure for the reformed Council.
  Moving for a short time to the issue of underground storage, perhaps I should declare a constituency interest. My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) mentioned Stow-on-the-Wold, which is in my constituency. Over the years I saw many drilling rigs round about, but I was never quite sure what they were for until I was told the other day by the Gas Council that it had not found a suitable storage area under Stow-on-the-Wold.
  My hon. and gallant Friend the Member for Winchester (Rear-Admiral Morgan Giles), who is the most obviously interested of all Members in this project, made the most welcome and responsible speech. I am sorry that I missed it, but I am told that he recognised the need for the Bill and welcomed it in principle. I well remember the time when Mr. Peter Smithers represented Winchester and the very strong opposition which came from him to the Private Bill which came at that time. I can assure the House that it was not his opposition which prompted the then Government to support Mr. Smither's candidature for the Secretary-Generalship of the Council of Europe. Private Bills are unsatisfactory. I think we all agree that it was no correct way to legislate on underground storage to do it by means of a Private Bill.
  This Bill, now that we have it before us, includes the sort of compensation terms, safety regulations and Government control which we should all like to see applied to an operation of this sort. It is, however, an unhappy thought what delays have resulted from the failure of the Private Bill to pass the House. It was withdrawn in March, 1962, and in July, 1962, the Government announced their decision to bring in a Public Bill. Now, nearly three years later, we have the Second Reading of that Public Bill. This shows that, if the original mistake had not been made of bringing the matter forward in a Private Bill, we might well have had some leeway, instead of being

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  well behind all our fellow industrial countries in this matter. Germany has had underground storage for 10 years. I am told that the United States has had it for about 40 years. Nevertheless, I want sincerely to congratulate the Government on bringing the Bill forward—not quite in 100 days but nearly so. I congratulate them very much on preferring it to the contentious Steel Bill, about which I am sure they are beginning to have second thoughts.
  In order to have an equalised rate of supply of gas in this country we should have to have, I am told, storage capacity for about 60,000 million cubic ft. of gas. The maximum rate in winter can be three times as high as the minimum rate in summer at which the consumer draws gas. If we take the average gasholder as holding 5 million cubic ft., the necessary storage capacity of that kind would work out at 12,000 average gasholders, and I think we should all agree that 12,000 average gasholders would be out of the question. The Chilcomb site is estimated to have storage capacity of 10,000 to 12,000 million cubic ft., so six storages of that size would meet the national problem at present. I think it more likely that it will be hard to find six storages rather than that we shall find more than six. But I hope that the Gas Council is successful in its storage plans and that it will make full use of the enormous benefits which can come to it from such methods.
  I press on the Parliamentary Secretary the point which my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) made, that the Bill does not contain provisions for using man-made or other sorts of holes in the ground for storage. The Bill is quite explicit in this repect and only porous strata are mentioned. I should like to know what the position is as regards man-made storages, man-made caverns and the like, and why provision for these has not been included in the Bill. It is most important that all possible storages should be made available.
  We are all fairly well satisfied with the safety provisions of the Bill, although we shall want them to probe them a little in Committee. We are relieved to hear that methane is non-toxic, so that, in any case, if there were a leakage from one
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  of the storages, one could probably expect no ill effects on the community.
  The compensation provisions, likewise, will need close examination in Committee, but there is one point I draw to the attention of the Parliamentary Secretary at this stage. As far as I can see, there is no provision for consequential damage arising out of an accident from gas storage underground.
  Mr. Patrick Jenkin: Hear, hear.
  Mr. Ridley: I hear my hon. Friend tuning up in advance for the argument which he will present later this evening when he will ask that compensation for consequential damage or loss of profits should be considered. This defect appears to be running through legislation from the Ministry of Power, and we shall, perhaps, have to raise the question later.
  From these benches we welcome the Bill. We regard it as a very good Bill, though we shall do our best in Committee to improve it. We remember keenly the persistence with which right hon. and hon. Members opposite tried to improve the Pipelines Bill and their devoted efforts in that connection. We promise the Minister and his hon. Friend that we shall give this Bill no less attention in Committee, and we shall do all we can to make a good Bill into an even better one.
  8.45 p.m.
  The Parliamentary Secretary to the Ministry of Power (Mr. John Morris): We have had a most valuable debate, and it is not often that two former Ministers take part together in a debate of this kind. I say at once that the right hon. Member for Bridlington (Mr. Wood), with his usual courtesy, has sent me a note apologising for not being able to be here at this stage.
  Some of the speeches by right hon. and hon. Members opposite sounded very strange to me. The right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd) drew the history of the gas industry in the 1950s and the atmosphere of despair. Indeed, at one stage he sounded like Brother Pilgrim travelling wearily through the Slough of Despond, but eventually he saw the Promised Land and paid high tribute to the industry as it is now.
  Indeed, from a large number of right hon. and hon. Members opposite, we

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  had profuse and justifiable tribute to the industry as it is now, including praise from the hon. Member for Yeovil (Mr. Peyton) the right hon. Member for Bridlington, the right hon. Member for Sutton Coldfield and the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). If I may paraphrase Shakespeare himself, here, in dealing with a great nationalised industry, we are come to praise Caesar and not to bury him. We have heard right hon. and hen. Members opposite at one moment paying great tribute to this publicly-owned industry and then putting on their other suits, changing from Dr. Jekyll to Mr. Hyde, and attacking public ownership.
  The suggestion was made several times that if we on this side of the House had had charge of the industry for the last 13 years it would not be in its present state. The sentiment of right hon. and hon. Members opposite seems to be that they oppose nationalisation as they oppose sin, that nationalisation is a great sin but that they are better than we are at organising sin. That was their theme and the hon. Member for Yeovil said at one stage that, despite the sentiments of praise he had expressed about the industry, he and his right hon. and hon. Friends considered that, inevitably, nationalisation made for inefficiency and created immense administrative difficulties.
  Mr. Peyton: The hon. Gentleman commits the same crime as did his hon. Friend the Member for Bristol, Central (Mr. Palmer). He must not put into my mouth words I did not use. I said that nationalisation is a bad idea and makes the running of an industry more and not less difficult. Therefore, we on these benches condemn it. However, we are condemned to live, when we are in Government, with the results of what right hon. and hon. Members opposite have done, and in doing so we have helped the gas industry forward to a great measure of success. If the hon. Gentleman would leave my words to stand instead of imputing words to me that I have not used, I should be grateful.
  Mr. Morris: I do not think that I attributed any wrong words to the hon. Member. What I said does not differ from the terms he has just used. We are back to the original position, that
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  he is against nationalisation—against sin—but that he and his right hon. and hon. Friends are better at organising it if it comes to pass. They try to wear two suits. They say they are against it but that they are better at organising it.
  I would prefer to accept the sentiments of the hon. Member for Wanstead and Woodford that, after 16 years of public ownership, we have a modern, thriving gas industry in the forefront of the new industrial revolution. I would say that that is not in spite of public ownership but because of it.
  Twelve years after vesting day, a Select Committee of this House reported:
  "The gas industry has reached a point of decision at which old processes and the old structure are being called in question. … Your Committee wish to emphasise that these decisions ought not to be delayed."
  For precisely these reasons—the technological revolution—the Government are presenting this Bill. In 1948, as my right hon. Friend pointed out, we had an entirely local industry, with over 1,000 gasworks in operation. The task then was to integrate the sources of production and also the outlets for sale in each of the varied areas. A yardstick of the vigour of this great publicly-owned industry in rationalising the mixed and varied structure which was found in 1948 is that instead of 1,000 gasworks, it now needs fewer than 300 plants to meet the country's gas needs.
  Without belittling the importance of local developments in the board's areas, the march of technology today demands a supplementation of the existing structure and new powers for storage. These are not separate but are interconnected. The first is necessary because of the great technological changes, and it would be difficult to implement the new powers of storage without having an artificial and out-of-balance weight on the component parts of the structure as it exists now.
  I do not want to misquote him in any way, but I think that on this occasion I am on safe ground when I say that the hon. Member for Yeovil asked why we had not published a White Paper. This is a matter of judgment. These issues were canvassed before the Select Committee. My right hon. Friend did not think that there was any conflict of principle and he concluded that there should not be a White Paper. However, I take the point

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  of what the hon. Gentleman was saying and I agree that no stone should be left unturned to explain to the public what the Bill means, what effect the storage proposals will have on the lives of the people concerned.
  I am sure that when the time comes to make specific proposals and to take the necessary steps to put the gas underground, the Gas Council will bear in mind the remarks and sentiments expressed by hon. Members today.
  Mr. Peyton: This is a Public Bill. It should not be left to the Gas Council to explain it in principle. Much more weight would be attached to an explanation from the Government. The Select Committee had the benefit of a long, patient and detailed explanation from Sir Henry Jones. The public will not. It is incumbent upon the Government themselves to make some effort to explain this and new developments to the public.
  Mr. Morris: The first suggestion is largely met by my right hon. Friend's speech today. He went to great lengths to explain the Bill, especially as it dealt with underground storage. He did it in what I thought were the simple terms for which the hon. Gentleman is now asking. A White Paper is not always the best vehicle to convey the meaning of proposals because of the language and phraseology frequently used in such documents. I hope that my right hon. Friend's speech and the proceedings in Committee will bring to the general public what we have in mind.
  Mr. Peyton: I do not wish to interrupt the hon. Gentleman unnecessarily. I shall be more content if he will agree to reconsider. I hope that he will give this second thoughts. I am asking not just for a White Paper, but for a simple and reasonable explanation which the public can read at leisure. Ministerial speeches are not always read with that care, from whichever party they come.
  Mr. Morris: Certainly. I thought that at the beginning of my remarks I made the point that we would consider, in consultation with the Gas Council, what is the best vehicle for dealing with the matter. It is not possible for me to give an assurance at this stage. I thought that I made that point abundantly clear.
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  The hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles)—I am sorry that I missed part of his speech—made substantially the same point, namely, that the objection frequently is not to what is done but how it is done. He referred to the importance of the correct presentation of these proposals. I take his point. My right hon. Friend will consider this as part and parcel of the points made by the hon. Member for Yeovil.
  Hitherto, as my right hon. Friend indicated, the Gas Council has had some specific powers. The Bill seeks to confer additional powers on the Council so that it can manufacture or acquire gas and supply it to the boards or, with the Minister's consent, direct to particular consumers; and can make and supply products. On such matters as balancing revenue and outgoings, development and the welfare of its employees, the Gas Council will be in the same position as the boards. The basis of the first three Clauses of the Bill is to put the Gas Council into the shoes, as it were, of the gas boards if at some stage it becomes advantageous for it to carry out certain functions now exclusive to the boards. The problem of organisation became acute last October with the very notable achievement of the importation of Algerian methane.
  May I deal briefly with the rating point made by the hon. Member for Essex, South-East (Mr. Braine) without going into all the complications of the matter? All that Clause 3 does is, again, to put the Gas Council into the same position as the gas boards. From the point of view of operational premises, gas boards, broadly, are not rated on the individual works in the industry but on a complicated formula which is based on gas bought and sold by the boards. The first part of the provisions in Clause 3 will not affect the amount which local authorities will receive in rates.
  However, the unhappiness of the hon. Member for Essex, South-East stems from another part of Clause 3 which deals with liquefied gas. The position in rating law has been clarified in Clause 3 as far as liquefied gas is concerned—for example, Algerian gas which is imported in liquefied form and then re-gasified. I will not go into the technical process, but the basis of it from the point of view of

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  rating law is that an evaporation plant should not be regarded as a place where gas is manufactured, or as such attract rateable value. This is the bone of contention of the Canvey Urban District Council.
  The formula determines the amount of rates which the gas industry pays to local authorities. The only asset which weights the distribution of rateable values in favour of the place where the asset is located is a gasworks. We seek in the Clause to ensure that, for the purposes of rating, this plant at Canvey Island is not a gasworks, and therefore, to the unhappiness of the urban district council concerned, would not weight the formula. However, if the position were otherwise, it would upset the amount of rates every other local authority in the North Thames area received.
  I am not entirely happy with the situation as it is. The urban district council has been told that the Clause is to be regarded, as the hon. Member indicated, as a holding operation. I have with me the correspondence between the urban district council and the Ministry of Housing and Local Government, and, as the hon. Member has told the House, a working party has been set up. There is no hardship at present because the system of rating is such that the import of gas in October last will not affect the rates until 1966. There is, therefore, no loss so far to the local authority. While the results of the general review of rating arrangements for gas are pending, I ask the local authority to be as patient as it can and to await what emerges from the review.
  Mr. Braine: I am grateful to the hon. Gentleman for his careful explanation of the position and I appreciate what he has said. Can he indicate when the rating review might be completed?
  Mr. Morris: I cannot give any precise indication. As the hon. Member appreciates, the working party includes representatives of the local authority associations and the gas industry. I hope, however, that the results of the review will be available in good time and that the local authority will not be unduly jeopardised by the timing. As I have indicated, there will be the period until 1966 during which nothing happens because the amount of gas produced does
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  not affect the formula until the year but one after that in which it is produced.
  I leave the issue of rating and return to the question of the Algerian imports to Canvey Island. The installation at Canvey is owned by the North Thames Gas Board. When the pipeline was built from Canvey Island to Manchester, it went through the areas of at least eight other boards. Because no one central authority could own the whole of the pipeline as it passed from the area of one board to another, each section had to be owned by the board through whose area it passed. Although it was possible in such circumstances to achieve the transportation of Algerian methane from Canvey Island to Manchester, in this day and age such an organisation is not the right kind of concern to put into effect the results of these great technological changes in the industry. The object of the exercise is to have a central authority that can undertake this. This is the answer to the Select Committee's first question about whether the existing statutory powers were sufficient to bring about the successful introduction of a national gas system.
  In dealing with the Select Committee's second question—whether, if new powers were needed, they should necessarily be granted to the Gas Council—I come to the comments of my hon. Friend the Member for Bristol, Central (Mr. Palmer) and my hon. Friend the Member for Norwich, South (Mr. Norwood). After a relatively short inquiry, the Select Committee of this House came down in favour of the thirteenth board.
  My hon. Friend the Member for Bristol, Central seemed to think that we were not going far enough and that there should be somebody with independent power at the centre to check local boards. It is not correct, however, for my hon. Friend to say, as I understood him to do, that the Bill will leave the industry with a Gas Council with its many limitations. The Bill removes all the limitations which concerned the Select Committee.
  Dealing with his second point, that there was not a word here about the Minister of Power's functions with regard to co-ordination with the other fuel industries, perhaps I might point out that under the Ministry of Fuel and Power Act, 1945, he has a duty to co-ordinate the fuel industries.

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  The hon. Member for Cirencester and Tewkesbury (Mr. Ridley), was not entirely happy about the Energy Advisory Council which my right hon. Friend set up. My right hon. Friend was not derogating from any powers or duties laid on him by the 1945 Act by setting up this Council. It is, after all, an advisory council, and at the end of the day it is up to my right hon. Friend to make his decision, but, like other Governments, and like most other Ministers, he has deemed it right to get a fairly wide basis of advice and to have consultations, before he comes to any decision.
  The hon. and gallant Member for South Fylde (Colonel Lancaster) raised the question of man-made structures and natural cavities, as did the hon. Member for Cirencester and Tewkesbury. This kind of structure is not covered by the Bill as it stands. The reason for this is that in the past there has been no need for legislation to deal with those particular aspects because, first, structures of this kind are usually smaller, and, secondly, if they are needed, authorities have been able to purchase the whole of the land, or, if necessary, rights in the land to develop these structures. As I understand it, it was because neither the Gas Council nor the area boards had the necessary statutory authority compulsorily to acquire rights in porous structures underground that it was necessary to introduce this legislation. If, however, there is any difficulty, or any legislation is necessary to cover these aspects, I am sure that we can consider the matter in Committee, but I am advised that there is no need for legislation.
  As my hon. Friend indicated, underground storage is widespread in the United States, and storages have existed since the end of the First World War. One also meets examples in France and Germany. They are new only in the United Kingdom, and they are necessary because of the wide seasonal variation in demand. Figures were quoted earlier in the debate, but we all know of the high cost of capital development in our fuel industries today to provide the capacity that is needed to meet the wide variation in demand in the summer on the one hand, and in the winter on the other.
  The very fact of the importation of methane from Algeria makes it necessary
  664
  to have some sort of storage capacity in this country. This kind of facility, and this kind of power being given to the industry, should, in due course, enable it to provide gas for the consumer as economically as possible.
  The Bill does not deal with any specific proposal. It will be for the Gas Council to bring specific projects to the Minister, and it would be wrong to prejudge what projects might come to him, and what decisions he might make.
  As I said earlier, the technique is novel only in this country. The Minister has control over what kind of gas is used, and obviously Algerian gas is a strong candidate because it has a large number of attractions. First, as I said earlier, there is the manner in which it is brought here; secondly, its high calorific value and, thirdly, the fact that it is non-toxic. The hon. Member for Yeovil raised the issue of toxicity and the possibility of changes. There have been changes, and there has been a tremendous success in reducing the toxicity of gas sold to consumers.
  Under the Bill the Minister will not be limited as to the kind of gas in respect of which he gives consent for underground storage. Any criterion that he uses may change from time to time, because his duty, as laid down in Clause 4, is to have regard to the safety of the public and the protection of water resources.
  The hon. Member also asked whether these words, in themselves, were precise enough. I am advised that they are, but perhaps we can also consider that point in Committee. The hon. Member also asked, as did the hon. Member for Cirencester and Tewkesbury whether the gas industry would need to have more borrowing powers. I would only quote the remark made by my right hon. Friend in the debate on 8th December last when he said
  "that the industry will fairly soon have to apply to Parliament for new legislation to extend its borrowing powers beyond the limits of the 1963 Act."—[OFFICIAL REPORT, 8th December, 1964; Vol. 703, c. 1465.]
  As for the procedure laid down for making these storage proposals, the object has been to ensure that the maximum reasonable protection is given to those affected, and that where non-frivolous objections are made no decision will be

  665
  taken before an inquiry is held. My hon. Friend the Member for Norwich, South asked a bout the time lost when these inquiries have to be held because of objections. There always is the difficulty of trying to achieve a balance between, on the one hand the urgent need of industry to have these new facilities—the same problem arises in the electricity industry—and, on the other hand, the need to ensure that the public, which is vitally concerned, is given a proper opportunity to present its views when objections are raised. We feel that the right balance has been arrived at in the Bill by having two stages and then providing that specified authorities may invoke a special procedure—a procedure which is confined to them.
  The hon. Member for Wanstead and Woodford raised the question of Section 52 of the Gas Act, 1948. There are two main proposals in the Bill—first, to enlarge the powers of the Gas Council and, secondly, to provide authority for the underground storage of gas. It is not intended to have a general review of the 1948 Act, but on the point that the hon. Member makes I am given to understand that the gas industry has made agreements with the principal oil companies about the giving of consents under Section 52 for the supply, by pipeline, of petroleum gases for use in chemical processes. That is an indication that the gas industry has been prepared in the past—and I am sure that it will be prepared in the future—to discuss suitable arrangements of this nature with other interested industries.
  Mr. Patrick Jenkin: Can the Minister give some indication of what has happened in respect of the proposals that were being discussed by the Board of Trade and the Ministry of Fuel and Power upon the point of defining what gas is covered by the 1948 Act? Have they been abandoned?
  Mr. Morris: I understand that in practice there has been no great difficulty, in that the Gas Council and the gas boards have made these agreements. On the detailed point of the definition of gas, perhaps the hon. Member would raise it at a later juncture, in Committee. I shall then be prepared to try to answer
  666
  the point. As I understand it, in practice there has been this working arrangement that has been going on for some time.
  The hon. Gentleman raised a number of other points. He asked which Ministry should be responsible for making decisions on points at issue relating to flora, fauna and other matters concerned with amenities when orders have to be made. I think it would be a mistake to think of Ministries and Ministers with their own selfish interests when there is a problem of this kind to be resolved. There are means of discussion within the whole field of Government, and the safe storage of gas is preeminently a matter which should be in the statutory charge of the Minister of Power. The hon. Gentleman also asked about a technical advisory committee. This was raised when the Private Bill was brought before the House. The Minister has at his disposal all the technical advice that he needs, but I will look into the question of the committee to which the hon. Member referred.
  I have tried to answer most of the points which have been raised in the debate. I commend the Bill to the House. It is a recognition of the changing demands of 1965 upon the industry. It gives to the industry increased and better machinery to carry out its obligation of maintaining an efficient, co-ordinated and economical supply of gas for the country as a whole. It brings this country into line with long-established developments—I wish to emphasise this—in other countries in enabling the industry to store gas in porous strata underground. One hopes that this will add to the efficiency, flexibility and security of supplies of this important fuel.
  This Bill will certainly assist a great industry to provide gas for the nation as a whole as cheaply as possible. This great publicly-owned industry has a fine record of service. It must continue to increase in efficiency and the Bill will give it the means to do so in the interests of all.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  GAS [MONEY]
  [Queen's Recommendation signified]
  Considered in Committee under Standing Order No. 88 (Money Committees).
  [Dr. HORACE KING in the Chair]
  Resolved,
  That, for the purposes of any Act of the present Session to confer additional functions on the Gas Council and to make further provision as to the rating of the Gas Council and Area Gas Boards, to increase the number of members of the Gas Council and to regulate and facilitate the storage of gas by the Council and those Boards in underground strata, it is expedient to authorise—

  (1) the payment out of moneys provided by Parliament of—

  (a) any sums payable by way of remuneration or otherwise to or in respect of inspectors appointed under that Act;

  (b) any remuneration, allowances or expenses payable to persons holding, or assisting or giving evidence at, inquiries held under that Act;

  (c) any administrative expenses incurred by any Minister under or in consequence of the provisions of that Act; and

  (d) any increase attributable to that Act in the sums payable out of moneys so provided by way of Rate-deficiency Grant or Exchequer Equalisation Grant under the enactments relating to local government in England and Wales or in Scotland;

  (2) any increase in the sums which, in consequence of the provisions of that Act, are required to be issued out of the Consolidated Fund or raised by the Treasury under section 45 of the Gas Act 1948 or section 2 of the Electricity and Gas Act 1963; and

  (3) the payment into the Exchequer of any sums which are or may be required to be so paid under or in consequence of the said Act of the present Session.—[Mr. Lee.]

  Resolution to be reported.
  Report to be received Tomorrow.

  NUCLEAR INSTALLATIONS (AMENDMENT) BILL
  As amended (in the Standing Committee), further considered.

  Clause 1.—(DUTY OF OPERATOR OF NUCLEAR INSTALLATION.)
  9.20 p.m.
  The Minister without Portfolio (Sir Eric Fletcher): I beg to move, in page 1, line 10, to leave out "physical hurt" and to insert "injury".
  When the consideration of this Bill was adjourned on 22nd January, my hon. Friend the Parliamentary Secretary had just begun to move a series of Amendments which the House had agreed to take together. I would now ask the House to consider, in addition to those which were mentioned on 22nd January, Amendment No. 50, in Clause 13, page 17, line 27, at the end to insert:
  "'injury' means personal injury and includes loss of life;".
  This could most conveniently be discussed with those which we were then discussing. The House will remember that, during the Committee stage of this Bill, as a result of a long discussion which we had with regard to the words "physical hurt" appearing in Clause 1, I undertook to consider whether, on Report, we could put down some Amendments to meet the points raised by hon. Members opposite.
  The object of this series of Amendments is to implement that undertaking. The short effect of them is that we shall avoid the use of the inelegant word "hurt" in the Bill as originally drafted and substitute for it the word which is more familiar in English law, that of "injury", the definition of which is contained in Amendment 50. We also omit the word "physical" and thereby extend the benefits which are conferred by this Bill. I believe that in putting down these Amendments we have gone a long way to meet the objections raised in Committee by hon. Members opposite.
  Mr. Nicholas Ridley: We are grateful to the hon. Gentleman for coming so far to meet the point which my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) urged so cogently

  669
  during the Committee stage. We have some reservations on this whole question, but I understand that it would be better to take those in conjunction with Amendment No. 49, which is not being discussed in this context, but we do welcome the omission of the word "hurt" and the substitution of the word "injury" and the definition of that word in Amendment 50. We think that this improves the Bill to a considerable extent.
  I would only ask the hon. Gentleman whether he has anything further to tell us about the unborn child. I think that this is probably best raised on this Amendment. He said that he would be thinking about it and giving us some further clarification. My memory goes back to the ballad of Chevy Chase when we are considering this point:
  "The child may rue that is unborn,
  The hunting of that day."
  The unborn child may well rue the nuclear accident, if it is not covered in this Bill. We know that this raises very serious and complicated points, but we should be grateful if the hon. Gentleman could tell us what consideration led him to his conclusion. He might also consider the point about the unconceived child, which added to the general confusion on the whole issue.
  Sir Eric Fletcher: I have given this matter some thought since it was raised in Committee. Two questions were raised. The first was whether, under the provisions of the Bill as it stands, an unborn child would come within the scope of the Bill and be entitled to compensation if, unfortunately, that unborn child suffered damage as a result of a nuclear incident. I am advised that it is not necessary to add anything to the Bill as it stands to enable such an unborn child to make a claim in the unhappy result of that child, when born, suffering injury as a result of a nuclear incident occurring before his birth.
  The position of a child not conceived at the time of a nuclear incident but conceived subsequently raises very different problems, as hon. Members will understand. In the first place, I imagine that it would be very difficult in those circumstances to relate an injury to the incident. I express no opinion as to whether any such person could ever substantiate a claim. I would think it
  670
  very doubtful. But in this whole field there must inevitably be matters of detail of this kind which are far more appropriately left to be dealt with by the judiciary in circumstances which may arise. In my view it is not the province of the Legislature to provide for a whole variety of hypothetical cases which could be imagined.
  Amendment agreed to.
  Mr. Speaker: In view of that exchange, I will endeavour to put what I believe to be parallel Amendments, but if exceed the wishes of the House I should be grateful if that might be made known to me.
  Further Amendments made: In page 1, line 11, leave out "hurt" and insert "injury".
  In line 23, leave out "physical hurt" and insert "injury".—[Sir Eric Fletcher.]
  Mr. John Morris: I beg to move Amendment No. 4, in page 2, to leave out lines 22 and 23 and to insert:
  (3) In determining the liability by virtue of subsection (1) of this section in respect of any occurrence of the licensee of a licensed site, any property which at the time of the occurrence is on that …
  This is a drafting Amendment, and it makes no change in substance. We are dealing with the definition of property on a site for the purposes of exclusion. This Amendment changes the word "a" to "the" to ensure that we are dealing with property on the particular site in question.
  Amendment agreed to.
  9.30 p.m.
  Mr. John Morris: I beg to move Amendment No. 5, in page 2, line 45, to leave out from the beginning to the end of line 2 on page 3.
  This Amendment is tabled to make the position of the Atomic Energy Authority in respect of property not owned by the Authority but on its premises identical with that of licensees. The need for it to cover the remote contingency of an incident in connection with one of the Authority's establishments causing damage in another has come to light because of the previous drafting Amendment.
  Amendment agreed to.
  Further Amendments made: In page 3 line 31, leave out "physical hurt" and insert "injury".
  In line 32, leave out "hurt" and insert "injury".—[Mr. John Morris.]

  Clause 3.—(DUTY OF OTHER PERSONS CAUSING NUCLEAR MATTER TO BE CARRIED.)
  Amendments made: In page 4, line 9, leave out "physical hurt" and insert "injury".
  In line 11, leave out "hurt" and insert "injury".—[Mr. John Morris.]

  Clause 4.—(RIGHT TO COMPENSATION FOR HURT OR DAMAGE CAUSED BY BREACH OF DUTY.)
  Amendments made: In page 4, line 15, leave out "hurt" and insert "injury".
  In line 19, leave out "hurt" and insert "injury".
  In line 20, leave out "hurt" and insert "injury".
  In line 24, leave out "hurt" and insert "injury".
  In line 26, leave out "hurt" and insert "injury".
  In line 28, leave out "hurt" and insert "injury".
  In line 31, leave out "hurt" and insert "injury".
  In line 37, leave out "hurt" and insert "injury".—[Mr. John Morris.]
  Mr. John Morris: I beg to move Amendment No. 18, in page 5, line 7, after first "section" to insert:
  "and to section 6(3) of this Act".
  This is a drafting Amendment involving no change of substance and is required only in the interests of clarity.
  Amendment agreed to.
  Further Amendment made: In line 18, leave out "hurt" and insert "injury".—[Mr. John Morris.]
  Mr. John Morris: I beg to move Amendment No. 20, in line 22, to leave out from beginning to the first "the" in line 26 and to insert:
  "shall not be entertained if the occurrence takes place after the expiration of".
  I think that for the convenience of the House it would be convenient to discuss, at the same time, two Amendments to
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  Clause 6: Amendment No. 33, in page 7, line 36 and Amendment No. 34, in page 7, line 38.
  Mr. Speaker: If the House so pleases.
  Mr. Morris: As the Bill stands, when material is lost, stolen, jettisoned or abandoned and, in the words of the Bill, there is a "nuclear occurrence" the claim and occurrence must both take place within 20 years of the loss. In Committee the hon. Member for Yeovil (Mr. Peyton) made what I thought a very important point in that if the material came within this classification and was lost it would be harsh indeed on someone if, say, the occurrence occurred in the nineteenth year after the original loss. He would have only a short time in which to make his claim.
  That seemed to me a harsh decision against this kind of claimant. Thus, we are trying in this way to meet the point by means of these three Amendments. The position remains, as regards the person against whom the claim is made, that the first 10 years of the limitation period, or whatever shorter period remains after an occurrence within the 20 year period, would be covered by insurance or the direct liability of the A.E.A. or Government Department. Later claims would be met out of funds provided, as Parliament may determine.
  By means of these three Amendments a claimant injured in these circumstances is placed in the same position as one injured in an occurrence due to an incident in a nuclear installation or during transport of nuclear matter under an opertor's control, except that, in order to place some limit on the operator's and the Government's commitment, in the case of the material lost and so on the Bill covers only occurrences which take place within 20 years of the loss.
  I should like to illustrate by practical examples what the position will be if these Amendments are accepted. If the loss of nuclear material occurred in the year 0 and the occurrence was in the year 21, there would be no claim against either the operator or the appropriate authority. That was not the point made by the hon. Member for Yeovil (Mr. Peyton); this is the overrider that we have maintained in this Measure—that the occurrence must take place within 20 years of the loss.

  673
  A second example is that if there is a loss in the year 0, an occurrence in the year 5 and a claim in the year 14, that is still within the 20-year period and the claim is against the operator. If the loss is in the year 0, the occurrence in the year 5 and the claim in the year 16, the claim would then be made against the appropriate authority, because it would be more than 10 years after the occurrence.
  The last two examples show against whom the claim would be made, but the type of case put to me by the hon. Gentleman was that in which there was a loss in the year 0, an occurrence in the year 19, within the 20-year period. If the Amendments are accepted, a claim can be made at any time between the year 20 and the year 49 so that, save for the overrider that the occurrence must have been within 20 years of the loss—there must be some limit of liability here—the claimant is put in the position of having a 30-year period in which to make a claim. That would be the limitation period, as in other claims under the Bill.
  Amendment agreed to.
  Sir Eric Fletcher: I beg to move, in page 5, line 29, to leave out from the beginning to "unless" in line 32 and to insert:
  (7) Section 5(1)(c) of the Act of 1959 shall not apply to any claim such as is mentioned in subsection (6) of this section.
  This is a consequential Amendment.
  Mr. John Peyton: I do not want to make the task of the Minister without Portfolio unnecessarily difficult. If he says that the Amendment is consequential, I accept that, of course, but I should like to know to what it is consequential.
  Sir Eric Fletcher: It is consequential on the Amendment moved by my hon. Friend which the House has just been considering.
  Amendment agreed to.

  Clause 5.—(EXCLUSION, EXTENSION OR REDUCTION OF COMPENSATION IN CERTAIN CASES.)
  Amendments made: In page 5, line 35, leave out "hurt" and insert "injury".
  In line 37, leave out "hurt" and insert "injury".
  In page 6, line 3, leave out "hurt" and insert "injury".
  In line 6, leave out "hurt" and insert "injury".
  In line 12, leave out "hurt" and insert "injury".
  In line 14, leave out "hurt" and insert "injury".
  In line 19, leave out "hurt" and insert "injury".
  In line 26, leave out "hurt" and insert "injury".
  In line 42, leave out "hurt" and insert "injury".
  In page 7, line 2, leave out "hurt" and insert "injury".
  In line 5, leave out "hurt" and insert "injury".—[Mr. John Morris.]

  Clause 6.—(SATISFACTION OF CLAIMS BY VIRTUE OF SECTION 1 OR 2.)
  Amendments made: In page 7, line 36, leave out from "which" to "is" in line 37.
  In line 38, at end insert:
  (c) which, being such a claim as is mentioned in section 4(6) of this Act, is made after the expiration of the period of twenty years so mentioned; or.—[Mr. John Morris.]
  Mr. John Morris: I beg to move Amendment No. 35, in page 8, line 2, after "Act", to insert:
  "other than a claim in connection with a site used by a department of the Government of Northern Ireland".
  The object of the Amendment is to ensure that claims outside the limit of £million or lodged after 10 years relating to a Department of the Government of Northern Ireland as an operator would be made to the Minister of Power and not to the Northern Ireland Minister in charge of the Department. The Amendment has been agreed with the Northern Ireland authorities.
  Amendment agreed to.
  Sir Eric Fletcher: I beg to move Amendment No. 36, in page 8, line 9, after "authority" to insert "to such extent and".
  Mr. Speaker: I venture to suggest that we discuss with this Amendment Amendment No. 37, in page 8, line 10, and the Amendment to Amendment No. 37, in line 10, leave out from "heard" to end of line 11.
  Sir Eric Fletcher: I am sure that will be convenient, Mr. Speaker. May I begin by explaining the purport of Amendment No. 37, to which, in a sense, Amendment No. 36 is consequential? I could then at the same time say a few words about the Amendment to Amendment No. 37.
  The Amendment is tabled pursuant to an undertaking which I gave in Committee to consider whether the language of Clause 6(3) was entirely satisfactory. I was pressed by the right hon. and learned Member for Huntingdonshire (Sir D. Renton), who pointed out that, as the Clause stood, the Minister of Power would, in effect, be, to use the right hon. and learned Gentleman's words, a judge in his own cause, because no person to whom this subsection applied would be able to establish a claim in a court. The right hon. and learned Gentleman objected to the words
  "if established to the satisfaction of the appropriate authority"
  which are in opposition to the words "duly established" which appear earlier in the Clause.
  The scheme of these claims is that there is a liability on operators up to a certain maximum amount and then there is provision that, if claims exceed that amount, claimants should be able to pursue their claims to the Minister. It is not contemplated or intended that such claimants, if ever there be claims in excess of £5 million arising out of one nuclear incident, should be able to sue the Minister, because there would be constitutional objections to that. It is also desirable that the Minister should be able to consider all such claims because, as I pointed out in Committee, there might be cases in which it would be more advantageous to a claimant to have the merits of his claim considered by the Minister, because he might for various reasons not be able to substantiate the claim in a court of law.
  9.45 p.m.
  My hon. Friend and I have given considerable thought to the best way of meeting the objections raised in Committee. I recognised then that a test which is somewhat less than an objective test is not very satisfactory. Amendment No. 37 would enable either party, either the claimant or the Minister, in the event of a dispute arising, whether with regard to
  676
  liability or with regard to amount, to refer the matter to the High Court. It will be appreciated that, in such an event, the parties who, presumably, would be heard by the High Court would be the claimant and the Minister because at that stage the operator would no longer be an interested party. His liability of £5 million would, ex hypothesi, have been exceeded and it would, therefore, not be any concern of his to assert himself in resisting a claim of the kind we are now discussing.
  I should add that the consequential Amendment No. 36 is necessary because, in the event of claims exceeding £5 million being payable by a Minister, either because he thought it appropriate or because, on a reference to the court, the court thought it just, it would be necessary for the amount due to be provided by Parliament.
  As I understand it, the Amendment to Amendment No. 37 in the names of hon. Gentlemen opposite is designed to provide that any determination by a judge on a reference to the High Court should be subject to appeal, presumably to the Court of Appeal. I hope that, on reflection, the hon. Member for Yeovil (Mr. Peyton) will not think it necessary to press it. It might be to the advantage of a claimant or it might be to his disadvantage, because an appeal would be open to either party. We feel that, in a matter of this kind, it would be sufficient—there are precedents for it—that the reference should be determined as a final determination by a judge of the High Court.
  Mr. Peyton: I do not want to involve the House in a long discussion on the point at this hour of the evening, but the Minister without Portfolio has said that there are precedents and I should be grateful if he would tell us what they are. For my part, I feel some prejudice against acceding to a proposition which involves any person coming before the courts in the loss of a constitutional right, namely, that of appeal. This sort of provision should not lightly be written into a Statute, and, before asking my hon. Friends to agree to his suggestion, I should like the hon. Gentleman to give us a little more explanation.
  Sir Eric Fletcher: The nearest precedent is the National Insurance legislation

  677
  of 1946. The hon. Gentleman will appreciate that this is not a case in which a litigant is in a position to sue a Minister of the Crown. It is not a case in which the Crown Proceedings Acts are applicable.
  It is a case in which, as the right hon. and learned Member for Huntingdonshire (Sir D. Renton) has observed, it is desirable to remove the suggestion in the Bill that the Minister has the last word and, therefore, we sought a precedent for a similar matter. In the National Insurance Act, 1946, there is a provision whereby a dissatisfied person can ask that the matter be referred for the determination of the High Court. As hon. Members opposite will appreciate, this is a reference. It is somewhat different from an ordinary piece of litigation between two parties and therefore the normal rules about an appeal are not really applicable to it.
  Mr. Charles Fletcher-Cooke: Any comparison with the National Insurance Acts, although no doubt in form apposite, is surely rather unreal. Clearly, in those cases, where relatively small sums of money are involved—although no doubt very important to the applicant, they involve sums of £50 or £100—it is obviously desirable that there should h a final determination one way or the other quickly.
  Here, however, we are dealing with millions of pounds and in such a case it seems wrong to cut down the possibility of an appeal. The actual assessment of the amount, the principles on which an amount as large as that are assessed, must often be a matter of acute legal controversy—far greater difficulties of principle than the assessing of references under the National Insurance Tribunal, important though these are to the applicant. Here we are dealing with millions of pounds. Is it really necessary to cut out the right of appeal for which there is a much stronger argument in this case?
  Mr. Patrick Jenkin: I would have thought that the Government could very well accept the Amendment which my hon. Friend the Member for Yeovil (Mr. Peyton) and others of my hon. Friends and I propose to the Government Amendment No. 37.
  Not only is the question of amount involved, as my hon. and learned Friend
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  the Member for Darwen (Mr. Fletcher-Cooke) has said, but one has to look at the words of the Government's own Amendment No. 37, for they refer to "any question" that could be referred to the court. It seems to me that this could include questions of law as well as questions of fact.
  He would be a very rash man, in spite of the great care we hope we have taken on the drafting of the Bill, to say that there will not be any question of law that might arise as to its construction—as to whether, for instance, a claim was out of time or was made by someone who was not entitled to a claim. These are questions which inevitably the Minister would have to refer to the court and which might give rise to very difficult points of construction.
  It would be wrong in these circumstances to say that a decision of the High Court or the Court of Session, whichever it may be, is final and that the claim cannot go any higher—cannot, in fact, go to the Court of Appeal. This seems to me to be a point of considerable substance and some constitutional propriety.
  One might be tempted to say that, if one litigated against the Crown and then the Crown passed retrospective legislation annulling the decision, one might as well stop at the High Court and not go to the House of Lords, but I hope that consideration will not be involved in the Bill. This is an important point and I hope that the Minister without Portfolio will give very careful thought to it and perhaps accept our proposed Amendment to Amendment No. 37.
  Amendment agreed to.
  Mr. Speaker: I would at this point ask the hon. Member for Yeovil (Mr. Peyton) whether he desires me to call his proposed Amendment to Amendment No. 37 separately. If he desires, I will do so, but not otherwise.
  Mr. Peyton: I do not wish to make difficulties, Mr. Speaker, but I would be obliged if you would call our proposed Amendment to the Amendment separately because I should like to ask the Minister without Portfolio one or two points on it.
  Amendment proposed: In page 8, line 10, at end insert:
  (4) Where in pursuance of subsection (3) of this section a claim has been made to the

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  appropriate authority, affecting the establishment of the claim or as to the amount of any compensation in satisfaction of the claim may, if the authority thinks fit, be referred for decision to the appropriate court, that is to say, to whichever of the High Court, the Court of Session and the High Court of Justice in Northern Ireland would, but for the provisions of this section, have had jurisdiction in accordance with section 7(1) and (2) of this Act to determine the claim; and the claimant may appeal to that court from any decision of the authority on any such question which is not so referred; and on any such reference or appeal—

  (a) the authority shall be entitled to appear and be heard; and

  (b) notwithstanding anything in any Act, the decision of the court shall be final.—[Sir Eric Fletcher.]

  Question proposed, That those words be there inserted in the Bill.
  Mr. Peyton: I beg to move, as an Amendment to the proposed Amendment, to leave out from "heard" in paragraph (a) to the end of the proposed Amendment.
  I do not want to press this matter, but I believe that the arguments which my hon. Friends have adduced are important. I have the strongest and most rooted prejudice to putting words like these into a Bill without very careful thought. I accept that there may be precedents. The Minister has produced only one, that of National Insurance, which, as my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) has said, is important but not on a comparable scale. I do not want to disturb the House at this hour of the night and I shall be content if the hon. Gentleman will say that this matter will be further considered when the Bill goes to another place.
  Sir Eric Fletcher: I want to be perfectly frank with the House about this. This is not a matter which divides the parties on any political issue. It is a matter on which the House should come to a decision in the light of all the relevant circumstances.
  There are two other factors which the House should know and which induced us to put down the Amendment in this form and not to accept the hon. Gentleman's Amendment. I observed just now that this is not an ordinary case in which a claimant can bring an action as of right against the Minister. It is a reference. It is a provision in response to the Opposition's suggestion that the Minis-
  680
  ter's decision itself should not be final. We now provide an independent review of the Minister's idea as to what is just.
  Therefore, it is something which will have to be governed by rather special rules of court. The House should know that in the rules of court as they stand at the moment there are provisions for references of this kind to be made. The rules of court are now under review. Although no final decision has been taken, I understand, it is highly likely that in the review of the rules of court which is taking place provision will be made for references of this kind to go not to a single judge, but to the Divisional Court. That, of course, would make it less necessary that there should be an appeal.
  The other consideration which has weighed with us is that it might well be to the advantage of the Minister that there should be an appeal. One cannot argue this on the footing that an appeal will necessarily be advantageous to the claimant. It may well be that the Government ought to take the view that the Minister should be protected against a possible adverse decision by either one judge or the Divisional Court and have an opportunity to appeal to the Court of Appeal. I am very sensible of that argument. If hon. Members opposite feel strongly about this, I will certainly give an assurance that I will consult my noble Friend and the other Ministers interested and reconsider the matter.
  Mr. Peyton: I am very grateful to the hon. Gentleman. He is most helpful in these matters and I gladly accept that assurance. His suggestion that the rules of court may be being amended in a way that would make the present provision more acceptable is an argument which could be used in support of the view put forward by my hon. Friends and myself. I am grateful to the hon. Gentleman. The position now seems to be almost analogous to the case in which the Inland Revenue might suggest that its cases should be referred to a judge of first instance and that thereafter there should be no appeal. This is something which the taxpayer might find highly unacceptable.
  It being Ten o'clock the debate stood adjourned.
  Ordered,
  That the Proceedings on the Nuclear Installations (Amendment) Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr Sydney Irving.]
  Mr. Peyton: I do not wish to prolong my remarks, and perhaps I may end with this postcript. In the last resort, I have no overwhelming or rooted objection in principle to justice being done to Ministers.
  Amendment to the proposed Amendment negatived.
  Proposed words there inserted in the Bill.

  Clause 7.—(JURISDICTION, SHARED LIABILITY AND FOREIGN JUDGMENTS.)
  Amendments made: In page 8, line 31, leave out "hurt" and insert "injury".
  In page 8, line 33, leave out "hurt" and insert "injury".
  In page 8, line 38, leave out "hurt" and insert "injury".
  In page 8, line 42, leave out "hurt" and insert "injury".
  In page 9, line 11, leave out "hurt" and insert "injury".
  In page 9, line 23, leave out "hurt" and insert "injury".—[Mr. John Morris.]

  Clause 8.—(GENERAL COVER FOR COM PENSATION BY VIRTUE OF S. 1 OR 2.)
  Amendment made: In page 10, line 19, leave out "hurt" and insert "injury".—[Mr. John Morris.]

  Clause 9.—(SPECIAL COVER FOR LICENSEE'S LIABILITY.)
  Mr. John Morris: I beg to move, in page 11, line 35, at the end to insert:
  "and sub-paragraph (ii) of the said section 5(3)(a) shall cease to have effect".
  I would suggest that we should take with this one Amendment No. 51, in the Second Schedule, page 24, line 10, column 3, at the end to insert: "Section 5(3)(a)(ii)".
  Mr. Speaker: Yes, if that is agreeable to the House.
  Mr. Morris: First, I must make an apology to the House. Some confusion arose when you called Amendment No. 21, in Clause 4, Mr. Speaker, in page 5,
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  line 29, to leave out from the beginning to "unless" in line 32 and insert:
  (7) Section 5(1)(c) of the Act of 1959 shall not apply to any claim such as is mentioned in subsection (6) of this section.
  That Amendment is consequential to the two Amendments with which I am now dealing. I thought it my duty to tell the House at the earliest opportunity how the situation arose.
  This is a drafting Amendment to remove a provision of the 1959 Act, which is no longer required. It has arisen because claims made more than 10 years after the occurrence must now be made, under the Bill, to the Minister. The provision in the 1959 Act requiring a licensee who receives such a claim to give notice to the Minister is no longer required.
  Amendment agreed to.

  Clause 10.—(SUPPLEMENTARY PROVISIONS WITH RESPECT TO COVER FOR LIABILITY BY VIRTUE OF S.1 OR 2 IN RESPECT OF CARRIAGE.)
  Amendments made: In page 12, line 20, leave out "hurt" and insert "injury".
  In page 13, line 35, leave out "hurt" and insert "injury".—[Mr. John Morris.]

  Clause 11.—(NUCLEAR SITE LICENCES.)
  Amendment made: In page 14, line 37, at end insert:
  (7) In section 2(2) of the Act of 1959, the reference to hurt shall be construed as a reference to injury.—[Mr. John Morris.]

  Clause 13.—(INTERPRETATION).
  Mr. Patrick Jenkin: I beg to move Amendment No. 49, in page 17, line 10, at the end to insert:
  "damage to any property of any persons includes loss of property of that person and any loss of profits or other earnings suffered by that person".
  Reference has been made to the long discussions that took place in Standing Committee on the words which have occupied the attention of the House to some extent this evening resulting in the substitution of "injury" for "hurt". Reference has also been made to the fact that "hurt" was an unusual word, but in the 30 columns of debate on this point in Standing Committee that was of secondary importance and the main issue

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  between the Opposition and the Government was whether the words as they then appeared,
  "hurt to any person or damage to any property",
  were apt to catch monetary loss, loss of profits, consequential loss, pecuniary loss or whatever one likes to call it. Clearly, such a loss cannot be included in the word "injury", nor could it be included in the phrase
  "damage to any property of any person",
  which still appears in the Bill.
  The Minister without Portfolio will remember that after some argument we arrived at a point at which we thought we were in agreement. On 8th December, the Minister stated:
  "An individual might be able to claim. A company might or might not be able to claim. All that I am saying is that it is the Government's attention to place a corporate plaintiff in an action under the Bill in the same position as he would be in an action for negligence at common law in which liability were either admitted or proved. That is as far as any Government should go. The Amendment goes further."—[OFFICIAL REPORT, Standing Committee A, 8th December, 1964, c. 35.]
  That was a different Amendment to the present one. What is painfully obvious is that the Government have not gone even as far as that. There is no Amendment in the Government's name to implement the intention, which the Minister then expressed, to place a corporate plaintiff in exactly the same position as he would be in an action for negligence if liability were proved or admitted. It is clear that in the case of an individual the measure of damages for any inury would include loss of earnings, including loss of professional earnings—indeed, anything that might come under the heading of consequential loss of pecuniary damage for an individual.
  I return to the point, which I dealt with at length in Committee, concerning the corporate plaintiff. I gave an example of circumstances in which a factory operated by a company was put out of action by a nuclear incident and loss was suffered which could not be described as damage to property but was purely monetary loss, with claims made upon the company for breach of contract and the like which nevertheless were attributable to the nuclear incident. I submit that that
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  sort of loss is certainly intended to be covered by the Bill and to be comprised within the absolute liability imposed upon licensees under the Bill, and yet it does not come within the words of the Bill.
  A suggestion was made, but was, I think, abandoned, that companies could somehow afford to stand that sort of loss. That is not a valid point. As an hon. Member on the Government side remarked the other day, there is no means test for justice. There could, however, be a direct effect upon the individuals working for the claimant company. They might well lose their jobs and their security of employment and, if there were not sufficient funds in the company to pay a decent redundancy payment, they might suffer considerable hardship. If a company goes bankrupt with substantial claim for loss for breach of contract, there is money available to pay the employees, but if a company is put out of business by a nuclear incident and cannot claim for this pecuniary loss, this monetary loss, it may end up with no assets with which to satisfy the legitimate claims of its employees who are in no way to blame for the trouble in which they find themselves.
  This is not the only point. It is not just the direct claim of the company. It is also that the legislation provides the framework against which those at present carrying on business are covering their own risks. Clause 4(1,b) effectively precludes anyone else being liable in cases where liability is covered by the Bill. But if liability is not covered by the Bill because the words of the Bill are not wide enough to comprise the sort of damage which the claimant has suffered, other people can be liable, and others have to find out whether they have to ensure against this other liability.
  I gave as an example the people who supply complicated components to the Atomic Energy Authority, to the Generating Board, and so on. I pointed out that the cost of insurance in these circumstances would be very high. Perhaps I might read an extract from a memorandum prepared by a well-known firm of insurance brokers and sent to its clients who engage in this sort of trade, that is, selling components to the people who build nuclear power stations. The previous paragraph says that these risks are insurable, but only through the

  685
  British Insurance (Atomic Energy) Committee. Under the heading of "Cost of Insurance", it says:
  "In view of the fact that there is only one source for obtaining cover there is no question of competitive terms and from our experience with other cases we know that the cost is extremely high. The premium does, of course, depend to a certain extent on the particular products being supplied and the limit of indemnity required, but we feel that it is futile to consider insuring for such amounts as, say, £250,000, in view of the potential size of claims following a major catastrophe."
  The point here is plain, that the Bill recognises the possibility of enormous claims in the unhappy event of an incident and makes provision for it, but it has left a gap which can be covered by insurance only at inordinate cost, and the sort of amounts which people would have to insure are the sort of amounts mentioned in the Bill, namely, £5 million, £10 million, and so on.
  I strongly urge on the Government the need to accept the Amendment. I take the point that the original Amendment which we discussed in Committee, using the word "loss" quite generally, may have been too wide, although they were the words based on the provisions of the Vienna Convention in Article I (1, k, ii),
  "any other loss or damage so arising or resulting".
  I understand that this is a point of continental law which refers to moral damage, for which no licensee in this country could ever be liable. I have therefore tried to devise a form of words which confines the damage which the claimant could claim under this head to loss of profits or other earnings suffered by that person, and I submit that these words are apt and not too wide to bring in exactly that form of loss which it seems to me the Bill and the original 1959 Act were intended to cover.
  I urge on the Government that this is a serious point of substance which has caused difficulty in the past to people engaged in the trade, and which has caused insurance problems of some magnitude and complexity. If the Amendment were accepted, it would make the position of people engaged in this business, with all its export potential and all the rest of it, very much simpler than it is at present.
  10.15 p.m.
  Sir Eric Fletcher: The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) repeated many of the arguments that he put forward in Committee, when he produced a whole series of alternative Amendments to the Clause. Although the precise form of his Amendment now is somewhat different from those which we were discussing in Committee, it raises precisely the same point. I have given the matter a great deal of consideration since then and I am still completely satisfied that it would be a mistake to advise the House to accept the Amendment.
  The hon. Member has repeated his proposition that the 1959 Act intended to cover the kind of consequential losses to which he has referred, but there is no substance for that proposition; indeed, in Committee he quoted what was said by the right hon. Member for Barnet (Mr. Maudling), who was in charge of the 1959 Measure, on behalf of the then Government. I have looked at that passage again and I do not think that the hon. Member can draw the consequences that he had in mind from what his right hon. Friend said then. Moreover, the words in the 1959 Act are "hurt or damage", and we have improved the position in the Bill by the Amendments which we have just been discussing.
  In Committee the hon. Member said—and from what he has said just now he seems to adhere to it—that he was satisfied that a personal victim would be covered sufficiently by the Amendments which have been put down to meet the case. His chief concern was with a corporate claimant, and he instanced the case of a large company which might have its factory damaged and lose its business and profits, and perhaps have claims made against it for breach of contract.
  That may be the case, but it is not only companies which carry on business; individuals also carry on business. An individual may have a factory and may, as a result of a nuclear incident, have claims brought against him for breach of contract. In that respect there is no difference between an individual and a corporation.
  I repeat that we are dealing with a rather uncharted field. We are making operators absolutely liable, regardless

  687
  of negligence, contributory negligence or anything else, and the issue here is the extent of that liability. What is the remoteness of the damage? This is a matter on which there have been many judicial decisions—sometimes conflicting—in recent years. Is someone who is liable as a result of negligence liable for damage which he could not possibly have foreseen, as in the Polemis case, or liable only for what a prudent man might reasonably have foreseen? That is what the common law says about it, and where the issue arises out of a claim for negligence the courts have to decide questions of remoteness of damage in each case on its merits.
  Parliament has never attempted to legislate in that sphere. In this sphere, because of its novelty and unpredictability, Parliament has to legislate, but it cannot legislate on precise details. That is not its function. There must always be particular cases relating to particular circumstances in which it is the proper function of the judiciary to arrive at a conclusion. One cannot foresee in what circumstances loss will ensue as a result of a nuclear incident. Having given the matter the best consideration I can, I am bound to say that in the language we now adopt we are doing two things. We are acting in concert with the provisions of the Convention and, since we are here implementing an international Convention, that is of paramount importance. We are honouring our obligations under the treaties and providing, I think, the best possible form of words to cover the kind of circumstances for which it is intended to provide complete cover for those victims, whether persons or corporate bodies, who suffer as a result of nuclear incidents. Therefore, I hope that the House will agree that to accept this Amendment would be going too far and entering into a sphere in which it would not be right to encourage entry.
  Mr. Fletcher-Cooke: One thing about which I agree with the Minister and regret to find myself disagreeing with my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) is that this problem, as the Bill will be drafted when we have finished with it, applies equally to natural persons as to corporations. That is not much
  688
  comfort because all it means is that the element of damage which my hon. Friend seeks to include is excluded both from natural persons, if they be traders or manufacturers, and corporations.
  Taking the Amendments we passed tonight, the damage for which an injured person, be he natural or corporate, can recover is injury to any person or damage to any property, and injury will mean personal injury and includes loss of life. By no stretch of judicial interpretation can loss of profits, however foreseeable, be included under personal injury or loss of life. Therefore, we have to consider whether loss of profits, which is a perfectly normal and fair damage in tort, can be included under damage to common property.
  Sir Eric Fletcher: Loss of earning capacity is a possible head of damage for individuals and embraces loss of property.
  Mr. Fletcher-Cooke: Loss of earning capacity, the Minister thinks, may be included under personal injury. I should like to know whether that is his view as the legal adviser, for the time being, to the Government. If that is his view, it goes a long way, and would, I think probably bring in the rules under the Leibosch and Waggon Mound and other cases. It does not strike me as very apt. Injury means personal injury. That is a new definition of personal injury, in the case particularly of a company, and does not seem at all apt to cover the loss sustained by a corporation whose profits are reduced. The word "personal" would limit the injury, I should have thought, to injuries to persons. If the Minister says that personal injury does include loss of profits, both to individuals who trade or a corporation, that is, I think, an end to the matter. I think we must know whether that is the advice tendered to Her Majesty's Government on the interpretation of this Clause, because I think it is strange.
  If it does not, of course, it is considerably reducing the sort of damages which could be recovered under the ordinary rules of tort. It is true that exceptional loss of profits, loss which could not be foreseen by anybody because, as in the case of the Edison, the company owning the boat in question was so poor that it could not have it repaired in the normal way, a totally exceptional loss of profit was suffered because the com-

  689
  pany was almost bankrupt and could not do what needed to be done. That was unforeseeable. If there is nothing exceptional in the victim, if he is an ordinary producer, manufacturer or trader who cannot carry on his business as a result of being blasted to bits by a nuclear incident, why could not he recover in the same way and on the same measure of damages as in the normal action for tort?
  I still do not know from the Minister whether his view is that the normal rules of tort apply or not under this wording. I do not think that they do, and I do not think that we ought to part from this until we have a firm assurance that they do.
  Mr. Peyton: I must say that I feel unhappy about this. In column 32, the right hon. and learned Gentleman said to the Committee:
  "I do not accept the view that a corporation is entitled to an unlimited claim for compensation."—[OFFICIAL REPORT, Standing Committee A; 8th December, 1964, c. 32.]
  He went on to say what the reason was for an extreme case, in column 35 as my hon. and learned Friend, the Member for Wanstead and Woodford (Mr. Patrick Jenkin) has pointed out:
  "All that I am saying is that it is the Government's intention to place a corporate plaintiff in an action under the Bill in the same position as he would be in an action for negligence at common law in which liability were either admitted or proved."—[OFFICIAL REPORT, Standing Committee A; 8th December, 1964, c. 350.]
  I do not wish to seem unduly suspicious but it seemed to me that the hon. Gentleman, in column 32, was letting out a little bit of dogma, whereas in column 35 he was being very much more reasonable.
  This is a much more proper approach to legislation. I echo the question whether the right hon. Gentleman is, in the name of the Government, absolutely satisfied that he has discharged the undertaking which he gave in column 35, which I have just quoted. If he is not absolutely satisfied, if there is any shadow of doubt at all, I think that he owes it to the House to leave the matter open until the Bill goes to another place, so that we may be assured that a corporate plaintiff will in fact, in law, be in the same position under this Bill as he would be at common law. I admit that this is a difficult matter. These are uncharted seas and there is no reproach against the hon. Gentleman at all.
  Sir Eric Fletcher: Whatever I say, the matter will in fact be left open, because this matter can be further ventilated in another place. I have no doubt that it will be and it is desirable that it should be. I would say that I am confident that I have fulfilled the undertaking which I gave in Committee, as expressed in column 35. It is the Government's intention to place a corporate plaintiff in an action under the Bill in the same position as he would be in an action for negligence at common law in which liability were either admitted or proved. It is my belief that the words in the Bill adequately give effect to that intention.
  Mr. Peyton rose—
  Sir Eric Fletcher: May I just add this before I give way? The hon. Member will appreciate that there is an inherent difficulty here which no words can resolve. It arises in this way—let us assume that some large company brings an action at common law because of somebody's negligence. Let us assume that it is not a case of a nuclear incident, Let us assume that it is a case in which extensive damage is caused to somebody's factory by reason of somebody else's negligence—perhaps a fire or aeroplane accident or some such occurrence due to negligence. In any such case where there is a claim for damages, it is inevitable that there should be a dispute between the parties about the amount to which the claimant is entitled.
  10.30 p.m.
  No one can dogmatise as to whether a claimant is entitled to say, for example, that if such and such an accident had not arisen he might have just been on the brink of fulfilling some very valuable contract which would have brought him in hundreds of thousands of pounds and that, having lost that contract, he is entitled to claim. In any such case there would be a contest as to how far he could support his claim and how far he could not, and the result would eventually depend upon a judicial decision which could not be predicated by any kind of words because that is not how the common law works.
  We are trying to arrive at a position in which we put a claimant under this Bill in the same position. It is not easy

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  to do so, but I think the words that we have chosen are apt in producing that result.
  Mr. Peyton: I do not want to press the Minister too hard, but I hope he will think that I am not being unreasonable in stressing this matter. Of course, the matter remains an open question because the Bill has to go to another place. I appreciate that. But, on the other hand, there is something more in it if the Minister says, "In order to satisfy the House absolutely we will commit the Government to looking again at this matter, to make absolutely sure that what we have said and what we have undertaken has, in fact, been carried out". This is all that I am asking and I do not think it is asking too much.
  Mr. Patrick Jenkin: I do not wish to be unkind to the Minister, but could he point to the words in any Amendment that has been moved tonight which have any effect on a corporate plaintiff's right to claim, and that would justify the Minister's claim that he has fulfilled his pledge in column 35 which has been quoted tonight? I do not think it affects the matter one way or the other.
  Mr. Peyton: With the leave of the House, Mr. Deputy-Speaker, I really must—
  Mr. Deputy-Speaker (Dr. Horace King): Order. The hon. Gentleman may only speak again with permission.
  Mr. Peyton: I did say "With the leave of the House", Mr. Deputy-Speaker.
  Mr. Deputy-Speaker: I do not think the hon. Gentleman understood. He can only speak again with the permission of the House. He has not asked leave of the House to speak.
  Mr. Peyton: I am sorry, Mr. Deputy-Speaker, but I do not think you heard
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  me. I did say "If I may, with the leave of the House".
  Mr. Deputy-Speaker: I am sorry.
  Mr. Peyton: I do not think I am being unreasonable in making this request. I would be very disappointed indeed if the Minister could not see his way to making this very small and limited concession in order to assure the position. We admit that this is a new field of legislation, and it is a very small thing to ask the Government to say that they will leave the matter open, that they will have another look at it and that attention will be given to it in another place. The hon. Gentleman would be running contrary to the line of conduct that has been adopted throughout the proceedings tonight if he did not grant us this small request.
  Sir Eric Fletcher: Of course, I can give the hon. Gentleman that assurance. The hon. Gentleman is being perfectly reasonable. He, first of all, asked me if I was confident of the view that I previously expressed and I repeated my confidence. But this is not a matter in which one can dogmatise. It is open to be reviewed in another place, and I can assure the hon. Member that between now and another debate in another place the fullest attention will be given to everything that has been said in this debate and in Committee, to see whether, in the Government's view, any further revision should be called for, although my present view is that it is not. But the whole matter is not precluded by what we decide now.
  Amendment negatived.
  Amendment made: In page 17, line 27, at end insert:
  "injury" means personal injury and includes loss of life;—[Mr. John Morris.]

  Schedule 2.—(ENACTMENTS REPEALED.)
  Amendment made: In page 24, line 10, column 3, at end insert "Section 5(3)(a) (ii)".—[Mr. John Morris.]
  Order for Third Reading read.—[Queen's consent, on behalf of the Crown, signified]
  10.36 p.m.
  Mr. John Morris: I beg to move, That the Bill be now read the Third time.
  At this late hour I do not wish to detain the House for long. We had a most interesting Committee stage, and we all benefited from the valuable discussions. I thank all right hon. and hon. Members who took part in the debate. Even if it was not possible on all occasions to accept the many suggestions which were made, certain beneficial changes have been made in the Bill, even though they may not always have met fully the requests made from time to time.
  One matter of major concern involved the words "physical hurt" in the Bill. We have discussed this today, and I think that the House generally accepted the Amendments in this respect which we put down on Report. Another matter of concern was the question of unborn children. My hon. Friend has explained that this evening. We had, too, what I regarded as a most important point—the extension of the time within which a claim could be made when nuclear material was lost or abandoned. I think that we fully met the requests made in the debate on that point.
  A point which I was not prepared to concede in Committee related to what might be regarded as rationalisation in that it was suggested that one Minister, probably the Minister of Power, should be the appropriate authority in relation to claims and for the purposes of the registration of persons following incidents. This question has been looked at again in consultation with the Departments concerned, and for the reasons given in Standing Committee the Government's view remains unchanged. It must be emphasised that the circumstances in which these provisions would operate are unlikely to arise, even if we were unlucky more than once in a generation. There is therefore no justification for setting up special machinery in any one Department, and it is better to leave it with the Department, which will have the necessary information, the power
  694
  to obtain information and the direct responsibility.
  There were discussions on the issue of the liability of the operators of nuclear ships. I regret that I am unable greatly to add to what has been said on this subject. Special difficulties arise in connection with nuclear ships which do not arise with land-based nuclear installations and the transport of nuclear material. For example, all existing nuclear ships are State owned—they are nearly all warships. This gives rise to special problems in international law, and these are being examined.
  I am sure that the House would like an indication of the expected progress and the various steps required to establish the international system under the three Conventions. We hope that the enactment of this Bill will stimulate other countries to move rapidly towards a situation in which they can ratify one or more of the Conventions. The Bill now enables the change in our law to be made in steps on dates considered appropriate by the Government. It is envisaged that as soon as possible the main provisions of the Bill will be brought into force so that we shall be in a position to deposit our instruments of ratification.
  There are, however, a number of consultations which will have to be completed before we can complete the exercise. I have in mind, in particular, the consultations with the Commonwealth and Colonial Governments and certain countries with which we have special agreements on reciprocal enforcement of judgments. Our aim will be to establish the régime as quickly as possible and to ensure that the changes in the United Kingdom law, our ratification of the Conventions and the coming into force of the Conventions all take place within a short period of time.
  The United Kingdom played a leading part in these Conventions. The very fact that this House has been able to pass legislation as quickly as it has been practicable should stimulate other countries to ratify the Conventions and set up a system similar to that envisaged in this Bill.
  10.42 p.m.
  Mr. Patrick Jenkin: I wish briefly to echo the congratulations which have been expressed to those who have been concerned not only with the preparation of

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  the Bill but with the great deal of work which went on with the treaties which preceded it. This will have been apparent to anyone who had the misfortune to sit through the Committee stage when I devoted a great deal of time in drawing attention to these treaties. I am very much aware of how much time and effort must have gone into their preparation.
  One must take note that there are two series of treaties—the Vienna treaty and the Paris treaty—under different auspices, and although harmonising treaties now exist, one hopes that eventually the international system will coalesce round the United Nations treaty, which is all-embracing, rather than round the O.E.C.D. treaty, which covers only the member countries of that organisation. I echo the point made in Committee about the dislike of the provision limiting foreign judgments, but I understand why it has been done.
  Finally, I should, perhaps, inform the House that I made a rather lighthearted but somewhat disparaging remark about the insurance market, a remark which I wholeheartedly withdraw. Incidentally, I had a jolly good dinner on the strength of it, provided by the Lloyds Underwriters' Association, which wanted to assure me that my remark was quite undeserved; and I unhesitatingly withdraw it. With that, I welcome the Bill.
  10.44 p.m.
  Mr. Ridley: My hon. Friends and I consider that we have a very good Bill, which has been made a little better in Committee, and I wish to add my tributes to those which have already been paid. In particular I pay tribute to my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) who, in a maiden Committee, so to speak, impressed us greatly. I congratulate him on his tireless struggle against hurt, which ended so successfully this afternoon. I also wish to thank all my hon. Friends who urged important points on the Government.
  We had a quiet and orderly series of debates in Committee, with one exception; when the hon. Member for Totten-ham (Mr. Akinson)—who, although not in his place, will, I am sure, excuse me to making this point in his absence—had a slightly non-relevant argument on
  696
  a somewhat non-relevant point. I think that our fears about the possible attendances of the Minister of Technology were all too nearly confirmed in the event. Apart from that, we had some thoroughly constructive and edifying debates.
  I am glad that the Government have not in the Bill departed from the private insurance principle. I was interested to note that in the debate on the 1959 Bill the right hon. and learned Gentleman the present Home Secretary said:
  "Rather than have that cumbersome legislation, would it not be simpler to assess what is the appropriate contribution, premium or whatever it may be, which should be paid to some Government institution by persons who wish to obtain licences for the use of atomic material, and required that the licensee shall, under the conditions of the licence, make that contribution to the Treasury, and that the Treasury, or some other Governmental institution, should be responsible to pay £5 million or over to cover the loss, whatever it may be? —[OFFICIAL REPORT, 9th February, 1959; Vol. 599, c. 878.]
  That would amount to nationalisation of the nuclear insurance market, and I am glad that the Government, now responsible for this Bill, have neglected their own advice in Opposition.
  The nuclear insurance business has amounted, I am told, to some £1,500 million since the beginning of nuclear installations for our own private industry, and a very large amount of those earnings have been in foreign exchange. So we should pay a tribute to the insurance companies for the very large amount of business they have picked up in the nuclear field. And if that does not get me asked to dinner, as my hon. Friend has been, it will be most unfair.
  The hon. Gentleman mentioned the difficulties of bringing the Bill into force. We certainly do not want to be the only relevant country. I am sure that he is seized of the complications of this matter, and I like what he said in opening this Third Reading debate. I would encourage the Government to stimulate other countries to pass similar legislation and to ratify the Convention. Above all, I would encourage them to be very careful that we ourselves ratify at the optimum moment, because I believe that what we have most of all to consider in regard to this Bill is the improvement of our chances of nuclear exports. The amount of business that could open to this country in the future is enormous, and

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  I am quite certain that the whole House will agree that we should bear this in mind as one of the main considerations in administering the Bill.
  We believe that this Measure will give security to those living or working in of near nuclear installations, and that it represents a most important and advanced piece of international co-operation. We on this side welcome it, and hope that the Government will be able to make very good use of it.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  SEVERN BRIDGE TOLLS BILL
  Mr. James Dance, Mr. Michael Hamilton, Mr. Hayman, and Mr. Will Owen nominated Members of the Select Committee on the Severn Bridge Tolls Bill.—[Mrs. Harriet Slater.]

  GIBRALTAR
  Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Harriet Slater.]
  10.48 p.m.
  Mr. Martin McLaren: We had some exchanges about Gibraltar at Question Time today, and it is purely a coincidence that I was given this Adjournment on the same day as that on which Colonial Office Questions were being answered. We now have an opportunity to revert to the subject at a little more, but not much more, leisure.
  We have noticed that the hon. Lady the Under-Secretary of State for the Colonies is going to Gibraltar tomorrow, and no doubt all the flags will be flying in her honour. I visited Gibraltar in December, in company with my hon. Friend the Member for Hornchurch (Mr. Lagden), and the hon. Members for Bristol, Central (Mr. Palmer) and Burnley (Mr. Dan Jones). We saw for ourselves the situation on the frontier of Spain, since when I regret to say that, by all accounts, it has got worse. I do not pretend that there is anything new about the situation; there was trouble there in 1954, but I am informed that it was not as bad as it is now.
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  I will not describe the nature of the difficulties on the frontier, because it is a state of affairs which is familiar to the House. We are glad to hear of the visit to Gibraltar of the senior economic adviser to the Colonial Office and we look forward soon to hearing about his recommendations.
  I think we would all say to the Government that we hope that they will deal generously with Gibraltar over grants and loans to help her build up a prosperous island economy, as she may have to at this difficult time, and we in this House would cheerfully grant the necessary supply. There is undoubtedly much that can be done to help Gibraltar to expand her tourist and shipping industries, but we must recognise that the whole quality and enjoyment of life in Gibraltar will remain seriously impaired as long as the frontier restrictions last.
  The key to the whole problem lies surely in the study of Anglo-Spanish relations, and it is worth asking, because it is relevant to Gibraltar's difficulties, why those relations should have deteriorated. Gibraltar, being a Crown Colony, conducts no foreign relations of its own. Its foreign policy is conducted by Her Majesty's Government, and that is why it is right for the matter to be debated here.
  I do not think that the recent proceedings in the United Nations about Gibraltar were particularly helpful. The object of such proceedings is supposed to be to see whether colonial peoples are being oppressed, but what happened in this instance was that representatives of Gibraltar stated in New York that they were entirely contented with their status and desired no change. The United Nations merely provided an opportunity and a public platform to Spain to resurrect her claims.
  Then there was a second episode—I think it was rather earlier in time than the United Nations episode, and I refer to this not in anger but more in sorrow—and that was when on 17th June last year there was a debate in this House on foreign affairs and when the present Prime Minister took the opportunity to make some rather disparaging references to the Spanish Government and to General Franco, saying of him that he looked forward to a change which could not now be long delayed and complaining that

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  drawings and details of frigates were being sold to a Fascist Government for a few million pounds.
  The reaction of the Spanish Government to that was both swift and certain. On 1st July the Spanish Minister of Marine said:
  "I am not prepared to accept the interference of the Hon. Mr. Wilson in the internal affairs of a country such as Spain which maintains the most friendly and normal relations with Great Britain. I hope to be able to maintain our cordial collaboration with the British Admiralty, but political prudence makes it advisable for us to break off a transaction which has been the subject, on the part of the Hon. Mr. Wilson, of a misplaced and unjustified intervention."
  As a result of that we lost, what I am not concerned with this evening, the contract for Spanish frigates.
  Mr. Arthur Palmer: Knowing that the hon. Gentleman is usually fair in these matters and having had the pleasure of being with him in Gibraltar, may I say that I cannot think that he is seriously suggesting that these difficulties started from the time to which he is referring? We were assured in Gibraltar that they went back in time to the Queen's visit many years ago.
  Mr. McLaren: The hon. Gentleman may have heard me say already that these difficulties started in 1954 and I went on to say that they have never been so bad as they are today.
  Later, even the Spanish Minister's hope which he had expressed of maintaining his cordial collaboration with the British Admiralty was dashed when, suddenly, the British Government cancelled the naval exercises which had been planned between the British and Spanish fleets. My information is that the British naval authorities who had been planning the exercises with the Spaniards were not even consulted about the likely consequences or the probable reaction of the Spanish Navy or people to their cancellation. Our naval authorities were just informed that the exercises were off.
  It is small wonder, in these circumstances, that relationships between Britain and Spain became worse, and this in turn led Spain to put increasing pressure on Gibraltar. For that situation, the Government must bear a large part of the blame.
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  The question is: what should be done now? In various quarters in Gibraltar, suggestions have been made that the time has come when counter-measures should be taken, not that it can ever be pleasant to make any such suggestions. One proposal is that air traffic between this country and Malaga should be discouraged so as to build up traffic at the airfield in Gibraltar. A second suggestion is that restrictions should be imposed on the immigration to this country of Spanish subjects seeking employment. This afternoon, the hon. Member for Fife, West (Mr. William Hamilton) suggested that the Government might consider discouraging travel by British subjects for holiday purposes to Spain. Yet another suggestion is that we should require that any imports to this country from Southern Spain should be routed through Gibraltar so that the economy there would benefit. What do the Government think of those suggestions, and what other possible proposals have they in mind?
  Over a century ago, another man born in Gibraltar, Don Pacifico, had his rights infringed abroad, and his case was the subject of a debate in this House on 25th June, 1850. Lord Palmerston, then Prime Minister, made a speech about him, and I shall quote the words with which he ended because, although conditions have entirely changed, the principles to which he referred are as applicable now as they were then. He asked whether it was not true that
  "as the Roman in days of old held himself free from indignity when he could say, Civis Romanus sum', so also a British subject, in whatever land he may be, shall feel confident that the watchful eye and the strong arm of England will protect him against injustice and wrong."
  Those who live in Gibraltar today are British subjects and, like us, they are citizens of the United Kingdom and Colonies. They are in trouble today, and they are looking to the Government here in London and to this House to protect them. We expect the Government to tell us what they propose to do to come to their assistance.
  11.0 p.m.
  The Minister of State for Foreign Affairs (Mr. Walter Padley): Before I reply to the points made by the hon. Member for Bristol, North-West (Mr. McLaren), may I say that I am sure that hon. Members on both sides of the House

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  would like to pay tribute to the work of the present Governor of Gibraltar. General Sir Dudley Ward, whose term of office will be coming to an end in the summer, and at the same time to congratulate his distinguished successor, General Sir Gerald Lathbury, whose appointment was announced today. On that, at least, I am sure that we can all agree.
  The Government are very conscious of the concern among hon. Members on both sides of the House about the situation in Gibraltar. Since 1704, there have been numerous attempts by Spain to challenge Britain's position there, but there has never been a more unreasonable and unnecessary campaign against the Rock than that instituted by the Spanish authorities the day after the adoption by the United Nations Committee of 24 on 16th October last year of a consensus on Gibraltar. It invited the United Kingdom and Spain without delay to undertake conversations in order to find a negotiated solution to disagreement over the question of Gibraltar.
  The British representative on the Committee made it quite clear that we could not agree to any discussion of our sovereignty over Gibraltar. This sovereignty is indisputable and rests not only upon the basis of freely negotiated treaties, but also on the freely expressed wishes of the inhabitants of Gibraltar. Our representative told the United Nations Committee that on the question of the future of the Colony we would be guided, as the Charter of the United Nations requires, by what we regard as the paramount interests of the inhabitants of Gibraltar.
  Despite this reservation, we took careful note of the consensus adopted by the Committee. As we have told the Spanish Government, we would normally have been willing to consider proposals by it for discussions of ways in which good relations could be maintained and causes of friction eliminated, but any such discussions were made impossible by Spain's own action in embarking on a campaign of restrictions against Gibraltar.
  This afternoon the Opposition suggested that the Government had brought these restrictions upon themselves—and even the hon. Gentleman, in a more moderate way, repeated the charge tonight—because of the alleged
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  cancellation of the order for the building of British frigates in Spain and the cancellation of the "Spanex" exercise. In fact, there was no order for frigates. The decision not to hold the "Spanex" exercise is equally irrelevant.
  Measures against Gibraltar were threatened by the Spanish representative in the United Nations Committee of 24 during the discussions last September, when the Tories were in power. We should also remember that similar restrictions were imposed in 1954, at the time of the visit by the Queen to Gibraltar, and restrictions continued for six long years despite the existence of successive Tory Governments. Let us for once not seek to make cheap party points out of the plight of these British subjects in Gibraltar.
  It is worth while placing on record the nature of the restrictions. Vehicles travelling in either direction have been subjected to long delays at the Spanish customs post at La Linea. The Spaniards claim that these delays are necessary in order to prevent smuggling, but in fact they have resulted from a deliberately imposed time for clearing the documents relating to each vehicle. There has been no pretence at searching the vehicles themselves, although unusual duties have, on occasion, been imposed on all sorts of goods taken across the frontier. In one instance, someone going for a picnic paid duty on a package of sandwiches on his way into Spain and further duty on those he had not eaten on his way back to Gibraltar.
  On 23rd November, without any prior consultation with the Gibraltar authorities, the Spaniards started to close the frontier gates at La Linea one hour earlier than had previously been usual and since the New Year a number of new restrictions have been imposed on transit of the frontier. The normal import of goods from Spain has been restricted. Driving licences issued in Gibraltar have been held to be invalid in Spain. Foreign nationals resident in the Campo area were told that they could no longer use their passports in order to cross the frontier for work in Gibraltar. Many of these unfortunate people have moved into Gibraltar where the Government have helped them to find accommodation so that they can carry on with their jobs. These tactics have inevitably

  703
  caused much inconvenience to large numbers of intending travellers. They have also affected many Spaniards on the other side of the frontier.
  Nor have disabled persons and invalids escaped this unnecessary and arbitrary behaviour. Persons crossing the frontier for hospital treatment at La Linea have often been subject to painful and humiliating delays and the Spanish authorities have even seen fit to cut off supplies of oxygen required by hospitals in Gibraltar. Tourists of other nationalities have been equally subjected to this extraordinary display of bad manners and incivility.
  If the Spanish authorities had hoped that by these means they could break the spirit of the people of Gibraltar, they have made a grave miscalculation. The people of Gibraltar have made it quite clear that they are not prepared to yield to pressure of this kind.
  As the House is aware, Her Majesty's Ambassador in Madrid, on various occasions in November and December, made representations to the Spanish Minister of Foreign Affairs about the situation at the frontier. When these representations had clearly failed, Her Majestys' Government, on 11th January, addressed a formal Note of protest about the restrictions to the Spanish Government. The Spanish Government replied to this protest by a brief reiteration of a request they had already made in an earlier Note for conversations about Gibraltar. In reply, Her Majesty's Government, in a further Note of 22nd January, restated their position with regard to these conversations. This was also made clear at the United Nations, where our permanent representative addressed a letter to the Secretary-General asking him to circulate the text of our two Notes to all members of the organisation.
  It may be that the Spanish Government are genuinely concerned about developments in Gibraltar and, in particular, about the constitutional changes introduced by the previous Government last August. Lawyers can always argue about the precise meaning of a new constitution, but if the Spanish Government considered that the situation posed a threat to any legitimate Spanish interest their proper course would have been to have taken
  704
  the matter up with us in private. Instead, they chose to prevent any holding of the conversations called for by the Committee of 24 by the immediate imposition of the frontier restrictions.
  No Government can be expected to agree to negotiations under duress and the Spanish Government should know us well enough by now to realise that this is certainly not a British habit. It has been suggested in various quarters that we might institute certain measures to counter the Spanish campaign against Gibraltar. I do not really think that hon. Members, including the hon. Member for Bristol, North-West, who initiated this debate, would wish us to engage in the same sort of petty harassment and obstructionism as the Spanish authorities have decided to indulge in.
  Let me, however, say that we intend to take all necessary measures to keep open all normal means of communication with Gibraltar itself. There have been reports in the Press of attempted interference by Spanish customs launches with ships carrying foodstuffs into Gibraltar. I am happy to be able to inform the House that there have been no more than a few isolated incidents of this sort, not involving British ships, some weeks ago. But we shall, of course, take all necessary measures to protect British shipping should the need arise.
  It is worth while recalling that Britain played a notable part in sustaining 2 million people in Berlin; and having carried that operation through, it would not be beyond the capacity of Britain to sustain the 26,000 of our fellow citizens of the British Commonwealth in Gibraltar.
  However, I hope that matters will not come to that, and for the moment I prefer to concentrate on the positive side of what we are doing to give practical assistance to the people of Gibraltar. As my hon. Friend the Under-Secretary of State for the Colonies informed the House this afternoon, she is herself flying to Gibraltar tomorrow to see the situation at first hand and to report upon it to the Government.
  Mr. Nigel Fisher: Will the hon. Gentleman give way?
  Mr. Padley: My time is so short that it is not practical to give way.

  705
  The economy of Gibraltar has been built up over the years on a basis of interdependence with neighbouring territories and particularly with the adjacent Campo area of Spain. If the restrictions are continued, adjustments will clearly have to be made in the economy of the Colony in order to give it greater selfsufficience. The senior economic adviser to the Colonial Office has already been sent to Gibraltar to advise the Government on appropriate measures to this end, and that in part meets the point made by the hon. Gentleman.
  As soon as his report is available to the Gibraltar Government, they will be in a position to consider the problem in greater detail and to determine its needs. Once these are established, Gibraltar can rely on Her Majesty's Government to consider urgently and with the utmost sympathy what help we can give.
  Other ways in which assistance can be provided from the United Kingdom are already being studied, but we would not wish to be drawn either into taking or announcing piecemeal and random measures. We would prefer to wait until we have full details from the Gibraltar Government of their requirements. We shall then be in a better position to decide on the best steps to take.
  The message, therefore, that I hope will go out from this House tonight is that if the restrictions are removed Her Majesty's Government will be ready to consider proposals for discussions with Spain. But we stand four-square by the people of Gibraltar in their present difficulties, and we do not intend to be bullied into giving up any British interests.
  Mr. Fisher: I wanted to interrupt the hon. Gentleman to say that, as he knows,
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  this is a matter of some concern in the country as well in the House, and, through him, to ask the hon. Lady the Under-Secretary of State to confirm that on her return from Gibraltar she will make a statement to the House, together with her recommendations for future action by Her Majesty's Government. As the hon. Lady knows, her right hon. Friend will not be reached for Questions for about 6 or 7 weeks, and I think that it would be the wish of the House and of the country to hear her observations at first hand when she returns, and her recommendations for action by the Government.
  The Under-Secretary of State for the Colonies (Mrs. Eirene White): The hon. Gentleman will realise that I shall be reporting to my right hon. Friend, and any statement that is made will have to be a matter of arrangement.
  Mr. Dan Jones: Might I extract from my hon. Friend the assurance that if these frictions continue on this frontier the Government will seriously consider economic reprisals against Spain?
  Mr. Padley: Her Majesty's Government consider that the task, certainly in the existing circumstances, is to sustain Gibraltar. We do not, as a matter of policy, wish to be drawn into retaliatory action of the kind that we denounce when practised by Spain. In the present circumstances, our policy will be to devise means of sustaining our fellow citizens in Gibraltar.
  Question put and agreed to.
  Adjourned accordingly at fourteen minutes past Eleven o'clock.

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Preamble
The House met at three of the clock, The Lord CHANCELLOR on the Woolsack!
Prayers—Read by the Lord Bishop of Oxford
The Lord Strathcona and Mount Royal—Took the Oath.
The Lord Selsdon—Took the Oath.

WATER ECONOMY IN INDUSTRY
3.5 p.m.
LORD INGLEWOOD: 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 encouragement is given to industry to use or install equipment which enables water for cooling or other purposes to be re-circulated, so reducing demand on water undertakers for extensive or costly new works.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF LAND AND NATURAL RESOURCES (LORD MITCHISON): My Lords, there is constant effort by statutory water undertakers to ensure, by encouraging re-circulation and by other means, that consumers do not misuse or waste water. The Water Resources Board and the river authorities will also have this much in mind. The scope for re-use of water by industry varies from firm to firm, but a great deal is done already. Given the general cheapness of water in the country, however, the provision by all industrial consumers of arrangements for re-use would be economically wasteful.
LORD INGLEWOOD: I thank the noble Lord.

FINANCIAL RESULTS OF AIRCRAFT AND HEALTH SERVICE DECISIONS
EARL FERRERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government to state the figure for:

(a) The average annual saving over a period of ten years resulting from the Government's decisions about the aircraft industry, which were announced by the Prime Minister in the House of Commons on February 2, 1965.

(b) The estimated annual cost to the Exchequer of the abolition of the National Health Service prescription charges which came into effect on February 1, 1965.]

LORD SHEPHERD: My Lords, on present costings, without taking into account the early stage of development and the certainty of rising costs of these cancelled aircraft, the figure is £30 million. The figure for the second part of the Question is £25 million.
EARL FERRERS: My Lords, I am grateful to the noble Lord for that reply. Can he confirm that the savings to be effected by buying the American aircraft in no way influenced the decision to do so?
LORD SHEPHERD: My Lords, certainly cost was a factor that was taken into account, but I am quite sure the noble Earl is aware that there were a number of other factors, in particular the gap before this proposed aircraft would come into service, taking into account the going out of service of existing aircraft.
LORD MOYNE: My Lords, can the noble Earl say whether, in calculating the saving, the amount paid out in wages and that to be collected in taxes resulting 'from production in this country were taken into account?
LORD SHEPHERD: I am quite sure the answer is, Yes.
EARL FERRERS: My Lords, I appreciate that there are other factors, as the noble Lord said, but can he say that the

269
savings that resulted from this decision were the result of it and not the cause of it?
LORD SHEPHERD: I think the answer would be, No.

COST OF AMERICAN AIRCRAFT PURCHASES
3.10 p.m.
EARL JELLICOE: 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 will be the cost in foreign currency and its sterling equivalent of the proposed purchase of American aircraft to replace the P1154 and the HS681.]
THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON): My Lords, the total dollar cost will depend on the total number of aircraft bought, on which no decisions have yet been taken and no contracts placed, and upon arrangements for the purchase of British equipment and for co-production of the Phantom. Detailed discussions with the United States Government about the initial aircraft orders, involving expenditure of up to £70 million (not all of which will be in dollars) on the purchase of aircraft and initial support equipment are now in hand.
EARL JELLICOE: My Lords, I am grateful to the noble Lord for his reply, so far as it goes, but it does not go very far. Is he surprised that I am rather surprised that it does not go rather further, in view of the full statement made by the United States Department of Defence two days ago? Can he confirm that the existing agreement was, in fact, signed by
his right honourable friend on last Monday? And in that event would he not agree that it was rather odd that some announcement was not made on this side of the Atlantic, more particularly in view of the fact that the subject was being debated on Tuesday in another place?
LORD SHACKLETON: My Lords, in reply to the first part of the noble Earl's supplementary question, I am very surprised that he is surprised, because he
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knows perfectly well that he himself gave No 1nformation of this kind at all in relation to the previous Phantom purchase by the previous Government, and there has been statement after statement by the previous Government that it was not customary to give detailed information on either numbers or costs. I have already explained why it is not possible to give this information now. On the point that he made with regard to the making of a full statement, I have to be a little careful here not to offend against the rules in relation to another place. I think I can say that it was the intention of my right honourable friend to give this information, but certain events, connected with the way Business is conducted in another place, prevented that from happening. It is his intention to supply that information to-day.
EARL JELLICOE: My Lords, I am grateful to the noble Lord for his reply to my supplementary question, so far as it went, but I think there is a difference between a contractual arrangement and the initial Phantom proposals. May I ask him whether it is the Government's intention, as soon as the deal is concluded, to have it published and let us have a White Paper giving full details of this matter?
LORD SHACKLETON: My Lords, may I quote to the noble Lord the statement by the previous Secretary of State for Defence?
"We never have stated the cost of an aircraft in advance. It has never been done in the history of any defence debate and the honourable gentleman … knows it perfectly well."—[OFFICIAL RFPORT, Commons, Vol. 690 (No. 61), col. 451, February 26, 1964.]
This was repeated later, when he said [col. 453]:
"I am not giving either the cost or the numbers because such information has never been given."
THE EARL OF GOSFORD: My Lords, may I ask the noble Lord whether the Air Staff are in agreement with this apparent down-grading of two of their projects?
LORD SHACKLETON: My Lords, as a former Minister the noble Earl knows that that is not a question which it would be proper to answer.

DETENTION OF THE KRAY BROTHERS
3.12 p.m.
LORD BOOTHBY: 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 it is their intention to keep the Kray Brothers in prison for an indefinite period without trial.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I understand that a magistrates' court has committed these men in custody for trial at the current session of the Central Criminal Court. Under Paragraph 12 of Schedule 1 to the Administration of Justice Act, 1964, the trial must begin not later than February 28 unless the court otherwise orders. This is not a matter in regard to which my right honourable friend has any responsibility.
LORD BOOTHBY: My Lords, I would only say, in response to that Answer, that I hold no brief at all for the Kray brothers, one of whom I have never met and the other of whom I have met on only two occasions in my life, last July. But I am on the record as having fought continuously—
SEVERAL NOBLE LORDS: Order, order!
LORD BOOTHBY: Why "order"? I am simply saying that I have fought against imprisonment—
SEVERAL NOBLE LORDS: Ask a question.
LORD BOOTHBY: I am going to ask the Lord Chancellor a question, because I am not interested in the activities of the Home Office, which have been characteristic in this case and have done infinite damage to the reputation of this country—
SEVERAL NOBLE LORDS: Order, order!
LORD BOOTHBY: My Lords, I am going to ask the Lord Chancellor a direct question. It is this: will he take a sharp and a hard look at our system in Scotland, where the procurators fiscal act under the directions of the Lord
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Advocate and where this kind of situation could not possibly arise?
VISCOUNT DILHORNE: My Lords, before the Lord Chancellor answers that question, may I ask the Leader of the House whether it is in accordance with the customs of this House to table a Question on a matter in respect of which the Government have no responsibilities at all, as has been stated, and which, according to to-day's Press, still remains sub judice?
LORD REA: My Lords, may I ask the Leader of the House whether he would agree that this is a leading question, is not in accordance with the tradition of this House, and is therefore to be regretted?
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I am sorry I was detained and was not here at the beginning of this part of Question Time. If I may give a direct answer first to the noble Viscount, Lord Dilhorne, I am informed that it is the responsibility of the Peer who asks the Question. The Table try to give advice but have no authority from the House to censor Questions. That is the official answer. Therefore, it rests with the Peer to ask the Question, and it rests with the Government whether they choose to reply to it.
LORD CONESFORD: My Lords, are all the Ministers aware that those who care most about human freedom have no desire whatever that the executive Government should interfere with the Judiciary in the administration of criminal justice?
THE EARL OF LONGFORD: I certainly agree with the noble Lord.
LORD BOOTHBY: My Lords, if this kind of Question is not allowed to be put on this kind of occasion in one or other House of Parliament, then we might as well pack up.
SEVERAL NOBLE LORDS: Order, order!
THE EARL OF LONGFORD: My Lords, I think the noble Lord will regret that intervention when he reads it in cold blood.
LORD SALTOUN: My Lords, just to keep the matter right, may I ask the Leader of the House whether it is not the case that every Question asked of the

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Government in this House is asked by permission of the House, and the House can always, at any moment, withhold its permission for the Question to be asked or answered? I think that is the correct position.
THE EARL OF LONGFORD: My Lords, answering on the spur of the moment, I should think that that is right, in the sense that anyone speaks with the permission of the House, and the House can always refuse to hear any speaker. But as I explained earlier, the responsibility rests with the Peer who puts the Question, and it would not ordinarily be for the Table to censor it.

BUSINESS OF THE HOUSE
LORD SHEPHERD: My Lords, at a suitable moment after 3.30 I shall be making a Statement on Prices and Incomes machinery, and my noble friend Lord Stonham will be making a Statement on the Firearms Act.
MILFORD HAVEN CONSERVANCY BILL [H.L.]
Read 2a, and committed to a Select Committee.
PEMBROKESHIRE COUNTY COUNCIL BILL [H.L.]
Read 2a, and committed to the Committee on Unopposed Bills.
POOLE CORPORATION BILL [H.L.]
Read 2a, and committed to a Select Committee.
PORT OF LONDON BILL [H.L.]
Read 2a, and committed to the Committee on Unopposed Bills.

HOUSE OF LORDS OFFICES COMMITTEE
3.18 p.m.
THE CHAIRMAN OF COMMITTEES (LORD MERTHYR): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Lord Bowles be proposed to the House as a member of the Committee in the place of the late Earl Alexander of Hillsborough.—(Lord Merthyr.)
On Question, Motion agreed to.

MINISTERIAL SALARIES AND MEMBERS' PENSIONS BILL
Brought from the Commons; read 1a, and to be printed.

EXPORTS AND GOVERNMENT POLICY
3.20 p.m.
THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION)THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION) rose to move, That this House welcomes the initiatives taken by Her Majesty's Government to encourage the export of British goods. The noble Lord said: My Lords, the Government's measures to encourage exports, which are being discussed to-day, must be seen against the wider background of our economic problems and the steps we are taking to deal with them. The House has already debated the measures which the Government had to take immediately on taking office. Your Lordships will recall that in October last we found a situation in which there was every prospect of a balance-of-payments deficit in 1964 far exceeding those of 1955 and 1960, whilst at home industrial production had been flat for many months. The Government did not feel able to let matters drift any further. Long-term measures were needed to get the economy moving again and in a direction which did not involve periodic balance-of-payments crises. But immediate and even drastic measures also were needed to rectify the situation and to provide a breathing space in which the longer-term measures could get under way. On October 26 we introduced the temporary charge on imports to check the
substantial rise in our imports which has been a feature of the last two years. I need not dwell on this measure, which has been fully debated, but I would reiterate the Government's determination to reduce, review and finally abolish the charge as soon as it is possible.
We have passed through a difficult period for sterling, but the Government's determination to discharge its responsibilities for maintaining the strength of the pound, as evidence by the increase in bank rate, together with the massive support in the form of credits from overseas Central Banks, have enabled us to withstand the crisis. We now have a period in which our constructive measures

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can begin to take effect. The measures to encourage exports are one part of these.
Last year, 1964, was a disappointing year for our trade. The deficit on the "visible" account was very substantial. Exports at the beginning of the year were growing quite strongly, but imports were rising even more quickly. In the first quarter of the year, imports averaged 21 per cent. more a month than in the first quarter of the previous year. By October, imports still seemed to be growing, although less strongly, but exports after the first quarter had been drifting down. This was the situation we faced: imports at a high level, and exports hesitant.
The picture has improved in more recent months. The fourth quarter of 1964 showed exports recording a good rise over the third quarter, and that trend appeared to be more buoyant. However, it would be wrong to read too much into the record December figure alone—the monthly variations are an inherent feature of these figures. Taking the year as a whole, exports rose by just over 4 per cent., compared with 1963. Imports, on the other hand, rose by 15 per cent. in 1964, and it is the disparity between these rates of growth which added so greatly to our difficulties on taking office. It is true that much of the unevenness in our exports in 1964 can be explained by the slower rate of growth of our exports to Europe. Our exports to Western Europe were 6 per cent. higher in 1964 than in 1963, but this is the smallest increase for five years, and it includes a fall of 21 per cent. in our exports to Italy.
With the large import bill which we have to meet, of some £5½ million a year, we cannot afford these setbacks, even though they may be temporary. We must look for a sustained effort to secure the steady growth in exports which we need, and we should not have to rely on an excessive growth of imports with every sharp rise in economic activity.
LORD BOOTHBY: My Lords, could the noble Lord give us any figures in relation to our exports to Eastern Europe?
LORD CHAMPION: My Lords, I have not those figures available, and I hope that my noble friend who is to reply to
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the debate at the end will be able to let the House have them.
We are confident that orderly planning and the abandonment of "Stop—Go" will bring us to a situation in which we can achieve a higher rate of growth than hitherto without the development of a damaging dependence on imports or a weakening in the persistence of our export effort. No one pretends that this will be either easy or painless.
The Government have reacted promptly and vigorously to this situation by making a thorough-going review of the whole range of Government services to exporters and by introducing a series of new and important measures which have been carefully designed to stimulate and help the efforts of British industry in overseas markets. Far be it from me to denigrate the efforts already being made by many British firms in the export field. As my right honourable friend the President of the Board of Trade rightly said, these efforts are already considerable. And some firms have done magnificently. But the time has come to pull out all the stops and to ask exporters, in the national interest—and we hope also in their own ultimate interest—to make every effort within their power to increase their sales abroad. There is room for all—whether the firm be large, medium or small—to make an added contribution to the export drive.
The Government's first obligation was to state the problem in clear and comprehensible terms. We have done this, and I believe that our exporters will rise to the challenge. We recognise, however, that exhortation is not enough, and it is for this reason that the Government directed that a thorough examination should be made of the ways in which the Government itself can be of direct service to exporters within the framework of our international obligations in GATT and to our EFTA partners. Our object is to help firms that are already exporting to do more, and to encourage firms that do not at present export, but have the potential to do so, to make a contribution in this field.
The House will by now be familiar with the measures which the President of the Board of Trade announced two weeks ago. I do not propose to go over these again in detail. They are divided broadly into three parts. First,

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there are the arrangements for which the focus and motive power will be provided by industry itself, through the British National Export Council, whose scope we have complemented by inspiring the establishment, alongside of, and, so to speak, in double harness with, the B.N.E.C., of the Commonwealth Export Council.
These Councils which are sponsored by all the leading national industrial and commercial organisations, as well as by the T.U.C., include in their membership businessmen of high standing, with long experience in the practice and art of exporting, who are giving their services on a voluntary basis to guide and inspire the national export effort. With the aid of their associated area committees the B.N.E.C. and the C.E.C. are charged with keeping under review our exports in most of our vital markets and are acting to reinforce and stimulate the efforts of our exporters.
We are working with the B.N.E.C. on ways and means of organising collective selling efforts and joint export-promotions activities—on the one hand by giving a fillip to old ideas, such as the so-called "piggy-backing" arrangements through which experienced exporters give a helping hand in export markets to small firms—and on the other hand by investigating, through a working party, the feasibility of setting up a new form of collective selling organisation, to mobilise the export potential of small and medium-sized firms who at present export little or nothing at all. Our aim is to find some
practical scheme of collective selling that will co-ordinate the efforts of every firm that may have something to contribute to exports. Let me hasten to add that we want to complement, and not to supplant, the services already provided by export merchants.
We have equipped the B.N.E.C. with two new measures which enable them to offer financial assistance towards the cost of trade missions and collective market research. We are confident that these facilities will encourage more businessmen to go overseas in search of markets for their products and will ensure that more potential buyers are brought to see our wares in Britain. It is open to any trade association or chamber of commerce to seek out opportunities for useful missions and market research and to put forward their proposals, and I have no
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doubt that they will not be slow to take advantage of the facilities now offered by the Government.
We are indebted to our predecessors in office for having created the B.N.E.C., though I think we may fairly claim not only to have grasped but to have positively developed the usefulness and importance of the functions which this body is eminently qualified to perform. Perhaps I may be permitted to take this opportunity to express once again the Government's appreciation of the valuable
services which Sir William McFadzean and his colleagues on the B.N.E.C. and the C.E.C., with their area committees, are giving to British exports. We are extremely grateful to these gentlemen.
The second leg of the Government's efforts to help exporters is the review, to which I have already referred, of the Government's existing wide range of services at home and overseas. These are superior to anything provided by any of our competitors, and we shall see not only that this remains true but that they are improved in every possible way. The export officers attached to the staffs of Board of Trade Regional Controllers already make well nigh 20,000 visits a year to firms on matters of export business. Overseas officers of the Diplomatic Service are anxious to help exporters in every possible way and to give priority to such work. Their advice and willing assistance are freely available to exporters.
The Government provide a service which is highly thought of by industry in the provision of facilities for participation in overseas fairs, trade weeks and the like. These services are being extended and provision is being made for a substantial increase in expenditure to meet the increasing demands that it is expected and hoped will be made on them. There is already plenty of evidence of appreciation by industry of the export services provided by the Government. However, we shall in the next few weeks be launching a publicity campaign in a renewed effort to ensure a greater general awareness in the country of the vital need to increase exports, and more particularly as wide a knowledge as possible in industry of the services offered by the Government at home and overseas to those who are keen to increase

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their exports. We want to see firms throughout industry making the fullest possible use of Government facilities for exporters.
In addition, Government Departments will now organise, directly or through the appropriate Economic Development Committee, a programme of meetings with
industries to pursue in detailed discussion the problems which each industry encounters in promoting and exporting its products. The E.D.C.s will take a special interest in problems of production and in action to increase the supply of goods available for export. The purpose of these meetings with industry is to ensure that full use is made of the new export facilities; to explore all practicable methods by which exports may be increased, including the establishment of export groups where these do not now exist; and to discuss ways and means of financing export promotion development councils.
Thirdly, I should like to turn to the new developments in the field of export finance. With the growing volume of exports sold on credit terms, we fully recognise how important it is that finance for exports should be readily available at a reasonable cost. With the full cooperation of the clearing banks, two measures have been introduced which will provide significant improvements in the present arrangements. First, the Export Credits Guarantee Department have made their bank guarantees, hitherto confined to capital goods contracts of not less than £100,000, available for all manufactured goods contracts over £50,000 involving credit of at least three years. As part of these arrangements, the clearing banks have agreed that the fixed rate of 5½ per cent. for advances covered by a bank guarantee will similarly be extended.
The provision of bank finance at the fixed rate of 5½ per cent. has also been extended, as announced by the Bank of England, to cover the longer-term element of loans covered by E.C.G.D.'s financial guarantees. These are loans of ten years or more duration made directly to overseas purchasers to finance the supply by British firms of large capital projects and ships for which long-term credit is appropriate. Under these arrangements, it will no longer be necessary to call on the insurance company and other City money at 6½ per cent. which previously financed
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the longer element in these loans. This will reduce the average interest rate payable by between ½ per cent. and ¾ per cent. a year, depending on length. This new facility offered by the clearing banks, which the Government welcomed warmly, will also simplify the procedures under which the money is provided.
These measures will make our exports more competitive in the medium and long term credit field where the cost of finance forms a substantial element in total costs, and where it is important that there should be certainty about the availability of credit at a fixed rate throughout the period of credit. While we hope that this will increase our sales, I must stress that we do not intend that it should lead to a lengthening of the credit terms which E.C.G.D. are willing to cover. It is in nobody's interest to encourage a credit race, and we have to bear in mind in these cases the desirability of our getting paid for our exports as quickly as possible. The measures that I have outlined have been widely welcomed by industry.
I should also like to refer to, and of course must, the Government's new export tax rebate scheme which has now been successfully launched. The first claim period for rebates has just ended, and I expect British industry to take full advantage of this measure. It has rightly been described as a positive and practical token that the Government are prepared to support export endeavours with more than exhortation. The figure of about £80 million which the Government estimate they will repay in the course of a full year is a substantial one. Those industries with the best export record will, of course, derive the maximum benefit. Cars alone are likely to receive over £5 million, and the motor industry as a whole £10 million; the electrical manufacturers some £5½ million; the agricultural and horticultural machinery producers £2½ million, and so on. Properly applied, sums of this order must have a significant effect on the position of British products in overseas markets.
In removing the encumbrance of the indirect taxes which are now being rebated, I believe that the Government have taken a positive and useful step. There has. I believe, been some criticism that it does not go far enough; that larger rebates are available, for example, to

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German and Italian exporters. This criticism misunderstands the position. In
Germany and Italy there are turnover taxes which, broadly, are levied at all stages of production and distribution when goods change hands. German and Italian exporters can claim a rebate of these taxes on the goods they export. Similarly, French exporters are exempted from the added value tax. The nearest counterpart we have in Britain to these taxes is the purchase tax; and this, of course, is not charged on exported goods. Our own scheme affords relief in respect of the duty on hydrocarbon oil, the vehicle Excise duly and the small
element of purchase tax which enters into the costs of production, manufacture or carriage of goods exported from this country. The amount of the relief is determined by calculations of the taxes borne in the course of production of general categories of goods. Remissions of more than these amounts, or certain other types of relief—for example, the remission on exports of direct taxes, such as income and profits tax and social welfare charges—are ruled out by our international obligations in respect of export subsidies.
The figure of £80 million is a large sum of money for the Exchequer to forgo, and we hope that it will be used by firms in a manner best calculated to increase the value of their exports. In some cases it may be applied to reducing prices; in others it may enable previously unprofitable export business to be undertaken; or, again, it may be used to improve the service which the British exporter can offer to his overseas customers, or to develop new markets. The choice of method will vary according to the circumstances, and we are happy to leave it to the experience of those engaged in the trade, bearing in mind the national interest as well as their own.
I realise that, in the last resort, it is the efforts and enterprise of industry, and the competitiveness of its products, that win and hold export markets. The Government are anxious to give public recognition to outstanding achievements in the export field, both by individual and particular industrial units. The New Year's Honours List included for the first time a new citation, "For Services to Exports", and the House will remember that a week ago the Leader of the House announced that, with the approval of Her Majesty the Queen, the
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Government propose to introduce arrangements for awards to industry. Prince Philip has graciously consented to act as Chairman of the Committee which will
work out this scheme. This announcement has been warmly welcomed on all sides.
My Lords, at this point in my speech I must say a word or two about the Amendment which appears on the Order Paper. When I put my Motion down, my purpose was twofold. One purpose was to try to assist in publicising the measures the Government have announced. The other, and even more important purpose, was to initiate a debate in which noble Lords who have wide knowledge in the general economic and export field would participate. I have been a Member of your Lordships' House for only three years, but during that period I have come to realise that, on its best days, it has no rival for the outstanding contributions that are brought to a debate by the knowledgeable Members, many of whom can come only when their particular subject is under discussion. I had hoped that this debate would have been such an occasion, for I had in mind many noble Lords from both sides of the House, and from both sides of industry (although that is a term I do not like to use when thinking of the overriding national interest), and I was looking for constructive criticism but, even more, for helpful suggestions—suggestions that would arise out of practical experience in this vital matter of export stimulation.
In parentheses, may I say how much I welcome on the list of speakers the names of the noble Lords, Lord Erroll of Hale and Lord Byers, both of whom are old Commons colleagues of mine? The one comes to us with all the knowledge acquired in high ministerial position. Although he was introduced here only yesterday, I would not say that his is too hasty a maiden. The other, I know from experience, can lay about him with great vigour—indeed, he castigates so often, equally, both of the major Parties. I would say, too, that his speeches always contain a constructive element, and I hope that the more constructive element will predominate in his speech this afternoon. I very much look forward to the speeches of both the noble Lords whom I have mentioned.

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I can assure the House that when I put down the Motion I was not trailing my Party coat. When I saw the Amendment on the Order Paper, my first reaction was to say, "Ah! A good old Party dogfight!", and to dig up the failures of past Administrations—and they are not hard to find, for the incontrovertible figures of proof are there. But then, on reflection, it seemed to me that, on this matter of exports, on which the whole future of this nation depends, we want a united national effort. We want the nation to pull together, forgetting for this purpose Party differences and those elements of class warfare such as still exist in our society. This is the spirit of the agreement by the Trades Union Congress and the four employers' organisations on prices and incomes, which will be announced later this afternoon.
As an old hand at this political game, I do not shrink from Party controversy, and, having so often listened to the noble Earl, Lord Dundee, I know that he does not, either. But I also know that he recognises that the national interest transcends Party issues, and I am confident that he will join me to-day in hoping that the initiatives taken by the Government in this matter of exports will be of real help in solving our balance-of-trade problem.
My Lords, I end by saying that the study of the measures to stimulate exports will be a continuing process. This debate to-day will be carefully read; and, in consultation with the British National Exports Council and other organisations, we shall continue to consider ways and means of increasing exports. In the meantime, I invite the House to endorse the Motion which I now move.
Moved, That this House welcomes the initiatives taken by Her Majesty's Government to encourage the export of British goods.—(Lord Champion.)

BUSINESS
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I am afraid that the Statements in the House of Commons do not appear to have been begun yet.

EXPORTS AND GOVERNMENT POLICY
3.52 p.m.
Debate resumed.
THE EARL OF DUNDEE THE EARL OF DUNDEE rose to move, as an Amendment to the Motion, to add at the end: "but regrets that the policies and actions of Her Majesty's Government have done much to prejudice export prospects." The noble Earl said: My Lords, I am disappointed by the delay of the Statements which has rather cruelly precipitated my own remarks on your Lordships who, I am sure, were waiting to hear the announcements on incomes policy and firearms with keen anticipation. But in the circumstances I must now immediately move the Amendment to this Motion, to add at the end:
"but regrets that the policies and actions of Her Majesty's Government have done much to prejudice export prospects."
But before I do so I should like just to assure the noble Lord, Lord Champion, that I am very grateful for the moderate manner in which he moved his Motion and that we most genuinely and heartily welcome everything that Her Majesty's Government are doing to promote and encourage British exports. The only purpose of my Amendment—it is not proposed to alter one word or syllable of the self-congratulatory words of the noble Lord's Motion—is to set these words in their right perspective.
The Statement which we were expecting from the Prime Minister to be made in both Houses the week before last, owing to the circumstances of that week could not be made in Parliament, and it had to be issued instead to the Press by the
President of the Board of Trade. It is a Statement which I think describes some
very useful advances in the help which we give to our exporters. I am particularly grateful to the noble Lord, Lord Champion, for the clear exposition which he gave of this Statement, because it is a fairly lengthy document and it contains one or two of those lucid gems of English prose which we sometimes meet with in Departmental pronouncements, such as the last paragraph of the section on export finance, which reads:
"Taken together, these two charges will substantially widen the field within which exporters can get finance at the fixed rate of 5½ per cent. instead of either at fluctuating overdraft rates or at the 6½ per cent. rate

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hitherto applied to the longer-term element of export lending, and constitute a major development in our system of export finance."
I am quite satisfied that the intentions behind this epigrammatical observation are entirely benevolent.
The growth of the work done by the Export Credits Guarantee Department has been going on very rapidly for a very long time. In the early 1950's the insurance covered about one-tenth of our export trade. Last year it covered one-quarter. That represents a value of something over £1,000 million. The premium rates have been progressively reduced. There was a reduction only last August of 10 per cent. in the premium rate; but there was a much larger reduction, I think it was two or three years ago, which amounted to as much as 50 per cent. on shipbuilding and 25 per cent. on a fairly wide range of other goods. And this was accompanied by special facilities both for the small firms and for the longer periods of insurance. I quite agree with the noble Lord, Lord Champion that they ought not to be interminable periods; but we did extend these periods of insurance.
The British Export Credits Guarantee Department is probably the largest organisation in the world doing this kind of thing, and I think that British exports are better covered in this way than those of any other country. The improved facilities for insurance given by the Department enabled the banks also to give better and more stable interest rates. It was three years ago that the clearing banks agreed that they would lend money at the rate of 5½ per cent., which would not fluctuate with the bank rate but would remain constant on contracts worth £100,000 or more guaranteed by the Export Credits Guarantee Department. Now, as the noble Lord has just told us, this minimum limit has been reduced from £100,000 to £50,000, which I think will be very helpful.
I welcome very genuinely the noble Lord's announcement (or rather the announcement of the President of the Board of Trade which the noble Lord described again) of the formation of the Commonwealth Export Council, as he said, in double harness with the British National Export Council, with Sir William McFadzean as its chairman. Both he and his colleagues whose names are published in this State-
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ment are men of great experience and great public spirit. I am also very glad to hear the news in the Statement that more money is to be spent on trade fairs and British Weeks. I have not been lucky enough—which probably some of your Lordships have—to be sent to a great many of the trade fairs; but in the few which I have seen—and I have no doubt in all the others too—the public money which has been put up for them has been very well spent, and I think that a little more expenditure would have paid off. Advertising in trade fairs pays the nation just as well as advertising in newspapers or on television pays a private firm.
I do not propose to make any adverse criticism of the export tax rebates scheme which the noble Lord explained, although perhaps it may be a little more open to criticism than other measures of which he spoke. It is estimated to cost £80 million and it may perhaps be doubtful whether the value to our export trade will be more than marginal.
The late Government examined this question, of course, continuously, as all Governments must do. The reason why we did not apply any tax rebate scheme of this kind was that, on the whole, we are more dependent for our living on exports than most of our competitors and we felt that if an international race in the granting of fiscal privileges in exports were once to start and get going, then, in the long run, the disadvantages which we might suffer might be greater than the gains that we should derive from it. But now that the Government have taken the risk, let us all hope that we shall get away with it.
I think it ought to be added that in this matter, as a general rule, we have been far more scrupulous than most other countries. I understand that the Government's legal advisers are of the opinion that these tax rebates on indirect taxes do not contravene our obligations under GATT. If that is so, I do not really see any reason why this tax rebate scheme should be associated in any particular way with the so-called balance-of-payments crisis, which the Government claim to have discovered last autumn. I do not think that the Government have given any indication of any intention to remove these rebates if and when they

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should come to the conclusion that there is no longer a balance-of-payments crisis. If it should prove that they are of real value to our exports and if they are not followed by any adverse consequences, I think that they might well be continued indefinitely.
I think that all noble Lords welcomed the announcement which was made in this House last week, and to which the noble Lord referred again, that an Export Awards Committee is to be set up, under the chairmanship of the Duke of Edinburgh, to make awards, whose nature will be determined by the Committee, to units—firms or individuals; it is not necessarily defined at this stage—who have outstanding achievements in the export of goods or in technological innovations. Probably many of your Lordships took some part, as we were all asked to do, in the export drive two or three years ago, when many of us agreed to do what we could to stimulate interest among firms and local chambers of commerce in our own areas. We found, I think, a great difference between one firm and another and sometimes between one chamber of commerce and another in their outlook. There are a great many of them anxious to export more, especially small firms, but they just do not know how to begin, how to get the right information and set about it. It is the Government's job to see that they have the facilities for obtaining this information. I think that most of these bodies are not thinking mainly of simply making more profit by selling at home or abroad. I think that they are all keen to do what they can, if they had the opportunity, to help the country by a more adventurous export policy. I think that we ought not to overlook the good that can be done by a system of awards of this kind. Of course, their value cannot be measured, but they may do a great deal both to stimulate and to sustain the continuous interest in exporting more goods abroad which we must spread throughout the community if we are to achieve our aims.
The noble Lord, Lord Champion, I thought, sounded just a little hurt about this Amendment. He told us that he had been hoping so much that, in putting down this Motion, he would assist in publicising these good measures and that he would provide an opportunity for con-
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structive criticism and helpful suggestion. I should like to say to the noble Lord that nothing gives me more pleasure than to tell the Government when they are doing something really well. I like to do it. And I wish that my commendation of the Government for what they are doing could be entirely unrestrained. But even the most favourable comment on the most wonderful achievements must sometimes contain some qualifications—like the report of the schoolboy, who had a very bad report at the end of his first term but at the end of the second term had a much better one, which said "Now that this boy's handwriting is really beginning to improve, I have at last been able to discover that he does not know how to spell."
I am delighted, and I want to do all I can, to compliment the Government on the improvement of their handwriting but, in spite of the heartrending appeal of the noble Lord, I cannot altogether neglect my painful duty of pointing out one or two spelling mistakes. I sincerely hope it will not arouse the noble Lord's apprehensions that we are going to have anything in the nature of a "Party dogfight" about this—I think that was the phrase he used. Of course, in our political discussions, particularly about the economic situation, there are some things on which we must disagree and others on which we can agree. I would say to the noble Lord that I am always anxious to minimise as much as I can the area of disagreement and find as much agreement as is possible.
I think that we do disagree, and possibly must disagree, about our assessment of the present economic situation. I have said before, and must maintain, because I believe it to be true, that the state of our economy is both sound and strong and that it has been sound and strong during the whole of last year. I must maintain that, because I believe it to be true. I know that during the summer the rise of industrial production for several months seemed to have halted. But the latest figures in November have shown that in this November compared with last November there has been a rise of between 5 and 6 per cent. in our industrial production. That has not yet been translated into gross national products, but I should think it would be not far off a 4 per cent. increase in the gross national product, which is supposed to

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be our target. As for the export and import figures for December, which were published the other day, like the noble Lord, I do not think one should ever lay too much stress upon one month, but, so far as this one month goes, it seems to be implementing Mr. Maudling's estimate, which he made in advance a long time ago, that we should have a difficult period during the latter part of 1964, but that by 1965 exports would begin to rise and imports would begin to flatten out. That is a subject on which we may have to disagree.
What I think we should all agree about is that, however good the increase may have been in our exports—and it has been very great indeed over the last year: an increase of 4 per cent. in the last twelve months, and 8 per cent. in the twelve months before that—and however much satisfaction that may give us, we shall have to achieve a still greater acceleration in our exports if we are to achieve our aims of maintaining a gross national product increase of 4 per cent., and, indeed, if we are to hold our position as a leading country in the world. The reason why I have put down this Amendment is simply because I think there are certain features of the Government's foreign policy and economic policy which will prejudice our chances of being able to do this, and which will result in our exports over the next two or three years being less than they would otherwise have been. Both in foreign affairs and in economic policy I think they have damaged the future prospects of our export trade.
At the end of July, in almost the last debate we had in the old Parliament, we debated Foreign Affairs, and I had the duty of speaking for the Government. I then spent a little time dealing with the position of our exports to South Africa. Although it was in another Parliament, I do not want to repeat anything that I said then, but I must make our position clear in this matter. The Government's decision to stop the export of arms to South Africa has been represented to us as a moral issue, a question of right and wrong, which I cannot accept, and I must repeat to your Lordships the substance of what I said in our debate last July. There had been in the previous December, on December 4, a vote in the Security Council of the United Nations asking
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Members not to send arms to South Africa. The Motion was supported by the United
States and by many of our friends in the Security Council. We believed that it
was an entirely false and mistaken idea, and just as mistaken as the American idea that it was immoral for us to send any goods of any kind to Cuba when all the American countries had decided not to trade with them. We thought that was an entirely false policy which would not achieve the results that were desired to be achieved. We also thought that the policy of the majority in the Security Council in favour of stopping arms being sent to South Africa was mistaken and wrong.
We could have easily safeguarded our own position in the eyes of the world by vetoing this resolution, and perhaps it might have been better if we had vetoed it, but we did not do so, because it was not necessary. It was not a mandatory resolution under the Charter. We made a statement, as I told your Lordships last July—it was made by our representative Sir Patrick Dean—which plainly said to the world that we should go on with what we are then doing. We had already decided to stop sending to South Africa anything which would most probably be used for the purpose of civil repression, but not weapons which were necessary for the defence of South Africa against aggression. We stated to the world then that we were going to interpret the resolution in this way, and nobody had any doubt about our attitude.
You may say, if you like, that we erred in perhaps pandering to false and irrational emotion on this. And if you said that, I dare say there might be something in it. There is a general convention that you do not veto a resolution in the Security Council unless you are the Russian delegate, or unless it is a very exceptional case of necessity, and we felt that it was unnecessary to veto this if we made our position clear. Therefore, we were in my submission under no kind of moral obligation to take the action which the Government have now taken in banning all arms to South Africa.
Let me remind your Lordships of this. It is very easy to indulge in false emotionalism of this kind if you do not have a very large trade with South Africa, which most of the nations who passed the resolution had not got. It

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does not hurt them if we bear all the burden of applying this Resolution of stopping sending arms to Africa and reducing our own trade. I think it is wrong and foolish of us to do it. I think it is a shameful surrender to irrational emotionalism which we should have been in a position to stand up against, because, in my submission, it will not have the slightest effect on the South African Government's policy. It will not cause them to move further away from apartheid, a policy which we deplore and abominate. It will not make them in the least more liberal; if anything, it will make them rather more obstinate.
I feel that some people are somewhat selective in their ideas about this. Nobody ever suggests that by putting a ban on the export of arms to Ghana you will prevent President Nkrumah from sacking all his judges when they acquit an accused person he wants to be convicted, and then, having sacked the judges, insisting on the execution of the accused persons who have been legally acquitted of the crime with which they were accused. That is just as much an interference with basic human rights as apartheid in South Africa. But nobody suggests that the proper remedy would be a trade boycott. In the case of Cuba, of course, lots of people have suggested it. But we do not agree with the suggestion. We do not think that the right way of persuading other countries to change their domestic policies is to stop trading with them, unless, of course, you are going to war, in which event it would be a case of blockade.
Therefore, I greatly deplore that the new Government have made this false and foolish concession to what I regard as unreasonable emotionalism by those who voted for the Motion in the United Nations Security Council. And the cost to us will be very heavy. Our total trade with South Africa last year was £200 million of exports, against only £120 million of imports. We had a very large trade balance. How much of that was due to arms I have not the figures for, but it has been estimated that over the next three years we may lose at least £150 million of exports by having foolishly and unnecessarily thrown away this large and valuable market so particularly valuable to our aircraft industry, which is now in such difficulties. In return, we
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shall have gained precisely nothing. We will not improve the position in South Africa one jot or one tittle by this suicidal policy of refusing to export.
I think there is even less excuse for the deliberate affronts to Spain by the present Prime Minister, which have first of all cost us the contract, which was almost "in the bag", of £11 million for frigates, and which will probably cost us three or four times as much, which we should have received as a supplier to Spain of the material for her new programme of military expansion, if we had not first offended the Spaniards, who are a very proud and sensitive people, and then refused to have our usual annual exercises with them. I am afraid the consequence is that these contracts have now gone elsewhere, and it will be a very great loss to our export prospects for the next three years. These
injurious things which we have inflicted on our own exports in South Africa and in Spain, I hope are not irreparable. But they may be, and I am afraid the Government are not particularly concerned about repairing them.
When we come to EFTA, there I have more hope. Not only do I hope that we may be able to repair the damage that has been done to our relations with EFTA last autumn, but I hope and believe that the Government are anxious, as we are, to put them right. It is most essential to our future as a trading country that this should be done. What we want in order to get a really big increase in our export trade is a much larger home market—a much larger free market. The rejection of our application to join the Common Market two years ago may be final, or it may not—we do not know. But for the moment there is no prospect of our joining. But we have this partnership with these other six European countries—seven or eight, with the associates. Their population is only half that of the European Economic Community, but their wealth, their income, is considerably more than half; it is more like three-quarters. Not only is EFTA an extremely valuable base for common free market production in itself, but our association with these other EFTA countries, and our retention of their confidence, will be an enormous help to us in overcoming the obstruction to the Kennedy Round, which is another of the great export problems, far more vital to the future of our trade

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and of world trade than anything which was mentioned in the speech of the President of the Board of Trade the week before last.
If we can keep the confidence of EFTA, which was very nearly lost, and certainly gravely lowered, by the precipitate action of the Government in imposing these import surcharges last October, we shall be making the best use of the best hope we have of achieving a real major breakthrough in world trade. I think that the failure to get into the Common Market was a blow, not so much to our exports as to the prosperity of the whole Free World. I think that our association with EFTA is one of the most hopeful instruments for the future in repairing that misfortune.
I think the Government have also prejudiced the future of our export trade by lowering our competitive power and by raising prices. I do not think it was necessary to have this autumn Budget putting an additional 6d. on petrol and 6d. on income tax. I know that it is justified by the Government on the ground that they needed the money to pay improved pensions next year. But I was one of those who believed Mr. Callaghan only two days before the Ejection on October 14 when he said at Cardiff that the Labour Party would be able to pay for all its improved social services out of economic growth. One reason why I believed that was that we ourselves had done so for the last thirteen years. We had raised pensions for a married couple from 40s.-odd to 109s. but not by increasing taxation—we had actually reduced taxation considerably during the whole of that period. We thought the Labour Party would be able to do the same thing.
I think it is a big error at this time to raise our cost of production, as must be done if you put up the price of a commodity like petrol and if you raise direct taxation. We do not yet know what the corporation tax is going to be like, although it looks very much as if it is going to be a form of double taxation—taxation on the profits of companies, with income tax paid all over again on anything over that which the companies distribute in dividends. All these things are bound to put up our costs of production and to lower
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our competitive power in the markets of the world. What we need is more competition and lower prices.
I was glad to notice that in the debate in another place the other day the Prime Minister indicated that the Government were preparing a Bill dealing with monopolies and restrictive practices. That is a measure to which we should have given first priority, if we had been in office now, having already dealt with retail price maintenance. I am very glad that the present Government are preparing this measure. We need more competition. I will not argue about the bank rate, because I know that the Government are as anxious to bring it down as we are to see it brought down. I will only say that in my view it need never have been raised if the Government had not needlessly created an atmosphere of crisis in the economic situation. That may be a matter about which we disagree, but I think it is true, and I am bound to say it. What we want is more competition and more friendship with foreign countries, even those with whose internal structure or policies the Government disagree. Do not throw way trade for the moral satisfaction of abusing a country whose domestic policy you do not like. We want more readiness to trade with other countries, in spite of political disapproval, and we want to do more to promote freer world trade.
If I may very humbly submit to the Government the advice which I would give to them, it is this. Rescind your mistaken decision to stop sending arms to South Africa; try to make friends with countries who will be good customers, like Spain; try to repair the damage to confidence which has been inflicted upon EFTA; and abolish the extra taxes which were put on in the Budget last autumn. I know that we cannot expect taxation to be heavily reduced, but at least it ought not to have been increased. Abolish those taxes, take off the import surcharge, bring down the bank rate, advance the date for the Bill dealing with monopolies and restrictive practices, and, if you find your timetable is too overcrowded, then make room by throwing overboard the out-of-date and foolish Bill for creating a national monopoly in steel which would, in my view, inflict greater loss on

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our future export trade than anything that may be gained by all the measures which the noble Lord, Lord Champion, has so clearly explained to us. When the Government have done these things, but not before, we shall then be willing to give them our unqualified congratulations on encouraging the export of British goods. I beg to move.
Amendment moved—
At the end of the Motion to add:
"but regrets that the policies and actions of Her Majesty's Government have done much to prejudice exports prospects."—(The Earl of Dundee.)

PRICES AND INCOMES MACHINERY
4.32 p.m.
LORD SHEPHERD: My Lords, it may be for your Lordships' convenience if I now repeat a Statement on Prices and Incomes Machinery that has just been made in another place by my right honourable friend the First Secretary. If I may, I will use his own words:
"The House will remember that on December 16 the Government joined representatives of trade unions and management in signing a Joint Statement of Intent on Productivity, Prices and Incomes. That Statement recorded agreement on the need to set up machinery, first, to keep under review the general movement of prices and of money incomes of all kinds; and, secondly, to examine particular cases in order to advise whether or not the behaviour of prices or of wages, salaries or other money incomes was in the national interest.
"I am now glad to be able to tell the House that after further consultations and after discussion in the National Economic Development Council we have reached agreement with the representatives of trade unions and of management on the machinery and procedures that are needed for these purposes. The first task which I mentioned—that of keeping under review general movements in prices and incomes of all kinds (profits, wages, salaries etc.)—will be undertaken by the N.E.D.C. The second task—that of examining par-
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ticular cases—will be undertaken by a National Board for Prices and Incomes. The Prime Minister has authorised me to inform the House that Her Majesty the Queen has been pleased to indicate that she would be prepared to approve that a Royal Commission be set up to discharge these duties. The National Incomes Commission would be dissolved at the same time.
"The new Board will have a vitally importantrô le to play, as its work develops, in making effective the whole policy for prices and incomes. I am confident not only that its recommendations will be accepted by the parties directly concerned but that they will have a growing influence on all who are responsible for settling the levels of prices and incomes.
"Fuller particulars of these proposals are set out in a memorandum, prepared in agreement with the Trades Union Congress and with the employers' organisations, which will be published as a White Paper and which is now available in the Vote Office."—
It will be in the Printed Paper Office of your Lordships' House—
"I understand that the Northern Ireland Government agree that the proposals in the White Paper should cover the whole of the United Kingdom.
"The next stage will be, after further consultations and discussion in N.E.D.C., to formulate the norm and criteria which will guide the National Board for Prices and Incomes.
"The discussions on these important questions of national policy have, as is right, been held with those organisations which are most generally representative of the interests of employers and of workers. We recognise, of course, that there are groups of workers and employers—many of them in the public sector—who have not been directly represented in these discussions. The Ministers concerned are in touch with the main bodies concerned."
My Lords, that is the end of the Statement.
THE EARL OF DUNDEE: My Lords, I see from the Statement that a White

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Paper is in the Printed Paper Office, and clearly it would be the general interest that we should not spend time in discussing this Statement until we have had a chance of reading the White Paper. I do not know whether I might ask, off the cuff, just one question of the noble Lord: that is, whether he can tell us what is the essential difference between this new National Board for Prices and Incomes, which I am delighted to see has the support of the trade unions, and the National Incomes Commission, which was also a Royal Commission and which, to our great regret, the trade unions would not support and which seemed designed for precisely the same purpose?
LORD SHEPHERD: My Lords, the difference, I would suggest to the noble Earl, is this. It is a question of the climate under which the two bodies have been set up. The previous Administration were unable to obtain the co-operation and support of the trade unions for the National Incomes Commission. The setting up of this new Board is due to the consultations and understanding by all bodies and the spirit and the atmosphere that surrounded it; and that, I would suggest to the noble Earl, is one of the reasons why we, as a Labour Government, shall obtain this incomes policy upon which exports so very much depend.
THE EARL OF DUNDEE: My Lords, the difference is entirely due to the climate, and not to the policy or the plan. Did the noble Lord not say that there was another difference?
LORD SHEPHERD: My Lords, the difference in this particular case is that the trade unions are prepared to work with this particular body.

FIREARMS LEGISLATION
4.38 p.m.
LORD STONHAM: My Lords, with your Lordships' permission, I should like now to make a statement on Firearms Legislation which my right honourable friend the Home Secretary has made in another place to-day. I will use his own words:
"I announced on January 21 that I was examining the adequacy of the present legislation affecting firearms, in
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consultation with chief officers of police. Our object has been to strike at the criminal, the potential criminal and the hooligan, while limiting as much as possible the restrictions placed on the law-abiding citizen and the burden placed on the police. The conclusions that the Government have reached are as follows:
"First, we shall propose to Parliament that the maximum penalties under the Firearms Act, 1937, for the possession of a firearm without a necessary firearm certificate or during a period of disqualification shall be increased from the present maxima of three months' imprisonment, and fines of £20 or £50, to maxima of six months and a £200 fine upon summary conviction, and three years' imprisonment and an unlimited fine upon conviction on indictment. I am also reviewing the penalties under certain related provisions, such as making a false statement to obtain a firearm certificate.
"Second, the Government have considered carefully the possibility of extending to shot-guns the firearms certificate procedure but have decided against it. There are probably at least half-a-million shot-guns in legitimate use throughout the country, and the burden which certification would put on the police and the users would not be justified by the benefits that would result. Instead we shall propose to Parliament that it should be made an offence, with maximum penalties of six months and £200 on summary conviction and five years and an unlimited fine upon conviction on indictment, to have any loaded firearm, other than an air weapon, in a public place without lawful authority or reasonable excuse. I believe that this should deter criminals and hooligans from carrying loaded guns—which is the real danger.
"Thirdly, in order to deal with criminals and potential criminals who carry concealed weapons, especially when travelling in cars, the Government propose to ask for a new power for the police to stop, search and detain persons in public places on reasonable suspicion that they are in unlawful possession of a firearm. The use by the police of this power would

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be closely supervised, and we are satisfied that it is required to prevent a rise in armed hooliganism and the use of firearms by criminals.
"Fourthly, as the weapons used are in the main stolen or illegally imported, I am re-examining the provisions of the 1937 Act relating to the registration of firearms dealers with a view to widening their scope and to increasing the control exercised over matters such as security of premises. "Fifthly, I have it in mind, in the period immediately before new penalties come into effect, to arrange a further amnesty so as to encourage those who have firearms for which they have no real use to surrender them to the police.
"I am confident that these measures would help the police in their fight against violent crime and I am arranging for the necessary legislation to be drafted."
LORD DERWENT: My Lords, we are grateful to the noble Lord for repeating that Statement. We are probably all agreed that some steps of the kind outlined in the Statement are now becoming necessary. There are certain questions of considerable importance and perhaps some difficulty involved in the Statement, and I have the feeling that we should probably do better, before making any comment on it, to wait and see the proposed legislation, because these points are not really suitable for discussion now.
LORD REA: My Lords, I should like to endorse what the noble Lord has just said. I think the whole House will welcome the Statement and the decision. It is sad that we have to come to give further powers to the police, but it is necessary, and of course we can trust our excellent police to use these powers most judiciously. One small point comes to mind to be taken into account when we come to it: air weapons are not included, but, as the noble Lord knows, they can be lethal. Perhaps that could be explained a little more in due course.
LORD STONHAM: My Lords, I am most grateful for the welcome given to the Statement in general by the noble Lord, Lord Derwent, and of course we shall have an opportunity to discuss details later on. I am particularly obliged to the noble Lord, Lord Rea, for his
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remarks and grateful, too, for what he said about the discretion of the police. I think it would not be inappropriate at this stage if I sought your Lordships' agreement to a tribute to the courage the police have displayed, particularly in recent months—courage which is really beyond all praise. It is gratifying also to know that in the fifteen incidents involving shooting in North and North-East London last December, the police made arrests in every single case. It is obvious that there is general agreement in this House, and I believe throughout the country, to the fact that the time has come, however reluctant we may be, when there is need for stiffer penalties, and I believe the proposals my right honourable friend has put forward will meet a very pressing need.
LORD CHESHAM: My Lords, as I asked the noble Lord the other day what I thought to be a rather pertinent question about this matter, I wonder whether he will allow me to say that while, of course, we have not had time to go fully into the implication of what he has just announced, it does seem to me, at face value, that, in principle, all legitimate interests in firearms will welcome what he has announced.
LORD STONHAM: My Lords, I am most grateful to the noble Lord, Lord Chesham. He will be aware that all legitimate interests have been fully consulted, and I think the proposals we have now decided to put forward will meet the need and will be supported throughout the country.
LORD MANCROFT: My Lords, may I join the noble Lord, Lord Derwent, in concurring that we should suspend detailed investigation until we see the legislation? But I hope the noble Lord, Lord Stonham, will forgive my expressing approval of what he has said, in view of the fact that he appears in his Statement to have embodied nearly all the suggestions I have put to the Government on the last 22 occasions I have raised this matter in your Lordships' House. I presume the question of arming the police has been once again gone into very thoroughly, and the fact that the noble Lord has made no further statement about it to-day means that the situation is as it was and that no change of policy is anticipated in this regard.
LORD STONHAM: My Lords, I am grateful to the noble Lord, Lord Mancroft, particularly, of course, because of his considerable experience in the office I now hold. It is the case that further consultations have taken place with the police with regard to arming the police, and it has been agreed, and is still agreed, that there should be no change in the position that has endured for so long.
LORD CHORLEY: My Lords, may I invite the noble Lord, Lord Mancroft, to come over on to this side?

EXPORTS AND GOVERNMENT POLICY
4.48 p.m.
Debate resumed.
LORD WILLIAMSON: My Lords, I think we should all welcome this discussion in your Lordships' House on the vital question of Britain's external trade, and particularly exports. We have had this afternoon two very temperate speeches, if I may say so, and we should be grateful to my noble friend Lord Champion for his detailed and informative exposition of the Government's methods and proposals for dealing with the situation. So far as the noble Earl is concerned, I always enjoy his speeches and I thought when he sat down that it could be summed up like this: that if the Government would rescind all the measures that they have taken and adopt all the measures which the Party of the noble Earl recommends, then everything would be all right.
My Lords, I believe that all our standards—our security of employment, standard of living, pensions, health scheme, defence—depend on our being able to sell to the rest of the world a sufficient proportion of our production and our manufactures. And I further believe that no Government, of any political complexion, will be able to maintain the very high standards that we have reached, and the higher standards to which we aspire, unless we have a much better export trade and a much greater production. I believe that our failure in this field will mean without doubt our inability to solve ever-pressing national problems.
There are those who believe that other nations in Europe whose standard of
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living, until a few years ago, was much behind our own have now caught up, and that in the not far distant future, unless there is a dramatic change, some of these nations will exceed our standards. In fact it is being said that, possibly in a few years hence, from these islands we shall be looking across the Channel with envy at the standards they have reached on the other side.
Our export problem is not something which has just happened. It might be better for us if it had been, because we might have been able to get a much more expeditious solution. Unfortunately, it is a problem which has been building up since the end of the war, and certainly over the past fifteen years; and there comes a time when, inevitably, elementary economics comes into play. This has happened on several occasions, in the crises that we have been having every few years, and in the crisis that we are in now. For fifteen years world trade has been increasing, and for fifteen years our percentage share of that trade has been decreasing.
I was amazed at what I thought was the complacency of the noble Earl, Lord Dundee, when he said that he disagreed with the assessment of the economic situation. It is this complacency, which has been shown over the past fifteen years, that has pitchforked the nation into the present sorry situation; and evidence about that is coming from everywhere. I happen to be privileged to be a member of the National Production Advisory Council on Industry, together with many of my friends who are here sitting on the other side—the noble Lords, Lord Mills, Lord McCorquodale of Newton, and others—and at those meetings I met many Conservative Ministers.
I have preserved the Treasury Bulletin with which we were provided to help us in our discussions. Among the tables in the Treasury Bulletin was one concerned with the shares in world trade in manufactures, and in every Bulletin we received our share was shown to be going down. I have the figures here. Our share of world trade in 1937, with a 15 million population gainfully employed, was 22 per cent. In 1950, just before such other nations as Western Germany had got into their stride, our share was 27 per cent. But then it started to fall, and it has continued to fall, until now,

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I understand, it is 14-9—Let us say 15—per cent. This, against Western Germany who started in 1950 at 8 per cent., and has now pushed up her export trade to 20 per cent. of the total.
Constantly at these meetings I pointed out this trend, and I asked if remedial measures could be taken. But the only measure that was taken was that the table was removed from the Bulletin. Then we had to press for the table to be put in again. It took about eighteen months of pressure; I made myself a nuisance about it at every meeting. But the table which was put in, and which appears to-day, is meaningless to anybody who sees the Treasury Bulletin. But, at any rate, if we get the Government publications we can find these figures. I give them to the House because of what, I repeat, I thought to be the complacency of the noble Earl opposite.
This is a bad performance in any language and on any grounds. The noble Earl will forgive me for referring to his speech on April 10, 1963, which I fully enjoyed. Then he said that we happened to be more dependent than anybody else on exports. I agree. I do not think that anybody who knows anything about the problem would disagree with that view: that we are more dependent than anybody else on exports. But in the face of the evidence, and the record of the Conservative Government in this connection, one would not be led to think that it was so important. The "valiant years" of 1940 were followed by the wastage years of the 1950s—twelve years in which exports were falling, and no action whatsoever was taken to deal with it. That was complacency.
We were told "Oh yes, but our volume of exports is increasing." Of course it was, because world trade was increasing by 7 per cent. in some years, and at an average of 4 per cent. during the whole of that time. I say that world trade was substantially and progressively increasing, and of course it is to be expected that exporting nations will strive to get a share of it. We in this island, being without any raw materials, must manufacture and export to get our food and our raw materials.
I have extracted from your Lordships' Library the O.E.C.D. Observer, No. 13, for December, 1964, which shows that, of the increase in the volume of total
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exports from 1953 to 1963, of the eighteen nations who had a share in it in world trade, we are next to the bottom. Belgium has 8-5 per cent.; Germany 11-70 per cent. Greece, Iceland, Italy, Japan, Luxembourg, and others, are above us. The lowest in the list is the United States of America. But the United States is not unduly bothered about exports. While we sell probably about 20,000 motor cars, the United States is selling 150,000 in her own home market, and anything she is exporting is surplus production so far as she is concerned. There we are. With regard to this increase in world trade, we stood at the bottom of the list.
I have come across a rather large volume from Sweden. Your Lordships can see the size of it, but I have extracted one page. Sweden is in a good position in the
world export trade. But the Swedish Government, speaking to Swedish employers,
said "Export or die". This page states that
"As competition in the arena of world trade grows more fierce with each Annual Report, Swedish industry braces for the struggle ahead."
The first sentence of the article says:
"Swedish exports doubled in the past 10 years—in volume as well as in value. They grew twice as fast as the gross national product."
Sweden is a vast country, many times the area of these Islands, with raw materials such as minerals, timber, and so on. Yet Sweden is aware of the fact that she must export or die, and she is making a success of exporting. I see no reason why we should not be making a better show ourselves.
What is more incredible, but nevertheless true, is that in recent years our imports of finished manufactured goods have exceeded our exports of the same products. We are a manufacturing nation. I have the figures here, and will not weary your Lordships with them, but they are taken from the Economic Report for 1963. They show that we are importing more finished manufactured goods than we are exporting. How can we get the balance of trade in our favour in these circumstances?
Many firms are making a valuable contribution and doing all they possibly can to boost our exports. But there are many firms, efficient firms and prosperous firms, which find it easier to trade in the prosperous home market. They see no reason

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whatever why they should take on the more difficult export business. I believe that these firms are the "niggers in the woodpile", and at some time some Government will have to take action against them. If, as my noble friend Lord Champion said, exhortation is no use, then what will have to be done? I would suggest—and this would be a very serious step to take—that it should be by limiting, or if necessary stopping, their claims on imported raw materials.
The noble Earl, Lord Dundee, will forgive me if I refer to his speech in April, 1963, when he said [OFFICIAL REPORT, Vol. 248, col. 1004, April 10]:
"… we cannot sell our exports because of costs which are going up … "
He went on to say [col. 1005] in connection with the crisis and the restrictive measures of 1961:
"Unless we can manage to keep the increase of incomes a little behind, and not a little in front, of the increase in production, I do not see how it is possible to avoid the same thing happening again"—
meaning the recurring crises and the credit squeeze. I do not quarrel with what the noble Earl said on that occasion. I fully agree that incomes cannot continue to rise without regard to increases in overall production. I also agree that price is one element in the exports; but it is not the only element. Certainly design, prompt delivery and other factors are equally important. Nevertheless price is an important factor.
Why did not the Conservative Party pursue a more equitable wages policy with the unions, as indeed has now been done by this Government? The Conservative Government pursued an incomes policy, but it was a policy related to wages and salaries only. Command Paper 1626, of February, 1962, clearly indicates that this was a question of restraining and limiting wages and salaries, with no suggestion as to how rents, profits or dividends were going to be dealt with. In answer to the noble Earl's question, I think that is the reason why the unions would not co-operate with the National Incomes Commission. They were suspicious also about the action taken in 1961 against the lower-paid Government workers and against the hospital workers, and so on.
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So we should welcome the remarkable achievement of the present Government. In a little over three months they have secured the goodwill of the employers' national organisations and the T.U.C. to co-operate. Unanimous agreement on the Statement of Intent was a great step forward. The announcement to-day of unanimous agreement to serve on the National Board to be set up for reviewing prices and incomes is a massive step forward. I know we all hope that it will be successful in its deliberations and consultations. To accomplish this in so short a time is an achievement beyond the wildest dreams of the most optimistic.
There are many speakers, and I must not take too long. The noble Earl suggested that the Government could do the best thing by rescinding some measures and adopting others. We shall know in time whether or not the measures which are now
being adopted by this Government are successful or not. If these measures fail, then a very serious situation will arise for this country which, in my view, will warrant an all-Party committee, besides employers and T.U.C.—the political representatives getting together to see if they can find a solution to the nation's problems.
5.6 p.m.
LORD ERROLL OF HALE: My Lords, I hope that your Lordships will not take objection to my making my maiden speech on the very day following my introduction to this House, but this debate is one in which I particularly wish to take part. My natural sense of diffidence on such an occasion has been assuaged by the very generous remarks made by the noble Lord, Lord Champion, in the course of his speech introducing this Motion. Naturally, on an occasion of this sort, and in order to avoid controversy, I shall confine myself to the terms of the Motion and will leave others to develop the arguments in favour of the Amendment. However, I shall take advantage in the course of my speech of the request by the mover that suggestions should be made. And while I hope that these will be constructive, one or two of them may appear to be critical of the Government's proposals. I would assure your Lordships, however, that I do not intend to embark on controversy this afternoon.

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I was particularly interested in the remarks of the noble Lord, Lord Williamson, when he referred to the National Production Advisory Council for Industry. I well remember his contributions when I myself was a member of that Council. I was interested to hear him reading out our, apparently, deplorable performance in that particular league table. But, of course, as he himself well knows, there are other economic league tables in which Britain comes out near the top and not at the bottom. Although it may have been rather naughty of us to remove the table from the Treasury bulletins, the new Administration have done something much more drastic. They have wiped out altogether the National Advisory Council for Industry, so that the noble Lord is no longer able to be a member of it at all.
I prefer to look at the record of the last five years of the last Parliament in another way, in terms of what we actually exported. In the fourth quarter of 1959 Britain exported £903 million-worth of goods, and in the fourth quarter of 1964, five years later, our exports for the quarter had risen to £1,110 million, an increase of over £200 million in value over the five-year period. This steady rise did not happen by accident. It was the result of a sustained export promotion drive during the whole of the last Parliament. I was at the Board of Trade myself for four out of those five years, two years as Minister of State and two years as President. I should like to assure your Lordships that we considered many schemes and proposals, some of which were rejected and some of which were successful. Among those adopted were successive reductions in E.C.G.D. rates. The average premium came down from 9s. 7d. per £100 in 1958-59 to 6s. 4d. per £100 in 1963-64.
We introduced the system of financial guarantees for large contracts. We also introduced fixed-interest finance for certain contracts, to which my noble friend Lord Dundee referred in his own interesting speech. We introduced the "small exporter" scheme; the Export Council for Europe was introduced, and we brought about a steady expansion of the "business visitors" scheme. There was a tenfold increase in spending on overseas fairs and British Weeks abroad, and there
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was greatly augmented publicity for Board of Trade services. The proposals which we are being invited to welcome to-day are a continuation and extension of what was initiated by the last Government, together with certain proposals which in fact we rejected for what we thought to be very good reasons. In repeating some of these reasons to-day, I hope that I shall not be thought to be controversial, as I shall try to suggest alternative methods of achieving the same ends.
I should like to begin, first, with the import surcharge. Your Lordships may wonder what the import surcharge can have to do with exports as such, but it does have now, and will have in future, I believe, a marked effect on our ability to export and on the reception created for our exports. Already I hear of a number of Continental firms who are considering switching their purchases from Britain to other countries, because of the adverse effects of the import surcharge on the exports of them and their friends to this country. Then again, other nations who have been faced with balance-of-payments difficulties have often, to put it colloquially, broken the international trading rules. In the past, we have always been able to bring the strongest of pressure to bear, and often with success, on the grounds that we have not broken international trading rules, and that they should not do so either.
Of many cases that I recollect in my own personal experience, the one that I think illustrates the point as neatly as anything was the decision of the Italian Government to restrict the subsidy to Italian farmers to those farmers who used Italian-made tractors and not British tractors. We pointed out to them they would be in breach of GATT, and that this was not in the best interests of international trade. The result was that they removed this discrimination, and so British tractor exports were able to flow once more to Italy. But now, I am sorry to say, we have made a much bigger breach of the rules than any other member of GATT, and I believe that something like nine commercial treaties have been broken. Having set such a bad example ourselves, we must expect other countries to rush to impose surcharges on our exports without notice at any time in

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the future, and it will be much more difficult for us to make any legitimate complaint.
I wish that there could have been some consultations with our EFTA partners (with whom in the last Government we had the closest and most friendly relationships) and possibly also with the principal GATT trading partners, in an effort to reach some agreement in advance. Personally, I should have preferred to see quantitative restriction on a selected range of imports. This is
permitted by GATT, and we should not have been in breach of our international obligations. Anticipatory buying, which was taking place before the introduction of the surcharges a month or two ago, could have been taken into account in the quantitative system when fixing quotas. Moreover, with such a system the Government know far more precisely by how much the import bill will be reduced and when the reductions will take place.
I should like now to say a word about the export rebate. I was particularly interested to read about this scheme in the Government's White Paper published at the end of October, because in 1960 there was some agitation for cash incentives for exports. As Minister of State it fell to me to rough out a scheme which was very similar to the one that is now being introduced. I roughed it out for consideration by my colleagues in the Government, and it was rejected at the time for reasons which I believe to hold good to-day. First of all, there was then, as there is now, no widespread demand for such a scheme in industry. Secondly, there is the very high cost, estimated by the Government at some £80 million of taxpayers' money, for what will be a relatively modest inducement. Thirdly, the rebate is being paid out in respect of existing exports, a major proportion of which require no such incentive and which will continue in any event.
Then there is another development of which I have already seen some positive signs; and that is, that foreign buyers will expect reductions in our export prices, and will press our exporters to share with them some of the rebate which our exporters will get—indeed, I am told that they are already making such demands. If, overall, only a quarter of
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the rebate has to be surrendered in this way to our overseas customers, Britain will in fact have to export an extra £20 million of goods this year in order to keep export earnings at exactly the same level as they would otherwise have been.
The next objection to the export rebate scheme can be summarised in one word—boredom. After the first two or three years, everybody will be bored with having to fill in all the forms in order to get the money back. I say that because I do not see that there can be any easy way of dispensing with the scheme, because it represents (and this is another objection to it) a modest, once-for-all, one-way devaluation on current account. It cannot be repeated, but it will presumably have to be maintained, because at no time could we contemplate our exports becoming more expensive again. So for ever more firms must go on filling in the forms to receive a usually fixed amount of money back at the end of the year. Sums which will be written into their accounts will come to be taken for granted after the initial novelty has worn off.
In an effort to be constructive, I should like to make the following proposal as an alternative. I believe that if one is to have a rebate scheme, a much better way would be to relate the cash refunds to increases in a firm's exports above a suitable base period. I suggest that, say, 10 per cent. of the total rebatable sum for any particular firm should be refunded for each 1 per cent. increase in exports. This would provide a sizeable incentive to firms to increase their exports and not just to keep them at the same level; because, clearly, No 1ncrease, no refund. I estimate that such a scheme would cost about £25 million per annum, and that it would save something like £55 million a year of the taxpayers' money. I shall in a few moments have some suggestions for spending some of that £55 million in other ways which I think would be more useful.
If I may turn to some of the proposals announced by the President of the Board of Trade in his Press statement on January 27, I should like to make some comments on some of his intentions. The publicising of Government services to exporters is something that I certainly

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welcome. I think that a fresh drive is needed every two or three years. I am doubtful about the merits of general Press advertising, because I believe that that can be expensive and the effect is often deadening. I think that personal contact between officials and firms, and between Ministers and firms, is probably the best method of all. But certainly I am glad that fresh publicity is to be given to the wide range of services.
A great deal in the Press statement is made of export councils and export committees. We know how effective a good export council can be—for example, the Export Council for Europe which was set up by my predecessor at the Board of Trade, Mr. Maudling. But it does not follow that, because one or, perhaps, two export councils are a success, we should attempt to cover the whole globe with a mosaic of such councils. Since October, no fewer than seven new committees or councils have been set up. I certainly accept that, at the right time, and with the right men on it, a council can do excellent work; but they are by no means a universal panacea or a substitute for the hard job of going out abroad and selling your own firm's goods. And it must not be forgotten how much of the businessmen's time they can absorb—time which would otherwise be spent in exporting their own firm's products.
Also, we are, perhaps inevitably, at the present time stressing the word "export" in such councils and committees, but my experience in travelling abroad on export promotion work is that many countries, particularly those with balance-of-payments difficulties, would like some help with selling their goods to us if they are to be able to buy more from us. I would prefer the regional export councils to be called mutual trade councils, and be given a remit to help imports into Britain where this would generate good will for our exporters. After all, one country's exports are another country's imports; and, as the world's greatest importing nation, I feel sure we could afford, with our expertise and knowledge, to help some of the smaller and younger nations to develop their exports to us without doing any great harm to our economy, and bringing a very substantial dividend of good will in return.
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My Lords, I was glad to see that there is to be increased spending on trade missions, and that both inward and outward trade missions are to be supported. As regards the inward missions, I should be glad to learn whether these are to supplement or to replace the existing and very successful business visitors' scheme, which has been running for a number of years. Several years ago about £30,000 a year was being spent on bringing an increasing number of potential buyers to Britain, at public expense, in order to see what we had to offer. This scheme had very good results, and I hope that it is not being wound up in favour of the new scheme. Of course, many of the business visitors to Britain—indeed, the vast majority of them—come here at their own expense, and they are coming here in ever-increasing numbers in order to see trade fairs put on in London and elsewhere. There is a great need now for a new exhibition centre in London. I think that the Crystal Palace project is probably the most suitable. Now that more money is available for export promotion and associated services, I hope that Her Majesty's Government will soon be able to announce a definite start on this important and valuable project.
I give a welcome, too, to the increased amount of money which is being made available for British trade fairs and British Weeks abroad. During the life of the last Parliament, expenditure under this heading increased tenfold, from quite a small sum to something like £1 million per annum—and I think we got very good value for money. But I should like to suggest that there is a limit to the number of overseas promotions which British industry can man up in any one year, and I think it is possible that that limit may well have been reached already. I therefore suggest that, if there is more money to be spent under this heading, it is better that there should be, so to speak, a bigger Government spend on each fair rather than on maintaining the existing rate of grant for a larger number of ventures.
I was interested to read in the Press statement about the permanent exhibition centre which is to be set up in New York. This, of course, has been tried before, but I think it will be an interesting experiment. But the real problem of these permanent exhibition centres can be summed up in one word—namely, dust.

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Who is going to keep the exhibits dusted? Unless the exhibition is permanently manned up by people qualified and able expertly to demonstrate the complicated equipment, it inevitably acquires a rather tattered and woebegone look and gets rather dusty; and there is nobody to explain to potential purchasers the merits of articles on display. I would suggest that the Government might study the lessons which are to be learnt from the British centre which was set up in Mexico several years ago, but which was subsequently closed down. It was an ambitious experiment. A number of stands had been put up in a former late-night dance hall of rather dubious virtue which had the advantage that all the taxi drivers knew exactly how to get to it. But, there again, the trouble was that, unless it could be manned up all the time, it acquired a rather woebegone look, and it was finally closed down.
Also, I think the experiment of collective market research is worth trying again, although your Lordships should remember that it has been tried before m the form of the British Export Trade Research Organisation, which had to be wound up for lack of support and interest. As to the meetings with industry which are to take place, and which were mentioned in the Press announcement, I am sure it is right to repeat this exercise which was so successfully carried out in 1960 and 1962. I still think it is probably best to continue with meetings of individual firms and Ministers and officials, rather than with group exercises. Although time-consuming, they can be more rewarding.
I myself believe that the biggest field for increased exporting is that of components and assemblies. I remember, for example, that there is a firm in the North of England which is making car springs and sending them to Detroit for incorporation in American-built motor cars. There is also a large firm in Peterborough manufacturing diesel engines which are sent across the Atlantic for incorporation in American trucks and vehicles. This is a field in which I think there is scope for a great deal of expansion in our exports, not only to America but also to many other countries; and, by sending components and assemblies abroad we do not as a rule arouse so much hostility and adverse comment from
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domestic manufacturers of completed products.
I am sure it is right to support the export efforts, and to introduce them to small firms. I welcome here, also, the renewed attention which is being given to the small firms. I am sorry to say that I have not much hope for the "piggyback" scheme. That, also, was tried before. Some years ago a number of big firms offered to help little firms, but they met with little or no response, because of the unreasonable suspicions and reluctance of the small firms themselves. I should like, without going into detail (for I do not wish to take up too much time on this occasion), to welcome the extension of facilities in E.C.G.D., and to suggest that perhaps the time has come for another "across the board" percentage reduction in rates, similar to that which I introduced in April, 1963.
On the scheme for awards for export achievements, I should like to make some comments because the possibility of such a scheme was very thoroughly examined in 1961, and it was turned down then for a number of good reasons. I think that, as the scheme is now to be launched, perhaps the best way for me to make my comments is to say that I think the Awards Committee which is about to be set up may well find it difficult to avoid some of the pitfalls of such a scheme. For example, it will be very difficult to secure fairness as between one firm and another. Then, there is the great problem of how to start off; because there really ought to be a big initial issue of awards to the very many firms, both large and small, which are currently achieving great export successes year in and year out. Why should the awards go only to the "new boys"? Awards certainly ought to go to firms such as the great vehicle firms, or the engineering firm in Leicester which is currently exporting over 90 per cent. of its output. All those firms should get awards, and it would be quite unfair if they were left out and were not given their accolade.
Then there is the problem of the difficulty of obtaining the information on which to decide whether a firm should be given an award or not. Are firms to write in and apply for a form to fill in, or send details of their achievements? Because it is somewhat alien to the British mentality to write in and ask

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for an award. Then, again, when the information is received, what check is there to be on the accuracy of the information? What is to happen when there is a subsequent falling-off in performance? Will the Committee have the odious task of removing the award or honour from the firms concerned?—an act which would, of course, be damaging to their image abroad. Perhaps I may make the suggestion that the awards system should be on an annual basis. If it is to be a trophy or a cup, there might be one for each industrial region awarded annually and surrendered at the end of twelve months in readiness for the next award.
We must remember that the object of the whole exercise is not just exports but improving Britain's earnings of foreign exchange. I should have liked to see in the announcements of the last few days and before Christmas more attention being given to the further development of Britain's tourist industry, one of our largest dollar earners. With some additional funds available, a lot more could be done to improve hotels, to provide facilities in beauty spots, to make historical monuments more readily accessible and to give support for travel agents which bring overseas visitors to Britain. I should also like to see more support for Britain's consulting engineers who already earn substantial sums for Britain abroad. They could, with assistance, prepare schemes for foreign Governments and enterprises abroad which would probably pave the way for our exports later, as other industrialised countries which already do this have found.
My Lords, I appreciate very much the patience with which you have listened to my remarks. In conclusion, I should like to take this opportunity of paying a tribute to the service of British officials, both at home and abroad, who year in, year out, are engaged in the export drive. I have met many of them serving abroad in different parts of the world; they are enthusiastic, able and efficient, and I hope most sincerely that British exporters will make full use of them in the months ahead.
5.32 p.m.
LORD FRANCIS-WILLIAMS: My Lords, I have the duty and the very great
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pleasure of congratulating the noble Lord, Lord Erroll of Hale, on a maiden speech packed with the information and knowledge of which he has so great a command in this field. I know that we shall look forward to hearing him often on future occasions when, though he speaks from the other side of the House, it will be a pleasure to know that the mantle of non-controversy which hangs over those making maiden speeches need no longer to be worn. I find myself in the somewhat curious position to-day of being a sort of sandwich between two maidens. I have the noble Lord, Lord Erroll of Hale, on the one side and the noble Lord, Lord Byers, on the other. While they are to some extent restricted, by the tradition of your Lordships' House in regard to maiden speeches, to unaccustomed neutrality, I hope they will forgive me, as the "sandwich" between them, if I throw in a little mustard of my own and if I say that I look forward to the time when they get rid of the inhibitions, so very temporary, of maidenhood.
As I listened to the noble Earl, Lord Dundee, I could not help wondering, during the greater part of his speech and throughout the earlier part of it, why he had put down his Amendment at all; and I could not help thinking that he himself was wondering the same thing. Certainly it seemed to me, if I may say so, that the bonnet of "Bonny Dundee" did not go twirling quite so high in the air as it often does on occasions of this kind. He struck me as a man who had been advised that it was his duty to show his anxiety to wound, but that his own good sense made him a little ashamed to strike.
If that does, indeed, represent his feelings, then I can only say that on this occasion his shame does him honour. Because it does not lie, I think, in members of the Party opposite, after allowing the export trade of this country to decline and the import/export imbalance to increase to the degree indicated by my noble friend Lord Williamson, and shown in figures that have often been put before the public, to criticise this Government for the action that they take to improve the balance-of-payments situation, whether that action has to be unpopular action, in the way of reducing imports, or more popular action, such as the endeavour to increase exports.

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The noble Earl, Lord Dundee, approved on the whole of most of the positive measures that the Government are taking. He seemed to regard them as satisfactory and desirable in attempting to solve a payments crisis which, he declared, the Government "claimed to have discovered". Claimed to have discovered, my Lords! If noble Lords opposite need more evidence than that which has accumulated, week after week, with every kind of statistics on the trade figures that have come out, before they believe our claim can be substantiated, I can only feel that they would not really be convinced when the last tip of the ship went down below the waves.
Then the noble Earl made a claim: he said that the economy was strong all the time, that all was well. It reminded me of a mutual friend who once went to see that great lady, Dame Edith Sitwell, shortly before her death. In the course of trying to make conversation—always a difficult thing in such a situation—the friend said to her: "How are you feeling?" And Dame Edith replied, in that precise way which so characterised her: "I am extremely well—except, of course, that I am dying." That was a very courageous statement from a great lady lying in a fatal illness. But it is a deplorable statement when made, in like circumstances, by those who find themselves at the head of a Government with a situation worsening day by day and who try to bolster themselves up by proclaming that all is really well.
These were not Micawbers waiting for something to turn up: they were only waiting and hoping that export trade would not go down too far before they had a chance to try to raise a fresh credit on the electoral bank. They ran so long in order to try to buy that credit (fortunately, they did not succeed) that they left a situation which with each new examination, each new turning-over of figures, each new inquiry in departments of industry when this Government came in, was shown to be worse than any member of the public, or even any informed Member of Parliament, could have expected.
What have the Government done wrong, according to the noble Earl, Lord Dundee? They have stopped arms to South Africa, although they did so,
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not only in the furtherance of what they believed, and what I believe and many people in this country believe, to be great moral obligations, but also in support of a majority decision taken by the Security Council of the United Nations, of which this nation is a member, and which we must make every endeavour to support; and they did so also as a member of the greatest multiracial Commonwealth in the world's history, knowing that our decisions, in circumstances of this kind, have, and must have, a great effect upon the attitudes and feelings of the members of that Commonwealth. Now we are told that this comes No. 1 among the failures of the Government in the eyes of the noble Earl, Lord Dundee.
I do not blame him for not being able to find more cogent arguments. I do not blame him because his defences are not so superb as he would wish. When one is trying to defend thirteen years in which, as the figures quoted by my noble friend Lord Williamson have shown, the writing on the wall about the British export trade was growing clearer and the international balance-of-payments problem for this country was growing larger and larger, thirteen years in which the Government of which one was a member sat back and did nothing, and whistled in the hope that, sooner or later, somehow things would get better, it is not easy to expect that one's defences will be as strong as one would like.
In a debate on a Motion whose mover felt that it would provide a platform for new ideas which would really be helpful and give a maximum lead to the export drive, all that the noble Earl did was to produce once again those tattered, blown-on arguments we have heard so often said before. He taunted the Labour Government with having, despite their Election promises, put on taxes. The Labour Party had claimed that they regarded the improved social benefits as essential, not only, I would remind your Lordships, on grounds of social morality and personal ethics, but also because it is only in the framework of a society which is felt by all its members, including particularly the members of trade unions, to be a society which is moving to a more just and fair basis that one can hope to get moving an

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incomes policy and the export drive which we need.
Yet the noble Earl taunted the Labour Government with having broken their pledges, because, having said that it would be possible to finance these essential things out of growth, they have now raised taxes. Of course, the promise that they would be paid for out of growth was made. That promise still exists, and that promise will be honoured. But when we come to the bedside of a patient who has been weakened by long years of neglect and hunger, the first thing that is essential is a blood transfusion, before we can start to build up the economy in the way which the measures of the Government will do. It is because the measures announced to help the export trade fit into a pattern in which the incomes policy and the whole economic policy of the Government are a part, that one believes they have some validity and will achieve their purposes.
I am glad—I think everybody must be glad—that the measures announced by my right honourable friend the President of the Board of Trade, and which were enunciated when this debate was opened, have received a welcome from all sides of the House. They represent a picture of an approach to a complicated problem which affords our only hope for a steady and consistent improvement.
Because what do exporters need? They need advice and information, particularly those who are being persuaded to enter into the export trade or to increase their export trade. That is being done by this further development of the already valuable export councils and trade missions, which I think are essential, by the development of market research in overseas markets and by the further expansion and use of the valuable overseas commercial services attached to our Embassies—I agree with everything that has been said about their value. As a journalist, I have often consulted the people concerned with these services and have been agreeably surprised, and often amazed, by the width of their knowledge of trading opportunities in the countries in which they serve and the amount of information they have available for those exporters who are prepared to take advantage of their services.
Secondly, in many cases exporters need financial help. This is being done by
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the development of export trade finance and it is also being done by the export rebate. Thirdly, they need the development of additional machinery, particularly for those who are only now going into the export trade or seeking to develop their export markets. This, too, is being done, in a co-ordinated approach to the problem, which includes a great many of the things which appear small but which together combine to make a substantial advance in the machinery for helping the export trade. But over and above that—and here I go beyond, I hope, what the Government alone can do—we need a much greater sense of what I might describe as the status of the exporter, a much greater belief in the importance of what those who are seeking to open up new markets or extend old markets are doing.
I believe that in this the Press, radio and television can play a great part, and I hope they will do so. It is only fair to say that the Daily Express, not a paper with which I always agree, has done a good deal in trying to stimulate belief in the importance of this subject; and I think the Daily Mirror has also done quite a lot in that direction. But I should like to see all the great national papers of this country setting up export correspondents—roving export correspondents, carrying the status of their leading foreign correspondents, who would travel the world, reporting back not only on export possibilities but also, with the aid of our trade missions and our commercial counsellors, the triumphs that have been achieved and can be achieved in the future by our exporters in such markets.
I believe that if we could get in this country a sense that the battle for exports is in its way as important as the battles of the last war, and if we regard—and newspapers should make it their business to help us to regard—the despatches from the export front as as interesting, exciting and important as any despatches from any battlefield, then indeed we might altogether develop such a mood of activity and energy in the field of exports that would place us permanently beyond this long, long struggle to put our balance of trade right.
5.52 p.m.
LORD BYERS: My Lords, I could very easily and with great delight follow the

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noble Lord, Lord Francis-Williams, straight through, because there is so much that he has just said with which I agree. But I think my first task should be to thank the noble Lord, Lord Champion, for the very generous references to myself
which he made in his speech and to welcome the invitation which he gave me to set about both sides of the Chamber with equal vigour. I am, however, mindful of the fact that your Lordships offer a natural indulgence to those making a maiden speech, although I must say that neutrality does not come easily to me, as so many of my old colleagues from another place also feel, and if in this debate to-day I stray into the realms of controversy, quite by accident, of course, I shall not seek the protection which a maiden speaker would have from the cut and thrust of debate which so many of us enjoy.
I understand that it is unfashionable nowadays to refer to the fact that one was at one time a pupil of the Leader of the House—so I will not do so. But it is with great pleasure that I recall that, of the five people at whose feet I sat at the university, three of them, the noble Lords, Lord Salter and Lord Murray of New-haven, and the noble Earl the Leader of the House, have found their way into your Lordships' Chamber. This does not mean that they are in any way responsible for the political views which I enunciate.
I welcome this opportunity which the Government have given us to debate this vital national problem of British exports. I am particularly pleased to see the perspective in which the noble Lord, Lord Champion, put this matter, by dealing first of all with the broad sweep of the national economy before going on to the organisation of the promotion of exports; and that is what I wish to do this evening. I believe, as the noble Lord, Lord Champion, said, that exports will become easier to achieve as we are able to promote greater efficiency in the United Kingdom economy as a whole, and as we are able to achieve higher productivity, and, of course, lower costs. I welcome particularly the Statement on incomes policy which was made to-day, and I hope that in time we shall be able to congratulate the Government on positive achievements in this field. If they get them, they will deserve a great deal of gratitude.
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As we are able to get a greater efficiency and greater productivity into our economy, we shall be able to obtain the full benefits of producing increased incremental quantities of goods at marginal costs. Here I believe that the Ministry of Technology has a field wide open to it in trying to get over that there is a great deal of profitable business to be done if you can be efficient to the point where you can get the benefits of the incremental quantities, which cost you very little to produce. It is against this background of achievement in getting the economy going, and holding it, that the Government's export drive will be broadly judged.
I want to say one thing on Mr. Maudling's 15 per cent. import surcharge, which was adopted by Her Majesty's Government, because I take a different view from that which has been expressed this afternoon. I think it is true that, although it does not apply to raw materials, it must have some effect on components which are imported and are then used as part of our export programme when they have been assembled into the final product. But I do not think that this is the major factor. I think that the thing which is really wrong with the import surcharge, and the reason why we should get rid of it as soon as possible, is that it gives a protection to the slothful British private entrepreneur which enables him to put off the day when he has to reorganise his own business. I believe that what is required is not notice to the foreigner that we are going to do this—although that would be a proper thing to do—but notice to British industry that they ought to put their house in order, and that they are not going to have this additional protection for much longer.
Secondly, I think there must be action as soon as possible to implement the findings of both the Monopolies Commission and the Restrictive Practices Court. I was interested to hear that this was to be one of the first matters to be dealt with by the Conservatives if they had won the Election, because I think there are something like sixteen findings of the Monopolies Commission that in the last three or four years have not been implemented. I do not say this critically, of course; but I think there is a certain

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measure of leeway here that the Government ought to take up as soon as possible. If we can get these findings implemented, and more teeth into the Monopolies Commission and the Restrictive Practices Court, we shall get the efficiency which this country requires if it is to get ahead in the export race.
Particularly I think that the biggest contribution which could be made to
industrial efficiency by increasing competition and increased exports would be a successful approach to join the Common Market and to get much closer to Europe. I believe that this is vital. A new initiative is absolutely essential in the near future. A great deal of work can be done in the industrial field to bring us closer to France and the Common Market countries. If we could only get into that tremendous market and its demand it might make all the difference to our future. That is as far as I wish to go in the short time I intend to take on the question of the national economy. I agree with the noble Lord, Lord Champion, that this is the starting point to get things more efficient and to get them going.
In the narrower field, that of organisation of the promotion of exports, I can speak with some personal experience, both of trying to export on behalf of a small company and also of having operated in the wider field of international business on a much larger scale. I think that both experiences are most valuable. I want to say without any doubt that exporting is not fun. It is remarkably hard work. It is a formidable challenge, and it takes a lot of guts to accept that challenge. And from time to time it is a very lonely business indeed. The sooner we realise that the people who go out to get exports are doing something really important, the better for all of us. The idea that it can be a form of enjoyment is something which I have never experienced at all. Any help that the Government can give to private enterprise in this field must be welcome.
I welcome the proposed greater publicity that we are to have. I agree with the noble Lord, Lord Francis-Williams, who said that the Daily Express had done a very good job in this field. I wish they would stick to their export promotions and "lay off" the Liberal Party. But, so far as they go, they are doing very well indeed. The idea of trade mis-
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sions will be a great help, and should be supported. Private enterprise should recognise that these trade missions must be supported, just as trade fairs must be supported, and that there must not be a feeling that it is something extra-curricula for British industry. This is a co-operative business between the Government and private enterprise, and, of course, collective market research, although it has already been tried, is worth trying again.
I hope that what the Government are suggesting is really only a beginning. I think we must move on to something much more dramatic and more all-embracing if we are to make the export drive a reality. I do not say any of this in a critical sense at all. Many of our commercial services in our Embassies overseas do an absolutely first-class job. I have had firsthand experience of how helpful they can be. They have improved tremendously over the past few years, but I still doubt whether they are adequate for the full exploitation of a major overseas market, despite the dedication of the people who are there.
I suggest that, in some of the more important of these markets, we ought to consider appointing to some of our key Embassies people who are, or have been, international sales directors of private enterprise, with a wide experience and broad background, to try to strengthen the existing organisation there. We could second such people, invite them to take up a job for a few years, and encourage them to build up a team of market research experts resident at the Embassies (not just sent out for one collective scheme or another but actually working there building up an intelligence system); people who know what is happening in British export industry at home, and who are prepared to find out new opportunities; people who are prepared to stand up to British exporters and tell them quite frankly where their own services and goods are deficient, where their deliveries are poor, what they have to do in order to get into the market and stay there. I know that this is a tall order, and it may well be that it could be tried out only on an experimental basis. But I believe that there is here a wonderful opportunity for getting into the Embassies, to help the tremendously good work which many of them are doing, some of the drive that

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has marked some of our better exporting industries and firms.
If that concept is accepted, I think the corollary to it might be to try to strengthen the services in the United Kingdom. Again, I do not denigrate these in any way at all, and I believe that a great deal of extremely good work has been done in the regional offices of the Board of Trade, the Export Councils, and so on. If one examines the United Kingdom setup, far too much reliance appears to be placed on a lot of business men giving one and a half hours a month to this problem, and not enough to strengthening the professional staff of the Export Councils, and possibly, also, the regional offices of the Board of Trade. We want these business men: they are very experienced people; they command confidence. But I very much doubt whether we are going to get all the results we want if we tend to treat the export business in this country as largely a part-time basis for some business men giving advice, and with insufficient professional staff in the councils that have been set up.
In this connection, I wonder whether the noble Lord who is to reply could tell us what the executive staff of the British National Export Council is? I have the feeling that it is not very large, and I should have thought that here one had an opportunity of getting more professionalism into the job. I want to ask one question on this point. Must we continue to be frightened of helping firms on an individual basis? If it is going to be in the national interest to help an individual firm, I should have thought that, with the reputation for
incorruptibility which our Civil Service has, we ought to take a chance on it. Furthermore, I do not see any reason why we should not make reasonable charges to the private enterprise firms for services which are offered to them. I have the feeling that there is a certain amount of fear on the part of the civil servant about giving specially favourable treatment, perhaps, to one firm as against another.
The main question should be: are we going to get export results in the national interest? I do not suggest that Government supplant private enterprise, but in my view there is a necessity for the higher degree of co-operation which the Government are seeking to get. There is a case
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for much more full-time professional services, and I think we should use people from private enterprise and second them for a time to the services which have to be performed.
I believe that there is a vast range of private enterprise which would find
things easier in the export field if they themselves would upgrade the quality and the status of their own sales representatives abroad. This is something that private enterprise can do. They do not have to rely upon the Government. The best of British private enterprise has international sales directors travelling the world making decisions being supported by their boards at home, and using real imagination. I heard of one the other day who was trying to sell heavy trucks. What did he do? He sent one out to one of these mines and left it there. He said, "Go on using it for three weeks, and you will discover it is first-class." That is the sort of imagination needed, and it can be done only by the people who carry the status and the backing of the board at home to make these imaginative decisions and get on with the job.
We have to recognise, also, that the sales effort must be more closely backed by real technical skill and know-how. Our salesmen in the export field must be more technically minded. Our technicians in the future are going to be some of our best salesmen in the export drive. I hope, therefore, that private enterprise will get on with this job of boosting the exports of this country upon which we have to rely for our standard of living.
My Lords, we are only on the threshold of licking this problem; but I believe that it can be licked, and I want to say this to the Government. If, by any chance, I and my noble friends should to-night find ourselves in the Lobby in support of the Amendment, it will be with some reluctance; but it will also (and I hope that in saying this I shall not be thought to be controversial or churlish) be understood that in taking that course, if we should do so, we shall not in any way have been swayed by the majority of arguments put forward by the official Opposition in the admirable speech, other than the arguments, of the noble Earl, Lord Dundee. May I also say that anything we in the Liberal Party can do to help the export drive we will do willingly.
6.9 p.m.
LORD MANCROFT: My Lords, I am sure your Lordships would wish to join with me in congratulating warmly the second of our three maiden speakers this afternoon. I particularly should like to congratulate the noble Lord, Lord Byers, on his spirited contribution to our debate, for personal reasons—for it is for 32 years that we have been friends, since we were both together at what I think I must describe, in the light of our debate on education yesterday, as a comprehensive institute of higher technology, in other words, Christchurch, Oxford, where were educated 13 Prime Ministers, 51 Members of your Lordships' House, the noble Lord, Lord Byers, and myself.
At the time the noble Lord was the guiding light of the Oxford University Liberal Club while at the same time I occupied what I thought a more worth-while function in the Oxford University Conservative Association. The noble Lord, probably unknown to your Lordships, was also a distinguished hurdler and I can congratulate him to-day, and I know your Lordships will agree with me, in having overcome the hurdle of his maiden speech as skilfully as he did in a different sphere at Oxford.
He has put his views to us with knowledge, clarity and sincerity and it has not been quite so difficult to understand which side of the fence he was coming down upon as it sometimes is from the speeches of noble Lords on the Liberal Benches in front of me. The noble Lord's idea of impartiality, which he rightly preserved in a maiden speech, was to swipe both sides as hard as he could—and I suppose that is a good version of impartiality. We shall look forward to hearing from the noble Lord again and I can promise your Lordships, having known him for 32 years, that we shall. I can only wait to listen to a speech from the noble Lord, Lord Byers, when he no longer has to be impartial.
My Lords, I myself leave in a few days' time for a trip to Canada where I hope to drum up a little export trade for my own firm, and I was therefore looking forward keenly to this debate, hoping to pick up a few hints on how I could improve my own trade. But I have to confess to the noble Lord, Lord Snow, who is not in his place at the moment, that it is possible that I may have to
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do a little business over luncheon. The noble Lord, Lord Snow, has been complaining about British businessmen who think they can do a deal over a luncheon lasting two hours, where there is a great deal of browsing and sluicing at somebody else's expense, and the businessmen, having achieved nothing, go back to their desks and remain slumped there in a soporific stupor until their secretaries awake them for tea. All I can say is that the noble Lord, Lord Snow, must have some odd friends. I propose to do as much business as I possibly can over luncheon, over tea, over dinner and, knowing the Canadians, who in other respects are a highly civilised people, I shall probably have to do it over breakfast as well. I do not mind so long as I can bring back the business.
There is a quotation in one of the novels of Arnold Bennett, which your Lordships will be greatly relieved to hear I have not been able to find, in which he disproves of the British habit of self-depreciation, of understatement and self-denigration, which, he says, is amusing to ourselves but does us immense harm abroad. He particularises the man who invites you down to his "little place" for the week-end, and you find that he has 24 under-gardeners; or suggests that he does indeed like "messing about in boats", and you find that he has sailed the Atlantic single-handed. We understand this; we understand it when examining our own faults in a fair light; we are doing so to our own satisfaction and advantage. But the foreigner does not see it that way, and I suggest that we have done enough self-criticism about our exports, our marketing and sales techniques and the time has come to realise the damage which this is doing to us in the eyes of our customers overseas.
I am not suggesting for one moment, of course, that there is not room for improvement, but there has been a great deal more improvement than most of us realise. Of course, there are still cases of late deliveries. If one understands what goes on in the London Docks, which to an exporter like myself appear to be organised by a committee under the joint chairmanship of the Mad Hatter and Mr. Bud Flanagan, one is not surprised that there are late deliveries; and our customers complain. But an immense number of our goods do get through to our

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customers at the right time, date and place. But we do not talk about this, and only let our critics know about the goods that do not get there on time; and our potential customers are getting the idea that British goods are always late. There is nothing further from the truth. Our deliveries are as good as, if not better than, those of most other countries of the world.
So it is with after-sales service. So much have we criticised our after-sales service that we are giving the impression to our overseas customers that if you sell a car or a washing machine overseas it will fall apart in five minutes and nobody will come to put it together again. Nothing could be further from the truth; our after-sales service is better than that of most countries, although it undoubtedly has room for improvement.
The point I am making is that bad news is good news and good news is no news. Do let us remember this and what is being thought about us in our overseas markets. If your Lordships doubt me for one moment do, I beg of you, as I have to do: read the overseas technical and trade Press and see how this sort of thing is picked up and emphasised and exaggerated out of all recognition. How many jokes have we heard about the English sales manager or sales director who cannot speak a foreign language? All right, I am a rotten linguist myself! An interpreter can be obtained easily. But few of us take the trouble to learn how to use an interpreter. The commercial attaché at any Embassy will teach you that in five minutes, and find you an interpreter whom you can brief about your own particular business, so that the interpreter has a rough idea of what you are speaking about and what your trade is before he has to interpret.
How many jokes have we heard about the sales brochures and literature that are sent out by the British wrongly printed, in the wrong language, in the wrong currency? It is just not true. Our standard in this respect is better than that of any other country in the world. We take an immense amount of trouble to get our stuff put in the right language and in the right currency system. Of course, we make mistakes now and again. We make fewer than anybody else. Do not let us go on giving
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the impression that we send out all our brochures in the wrong language, in the wrong currency, to the wrong people. I welcome the remarks of the noble Lord, Lord Champion, in this respect and also on this question of using the Embassies, and I think the noble Lord, Lord Byers, made this point, too. They can provide an immensely good service. So does the Board of Trade; but not enough of us know what those services are and how they can be used.
I would differ from the noble Lord, Lord Byers, on one point. I think he suggested sending sales directors of experience into the Embassy jobs. I would suggest that his aim, which is a right one, could be achieved the other way round, by sending more commercial attaches to do a course of instruction and attachment with big British firms, who would be prepared to show them a bit more of the detailed day-to-day work with exactly the same object which the noble Lord wishes to obtain.
Another point which I should like to make is the importance when you come back from overseas of reporting back to the Board of Trade on what you have found in a particular market and of ways in which you think the Board of Trade can improve their services to commerce and industry. I had the honour of representing the Board of Trade for seven years in your Lordships' House, and I speak from experience of their ability and willingness to meet businessmen on a practical and businesslike footing.
The last cliché to which I wish to draw attention, which in my opinion is bandied about quite wrongly, is that we are bad salesmen. We are very good salesmen. Go and ask some of our rival salesmen in markets overseas and they will tell you straight away that they do not like the skill of British salesmen abroad. We were once bad salemen. We thought that goods would sell themselves. They no longer do and we know it. I had the honour for three years to be President of the Institute of Marketing and Sales Management, and I was impressed with the energy and vigour with which people in all departments of the sales market were preparing themselves to do battle overseas. So I say, for heaven's sake let us stop under-selling our expertise, our marketing skill, our salesmanship and,

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worst of all, under-selling our goods and services. We have very little to be ashamed of. We certainly have room for improvement. We shall not improve our status in the export market by running ourselves down in the eyes of the marketing world.
Noble Lords opposite are in a delicate position, too. They must be careful. I understand that exports are our life-blood. I think everybody understands that. I think noble Lords opposite do. The noble Lord, Lord Francis-Williams, gave us on this side of the House a good pasting for our attitude towards exports. If he has any blows going spare, perhaps he would have one for the Chairman of his own Party, Mr. Shinwell, if he is still on speaking terms with him, who once remarked, if I remember correctly, that
"increased exports are demanded. Never was there a greater fallacy."
I am afraid I cannot from memory complete the quotation, and not having a copy of the Daily Express with me and not being near the Despatch Box I am not prepared to have a lobbing match with noble Lords opposite. I do not want to make too much of this point, but 75 per cent. of the export trade of this country with the world at large, our life-blood, is in the hands of private enterprise.
Noble Lords opposite are not all that fond of private enterprise. They have said so once or twice. I remember Sir Stafford Cripps in this very House when it was occupied by another place saying, "I do not believe in private enterprise, and nothing on earth will ever make me believe in private enterprise". Well, we are going to try hard in the short time they occupy those seats to make noble Lords opposite, if they do not believe in it, at least understand its difficulties and realise that in the hands of private enterprise rests largely our export trade upon which our life depends. People export not, as Lord Byers said, for fun but largely for profit—p-r-0-f-i-t—a dirty word! We want at the end of a very hard day's work to put a little money in our pocket and to keep it there, not to have it removed by prohibitive and vindictive taxation. Noble Lords opposite will forgive my speaking frankly on this, but they have been quite firm with us and it is as well they should
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know that we too have our thoughts about them.
I think it is an elementary maxim of law in most countries that man intends the natural consequences of his actions. I can therefore assume that noble Lords opposite intended some, if not all, of the natural consequences of the recent actions they have taken, I am sure with the best will in the world, to help our export trade. Take the 15 per cent. surcharge. This has done us much harm abroad. I should have thought a child in arms—always presuming that a child in arms would recognise a 15 per cent. surcharge when it saw one—would know what was likely to happen. The British business man's word, hitherto regarded as sacred, has become desecrated; our contracts have been broken. Our customers say, "Why in Heaven's name did you not take us into your confidence and explain it first?" My experience is very much the same as Lord Erroll of Hale's. We are losing customers; Swedish and Dutch buyers with whom my firm previously did business have stopped trading with us out of protest. We are also having the greatest difficulty with the French. Did not noble Lords opposite realise that would be the inevitable consequence? What about bank rate? Did they not realise how much export business we should lose by that rise, by customers trading on a four-month basis not being prepared to pay the interest rates on bills of exchange and either raising the credit elsewhere, which means we are losing that financial business, or else completing transactions in other countries?
With regard to this export incentive scheme one sees what the Government are trying to get at, but there is going to be endless argument, I suggest, over who is to be the beneficiary. Is it the supplier or the man who effects the overseas sale? I agree with the many noble Lords who have drawn attention to the fact that publicity for the rebate scheme is encouraging foreign buyers to ask for a discount or contribution to their advertising schedules. The noble Lord opposite has quite rightly asked for constructive suggestions. May I ask him to look at the drawback procedure and see whether anything can be done to accelerate that? I know quite a few cases where delays have been very long; the claim has been

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agreed but the delay in settling has been unreasonable.
The noble Lord, Lord Erroll of Hale, referred to the travel industry, and in particular to the travel agents who he suggested should be treated with considerably more kindness by the Government. I should of course agree that
travel agents should be treated with kindness by the Government, even if I were not a travel agent myself. The noble Earl, Lord Dundee, referred to Spain. Again I assume that the Government intended the natural consequences of their actions. What did they imagine would happen as a result of their ridiculous attitude towards Spain? Surely this artificial row over Gibraltar inevitably followed the Government's attitude, and surely there will inevitably be a very large doubt about the travel trade to Spain. We are told the Spaniards will not cut off their nose to spite their face, but they are a proud people and they may be prepared, to the detriment of the British travel trade, to forgo, for a principle, the enormous benefit to their own travel trade. Tourism is a very volatile trade. We saw another case only a short time ago when it was rumoured that the Americans were intending to put a 100 dollar export tax on all tourists. This was only a rumour, but the immediate and detrimental effect has been marked. So I support the noble Lord, Lord Erroll of Hale, in his comments upon the volatility of the travel trade.
I have tried to draw attention to a few ways in which the Government have not foreseen correctly the inevitable consequences of their actions. I will not waste any more time by repeating points already made, particularly by my noble friend Lord Dundee, whose speech I support. I agree with noble Lords opposite in their right to demand concrete suggestions from all sides of the House, and I have done my best to supply one or two. Our man in Canada said to me this morning in a letter, "What on earth is your Government up to? We are very uncertain here". Sir Winston Churchill used to lay down as a maxim, when he was travelling abroad, that he would never make any criticism of his own Government; but he always made up for that when he got back. I shall hope to follow that admirable example, and, even if I do not make up for it when I get back, I will show that my heart is in the
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right place before I go by supporting my noble friend Lord Dundee in the Lobby, if he sees fit to take us there this evening.
6.27 p.m.
VISCOUNT ADDISON: My Lords, may I first add my congratulations to the two noble Lords who have made their maiden speeches? They both bring great experience to your Lordships' House, and we are the richer by their presence. We have heard two excellent speeches, and I very much hope that we shall hear both noble Lords often in the future. For the Record, I think I should say at once that I am in receipt of one modest director's fee from a small merchant trading company in the City. But this does not form part of my normal business activity; nor does it greatly affect my financial situation, even when added to the now generous allowance that I am entitled to claim on appearance in your Lordships' House.
The level of reserves of gold and foreign currency in the Bank of England can, I think, be regarded as a rough-and-ready barometer of the terms of trade, and whatever may be said in support of Lord Champion's Motion, there was very little in Lord Dundee's speech to attract my support to the Amendment. It seemed to me that the record of the outgoing Government showed that there was last October, at the end of the period of thirteen years, rather less gold and foreign currency reserves in the Bank of England than when they started in 1951—and that, of course, was after a number of foreign investments, such as Trinidad Leaseholds, oil concessions, the British Ford Motor Company, had been converted into foreign currency. As far back as I can remember, about 1910, there has always been a deficit on visible import-export accounts in this country. But exports are not necessarily things, that is to say goods; they may be services, or "invisibles", as we have been taught to call them. And in the past these have been relied upon to bring the trading account into balance and leave a profit to swell our reserves.
Whatever may be said about Britain as a manufacturing and exporting country, it is in the field of these services that we have held a position of advantage over other countries. The reason for this is the reputation of our merchants, shippers, bankers, insurance men and the like.

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When a producer of, shall we say, coffee in South America wishes to dispose of his product he is willing to deal against a London bill though he may be unwilling to trust his neighbour. A producer of jute in India will deal readily with a London merchant, though perhaps he will not do business with any other merchant in the world. I have heard it said that some of the great fortunes of the British insurance companies were laid down at the time when they were willing almost to bankrupt themselves in paying out claims from the San Francisco earthquake when many American and other foreign companies were unable to meet their obligations, and did not do so.
In your Lordships' House last week I listened to the winding-up speech by my noble friend Lord Snow in our debate on technology. Owing to the imminence of the Royal Commission, the noble Lord had only a short time in which to speak, but I thought he spoke with the great wisdom which we all know he commands. He warned us against what he described as "ideological preconceptions", and he said that "of course we wanted to make profits", and "increase our reserves". And indeed there is no room for prejudice.
However much some of our friends overseas may dislike to hear me say it, London is still the centre of the largest single area of world trade, the sterling area; and provided that nothing is done to disturb confidence, its potential need not decrease, but must be made to increase with the gathering of our reserves and resources. We have been called a nation of shopkeepers. Call us merchants, and I should have no complaint to make. It is a field of activity in which we are supremely good and in which we are universally trusted. I want to stress the immense earning capacity of these services, and to ask the Government to do everything in their power to assist in reinforcing it. We on this side of the House, at any rate (and perhaps I might mention this to the noble Lord, Lord Mancroft) should remember that the fountain of capital at the back of all these activities is the Bank of England, a nationalised institution which will participate in the rewards of enterprise.
For my part, I think that the Government have made a fair start on the export front in difficult circumstances; and in
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spite of what noble Lords opposite may think, or what Mr. Enoch Powell may say, industry as a whole has a good deal of time for the Government. In my own knowledge, after the Election there was great good will for the Government in the City, and although some things may have been said and done which have not helped to consolidate this good will, the Government will not ask to be judged otherwise than upon results. In fact, I think that is what I heard from my noble friend Lord Champion in his opening speech—that they wished to be judged on results. In my view, this is the way that any Government should be judged.
I have no doubt that some of the steps they have already taken, and others, will help to bring about recovery and a new prosperity. I sincerely hope—here I agree with other noble Lords who have spoken—that the import surcharges may soon be dropped and the 7 per cent. bank rate lowered, because the former can act only as a form of protection for inefficient industry, and both must be regarded as temporary stopgaps. These measures, if perpetuated, must increase costs, the one by raising the price of imports—even if they are non- esential imports—and the other by raising the price of new industrial capital.
I do not think that devaluation of sterling is in any way a solution of our problem, by reason of our dependence upon imported raw materials and some food. In the end, devaluation would cost us more than we could hope to gain by any temporary relief. In my view, sterling, even now, is probably pegged too low in terms of foreign exchanges, and I think this will come to light over the months and years ahead if a forceful and imaginative policy is pursued by the
Government. I strongly support my noble friend's Motion, and I hope that your Lordships will reject the Amendment.
6.35 p.m.
LORD GRIMSTON OF WESTBURY: My Lord, although I have spoken many times previously in this Chamber, albeit in another place, this is the first time that I have ventured to address your Lordships in this place, and I ask for your kind indulgence. Your Lordships will appreciate that in speaking to-day in this debate, which embraces both the

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Motion and the Amendment, it is not easy to remain entirely non-controversial, as one should do in a maiden speech. Having, however, over the years, acquired very great respect indeed for Parliamentary usages, tradition and customs, I will do my best to conform, but if I should err in some slight degree, I hope your Lordships will be indulgent, bearing in mind the Latin tag de minimis non curat lex, which others tell me means that the law is prepared sometimes to overlook minor offences.
I turn first to the Motion, because I think that noble Lords on all sides of the House will agree that the steps to be taken for export encouragement are most welcome. I personally have long had the feeling that some financial incentive for exports should be possible; but hitherto it has always been said that it was not, for various reasons. During the debate to-day various different opinions have been expressed with regard to this. However, I adhere to my view that it should be possible, and I would say to your Lordships that it is often interesting to observe how the impossible becomes possible when circumstances really exert pressure. Many of us will remember that before the war a P.A.Y.E. system was held to be administratively impossible. I see the noble Lord opposite agrees with me. He and I probably heard it said in another place. But the pressure of the war made that possible. The system is now accepted everywhere, despite the fact that generally the Treasury makes employers do most of the work and does not pay for it.
As I say, I greatly welcome the attempt to introduce an export rebate. I should like to give your Lordships an instance which came to my knowledge a short time ago, affecting a small firm—it is the small firms that we desire to help with the export trade. A small firm wishing to do something for exports obtained an order from America for a comparatively small amount of cloth. On delivery they were informed that the cloth was not up to specification. They knew perfectly well that it was, and were suspicious that there was a "try-on" in order to get something knocked off the price. In the event they had to instruct their agent to go into the matter, thereby incurring much extra expense,
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involving his services, transatlantic telephone calls, and so on: so much so that when the cloth was eventually accepted as being up to standard most, if not all, of their profit had gone. Rather naturally, they came to the conclusion that, with the best will in the world, the game was not worth the candle unless some tax concession to meet this sort of thing could be made available.
This is only one case of many of a similar sort which may happen. I therefore very much hope that the proposed scheme for export rebates will work to the assistance of small firms. If it does not, I suggest to the Government that another look should be taken at the proposals which were made by the noble Lord, Lord Erroll of Hale, in his maiden speech to the House to-day.
I turn now to the Amendment which raises the question of the loss of exports through Government action, either direct or indirect. Any Government must for strategic reasons from time to time place an embargo on certain exports, but to lose exports through embargoes or otherwise for political reasons raises, as I am sure your Lordships will agree, quite different and quite considerable issues, on which I should like to make one or two observations.
For this purpose I refer to what has happened in the case of South Africa. In that regard we have the Simonstown defence agreement, and there can be no strategic reason for the placing by the Government of an embargo on the export of military equipment to South Africa, which, I understand, will mean the loss of some £150 million of export orders over the next three years. The reason can only be to register dislike of the apartheid policy of the present South African Government. We are not debating that issue now, but I think I can say almost certainly that the apartheid policy finds disfavour, to put it at its lowest, on all sides of this House. But an export sanction with the object of bringing pressure to bear on another Government to alter its domestic policy is surely contrary to the purposes and principles of the United Nations Charter; although I must observe that in recent years the Charter has been honoured in the breach as much as in the observance, even by the Organisation itself.

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In the use of economic sanctions it seems to me one gets into the position of damaging one's own vital interests and at the same time merely stiffening the attitude of the Government one is seeking to influence, and indeed thereby getting the worst of all worlds. From various news items which have appeared from time to time your Lordships will have seen that the undoubted prosperity in South Africa at present is spreading to all races, even, I am told, to the extent of the job reservation system beginning to break down through sheer economic necessity. I believe that Her Majesty's Government do not favour economic sanctions against South Africa, but an embargo on the export of all arms cannot but be a step in that direction and is surely detrimental to export prospects, if only because it may create an antipathetic climate in relation to British exports, which will be a gift to other nations anxious to compete with us there.
It was only recently said to me in a letter from Johannesburg that Americans, French, Germans and Japanese keep arriving in droves, all smiling and anxious to do business. It can be seen that if we persist in this policy there are plenty of other people there who will pick up what we have lost. A commercially hostile attitude to South Africa can only damage our interests, without having the slightest effect on the Government there in relation to their domestic policy. I believe that their domestic policy is far more likely to be eroded by the spread of prosperity in that country to all races.
There are other instances where we have lost the prospect of exports for similar reasons. They have been referred to in this debate and I do not propose to say any more about them, but I have used the South African case in my argument, as I believe that it well illustrates the unwisdom, to put it at its lowest, of introducing politics into the pattern of trade. That is the point I wish to submit to your Lordships, and I hope I have done it in not too controversial a manner.
Finally, I would venture to state our problem in the simplest terms, and for that purpose I paraphrase a famous jingle, which I am sure your Lordships will remember very well, once coined by an
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Ambassador of ours to the Dutch. I would paraphrase it in this way:
"In matters of commerce
The fault now is such
That we're selling too little
While buying too much."
My Lords, in his lucid opening speech the noble Lord, Lord Champion, said that the time had come to pull out all the stops. I am not without hope that perhaps he will exercise some influence on his colleagues to stop some of them from pushing some of them in.
6.47 p.m.
LORD ROYLE: My Lords, from the great height of four months' experience in your Lordships' House, it is my privilege and duty to congratulate Lord Grimston of Westbury on his maiden speech. Things seem to have gone into reverse, for in another place he held the exalted position of Deputy Chairman of Ways and Means, and I was one of his "boys" on the temporary chairman's panel; I bowed to his superior knowledge and experience. So it is a delightful feeling for me this evening to be in the position of congratulating him on his first speech in your Lordships' House. I do so with the utmost possible pleasure, and I know that, whilst his voice was rather stilled for some time in another place, he will make up for those years, I hope, by addressing this House more often than in recent years he was able to address another place.
I have listened, I think, to every word of this debate so far to-day. I should like first to deal with Lord Grimston's point with regard to exports of arms to other countries which do not think like us and about which we are deeply concerned. In this regard I am in complete agreement with the view expressed by my noble friend Lord Francis-Williams with regard to South Africa and in regard to Spain. I do not want to develop it at this point and at this hour, but I would only say to noble Lords opposite that it does not seem to me to have been a very good idea to think of exporting arms to a country which is blockading the frontier to Gibraltar. For 200 years the Spanish Government have been claiming that Gibraltar was theirs, and we have resisted that claim. If we had provided them with arms, I wonder whether they would have used those arms to increase that blockade.

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As to the speech made by the noble Earl, Lord Dundee, it seems to me to be rather mean and petty for the Opposition to put down the Amendment to this Motion which appears on the Order Paper. The noble Earl told us a delightful story about spelling, and said that the master was at a better advantage when he was able to see, through the student's writing, that the student could not spell. When the noble Earl went on from there to talk about the state of our economy during 1964, and how everything in the garden was lovely, I came to the conclusion that he could not read. What has he been missing during those particular twelve months, about the Conservative Government's lack of activity after their vacillating policy on exports?
As in most other things over the past thirteen years, they have what I can only describe as the audacity to put down this Amendment to my noble friend's Motion to-day. They have been devoid of ideas and incentives, and all their criticism rather raises the bile of an enthusiastic Government supporter, when he sees the real efforts that are now being made to redress the situation which the Government found when they came into power after those thirteen years. The Tory Government over these years repeated the need for exports, I would say, like a Buddhist lama spinning a prayer wheel. Magical words like "automation", "integration", "national rate of growth" have not got us anywhere, because the previous Government were not prepared to take action on their words. I submit, my Lords, that the present Government are alive to the necessity for action as well as for words, and the incentives which have been so recently announced, and which have been enunciated by my noble friend Lord Champion this afternoon, are an indication of the intentions of the Government.
One point of a detailed character in those incentives, which attracts my attention particularly, is the reduction from £100,000 to £50,000 as a minimum for the exports guarantee, with a fixed interest rate of 5½ per cent. I believe that this will be a tremendous fillip for smaller firms, apart from large firms, when they are dealing with the smaller package deals. Recognition is necessary that our national rate of exporting is conditioned by hundreds of thousands
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of separate transactions, each requiring different considerations even within the same industry, aye, and even within the same company. Goods are often sold on a personal friendship basis, and on a basis of quality and service; many, oftentimes, with price a secondary factor.
Let us face it, my Lords. In the final analysis, a Government can only make the climate right and provide encouragements and incentives. In this regard I wonder whether my noble friend the Parliamentary Secretary can help me, when he comes to reply, on the languages question. The noble Lord, Lord Mancroft, dealt with this matter and seemed to indicate that it was his view that we were pretty well served in this direction. I have my doubts—
LORD MANCROFT: My Lords, may I interrupt the noble Lord? I am afraid that he misunderstood me. I did not say that we were well served. What I was suggesting was that, if we had not got the linguistic ability which we all ought to have, we ought to make use of the interpreter services rather than fumbling with our own schoolboy French. That is the point I was trying to make.
LORD ROYLE: I am much obliged to the noble Lord and I accept the correction. I wanted to go on to say how my mind is working here, because I believe that in export matters we have in these days to become a nation of ability in languages, as we never have been in the past. I believe that courses might be introduced at company level, because no native agent can possibly take the place of a firm's own representative, who has intimate knowledge of the product, speaking to people in their own tongue. I wonder whether my noble friend Lord Rhodes can indicate whether the export branch of the Board of Trade is able to offer help with such courses, and whether, as an alternative, they can offer translation help, particularly where sales material is involved. Noble Lords will agree that it is important to use not only good grammar but the right idiom and the right currency, measures and weights in constant use abroad.
While I am addressing myself through your Lordships to my noble friend, I wonder whether he saw in The Times

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on February 4 a short statement on Japanese export policy. It stated that Japan had attained a 22½ per cent. increase in exports in 1964, but it went on to say that Japan was feeling that in 1965 it might not be doing quite so well, owing to the intensive drives of other industrial countries. Her exporters were being urged to concentrate on what were called the "orthodox" markets—the United States of America and Europe; in other words, main rather than marginal outlets. The article said that Japan wanted to establish bridgeheads in Europe, at the same time advocating a more subtle approach to developing countries with the ground prepared by market research. I would ask my noble friend whether the British approach is anything like this. I pass the 22½ per cent. increase, in the light of our own experience over the past few years; but can we take a hard look at Japanese methods, without copying some of the doubtful and rather unscrupulous methods in which Japan has engaged in the past?
Of course, in making the climate right, Her Majesty's Government may be faced with unpleasant decisions. I believe that we have to tackle this matter very
seriously. Perhaps a company which cannot compete must be merged with some other company, or other companies. The rationalisation of the cotton industry was an example of what I have in mind. Maybe others should follow suit. At the same time, I feel that something may have to be done to treat companies as more complete entities, so that capital and labour are helped to transfer from uneconomic to economic activity.
I feel that so many things can be done to seize every opportunity to make exporting attractive. There are measures such as special allowances to overseas salesmen. Perhaps in this regard I am more with the noble Lord, Lord Mancroft, than with my noble friend Lord Snow, because I enjoy lunches and I think a very great deal can be done in business over lunches. I would not object to special allowances being made to our overseas salesmen, both here and abroad, for entertaining purposes. In a smaller way—but is it not important, my Lords?—I wonder whether firms might help by paying the travelling expenses of representatives' wives so that they might
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travel with them. Or is that not a welcome idea?
In a general sense, I would say that there is no short-term solution, and many years have been wasted. It all depends, in my view, on slanting priorities so that what we can spend as a nation goes first towards improving our long-term efficiency. Along with social justice, we have to get more from our capital; more from the work of management and worker. Finally on this point, I think that the "little Neddies" (for the want of a better term) can contribute a great deal to increasing efficiency in British industry. We might even think, I believe, in terms of scores of such small councils. I will not develop that point, but I have particularly in mind, out of my limited, personal knowledge, the textile machinery industry, and I use it as an example.
I have only one other point that I want to make, and I have a little uncomfortable feeling that I am taking advantage of your Lordships in this debate in making it. It is a point I want to make the other way round. I believe that there are some things we should not export, and I am seizing this chance to say so. For most of my life I was engaged in the meat industry, and that is why this thought goes through my mind. I feel that a great mistake is being made in exporting large numbers of cattle to the Continent of Europe. Apart from the
humane aspects which are very important we are experiencing a very serious period of meat shortage. Last year, we exported 300,000 beef cattle—one beast for every 50 British families. I do not know that, if we had not exported them, we should have upset the Government's deficiency payments scheme very much, but it would have helped very considerably with the cost-of-living figures in this particular commodity.
I know that many of these cattle cross the Irish border from Northern Ireland to Southern Ireland, but the Republic does not need them, and I am sure that most of them find their way to the Continent of Europe. The price of beef is rising because of an increasing shortage of supply. It is no good saying, "If we did not send them the cattle they would go to South America for their meat, and we should lose the trade", because the fact is that the Argentine is already doing that, and our supplies from there have

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already been greatly reduced. We need to ensure a steady flow of meat into the home market with as little price fluctuation as possible, particularly during the months from February to August, which are the difficult supply months, and this cannot be achieved by sending thousands of cattle and sheep overseas—good food which we need for ourselves.
I just drop this point in, but I should be very sorry to think that it was detracting from what I said earlier on the general export position. In that respect, in respect of the cattle, I hope that my noble friend Lord Champion, who is responsible in your Lordships' House for Ministry of Agriculture matters, will pass on what I feel about it.
But, finishing up on the general point of exports, I share the optimism which has been expressed by the noble Lord, Lord Byers, this afternoon. In passing, may I join in congratulating him on his very forceful speech? It was the kind of speech we expected from him, and which we were accustomed to hear from him in another place. I always had a feeling, if he will permit me to say so, that a great deal of the confidence which we now know he has and hear from him arose, in the beginning, from the fact that he was made Chief Whip of a great Party in another place. I think their Members were seven in number; and I think his confidence arose from that exalted position. If it was that, we have benefited from it; and I myself was delighted to hear his speech this afternoon. So I share his confidence, and I share the confidence expressed by the noble Lord, Lord Mancroft. But I have the confidence a great deal more because I know of the determination of the Government which I have the honour to support.
7.6 p.m.
LORD HAWKE: My Lords, I have listened to three maiden speeches of remarkable quality to-day, and I do not remember ever having done so before. I hope we shall hear from all the speakers again. I am not going to follow the noble Lords opposite in detail, though I am glad to see the noble Lord, Lord Francis-Williams, back in his place looking fully recovered from the privations of thirteen years of Conservative rule. Since the war, we have had export
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drives the whole time. Sometimes they hot up and sometimes they die down a bit. At the moment, the "heat is on", because we have seen the statistical position. But we must be careful not to let our enthusiasm run away with our discretion, which is what is apt to happen when Governments start to have too big a hand in trade.
I will start off with a cautionary little tale. Nearly twenty years ago, when the noble Lords opposite were forming the Government of this country, the word went out that we must "export or die"; and at the same time everybody was told that prices must be kept low. This, my Lords, was in a sellers' market, when goods could be sold for almost any price. Now the iron and steel control were allowed to dole out to particular friends of this country small parcels of steel rails at £25 or £26 a ton. This was quite insufficient, of course, to meet their needs, so they went round the corner and bought the rest of their requirements from Belgium, at £46 to £50 a ton. That is the sort of thing we have to be careful about.
Our mistakes this time cannot be due to a sellers' market, because there is not a sellers' market. But this time we might fall into a very different trap, and that is of selling goods regardless of whether we shall be paid for them—and that is a very real danger to-day. It is perfectly possible for exporters in this country to get paid for goods through our guarantee arrangements—the banks discounting, and so on—but those goods may well be paid for by the recipient countries with loans given by this country to their own country—loans which, in the outcome, may never be repaid. So, in effect, Britain may not get paid for those goods; and it is of that that we have to beware. Incidentally, if more and more trade is done on longer and longer credits, we shall need an increasing statistical balance of trade to offset the larger proportion of payments due to come in in the future, as compared with the payments we are receiving in respect of past credits.
To carry the situation to an extreme, one could imagine a situation in which we show record figures but are, nevertheless, bankrupt because nobody is going to pay us until years ahead. And when we look round the world the prospects

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of payment are not very bright in many countries. South America has its usual chronic shortage of foreign exchange; in black and brown Africa the prospects of getting paid in some years' time are deteriorating, or appear to be so, to say the least. India and Pakistan are facing an impossible problem of fecundity and look likely to be deteriorating markets. In fact, it is only in North America, Europe, Australia, New Zealand, South Africa, Russia and Japan—and, I should add, the oil-rich Arab States—where there seem to be reasonable and certain prospects of our exports being paid for.
My Lords, for trade purposes the world is divided into rich and poor, into East End and West End; and as more synthetics tend to replace the natural materials grown by the poorer countries and the poor proliferate faster than the rich, the imbalance looks like getting greater. We have put our signature to various treaties of a free trade nature which add up to the fact that if one of our nationals wishes to buy foreign goods in preference to British goods we cannot stop him, even if in so doing he is bringing us to the bankruptcy court. There is only one thing we can do under these conditions: that is, to retaliate by stuffing our goods down the throats of the foreigners; and that is precisely what we are trying to do with export trade. I find that America is starting an export drive, too; and, from what noble Lords opposite have said, so also are the Japanese; and I have no doubt that the other countries in the world will be hard at it soon.
Another facet of this project, and one which is very much in the hearts of noble Lords opposite and of many on our side too, is that, unless our export drive is successful in providing us with a surplus, we cannot expect to provide help to the more backward countries of the world. You cannot export an imbalance of trade; it merely makes the imbalance worse than ever. You cannot give away out of the deficit in the present circumstances. I say "in the present circumstances" because I do not believe the problem is completely insoluble. I believe it will be perfectly possible to devise an auxiliary international currency, reserve units, which could be earned by those nations who are giving away production to the
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poorer nations. I will not go into it in detail. It is a long-term project and I shall leave it to the economists to do; but I am sure it can be done.
I turn to another point. It is significant, but not surprising, that the greater
part of exporting is done by the larger firms, and for that reason I think we should be wary of following our usual inclination to think that everything big is bad. I know that once you get too big for the boss to know everybody, you lose the human touch; but the vast majority of firms have got far beyond that stage already, and once they have done so, they might well get to the stage where they are big enough to "talk turkey" to foreign competitors and also to run the proper sales organisations abroad, and have the proper research.
For a great many trades prices are so cut in the export field that unless there is a reasonably secure home market, at a profit, there will be no wherewithal to support the necessary organisations overseas. Witch hunts to find monopolies and price rings behind every bush, so beloved by the Liberal Party—I see that they are not here—can damage our export prospects; and it is a great mistake to think that you are really benefiting the consumer in the long run by so doing. We cannot leave all our exporting to the big firms. It is bringing the smaller people into the export market which is the problem, and it is here that there is considerable scope for improvement. I read the other day a series of articles on exports that gave these methods for the smaller firms: first, selling to exporters in Britain; second, selling to importers abroad; third, appointing agents abroad; and fourth, having their own selling organisations abroad.
There is a fifth which I have seen practised and which I think could be of considerable value. It is a combination of methods three and four. It is really built round a very expensive high-class representative with technical knowledge. These people are rare and much too expensive for the small firms to be able to hire them. It means forming a group, probably covering most of a small trade and a good portion of a larger trade, and forming a joint selling organisation. The group then appoints in the markets abroad a good old-established agency firm who know that market inside and

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out and who can provide warehouses, office accommodation, local selling staff and everything else. The representative then has to conduct the strategic side of the sales. He talks to the big customers, investigates complaints, sees what the competitors are doing and reports it home to his principals. He generally travels around and, in fact, he often serves more than one country.
The practical difficulty on which the system breaks down is to find out a method
of allocating the sales which are collected by the representative and to apportion them round the group. I will not pursue that any further; but I think that that is about the only way the small and medium sized firm can afford a proper sales organisation.
One of the difficulties which has been referred to before is that of linguists. It is all very well for my noble friend Lord Mancroft, whose speech I thought was absolutely splendid, to say that you can get en rapport with foreign buyers through an interpreter without talking their language. I do not believe it myself. The ideal is to be able to talk the language. It is time we really got down to this language question in a much bigger way. I suggest, as a start, that in what used to be regarded, when I was at university, as the rather easier courses, that is, the Arts courses, when you read for a Honours degree in Arts you should be required to acquire one or more languages, perhaps one of the great Oriental languages. I have no doubt that the time spent on that might detract to some degree from that spent on economics, history, law and the classics; but who can say that it will not give greater pleasure and greater profit in after life to be something of a linguist rather than a first-class economist or a first-class lawyer? There are many economists and lawyers about and not very many Oriental linguists.
In conclusion, I think that noble Lords opposite have completely misdiagnosed the economic situation. Our difficulties are caused solely by the colossal amount of spending power loose in this country, as a result of the increased wage packets in 1964 and the increase of capital values, which people have been tempted to cash in on, thinking that a Labour Government might get in and, after that, the deluge. The problem of imbalance relates to our
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prosperity here, and our choice is whether to cut down our abundance here or to export it. We all know which is the more pleasant course.
7.21 p.m.
LORD LATHAM: My Lords, notwithstanding the admirable speech of the noble Earl, Lord Dundee, I felt that he has not his heart in this Amendment. One can understand and appreciate this, for the Amendment is really empty of reality. It was a bleak task the noble Earl was given and he deserved our sympathy, for we on these Benches have a genuine and friendly regard for the noble Earl. I felt that there lurked behind his speech the disabling knowledge that the Governments of which he was a respected member and those before had done little positive and effective to counter the continuous comparative shrinkages of our exports and, therefore, our share in the expanding world trade.
Like my noble friend Lord Royle, I propose to be critical of the causes of the present situation. It cannot be denied that the steps the present Government have taken were, in some important respects, conditioned by the calamitous state of affairs when they came into office and they can be fairly and honestly judged only by reference to that fact. Thus, in considering the Motion and the Amendment, one can, one indeed is almost compelled to, range over the general economic structure and position of the country.
This Amendment is a portentous piece of coverage to hide the disastrous state of the nation's economy when the present Government took over and from which we are suffering to-day and from which we are likely to suffer a good deal in the future. So serious was the situation that, in order to save the nation from approaching calamity, steps had to be taken and things had to be done which in less threatening circumstances could and would have been avoided. The industrial and financial future of the nation was in a parlous state. Something had to be done, and done quickly. Courage was needed. And it was not wanting. It was exercised, without regard to or for electoral or, indeed, other Party considerations. The nation's needs predominated. The new Government acted, and at once, notwithstanding that they were faced with

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the coagulated mess and muddle of thirteen years of failure and misgovernment.
During those years, successive Tory Governments flagrantly put the needs of the nation second to the electoral interests of the Tory Party. The history of those thirteen years is littered with baleful instances. This unpatriotic conduct reached its unabashed culmination in the statement made on November 11, 1963, by the then Prime Minister when he said:
"From this moment on, the fact that there is a General Election ahead of us must never be out of our minds … every speech that we make in Parliament or elsewhere must have that in mind … ".
The interests of the nation were to be subjugated to those of the Conservative Party. Indeed, the statement came pretty near suborning Parliament itself—all for the greater glory of the Tory Party. This was the despairing battle cry of the then newly-appointed Prime Minister, if "appointed" is the right word for the shabby procedure which attended that affair. Be that as it may, the Tory Party and the then Prime Minister complied in abundant measure, especially the Prime Minister. He postponed the Election. He gave solemn assurances to the people as to the state of our economy. He asserted that the economic outlook had seldom been stronger, which statement, fortified no doubt by his match sticks, he proceeded subsequently to reaffirm. This, at a time when our balance of payments was rattling into increasing deficit and was mounting from day to day. Forsooth, the very next day, the Board of Trade released the trade figures for January, 1964, which showed the largest trade gap ever recorded.
As Prime Minister Sir Alec Douglas-Home must have known the facts of the situation, in which case he misled the people for Party reasons—a pretty unworthy procedure. If, in the other case, he did not know the facts, he was guilty of culpable negligence in making the statement and unfitted for the office he held. At the General Election the electors took that view. The Government that he led failed to take the necessary steps to arrest the alarming growth in the deficit in the balance-of-payments account. On the contrary, he left it to the new Government to take speedy and effective steps to arrest the gathering deterioration of our overseas
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economic affairs. Some of these steps were distasteful to us, but in the serious circumstances which existed they were unavoidable.
It may be thought that this is an old story. It is not: for the nation is suffering acutely from the consequences of the gross inaction of former Governments. It is a shabby, shoddy story of shiftless men in fear of facing the judgment of the people and gambling with the interests of the nation for Party political considerations. And the story is relevant both to the Motion and the Amendment. for many of the grave difficulties that beset the nation flow from the postponement of the Election for Party political motives.
The Amendment regrets our policies and actions as regards exports. No such charge could be made against the Tory Government. For thirteen years, they had no policy and took no positive action to effectively expand our exports. They were well content to leave things as they were, and, indeed, to leave them to get worse, in ease, sloth and complacency. I recall the gracious Speech of 1961, which was also a crisis year, when the nation's economy was already suffering from grave and enveloping sickness. Yet the only reference in the gracious Speech to the chronic deterioration of our affairs was the soporific words that the Government would pursue "the vigorous promotion of exports". And the only positive measure of promotion specified in the gracious Speech was to the effect that the limits of the provision for the Export Credits Guarantee Department would be raised. What a remedy for the wasting disease which beset us then! What valiant vigour! And what chicken feed! It is not without significance that it has been left to the Labour Party, within a few weeks of taking office, among other positive measures, and as part of a really vigorous promotion of exports, greatly to widen the field of financial facilities available to exporters at lower rates of interest.
What else did the Tory Governments do to promote exports, vigorously or otherwise? Let me be fair, even to the blameworthy. There is quite a chronicle of achievement, some items of which I will specify. Our share of world trade dropped from 25·5 per cent. in 1950 to 14·6 per cent. in 1963; and the share fell

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every year under Tory Governments. That, of course, was some achievement! In the second quarter of the year 1964, our exports of manufactured goods rose 6½ per cent. above 1963, compared with the average improvement of 14 per cent. by the main manufacturing countries. Again, this is achievement. Whether these achievements are policies and/or actions I leave it to noble Lords opposite to say. They undoubtedly show vigour; but in the wrong way, and with the wrong result.
Let me give two further examples of Tory promotion with vigour. West Germany increased her exports to Britain in 1964 by nearly 28 per cent., and we increased ours to her by only 2·8 per cent. That is yet more achievement. According to Board of Trade estimates, the overall deficit on balance of payments is likely to be £800 million for 1964. Imports are up by £700 million, or 15 per cent.; exports are up by £173 million, or only 4V per cent. There we have outward and visible indication of promotion and vigour in excelsis. These four items show how effective in positive achievement Tory Governments can be, especially when they are vigorous.
My Lords, the noble Earl, Lord Dundee, has produced no evidence, nor is there any evidence, to show that our actions are prejudicial to their purpose. On the other hand, the outlook is encouraging. So much for the wise proposals of the present Government to aid and expand our export trade, which is so important and
vital an element of our national economy. These have been admirably explained and deployed by my noble friend Lord Champion and other noble Lords. But these proposals, projects and facilities are only a part of the whole economy and social structure of the nation which former Governments had brought to a grave state. Much of our industrial equipment is out of date, obsolete, and has fallen behind our overseas competitors to a frightening degree. Previous Governments have done nothing more than prattle about modernisation, a subject which they seem to have discovered by accident a year or so ago. It has been left to the Labour Government to do something; to get on with the job. And they, the former Tory Governments, have brought about the decline of our influence in world affairs to a degree
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the like of which we have not suffered for centuries.
A propos of this, I was interested to read the article appearing in a Sunday newspaper of January 31, written by a former Member of your Lordships' House, which posed the question: "Can Britain ever be great again?" The answer, of course, is, Yes; but not under Tory government, which has brought Britain to a deplorable loss of her former influence, when a leading member of successive Tory Governments, and an aspirant for the position of Prime Minister, can publicly ask such a question and postulate that Britain has lost her greatness.
My Lords, if that is so, who is responsible? Surely it is the Tory Governments of the past thirteen years. To what a sorry pass they have brought this country! Only a Government which places the nation's needs before Party or office; which is forward-looking; is imaginative in conception and in planning; and is dynamic and infused with the spirit and will of progress, can restore Britain to her rightful place of greatness and influence in world affairs. This is the noble task to which the present Government have set their purpose and their objective. Exports are but a part of this beckoning challenge, although a most important and fundamental part,
I will now descend from Britain to the Conservative Party—and despite past assumptions, the two are not synonymous. Your Lordships will no doubt have seen that a new Chairman of that Party has recently been appointed. He introduced himself over the television the other night and told viewers what his Party proposed to do if returned to power. He did not tell them what they had done in thirteen years, because that would be precious little. But now, having wasted those years, the first objective would be, he said:
"by ruthless action to root out inefficiency where it lurks, without fear or favour".
Well, well! This is the Party which was in office for thirteen years, during which they did little or nothing; allowed inefficiency to flourish, content to recline at ease, fortified with the redolent slogans such as "Never had it so good" and "The opportunity State"—the opportunity, I suppose, to be inefficient and complacent. He then proceeded to say that defeat had given the Tories a chance

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to take a "hard look" at themselves. Really, my Lords, this must be a most self-revealing and hazardous exercise. But is not that what the Tory Party have been doing for years—just looking?
Listening to Mr. Du Cann, who I trust will not get a stiff neck from too much looking, I speculated as to whether he had consulted Mr. Enoch Powell, who traipses around his dreary way honestly pedalling a philosophy for the Tory Party which no one will openly buy—a philosophy of "free for all". Why Mr. Powell should do this I cannot think; for it has always been, in any case, the basis of the policy of Tory Governments, with disastrous results for our country and its people which we all know from experience.
My Lords, it cannot, I think, be denied that many of the difficulties which later arose could have been met, or indeed avoided but for the failure, for Party reasons, to take appropriate action early last year. The story of those days of default is unedifying; it is also interesting and informative. A version was given in the Financial Times of November 28 last, and it shows clearly to what lengths the Tory Party will go. Now the Financial Times is a responsible newspaper, not visibly a supporter of the Labour Party. I have seen no question of the accuracy of the story, nor any answer or explanation. What a damning indictment it was! It ought to be read by every person interested in public affairs. For those reasons, which I have briefly indicated, I will support the Motion.
7.40 p.m.
LORD FERRIER: My Lords, I propose to speak to this debate in the spirit which obviously prompted the noble Lord, Lord Champion, to put down the Motion. It is not my intention to refer to tariffs, protection, GATT, EFTA, the Common Market, or even the more important matters of export credit facilities, or even export tax rebates. These have been, and are being, thoroughly debated. I turn to the human element which to me—and, it is obvious from the speeches, to other noble Lords—is the most important of all. It is an element which I believe is too often overlooked by the pundits of both Parties.
We shall never expand our exports unless there is an incentive to the indi-
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vidual, whether it be in terms of amour propre or in terms of financial incentive. I put amour propre first, and perhaps one might put it another way, because it seems to me that the financial reward is as dross if it does not bring with it some sense of fulfilment. It was adventure, coupled with the search for gain, which sent out the British merchants who were followed by the flag. The cliché that trade follows the flag is far from the truth, which may be just as well, because, of course, the flag, as we know it or knew it, is being withdrawn. But our export trade must go on or we perish.
As to our standing overseas, I have said in your Lordships' House before, and I say it again, that we are at a disadvantage in view of the unquestionable victory of the Axis propaganda machine in reviling the Briton overseas. The lie was such a big one that people, even at home, began to believe it, and we want in my view more of the spirit of self-confidence which the noble Lord, Lord Mancroft, disclosed. However, we must face the world as it is, the flag being withdrawn, and one thing we must do is to praise, support and reward the men and women who do our business overseas. This is the burden of my contribution to this debate.
As matters stand, most Britons abroad are employed by big organisations. Such employees have comparatively secure conditions. But not so the few who have to
fend for themselves. If there is still a Pagoda tree to shake little golden fruit falls to the ground, and the tax gatherer, here or abroad, or both, gleans most of it. It is fair to say that great advances were made by the last Government in matters such as double income tax relief, easier conditions for taxation on houses at home, leave pay, amenities, and so on. But there is more that can be done to make life easier for the man who is working overseas. For
these are the men, whether they are employees or self-employed, who sell service and replace British export products. They are worth, first of all, an outspoken acceptance of their importance to the nation—an importance which is out of all proportion to their numbers. This is a point which other speakers have made in the course of the debate.
Secondly, it is doing them no service to cry down the quality and the price of

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British products. It is well to remember that a buoyant home market for a product is one of the best sales points overseas. I think, and my thought is based on information I have recently received, that too often producers here pay too little attention to advice from overseas about the design, the finish and the packing of their products. Be that as it may, some of the efforts which this
Government superimposed on those of the previous Government are pressing in the right direction. However, with the noble Lord, Lord Erroll of Hale, whose maiden speech I much enjoyed, I believe that Councils and the like are no substitute for men going out to sell their products. Councils "can call spirits from the vasty deep," but will they come when they "do call to them"?
Now what practical steps can be taken to help the individual? I think that the Government should encourage increased contacts with chambers of commerce here. Perhaps the noble Lord, Lord Byers, would agree with me, in the light of what he said in his interesting maiden speech. Overseas trade commissioners should be urged to try to give help and assistance to all British traders, small as well as great. What I mean is this. It is all very well to make a great stir in some capital city about a trade mission, a "British Week", a trade fair or the like, but such attention should not overshadow attention to the affairs of the small manufacturer or trader or his representatives all the year round in all conditions of weather. I would here again agree with the noble Lord, Lord Erroll of Hale, in his general tribute to officials here and overseas who are connected with the export drive. But it is well to remember that they are only human, and that they work in extremely varied circumstances.
Talking of trade commissioners, of course they vary as individuals, and they vary in their locations. One enterprising exporter told me the other day that he felt that on the whole our trade commissioners were less effective than those of, say, the U.S.A. On the other hand, another told me only yesterday, speaking of another part of the world, that our trade commissioners there were absolutely first-class, and he felt that British traders do not use them enough. In other words, it cuts both ways. Both
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could be urged to support each other to the full. In this respect, I agree with what the noble Lord, Lord Byers, said in his speech welcoming the suggestion of Government propaganda in this regard, which was outlined by the noble Lord, Lord Champion.
While on this subject, may I say that a Government does well to organise and to assist trade missions, but I should like the noble Lord who is to reply to take particular note of what I am going to say in respect of trade missions. It should be remembered that there are small missions, small groups of exporters and traders, or would-be exporters, such as those who have been organised and are now being organised by the Scottish Council. The numbers taking part in such missions and, indeed, the effectiveness of the missions themselves, could be improved by a specific financial assistance. What I say now cross-checks with what other noble Lords have said about the need for supporting the small man and the small individual. Similarly, I say that assistance should be available to small groups. Do such qualify for assistance of this sort, and could this kind of help be developed? This was a point to which the noble Lord, Lord Champion, made reference in his speech.
There is another technical matter to which I would refer—it is perhaps ancillary but, nevertheless, relevant—and I refer to the matter of patents. Surely it is of the utmost importance not only that British patent rights should be supported in this country, but that efforts should be made to see that they are supported or defended elsewhere. It is a stab in the back for British enterprise if a patent—and one must remember that it exposes to all comers the basis of an invention—is not held inviolate, at least by the State. I am not at all happy that this point has been appreciated in its export aspect. We should, I feel, press for international recognition of the importance of patents.
My Lords, I am now going to walk on thin ice. I am going to turn to the matter of expense accounts. What a lot of nonsense has been talked about this question: and how unfairly the attack is pressed, and pressed very largely by people who have little or no business experience! There are two facts about them which are outstanding, to my mind. The first is that they are occasionally

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abused—there is no question about that. But it is not only in business circles that expense accounts are abused. The second fact is that when you criticise expense accounts you criticise the income tax authorities. After all, the income tax authorities are pretty sharp about this; they catch up with offenders in the end. To cry out about expense accounts is to cry out about the efficiency of the tax gatherers.
But, my Lords, expense account outlay is an absolute necessity of exporting. Directors and executives simply must have freedom to judge in this respect. Insist, if you like, that such expenditure should be based on actuals, but recognise it, as I have said, as an investment in trade. Whether it be spent abroad or at home, no matter. Let the income tax authorities pounce on ridiculous extravagance, by all means, and let boards of directors be strict about mutual entertaining at their company's expense. But make sure beyond peradventure that no order is lost because some sales executive has failed to entertain a customer.
There was only one respect in which I agreed with the noble Lord, Lord Francis-Williams, and that was with what he said about the need for raising the status of the business man in the eyes of the public and the Press. There is too great a tendency to sneer at salesmen. If I may parody Kipling:
"For it's salesmen this and salesmen that,
And salesmen go away,
But it's 'Thank you, Mr. Salesman'
When the exports have to pay."
In parodying like this I refer to the unbalanced attack on a particular industry which has taken place in past years and which has definitely affected our export trade.
THE EARL OF LONGFORD: My Lords, may I suggest one thing to the noble Lord with which I am sure he will agree? Would he not say that the present Prime Minister has laid an altogether welcome emphasis on salesmanship in broadcasts and other ways in a manner one cannot remember from a Prime Minister of any Party in the past?
LORD FERRIER: I thank the noble Earl. I did not know that the Prime Minister had broadcast to this effect. I am delighted to hear that he has, because this was a point, incidentally, which was
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made from the Government Benches only this evening and I could not support it more strongly. Salesmanship is something which we are far too little inclined either to respect or to study.
To turn to the question of entertaining, how many hours have I spent entertaining business people, thinking all the while of the work mounting up on my desk! But it has been part of the job, and it has been a job in which every minute has been worth while if it has resulted in more business on the shop floor.
The noble Lord, Lord Snow, is reported to have criticised the British business lunch, and the noble Lord, Lord Mancroft. has already referred to this point. The noble Lord, Lord Snow, compared it with the workers' tea-break. Let us be reasonable about this sort of thing. There may be, in fact there is, abuse on both sides; but my experience of working lunches is very different from that of the noble Lord, Lord Snow. But perhaps, as the noble Lord, Lord Mancroft, said, the noble Lord, Lord Snow, keeps odd company in industry.
My experience of working lunches is that they are simple meals, with little or no alcohol, and probably the same fare as is available in the works canteen next door; and it is business, business, business all the time. It is often the only time when directors and executives can exchange information and experience more or less uninhibited, and it may be the only opportunity when they can all meet
some export contact. Business lunches involving entertainment for visitors or delegations are quite another matter. Nevertheless, when one comes to think of the working day, my experience is that a working director's working day is one embracing every waking hour.
Please do not let us allow prejudice or over-enthusiasm to cloud our judgment on our fellows. Let us all pull together to build up our export machine. In this respect I agree with the noble Lord, Lord Mancroft; do not let us seem to revel in underselling ourselves.
It is increasingly necessary for directors and executives to go abroad, and reference is made to this point in page 15 of Export Trends. This point has been mentioned already, particularly by the noble Lord, Lord Byers. Incidentally, are the "top people" inclined to go abroad only at the best time of the year, and

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possibly only to the nicest places? Let us always remember Pagett, M.P. But there is a point about business oversea which I have recently had brought to my attention: that agents might like to see more of the younger executives and not the top directors: the younger executives who have a closer contact and link with the shop floor, which goes far to overcome the point I made earlier about the necessity for guidance in respect of finish or packing in the production of goods for overseas. This also goes some way to meeting Lord Byer's seggestion that technical men might well be taught to look forward to being salesmen; and Lord Mancroft's point in reverse might well be made that it would do overseas officials and officers of the Export Council good to have a training course with industrial organisations.
There is another point in regard to visits overseas which, as I have said, are becoming more and more necessary. Earlier in my speech I referred to men and women overseas. I think it should be more generally accepted that leading executives going abroad should be encouraged, if circumstances permit, to take their wives with them. Wives greatly lighten the burden of overseas visits, making it possible for husbands to put in a more effective day's work. The wife helps with entertaining and with the engagement book. She does the packing for the hotels and the laundry. But, most important of all, by swapping yarns with the wives of overseas associates she engenders an exchange of confidence. I have known wives, indeed, help with preparing reports. But, more than anything, the man has someone to talk to when decisions have to be made, when he, as Lord Byers says, may be feeling a lonely man and right out on a limb. However, talking of overseas expeditions, I hope that the income tax people will stop charging tax on the saving in the cost of food not consumed at home by people abroad on business. That is something I have experienced.
Lastly, I turn to the question of taxation on the individual. Let us recognise that unreasonable limitations on expense accounts, swingeing income tax and surtax, taxes on wealth, capital gains tax, corporation tax, which may strike at rewards of overseas investment and so on, all contribute to restrict any incentive to adventure. With burdens of that nature
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superimposed on the effort which is required to-day to promote exports, exporting is not fun. It is no use being donnish or doctrinaire when you are dealing with competition in the wide, "wide" world. Do let us be sensible and recognise that exporters need incentives, moral and financial; and good luck to any Government who will give them such! I will end as I began by welcoming the spirit of Lord Champion's speech. I was quite prepared to abstain from voting for the Amendment, but after hearing the speeches of the noble Lord, Lord Francis-Williams, and the noble Lord who preceded me, I will change my mind and go into the Lobby for the Amendment, if your Lordships have reached that stage before I have to leave to catch my train to Scotland.
8.3 p.m.
THE EARL OF DUNDONALD: My Lords, time is getting on. Many things I was going to say have been covered most ably by the excellent speeches of my noble friends Lord Dundee and Lord Mancroft. I shall therefore be brief. While welcoming any measures to help the exporter and the manufacturer wishing to export, I feel that some words of Lewis Carroll apply to those of us concerned in the export business, in relation to the present Government:
"'The rule is, jam tomorrow and jam yesterday—but never jam today.' 'It must come sometimes to "jam today"', Alice objected. 'No, it can't', said the Queen. 'it's jam every other day; today isn't every other day, you know. 'I don't understand you', said Alice. 'It's dreadfully confusing.' 'That's the effect of living backwards', the Queen said kindly: 'It always makes one giddy at first.'"
Exporters are certainly giddy at the moment, trying to sift through the incomplete statements of Ministers, and we are working backwards in that we have to piece together the jigsaw in retrospect. The export rebate scheme, which has been mentioned to-day, became clearer to us in the business as a result of an excellent article published in the Financial Times on January 20, just over two months after the initial announcement by the Chancellor of the Exchequer; and in this connection may I say how indebted we are to the Press for the clarification of certain statements of Ministers in putting them in amplified form. The Chancellor in his November Budget speech said,

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"This scheme would enable firms to keep their prices competitive, devote more effort to marketing their goods abroad and develop larger resources to keeping their products fully adapted to the requirements of overseas customers".
What was not stated was that there was to be more form filling—that is, more administrative, non-productive man hours; and what also has not been stated, so far as I know, is when and how the manufacturer or exporter collects the rebate, and in what form. Two more forms, as your Lordships who are concerned in this business well know, are now to be completed. I have not managed to get copies of them yet, but it is stated in the Financial Times, which we trust to be accurate, that they can conveniently be prepared from the file copies of export sales invoices. Is it too much to ask that firms be allowed to send in to whoever is producing the rebate copies of the actual invoices, rather than fill up these two additional forms?
We are quite used to certifying invoices with the EFTA certificate. We have been doing it for years, so I can see no reason why firms should not be trusted to supply extra copies or certified copies of the actual invoices and so save this additional form filling. I endorse what the noble Lord, Lord Errol of Hale, said in connection with the views of customers abroad now that they have wind of these rebates. Ours in certain countries have made the suggestion that they should have a discount. When we get our discount I do not know, but they have suggested that they have their discount, or split the discount with us.
To change the subject, an announcement was made only a week or two ago—it was mentioned to-day by the noble Lord, Lord Champion—concerning the interest rate of 5½ per cent. which would be available from the joint stock banks for financing exports. I listened very carefully to-day to the noble Lord, Lord Champion, to see whether I could learn more about this in relation to some problems we have. I am advised that this rebate on interest will not apply if the value of the order is under £50,000, or if the length of credit required by the customer is for a period of less than three years. In either of these circumstances the manufacturer will have to obtain funds to finance an order of this sort at the current rate of not less than
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1½ per cent. over bank rate, which at the moment means 8½ per cent. or more.
A very great deal of our exports are sold on terms of payment of 90 to 120 days. In fact this is virtually the rule in dealing with steel tubes and similar products where an order, particularly for Europe, is not worth more than say £30,000; so this 5½ per cent. interest rate is going to help only a small proportion of firms concerned with extended-payment terms over three years and in excess of £50,000. If we take, for example, the manufacturer of a product which requires the importation of a special component, a key part, perhaps from the United States, he now has to pay a surcharge of 15 per cent. on the imported part, and when selling an order worth say £40,000 abroad with payment terms extended over two years the customer is expected to pay interest charges of about £1,500. I have calculated this on the usual basis of a 10 per cent. deposit bearing No 1nterest and the rest in four equal six monthly payments on the diminishing balance basis. How do the Government imagine we are going to be able to compete overseas with our products when they are loaded with these excessive interest charges and a surcharge on a component?
The real root of the problem here, of course, apart from the surcharge, is the high bank rate made necessary entirely because of the lack of confidence incurred in our currency and our economy as a result of contracts and trade agreements broken by the present Government when they came into office. We know that some members of the Government have no practical commercial experience, but I hope that we shall go through a period when, for the country's sake, they will possibly do a little bit of learning. The next EFTA meeting takes place very soon, and I hope the Minister who attends puts up a good show, because I understand that the professionals who attended the last one were not very impressed. Later there is to be the meeting of the bankers, scorned by certain Ministers, but they saved the pound. They are going to ask how we propose to pay back the £1,000 million which this country has been lent.
I believe, that, since the Government came into power, they have in fact learned one thing—namely, that the

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foreigner can often speak and write English, and that those concerned with investing in our economy often read English newspapers. If this lesson is now learned, perhaps in future Ministers will try to think before making ill-considered statements such as were made concerning the Concord during the first few days of this Government's office.
8.11 p.m.
VISCOUNT DILHORNE: My Lords, yesterday and to-day we have been debating the most important subjects of education and exports, and I am glad that from time to time we have been honoured by the presence of Lord Snow, who took part in the debate yesterday and whose Department, I should have thought, has a considerable part to play in the development and expansion of exports. I am not going to seek to assess which of the two subjects is, in fact, the more important. It may be that for long-term, education certainly is. But for short-term, and also possibly in the long term, it may be that exports are the more important; because on the successful achievement of our maintenance and expansion of exports depend whatever plans we may make for education, whether it is for comprehensive schools or, with Lord Snow's new-found support for Eton, for maintenance of that establishment.
The noble Lord, Lord Champion, introduced this debate. I am sure that the House is grateful to him for having given us the opportunity of discussing this most important subject. The Motion as it stands we cannot agree with, because it tells only a part, and I would suggest a small part, of the story. But when it is amended, as I hope it will be, we can, I hope, carry it nemine contradicente.
In the course of our debate to-day, we have had no fewer than three excellent maiden speeches. First, there was my old friend—old in friendship, but not so old in age—and colleague, the noble Lord, Lord Erroll of Hale, who spoke with great authority, and who made a speech which I suggest deserves the closest attention. I shall come back to it later. There is one matter with which he dealt—after all, it was some hours ago—to which I hope we shall have a positive reply from the noble Lord who is going to reply to this debate. I will come to that question
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in a few minutes, but it is an important question with regard to export rebates.
Then we had a speech from the noble Lord, Lord Byers. It appeared to me that he obviously found the restraint of maidenhood somewhat irksome. No doubt he will lay about him more vigorously in future. Indeed, if he accepts the invitation so courteously extended to him by the noble Lord, Lord Champion, it may well be that the noble Lord, Lord Byers, will retire with two black eyes. Then we had a maiden speech (which unfortunately I was not able to hear) from my old friend and colleague, Lord Grimston of Westbury. For many years he held an office which made it impossible for him to take part in debates in another place. That was our misfortune. I hope that it will be our good fortune to hear him, and indeed Lord Byers and Lord Erroll of Hale, on a great number of occasions.
My mind goes back to those years in Opposition, from 1945 to 1951, in another place when Lord Grimston of Westbury and I sat together on the same Bench. It was a happy period of co-operation. It may be that our attacks on Her Majesty's Government at that time were not entirely co-ordinated, but, in the light of that experience, I hope that his accession to your Lordships' House may augur considerable trouble for Her Majesty's Government.
To come back to the Motion as tabled, it really is a quite narrow Motion, somewhat provocatively worded (the word "welcomes" appears) and without any reference to the wider matters which ought to be considered on a debate on exports. All the House was asked to do was to welcome the Government's initiative. It was not put down as a wide-ranging debate on exports. I am glad that it has been such a debate; and the fact that it has been is largely due to my noble friend Lord Dundee who tabled the Amendment.
I believe that we have had a most useful and valuable, and indeed important, debate. The noble Lord, Lord Champion, made some reference to its possibly becoming a Party dog fight. He said that he feared it would be. So far as any speeches from this side of the House are concerned, either from these Benches or from the Liberal Benches, his fears have been proved wholly unfounded, as I am

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sure he will agree. Unfortunately, I cannot say the same for the speeches made by members of the Party opposite. Three of their noble Lordships obviously anticipated that this debate would be a Party dog fight and prepared their speeches or essays accordingly.
First, there was the noble Lord, Lord Francis-Williams. He began by describing himself, if I caught his words aright, as somewhat of a sandwich between two maidens. I do not know what happens to a sandwich in that position. I should have thought a more accurate description would be that the two maidens constituted the outside of the sandwich and the inside was a not insubstantial portion of meat which had obviously been there since the last Election, for his speech savoured entirely of Party politics. If there ever was a speech which lowered the level of the debate and might have led to a Party dog fight, I think it was that of the noble Lord, and I will refer to it again later.
Then we had the noble Lord, Lord Royle, following, so I understand, faintly, but still pursuing, the example set by the noble Lord, Lord Francis-Williams. Finally, we had a long and snarling essay, fairly well read, by the noble Lord, Lord Latham, who has not honoured us with his presence after being exhausted by that effort. Apart from those three speeches to which I have referred, there have in fact been no signs of a Party dog fight in our debate to-day.
I think the noble Lord, Lord Champion, would agree that it has been an important debate, on a high level and sound in content. I certainly want to keep it on that note. I am grateful to the noble Lord, Lord Champion—and I am sure the House is—for explaining so clearly to-day, on February 11, the proposals made public by the Government on January 27 last. Those proposals, as my noble friend has said, are generally welcomed, though I must say that the comments of my noble friend Lord Erroll of Hale in relation to the export rebate require very serious consideration. The noble Lord spoke with great authority.
I do not propose—for I do not speak with his authority on this subject—to comment on the problem which he posed; but it is incumbent upon the noble Lord, Lord Rhodes, when he comes to
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reply, to deal with the matter raised by my noble friend, a matter which I regard as of considerable importance. I am sure that noble Lords in all quarters of the House will agree that perhaps one of the most important things the noble Lord, Lord Rhodes, can do in relation to the Government's proposals is to give a positive answer to the problem posed by my noble friend. My noble friend made the comment that a great many of our customers would require, or demand, a share in the rebate, and that the effect might well be that we should have to sell another £20 million-worth of goods abroad really to stay where we were.
There is no dispute in any part of the House as to the vital importance of the subject which we are discussing and of the importance of exports to our country's future. The Government's proposals, as has already been said (and I fear it is the case), will be relatively marginal in their effect. I hope—I think we all hope—that those who take this view are wrong; but so far as I can see, those proposals are likely to be only relatively marginal in their effect.
My noble friend Lord Dundee, in the course of an excellent speech, reviewed in detail the whole position. I do not propose to review it in detail again, but he was followed by the noble Lord, Lord Williamson, who spent much of his time in attacking a speech made two years ago by Lord Dundee. Well, that is going back a little. He attacked also the record of the late Government. He did not seem to me to be nearly so happy when he sought to defend the decision of the T.U.C. not to co-operate with the National Incomes Commission in the lifetime of the late Government and their change of attitude now. I welcome their change of attitude. I think that if they had co-operated in the past, our prospects for the future might be brighter.
The criticisms advanced, and in particular those advanced by Lord Williamson, as to what the late Government had done in relation to exports were fully and completely answered by my noble friend Lord Erroll of Hale. He reminded us of what had been done. But when we came to hear the noble Lord, Lord Francis-Williams, it might have been as if Lord Erroll of Hale had never spoken at all. For Lord Francis-Williams (who

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described himself as "a sort of sandwich") delivered an address which was a real electioneering speech, a speech on which I will not spend more time, but which I would say was not wholly accurate in regard to the facts.
Lord Francis-Williams was followed by the noble Lord, Lord Byers, who I thought made a number of useful points. He stressed in particular the need for this country to move closer to Europe. Well, whether we are for or against this country's joining the Common Market, the Common Market is there; and, as the figures disclosed in the course of this debate show, our percentage of trade to Europe has diminished. Whatever view one may take about the Common Market, it is surely of the first importance to this country that our exports to Europe should be not only maintained but, if possible, increased. Quite apart from the Common
Market question. surely the noble Lord is quite right in saying that whether or not we enter the Common Market we should seek (and I think I correctly quote his words) to get closer to Europe. Surely that is common sense.
In this connection the Government have taken a step which is most disastrous in its consequences—I refer to the imposition of the 15 per cent. surcharge. My noble friend Lord Mancroft, in the course of an admirable and interesting speech, posed the question whether the Government intended the natural
consequences of their acts. The 15 per cent. surcharge may well increase the price of goods which we want to sell where those goods embody the components which have had to pay the surcharge, or indeed where machinery by which they are made is affected by that surcharge.
But surely the really serious thing in relation to the export trade is the antipathy of our customers and potential customers which arises from the breach of no fewer than nine treaties. It has been said before that we in this country are expected to set an example in keeping treaties—indeed, we have nearly always prided ourselves on doing so. The fact that we have caused this antipathy must, so far as I can see, seriously prejudice our export prospects. And all we
are told by the noble Lord, Lord Champion, speaking on behalf of the Government at the very outset of his
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speech, is that we must reduce and review the charge as soon as possible. I would agree that it must be reduced, and, I hope, abolished, as soon as possible. Nobody could say that the harm which it has already done to our prospects in the export field is inconsiderable, and the longer it is kept on the more damage it will do—damage which may completely offset the effect of the initiatives which we are asked to welcome to-night.
The noble Lord, Lord Ferrier, paid tribute to the salesmen and to their skill and art. I have no doubt that it is a great skill and a great art which they possess. The noble Earl the Leader of the House interrupted my noble friend to ask him whether he was aware of the great tributes paid by the Prime Minister on the wireless and on television, to salesmen. I am not aware of those. Perhaps I do not have as much time as the Leader of the House to watch the Prime Minister on TV, on which he appears fairly often. But it is not much use paying tributes to salesmen and salesmanship, on the wireless or on television, if at the same time the Government headed by that Prime Minister put impediments in the way of salesmanship, such as the imposition of the 15 per cent. surcharge.
It is not only that, my Lords. We have had references to-day to Spain and Portugal. I was interested to note that the noble Lord, Lord Williamson, who followed my noble friend, did not seek to defend those losses of exports. They are bound to be substantial. They may, indeed, affect employment in this country. Then there is South Africa. We were not bound by any treaty to withhold arms from South Africa, to stop exports to South Africa, but what is said is, "Ah!, but there was a moral obligation there." Whether it is worse to break nine treaties or to adhere to what is thought to be a moral obligation when, in fact, it is not, is not for me to judge. But it comes ill from those who break nine treaties to seek to justify their course of conduct in losing our trade with South Africa by saying that we were under a moral obligation.
That decision has been made; it is in the past. It has had no effect on the policies of South Africa. It has brought no advantage to this country, in the Commonwealth or elsewhere. Is it too much to ask that in those circumstances

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Her Majesty's Government, if they are serious about exports, should review their decision, should reconsider their attitude? If they are serious about the importance that they attach to exports, surely what they will have to do is to endeavour to repair the damage they have, by their own acts, already done; to restore the friendship of the European countries who are offended by the way in which this surcharge was imposed; to restore good relations with Spain which was bitterly insulted by the Prime Minister's speech and conduct; to restore better relations so far as trade with South Africa is concerned—although we are all agreed in our dislike of the policy of apartheid. But unless the Government are prepared to reconsider these matters, it seems to me difficult to accept that they really attach the importance that should be attached to the export situation of this country.
So far I have dealt only with what I call the impact on our trade prospects of the foreign policy followed by Her Majesty's Government. But, as my noble friend Lord Dundee said, there is also their economic policy, which cannot exactly be described as having been helpful to sustaining and securing an increase in exports. The increase of taxation, the increased petrol tax, the transport system—is it not essential, if we are to have an increased share of the world's exports, that we should reduce our costs, not only of manufacture but of transport, as much as possible? Yet what has happened to the programme of modernisation on which we embarked? Dr. Beeching has gone. Are we going to get liner trains, or are they going to be opposed by the trade unions? What about the docks?
I fully agree, as indeed we all do, with what my noble friend Lord Mancroft said on that particular matter, and I should be the last to denigrate what is going on in this country and what this country has achieved. But, at the same time, if we want to improve our prospects for the future, surely we cannot rest content with the present transport system, the present system of operation of the docks. Indeed, we have sought to tackle our transport system; but what is the Party opposite doing about it? "Co-ordination of road and rail transport"—was it not from 1945 to 1951 that we heard that said? I do not remember
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any policy coming out, even before the 1951 Election, and now, surely, it is all going to stand still until this policy is abolished. What about the imposition
of the 7 per cent. bank rate? These are all things which impede our export prospects.
Again, there is the way in which our Government have handled our aviation industry. We shall be debating that subject next week, and I do not want to go into it in any detail this evening. But, my Lords, does that not affect our
prospects of selling aircraft overseas? Does that policy not affect our prospects of increasing our exports?
I have here the statement issued by the United States Department of Defence through the United States Information Services. It is dated Washington, February 9, and the first paragraph reads as follows:
"U.S. Defence Secretary Robert S. McNamara signed agreements with the United Kingdom and Australia Tuesday for the sale of some 1,000 million dollars worth of American military equipment to the two nations."
A little lower down it gives the figures for the sale to the Australians, which amounts to 255 million dollars' worth. From that it would seem that the sales to this country are some 745 million dollars' worth. The noble Lord, Lord Shackleton, answered a question about this to-day. It is, indeed, curious that we should get more information from a release through the United States Information Services than we can obtain from Her Majesty's Government. But the figures given in this statement hardly seem to me to accord with the figures given by the noble Lord in his Answer to-day, which I shall study; I have so far had the opportunity only of hearing it.
I want to draw attention to the concluding paragraph of this release, which reads as follows:
"In announcing the signing of the two agreements, Secretary McNamara said that the sale of military equipment by the United States over the past three and one half years has played a major part in helping to reduce the U.S. balance of payments problem."
The converse of that, surely, is that the purchase by us, under contracts entered into very recently by Her Majesty's Government, is not likely to help reduce our balance-of-payments problem. It must mean that we have to sell far more exports to remain in the same position.

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My Lords, I conclude as I began. I think this has been an extremely interesting debate to listen to, and a very important debate. I am grateful to the noble Lord, Lord Champion, for giving us the opportunity of discussing this important subject. I think he was optimistic in thinking that we could acquiesce in his desire—I sympathise with him—to find some body or some person who could say something in approval of Her Majesty's Government at the present time. We think that this Motion will be made much more accurate by the carrying into it of this Amendment, and if we succeed in that, then, indeed, my Lords, the Motion as amended should be approved by the whole House.
8.40 p.m.
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES): My Lords, may I, too, say how much I have enjoyed to-day's debate—and I think everybody who has been in the House has done the same—and the speeches that we have heard from our new colleagues? May I mention particularly the noble Lord, Lord Grimston of Westbury. Time and time again in the past I have tried to catch his eye and have not been able to do so, but this afternoon I felt as though I had got a little bit of my own back because there he was on that Bench making his maiden speech. The same might apply to the noble Lord, Lord Erroll of Hale, because many times in the past we have exchanged across the Floor of the other place, especially at the time of the cotton reorganisation programme, various little bits of information that we thought might do each other good; and I am certain that during the course of the next weeks and months we are going to do the same again here. But we welcome him. He always has a bright and cheery face, and we are glad to see him. To the noble Lord, Lord Byers, whom we thank for his contribution to-day, with so much of which many of us agreed, may I say that we hope he will do what it is his nature to do, and that is to speak often; then I am certain everybody will be pleased.
The noble Earl, Lord Dundee, who began this debate on behalf of the Opposition,
really agreed with the Motion. He was delighted with it. He was as pleased as
pleased could be that we had put this Motion down saying that we welcomed the
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export proposals; and, really, there was very little difference between what he had to say and what is in the Motion. Time and again when he has got on his feet here in the House about an economic problem he has said that there was no crisis last autumn. His words to the House to-day were, "The balance-of-payments crisis that the Government claim to have discovered last autumn. … "All I can say to the noble Earl is that every time he mentions this I shall do my best to give him the figures that I am going to give him now, and perhaps one of us, at any rate, will weary the other out in course of time. But before I go any further, may I say that it is a pity that Sir Alec Douglas-Home, the late Prime Minister, did not discover it last year?—because if he had it would have saved this country an enormous lot of trouble and a tremendous lot of heartache. But, no. All the way through last year the Government were saying there was nothing wrong with the economy; and the noble Earl, Lord Dundee, is simply following out this statement by the Prime Minister.
But listen to these figures on the trade balance—and I promise the noble Earl that every time he brings this matter up I will read them to him: 1963, first quarter, a favourable balance; second quarter, £6 million minus; third quarter, £24 million minus; fourth quarter, £42 million minus. Then 1964: first quarter, £108 million minus; second quarter, £135 million minus; third quarter, £156 million minus; fourth quarter, £124 million minus. And that was at the time when the Prime Minister of the last Government was going round the country saying that the economy had seldom been stronger. If the position was not seen, then we cannot blame the previous Government for their actions, but we can blame them for their ignorance and ineptitude.
If I may, I want to refer to one or two things, without getting too partisan, that I think they ought to know. Now Australia, New Zealand, the Common Market Six and the EFTA Seven all accept the American version of the Keynesian doctrine which we have. We all do. We like it. What does it do? It gives us the motor car, the "fridge" and the washing machine; but we tend to be a little reluctant to accept some of its rules. One of the rules is that you cannot have in this

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prosperity club an obviously privileged section of society. Another rule is high productivity, and that earnings are bracketed with it. And, because we believe in that, we have had tremendous success in forging the new machinery regarding incomes and prices. When the Party opposite tried their hand at it with their National Incomes Commission their failure was an absolute, resounding disaster. They were like the monkey with its hand through the bunghole of a barrel clutching a nut and trying to get it out but not being able to—and the nut the Tory Party were clutching was the nut of privilege.
My Lords, if they came to power tomorrow they would be no better equipped to do this job than they were when they left office. When I talk about the privilege that runs through our society I am serious about it, because you will have to think about it. It is no use the smug faces thinking that somehow or other they can laugh it off, because they cannot. Mark my words! what the business community has done with the Labour unions in the last three months has effected a major dissociation of business from the Tory Party. Make no mistake about it. A lot of people criticised Mr. Selwyn Lloyd when he was Chancellor of the Exchequer. I think he was the best Chancellor of the Exchequer the present Opposition produced when they were in power. Now steady on: do not start throwing things. I will tell you why. He knew the rules of the prosperity club. He was the man who saw that it was necessary to surrender some privilege, because he was the man who first brought in the capital gains tax—these are facts—and he was the first man who had to do with the setting up of "Neddy".
Now may I say this—and I will continue to say it in this House if this kind of arrogance is put over; because it just is not right to judge a Government after 100 days. There is hardly anybody in this House who has not at some time or other said, "Ah!, you cannot judge statistics on only a month's figures." If you cannot judge statistics on a month, how can you judge a Government on 100 days?
VISCOUNT DILHORNE: It was your idea not ours.
LORD RHODES: All right, it was our idea; but you did the judging. Let time tell.
VISCOUNT DILHORNE: The country will judge if it is given that opportunity.
LORD RHODES: I hope it does, and I am perfectly certain it will.
The Leader of the Opposition in another place, speaking in the country last week, said there was a ferment of ideas going on in the Tory Party. It is a pity they had no ferment when they were in office; they might have left it better. But for three years the Party opposite, including the new noble Lords, pinned their faith on our entry into the Common Market. What would happen, they cried, if we did not enter the Common Market? I must confess that I am a Common Marketeer; nevertheless, what a way they went about it! What time they spent on it! The wasted years! For three years the energy of the Ministers and Departments was spent on those abortive negotiations and the work in the Departments was neglected. Yes, it was neglected. You cannot do two things at once. You cannot have an overriding urge to do something like that and at the same time attend to all the other things going on.
I remember, time and time again, as does the noble Lord, Lord Erroll of Hale, Ministers returning from the Continent. They used to stagger into the other place just like exhausted prima donnas. We were told all the time that the economy must be exposed to these winds; we must give it a cold draught. We were often told—and remember this—that we could not survive as a nation unless we went in. We have had criticism this afternoon from noble Lords opposite for what we have done in 100 days when, if I remember aright, for three years they had no faith in the future of this Britain of ours outside the Common Market. We are not in yet. What right have they to criticise? But, my Lords, enough of that—though I have a lot more and I will use it at the slightest provocation. Good gracious! that was all provoked out of a remark of the noble Earl, Lord Dundee, and that is as far as we have got.
My Lords, let me say on this question of exports to South Africa that I have

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an interest. My wife and I have relatives in South Africa who, I suppose, have been settled there just as long as any Britons ever have. We get great long screeds from one of them every now and again, asking questions that I cannot reply to altogether. We feel it. But I must say this: that the Government policy on the export of arms to South Africa follows out entirely United Nations resolutions, and we are sticking to them. The latest of these was on June 18, 1964, while the Party opposite were in power. Existing contracts are being honoured including the contract for the supply of Buccaneer aircraft and spares. It seems that it was said that all these contracts were going to finish straight off; that is utter nonsense.
There was no actual contract for the supply of Bloodhounds worth some £16 million and the embargo on their supply was clearly within the terms of the United Nations resolutions. A lot of the fear and a lot of the nervousness about what is going to happen as a result of this embargo (or even in regard to the case, which I shall deal with in a minute, of import restrictions) is a figment of the imagination of a lot of people who were "doing this Government down". It has no foundation in fact except in one or two exceptional circumstances. The sort of general assumption made by the noble Lord, Lord Erroll of Hale, on the question of contracts lost had nothing to do with it. But let the noble Lord, Lord Erroll of Hale, realise this; that there is something else in a business transaction besides sentiment; it is value for money. They are getting value for money from this country and the contracts they have on will be honoured because they want them. This is what is happening.
There have been allegations that we will lose £150 million of arms orders from South Africa. It was put in a most ingenious way. If somebody had not "known his stuff" the House would have perhaps fallen for it. The £200 million is the amount we do in trade with South Africa. It seemed that if you deduct the £150 million from £200 million that would leave us with £50 million of trade. This is absolute nonsense! The sale of arms to South Africa in recent years bears no relation to this figure; and it has no justification whatever. Do not let us have any of these half-baked generalisations. The Government does
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not consider that trade with South Africa outside the embargo will be materially affected. From what I have heard from my contacts in South Africa, it is the case that exports to that country have been increasing—they are running at over £200 million a year. We are proud to trade with South Africa. Make no mistake about that. We have an exhibition centre in Johannesburg, the Rand. And may I say, quite sincerely, to the last Government that they showed exceptional foresight in seeing that that place was put up. I will give them that: I will give credit where it is due. But in the Rand exhibition at Easter there will not be a single empty space amongst the British manufacturers showing the flag in that place. We are "going the whole hog" with it. We are not drawing back in the slightest. I may say that there is every indication that there is going to be a very successful exhibition there.
My Lords, the Government are anxious to see normal trade relations continue with Spain, a market which offers great opportunity, because in recent years Spain has been the most rapidly growing export market.
SEVERAL NOBLE LORDS: Oh!
LORD RHODES: All right! In 1964, exports to Spain, including the Canary Islands, amounted to £75 million. But, somehow or other, it seems that noble Lords opposite cannot think about trade with a country like Spain except in terms of arms. It is about time they did. With regard to Portugal there is no embargo on the export of arms; but licences are not granted for the export of arms to Portuguese overseas territories. This, may I say, is a continuation of the policy of the last Government.
We were pleased to hear the noble Lord, Lord Williamson, on the question of productivity and production that he knows so well. I want to come now to the answer to the noble Viscount, Lord Dilhorne, and the noble) Lord, Lord Erroll of Hale, on the question of the rebate. There are comparatively few instances where firms abroad have asked for the amount of the rebate to be given as an additional discount. There is only one that I know of—in the Netherlands. The noble Lord, echoed by his senior, who wound up—
VISCOUNT DILHORNE: My Lords, I should like to correct the noble Lord. I do not claim any seniority.
LORD RHODES: Shall I say the noble Viscount who came after the new noble Lord, who was talking about the marginal benefit that this rebate is going to have for British business men. It is quite obvious that the noble Lord has not a Department behind him, because his stuff is nonsense, absolutely so. I was up in Lancashire a fortnight ago, talking to the managing director of a large concern which exports large quantities of machinery overseas, and we did a little sum. His benefit in a year was £400,000. Is that negligible?
With regard to the other suggestions the noble Lord made, the noble Lord's alternative, the fact is that to relate cash funds to increases in each firm's exports would not be compatible with GATT. The noble Lord has always been a fervent worshipper at the shrine of GATT, and I think that will settle him on that point. Remission of more than the amounts collected as tax would be an export subsidy—and that, according to the noble Lord, would be terrible: it would be inconsistent with our international obligation. It is no use the noble Lord shaking his head. He always took the advice of his civil servants, and I am taking mine.
The noble Lord was afraid that the New York Trade Centre would get a little dusty. The Government appreciate the difficulty of a centre of this sort. There is no question that unless it is very carefully followed up and watched, and really looked after, it can get a bit "tatty", but we are quite determined to do this.
LORD BYERS: My Lords, which Government is the noble Lord referring to in using the word "tatty"?
LORD RHODES: My Lords, I was not referring to any noble Lords opposite—and I had better say that I was not referring to any of my noble friends on this side. I was referring to the permanent exhibition centre in New York City. I think it was the noble Lord, Lord Erroll of Hale, who said that it was likely to get "tatty", if it was not dusted. That is precisely the case. But we are going to make a success of this one. I can assure the noble Lord that we will. We are regarding it as a practical experiment,
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and we hope, given the support of the British-American Chamber of Commerce, to whom we are sincerely indebted for helping with this scheme, that it will be successful.
May I say, in answer to the noble Lord's other question about sponsored visits, that financial assistance under the new rules is applicable to missions which we organise to come into the country, as well as to those which come into the country of their own volition. That is the complete answer to what the noble Lord asks.
May I thank the noble Lord, Lord Byers, for his contribution? I have read his remarks with interest on so many occasions; and he is so right about this matter of status. I do not propose to speak for long, but I want to refer shortly to this point, because of the way in which so many people in this country, particularly in the entertainment world, have lampooned our salesmen overseas. There is no question that the salesmen of this country are as good as any in the world, and I am not going to let it pass that they waste their time. They do not.
The noble Lord, Lord Erroll of Hale, said that exporting was not fun. The noble Lord did not say that it was fun when he was President of the Board of Trade, but Mr. Macmillan said it for him. I do not think that it is fun at all. On and off, I have been exporting for forty years. It has been hard going, hard graft. I remember, when I first started it, going with a little bag to a foreign capital.
A NOBLE LORD: Oh!
LORD RHODES: I will deal with you in a minute. I had some woollen samples in my bag. After a hard day's "flogging" I had my bag in my hand, and I was on a bridge—and it was not moonlight—and I had had such a shocking day that I did not know whether to throw my bag in, throw myself in, or throw both of us in. But fortunately I was able to overcome that feeling.
May I say to the noble Lord, Lord Byers, on his reference to Embassies overseas, following on the Plowden Report, that I think before we accept too many strictures in this connection we had better see how the new system is going to work, because I am perfectly certain it will need a month or two to settle

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down. But after that you can depend on it that this Government are going to follow it up. We all admire and enjoy the speeches of the noble Lord, Lord Mancroft. We know that he knows what he is talking about, except when he is talking about the Labour Government with his tongue in his cheek. We know that he knows what he is talking about when he speaks of commercial attaches and the way things are done abroad and the way he goes abroad getting business. I may say that I agree with him—and I do not know why it has not been done before—that Ministers should take such men into their confidence before they go overseas. Only two days ago a prominent industrialist in this country told me that he was going to make a trip to Australia. I said to him: "There are five things I want to know about Australia. Will you put them down, and let me know about them when you come back?" At the time I was previously at the Board of Trade as Parliamentary Secretary, that is what the great firm of Courtaulds used to do, and they would bring me an up-to-date appraisal of the American market.
I have great difficulty in looking at any of these problems except through the eyes of the businessman. I knew early on that too much concentration on the home market would limit my expansion as a businessman. In a high capital cost industry like mine, the wool industry, of which I am very proud—and it is an industry that is still exporting £169 million worth of goods a year, which is quite terrific—you have to get out and sell your stuff or else your runs are not long enough to cope. And you do not do it for the country's prosperity, either; you do it for what you can put into your pocket and plough back into your plant. People do not pay much attention to exhortation to be patriotic and export.
What we feel is that people have a sense of the need for honouring the exporter officially and by the public at large, and that is precisely what we in the Government are recognising through the award scheme. When the noble Lord, Lord Erroll of Hale, criticised this award scheme, he was setting up his Aunt Sallies and knocking them down before we have even started. After all is said and done, in view of the people who are running this award scheme, I and my Party believe it is going to work, and work well.
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I believe it is important when employers and union leaders, sitting together on a council such as N.E.D.C., agree a target for exports, and that is the sort of factor that carries weight. Every firm begins to compare its own performance; and many of us think we can cope with most world competition, excepting perhaps that of Japan and a few other countries. Here I will answer the noble Lord, Lord Royle. There is no single obvious reason why the Japanese are so efficient and proficient. Certainly they have a prosperous home industry. They have organisation and scientific appraisal of world markets; but, above all, they are making progressive and determined efforts in the export markets. They are quite determined to break into markets, regardless of cost.
I think, too, that the Western nations, including our own, should appraise what the Japanese do in terms of their scientific methods in analysing world markets. When I was there two years ago, they showed me what they were doing. With their computers and their analysts they Know whether a commodity is increasing in volume in the world markets. If their share is not equivalent to the growth in world trade, the Japanese authorities want to know why.
VISCOUNT DAVENTRY: My Lords, may I ask the noble Lord why he does not employ Japanese in his business?
LORD RHODES: I think that is a ridiculous question, if I may say so. I know that when the Party opposite were in power for so long (this was when I was quite a little child) it ruined labour relations for the whole of my lifetime in that village when, shall I say, businesses of those days imported Chinese. But that is nearly a century ago. Surely the noble Lord is not thinking as far back as all that. I think the Japanese beat us in marketing, and we have to face these criticisms. Are we doing as well? I am now speaking as a businessman. The Japanese have a flair for working back from the market to the factory, and that is something that many of us have not got. This is what wins export orders. There is nothing to prevent us from doing the same—it is not their prerogative and theirs alone.
I want industry to know that we are aware of the many problems confronting it. One thing we are certain about is

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that exporters need a good economic climate at home. The price of the article determines its success abroad, so we need stability and expansion at home. That is precisely why the Incomes and Prices Review Body, which has been set up today, is going to be a tremendous asset to British exporters.
My Lords, I am coming to the end of what I have to say. Large numbers of British companies are doing a highly efficient job in selling to world markets—and I mean that. I believe that a British firm at its best has no peer in the realm of export selling. There are firms who are making first-class products who have not fully assessed their products in the export field. May I urge the chief executive of every medium-sized firm to ask himself these questions? What percentage of his advertising budget is spent overseas? What percentage of his sales force is employed seeking overseas markets? What is his pricing policy on export business, and how does he assess his own prospects for making an export contribution?
Now to the firms who will enjoy the fruits of the export rebate. I want the Press to back the appeal of the noble Lord, Lord Francis-Williams to make this into something of a national cause. Would every firm calculate the saving in tax under the rebate scheme and spend some of it in one or other of the following ways: the design of products for export markets; overseas advertising, the employment of additional people with overseas selling know-how who are nationals of the country where they want to break ground?
To sum up the action that has been taken: there are the new arrangements for export finance. In particular, the
lower limit of £50,000 instead of £100,000 is a boon to the smaller exporter—he can now discount his bills and get his money circulating quicker. May I say to the noble Earl, Lord Dundonald, that I will send the information to him about the implications of the £50,000 and how it applies up to the three years, and why it is that consumer goods do not come under this particular scheme. There is the new arrangement for the financial guarantees which give an incentive to the overseas buyer to buy British; the assistance to buying missions coming into the country, and to those missions going out to sell; collective market research; the stepping up of assistance to industrial participation in overseas trade fairs, British Weeks and store promotions in many parts of the world.
We are bringing back commercial diplomatic officers from overseas to have personal discussions with manufacturers here about what, and how, to send to the countries in which they are working. Twelve are coming back from Australia this year and are going to Lancashire, Yorkshire and all over the place to talk to the people who know. There is the reorganisation of the Diplomatic Service, with trade promotion work as one of its first charges, and the export rebate scheme. These are all practical aids. This is not preaching; this is not hectoring; this is not exports by exhortation. This is holding out the helping hand to industry to help itself and, at the same time, help Britain to take its proper place—and we are proud of it—among the foremost exporting nations of the world.
9.28 p.m.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided:—Contents, 82; Not-Contents, 32.

CONTENTS

Aberdare, L.

Crathorne, L.

Falkland, V.

Albemarle, E.

Daventry, V.

Ferrers, E.

Allerton, L.

De La Warr, E.

Ferrier, L.

Amherst of Hackney, L.

Denham, L.

Forster of Harraby, L.

Ampthill, L.

Derwent, L.

Fortescue, E.

Auckland, L.

Dilhorne, V.

Gage, V.

Balerno, L.

Drumalbyn, L.

Glendevon, L.

Belhaven and Stenton, L.

Dundee, E,

Gorell, L.

Boston, L.

Dundonald, E

Goschen, V. [Teller.]

Bridgeman, V.

Effingham, E.

Grantchester, L.

Brooke of Ystradfellte, Bs.

Egremont, E.

Grenfell, L.

Chesham, L.

Egremont, L,.

Grimston of Westbury, L.

Colville of Culross, V.

Elliot of Harwood, Bs.

Hastings, L.

Conesford, L.

Emmet of Amberley, Bs.

Hawke, L.

Craigton, L.

Erroll of Hale, L.

Horsbrugh, Bs.

Howard of Glossop, L.

Mersey, V.

St. Just, L.

Howe, E.

Mills, V.

Sandford, L.

Ilford, L.

Milverton, L.

Shannon, E.

Inglewood, L.

Molson, L.

Somers, L.

Jellicoe, E.

Moyne, L.

Soulbury, V.

Killearn, L.

Nairne, B.

Stonehaven, V.

Kilmuir, E.

Newton, L.

Suffield, L.

Long, V.

Northchurch, Bs.

Thurlow, L.

MacAndrew, L.

Rathcavan, L.

Wakefield of Kendal, L.

McCorquodale of Newton, L.

Remnant, L.

Waleran, L.

Mancroft, L.

Rockley, L.

Windlesham, L.

Margadale, L.

Rowallan, L.

Wolverton, L.

Merrivale, L.

St. Aldwyn, E. [Teller.]

NOT-CONTENTS

Addison, V.

Chalfont, L.

Longford, E. (L. Privy Seal.)

Archibald, L.

Champion, L.

Mitchison, L.

Arwyn, L.

Francis-Williams, L.

Phillips, Bs.

Attlee, E.

Gaitskell, Bs.

Rhodes, L.

Beswick, L.

Gardiner, L. (L. Chancellor.)

Royle, L.

Blyton, L.

Henderson, L.

Shackleton, L.

Bowden, L.

Hobson, L.

Shepherd, L. [Teller.]

Bowles, L. [Teller.]

Latham, L.

Stonham, L.

Brockway, L.

Leatherland, L.

Taylor, L.

Burden, L.

Lindgren, L.

Williamson, L.

Burton of Coventry, Bs.

Listowel, E.

On Question, Motion, as amended, agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.

DEPREDATIONS OF WOOD-PIGEONS
LORD TWEEDSMUIR LORD TWEEDSMUIR asked Her Majesty's Government:
Whether they can give any estimate of the annual cost to the country of the depredations of wood-pigeons.
LORD CHAMPION LORD CHAMPION: No very close estimate can be given. A ten-year ecological study of the wood-pigeon, its daily food requirements, and the estimated population, suggests that in Great Britain damage of the order of £2 million to £3 million a year is done to crops, many of which, however, recover to a degree, the extent of which it has been found impossible to calculate.

PRISON SERVICE RECRUITMENT
LORD MANCROFT LORD MANCROFT asked Her Majesty's Government:
Whether they can indicate what reasons, besides the rates of pay, are responsible for the sharp drop in recruitment for the prison service; and
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whether the situation is likely to result in delay of the opening of any new prisons.
LORD STONHAM LORD STONHAM: The figures for the appointment of male prison officers over the last five years are as follows: 1960–301; 1961–337; 1962–787; 1963–851; 1964–582. It will be seen that although the figures for 1964 are lower than those for the previous two years they are still substantially higher than those for the earlier years. There was a significant drop in recruitment in the second half of 1964 but there has been an encouraging increase in applications since the beginning of this year and every effort will be made to maintain this. There is no reason to suppose that the opening of any new establishment will be delayed.
It is never easy to identify the causes of fluctuation in recruitment, but my right honourable friend cannot accept the inference that the rates of pay have necessarily been a major factor. Pay was increased with effect from April 1, 1963, December 1, 1963, and January 1, 1964, and is currently under review under the terms of the national pay agreement for the Civil Service.
House adjourned at twenty-five minutes before ten o'clock.