Sitting of 17 November 1965

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  COVENT GARDEN MARKET [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to make provision for the transfer of Covent Garden Market to a site in the London boroughs of Lambeth and Wansdworth, it is expedient to authorise—

  (a) the issue out of the Consolidated Fund of any sums required to enable the Treasury to fulfil guarantees given by them with respect to the redemption of, or the payment of interest on, Covent Garden Market Stock or Covent Garden Market debentures; and

  (b)any increase attributable to provisions of the said Act of the present Session in the sums which under Section 40 of the Covent Garden Market Act 1961

  (i) may be issued out of the Consolidated Fund to enable the Minister of Agriculture, Fisheries and Food to make advances to the Covent Garden Market Authority;

  (ii) may be raised under the National Loans Act 1939;

  (iii) are required to be paid into the Exchequer and subsequently issued out of the Consolidated Fund and applied in redeeming or paying off debt or meeting such part of the annual charges for the national debt as represents interest.

  Resolution agreed to.

  CORPORATION OF THE TRINITY HOUSE OF LEITH ORDER CONFIRMATION BILL
  Read the Third time and passed.
  CLYDE NAVIGATION (SUPERANNUATION) ORDER CONFIRMATION
  Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act 1936, relating to Clyde Navigation (Superannuation), presented by Mr. Ross (under section 7 of the Act); and ordered to be considered upon Tuesday next, and to be printed. [Bill 17.]
  GLASGOW CORPORATION (NO. 2) ORDER CONFIRMATION
  Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to Glasgow Corporation, presented by Mr. Ross (under Section 7 of the Act); and ordered to be considered upon Tuesday next, and to be printed. [Bill 18.]
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Rabbit Clearance
    Mr. Bakerasked the Secretary of State for Scotland if he will seek to make membership of rabbit clearance societies compulsory in areas where such societies are functioning.
    The Minister of State, Scottish Office (Mr. George Willis): My right hon. Friend will consider this suggestion.
    Mr. Baker: I thank the hon. Gentleman for that reply, but I draw his attention to the fact that the whole of Scotland is a rabbit clearance area under the Pests Act, 1956. Will he take steps to ensure that all Scotland is brought into this category for the purpose of rabbit clearance?
    Mr. Willis: The responsibilities in this are fixed on the agricultural executive committees, and we have no reason to doubt that they are doing their job.

    North-East Scotland (Development Plan)
    Mr. Bakerasked the Secretary of State for Scotland what plans he has for preventing depopulation of the north east of Scotland.
    Sir W. Anstruther-Grayasked the Secretary of State for Scotland when he will announce his plan for the Borders.
    Mr. Wolrige-Gordonasked the Secretary of State for Scotland (1) when he now expects to publish the north-east of Scotland Development Plan;
    (2) whether he will make a statement on his policy to reverse the trend of migration from the north-east of Scotland.
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland when he now expects to publish the Government's plan for the north-east of Scotland.
    Mr. Willis: The Government's plans will be set out in a White Paper which my right hon. Friend hopes to publish at the turn of the year.
    Mr. Baker: The National Plan foresees an average annual decrease of 20,000 in the working population of Scotland till 1971. Is not this an alarming tendency, and will it not bear most hardly on the periphery of the rapidly developing areas of central Scotland?
    Mr. Willis: We are concerned about this bearing on the periphery, and part of the object of the plan is to do as much as possible to prevent that happening.
    Sir W. Anstruther-Gray: Is the hon. Gentleman satisfied that the plan for the Borders should be delayed until the plan for the north-east of Scotland is ready, as so much research has already taken place into the Borders problem?
    Mr. Willis: All these plans have to be fitted into one plan, otherwise they are apt to be contradictory and to fit into no pattern at all. It is precisely because of this that we are publishing a National Plan. The National Plan will take account of the needs of the various areas and of the reports which have been produced for these areas.
    Mr. Wolrige-Gordon: Is the Minister aware that the North-East Development Plan has taken a very long time? Will he agree that plans are no substitute for action and that this problem of depopulation is serious and is still going on? Does he understand that there is urgent need to stem that tide and to start once again to revive employment in these distant areas such as the north-east of Scotland and other parts of Scotland in order to give our people a chance to work in the area where they were born?
    Mr. Willis: I understand hon. Members' impatience. I only wish that they had shown the same impatience during the past 13 years.
    Mr. Bruce-Gardyne: Is the Minister aware that there has been almost intolerable procrastination by the Government in this matter? Is he aware that I was
    1118
    assured a year ago that this plan for the North-East would be published in the very near future? Can he guarantee that it will be published as soon as possible in the New Year? It has taken far too long already.
    Mr. Willis: Yes.

    New Town (Irvine)
    Mr. Youngerasked the Secretary of State for Scotland whether he will make a statement on the creation of a new town in the Irvine area.
    The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): Not yet.
    Mr. Younger: Is the Minister aware of the great interest shown in this suggestion of a new town, particularly by the hon. Member for Central Ayreshire (Mr. Manuel), who I know is very interested in it? Does he realise that many planning decisions of all kinds are held up in the meantime? Can he give any indication at all of when we may have a decision on this important matter?
    Dr. Mabon: On the first part of the question, yes, Sir. On the second part of the question, the report was received on 31st May. Discussions have gone on with the local authorities concerned. My hon. Friend hopes to have a meeting on 3rd December, and after that we shall see what is what.
    Later—
    Mr. Manuel: On a point of order. May I have your permission, Mr. Speaker, to ask a supplementary question on Question No. 3?
    Mr. Speaker: I understand the hon. Member's interest. I am sorry that I missed the hon. Member at the time. It is now too late.

    Ayr Bypass
    Mr. Youngerasked the Secretary of State for Scotland when he expects work to start on the final stage of the Ayr bypass.
    The Secretary of State for Scotland (Mr. William Ross): I regret that it has not been possible to find a place for this scheme in our trunk road programme up to 1970.
    Mr. Younger: Does the right hon. Gentleman not recall his own promise a little more than a year ago that a Labour Government would complete this bypass? Does he not agree that there is great danger to people past whose houses traffic is now flowing? Will he please look again at the programme to see whether he can bring it forward?
    Mr. Ross: I still hope that a Labour Government will complete this programme. I remind the hon. Member that he was so proud of the priority given to this project that he put it in his election address.

    Canadian Centenary Exhibition
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what pro posals he has for visiting the Canadian Centenary Exhibition in Montreal in 1967 in order to encourage or assist Scottish producers and manufacturers to show their wares there.
    Mr. Ross: None, Sir.
    Mr. Clark Hutchison: Does the right hon. Gentleman know of the success of the trade mission to Australia recently? Why will he not not make preparations so that we may have similar success in Canada? Is he aware that the United Kingdom site at Montreal is extremely good? Does he recognise the wealth of good will towards Scotland by Canadian people?
    Mr. Ross: I welcome the spirit of the hon. Member's Question about the Canadian Centenary Exhibition, but he will appreciate that this is a cultural and prestige exhibition. It is not related to trade at all; in fact, commercial exhibitions there are forbidden. But he should not take it that we overlook the importance of this, or, indeed, that we are overlooking the question of having commercial participation by Scotland in trade fairs at that time.

    Artificial Limbs
    Mr. Manuelasked the Secretary of State for Scotland what is the number of patients requiring artificial limbs; and what is the average waiting period before limbs are supplied.
    The Under-Secretary of State for Scotland (Mrs. Judith Hart): At 31st
    1120
    October 176 patients had been measured for but had not received their first artificial limb, and 657 patients were awaiting a replacement limb. The waiting time varies, depending on clinical and other factors and any average period given would not be meaningful.
    Mr. Manuel: Is the Under-Secretary of State aware of the many complaints which many hon. Members have had about the waiting period for artificial limbs? Is she aware of the great concern and anxiety which this causes and the trouble which is caused both to employers and workmen because they cannot get back to employment as early as they ought? This is something which ought to be hurried on by her Department as much as possible.
    Mrs. Hart: I take the point made by my hon. Friend. I can assure him that I, too, am deeply concerned about the waiting period involved. We have made a number of efforts during the year, as a result of which there has been a considerable improvement in some directions, but I am by no means satisfied yet, and we are looking at the situation.
    Mr. Stodart: May I ask the hon. Lady whether all possible resources in Scotland are being fully utilised for this purpose? I have in mind the supply of artificial boots for artificial limbs, which are made by the Princess Marie Louise Hospital. Is the order book of that hospital completely full at the moment?
    Mrs. Hart: Most order books are full. We are looking very closely at the possibility of enlarging the field of production, and this is very relevant in speeding up the whole process.

    Slum Clearance
    Earl of Dalkeithasked the Secretary of State for Scotland what plans he has formulated in the course of the past year for accelerating the pace of slum clearance.
    Dr. Dickson Mabon: In response to approaches my right hon. Friend has made to them, Scottish local authorities are proposing to accelerate the rate of slum clearance, so that some 45,000houses are closed or demolished during the three years 1965 to 1967. He intends to present very soon a White Paper about this and other aspects of the housing programme.
    Earl of Dalkeith: While thanking the Minister for that Answer, may I ask him whether he realises that this is another sad story of procrastination on the part of the Government and that a great many of us are profoundly dissatisfied that he has not shown a greater sense of urgency in pressing ahead with the solution of these tragic social problems resulting from the slums, particularly in view of the aggressive speeches made by his right hon. Friend when in Opposition?
    Dr. Mabon: I am sorry that the hon. Member misheard me. The figure which I stated was 45,000 houses proposed for demolition in three years. The past average has been 12,000 a year. The present figure of slum clearance under this Government is 7,870 in the first six months. I think that the hon. Member is wrong

    Justices of the Peace
    Mr. William Hamiltonasked the Secretary of State for Scotland what steps he is taking to ensure that newly-appointed justices of the peace shall represent accurately a cross-section of the community from which they are appointed.
    Mr. Ross: Advisory committees are asked, when they recommend persons for appointment as justices of the peace, to see that there are persons in the Commission representative of various sections of the community and I take into account the need to secure this when I am considering their recommendations.
    Mr. Hamilton: Will my right hon. Friend give an assurance that he takes into account not only political affiliations and political colours in various areas, but the social and economic background of the individuals representing particular areas? Will he take into account the desirability, wherever possible, of appointing postmasters or sub-postmasters, because very often these are the people most in contact with the local community?
    Mr. Ross: Yes. General guidance along the lines of the recommendation of the Royal Commission has been given to the committees in respect of this matter. I find that they do select carefully, but we must appreciate that the
    1122
    paramount consideration must be fitness to discharge their judicial functions. I can assure my hon. Friend that I will take into account the matters which he has raised.

    Procurators-Fiscal
    Mr. Wylieasked the Secretary of State for Scotland if he will seek to improve the terms and conditions of service for procurators-fiscal to encourage recruitment to that service.
    Mr. Willis: In August last increases of salary, effective from 1st January, 1964, were awarded to various grades of the Procurator-Fiscal service, including the recruitment grade.
    Mr. Wylie: Is the hon. Member aware that, with the development of legal aid in criminal cases, there is an ever-increasing demand on the Procurator-Fiscal service, and that unless recruitment to that service is speeded very serious danger arises that the administration of criminal jurisdiction in this country will be seriously prejudiced?
    Mr. Willis: I am aware of certain difficulties in connection with this service, but there are shortages of legal civil servants in practically every sphere and I do not think they are any worse in this sphere than in any other.

    Erskine Bridge
    Mr. Wylieasked the Secretary of State for Scotland if he will make a state ment on the progress of the Erskine Bridge project and the probable starting date.
    Dr. Dickson Mabon: Dunbarton and Renfrew County Councils have agreed with my right hon. Friend's proposal that the bridge should be built as a trunk road project; and our intention is that work should start in the financial year 1967-68. My Department is now taking over the preparatory work from the joint committee formed by the two councils.
    Mr. Wylie: Is the hon. Member aware of the importance of this project to the whole trunk road problem in Renfrewshire and that it is a matter in which the people of Renfrewshire have a very great interest?
    Dr. Mabon: My constituents are thoroughly overjoyed.

    Farm Improvement Scheme (Sludge Tanks)
    Mr. Stodartasked the Secretary of State for Scotland if a grant is available under the farm improvement scheme for sludge tanks which are made of synthetic rubber.
    Mr. Willis: My right hon. Friend has had no applications for grant on sludge tanks made wholly of synthetic rubber. Any application would have to be assessed in accordance with the conditions of the scheme, including the test of durability.
    Mr. Stodart: May I congratulate the hon. Member on the fact that his procrastination has not been carried into the field of sludge tanks? May I ask him whether he is, aware that applications have been made to his Department for grants for tanks which may not have been made wholly but which had been made at least partly of this material? Is it not the case that grants are available for these tanks under the farm improvement schemes in England and Wales? Is he satisfied with the co-ordination between his Department and the Ministry in seeing that there is uniformity in this matter?
    Mr. Willis: There have been two applications and each of them was in connection with a tank in which the synthetic material was used as a lining. It was therefore not made wholly of synthetic rubber. There is nothing against the use of this material if it measures up to the requirements of the scheme.

    Shellfish (Rail Transport)
    Mr. Grimondasked the Secretary of State for Scotland what representations he has received about the refusal of British Railways to carry small consign ments of shellfish; what reply he has given; and what is his estimate of the effect of this decision on the shellfish trade in the North of Scotland.
    Mr. Willis: I have received such representations, but I understand that small consignments of shellfish are carried in guards vans of passenger trains, provided there is room, and I shall reply to that effect. I appreciate that some fishermen are anxious lest this should result in delay and losses, but I have no evidence
    1124
    that it has had any significant effect on the shellfish industry.
    Mr. Grimond: Is the acceptance of these small consignments in the guards vans of passenger trains a new offer of British Railways? Will these people be charged the penal rates by British Railways which are being charged for a full van consignments? Has there been any exploration of other methods of moving them if this proves unsatisfactory?
    Mr. Willis: Some of the fishermen are arranging their own schemes for the consignment of shellfish, as with other fish. As far as we can see, this seems to be working quite well. British Railways gave a three-month halt in the arrangements coming into effect to enable it to be done. The prices to be charged are as set out by British Railways in their scheme. No change was made.
    Mr. Grimond: Is it a new offer?
    Mr. Willis: This is an offer which was made originally.

    Sheep and Lambs (Prices)
    Mr. Grimondasked the Secretary of State for Scotland what are the current average prices in Scotland for fat clean sheep and fat lambs this year compared with 1955.
    Mr. Willis: For the last period for which this information is available, namely the four weeks ended 26th September, 1965, the average prices paid at Scottish auction markets for sheep certi-field for fatstock guarantee payments were for clean sheep 26·5d per lb. and for lambs 32·6d. per lb. The comparable figures for 1955 were 25·4d and 30·8d, respectively.
    Mr. Grimond: From those figures, it is clear that the prices have risen very little. While one welcomes anything which keeps down food prices, because—
    Mr. Speaker: Order. The right hon. Gentleman must ask a question.
    Mr. Grimond: Is the Minister aware that the costs which these sheep farmers have to meet have risen very much—for example, transport costs? This may have a serious effect on the sheep farmer in Scotland unless a bigger profit is available to meet the extra costs.
    Mr. Willis: These factors are taken into account at the time of the annual review. In the last Review White Paper it was pointed out that this section of the industry continued to show a good figure of profitability, so it would not appear that heavy losses are being incurred. But all these factors are taken fully into consideration.

    Hospital Building Programme
    Mr. Stodartasked the Secretary of State for Scotland why it has taken over twelve months to review the hospital building programme; and when he expects to publish the result.
    Mrs. Hart: There are many factors to consider in the review, and its later stages have to await Government decisions about priorities in expenditure. My right hon. Friend hopes to publish the results of the review by about the end of the year.
    Mr. Stodart: Does the hon. Lady agree that, whatever has motivated her right hon. Friend in this matter, it is not the dynamic feat of energy which we were promised by the Administration? Can she give a firm and unqualified undertaking that the review will not affect in any downward direction at all the quinquennial expenditure in the two periods to which the Government fell heir in the plan of the last Government?
    Mrs. Hart: I can reassure the hon. Gentleman that there will be no reduction in the total programme. We believe in a dynamic programme of social investment and, therefore, we must plan everything in integration.

    Capital Projects
    Mr. MacArthurasked the Secretary of State for Scotland what is the number of capital projects in Scotland which are being slowed down in response to his circular letter to local authorities drawing attention to the Chancellor's state ment of 27th July; and what is the total value of these projects.
    Dr. Dickson Mabon: Local authorities are not required to report to my right hon. Friend all projects which they have decided to defer.
    Mr. MacArthur: Is the hon. Gentleman aware of the very wide interest in
    1126
    these matters? Will he take some action to find out whether the Secretary of State's request for cuts is being observed by local authorities? Will he recognise that the Chancellor's statement in July and the Secretary of State's circular represented major changes in policy and that the House wishes to know what cuts are being made in Scotland?
    Dr. Mabon: The answer to the first part of that supplementary question is, yes, to the second part, yes, and to the third part, no. In exemplification I would point out that the total borrowing in the three months August, September and October, apart from houses and schools, of course, was £8·3 million compared with £12·9 million in April, May and June. Without a disproportionate amount of work it would be impossible to give a complete list, although I recognise the hon. Gentleman's interest in the matter.

    Teacher Training Colleges
    Mr. MacArthurasked the Secretary of State for Scotland what plans he has for providing extra teacher training colleges in Scotland.
    Mrs. Hart: A large programme is in hand for the expansion and modernisation of the facilities of the colleges of education, including a new college for 900 students due to open at Hamilton next October. My right hon. Friend has under review the possible need for an extension of the programme.
    Mr. MacArthur: Can the hon. Lady say whether the programme has been cut back by the Secretary of State's request to local authorities to hold back expenditure for six months and to plan for reduced expenditure in the next financial year? What effect will these cuts have on the supply of teachers in Scotland during the next critical years?
    Mrs. Hart: There is only one area in which there is slight deferment, and this does not affect the number of places to be available next year. The unprecedented demand for places in the colleges requires us to look again at the programme for next year and the year following, and this is what we are doing.
    Mr. Brewis: How many prospective students were unable to gain places at the training colleges at the beginning of the year?
    Mrs. Hart: Because of the demand for places, it was necessary to limit acceptances to those who applied within the period and who were not late and to those of the correct minimum age. On that basis, we had to refuse 110 girls who applied for admission to the three-year diploma course and who were either under the minimum age of 17 or had not applied in time. That is all.

    Marriages (Young Persons)
    Mr. William Hamiltonasked the Secretary of State for Scotland how many marriages involving persons between the ages of 16 and 18 years occurred in each of the last 10 years; and if he will introduce legislation to raise the age limit.
    Mr. Willis: The number of the marriages in which either one or both of the parties was 16 or 17 rose from 1,302 in 1954 to 2,938 in 1963. I shall, with permission, circulate figures for each year in the OFFICIAL REPORT. I am not aware of any general demand in Scotland for raising the lower age limit.
    Mr. Hamilton: Is my hon. Friend using the argument that there is no demand for action as a reason for taking no action at all, because in that case the Judges Remuneration Act would never have gone through this House? Does not he think that the age of 16 is a very low age for this desperately lifelong commitment to be taken? Will not he reconsider the position? How long has this legislation been effective?
    Mr. Willis: This was the common law of Scotland and was made statutory in 1929, so it has always been the law of Scotland. The question as to whether the age is too low is a matter of opinion. We have no evidence that there is any demand to change this law.
    Following are the figures:
    The number of marriages registered in Scotland
    (a)where one or other of the parties was aged 16 or over but under 18

    1954

    1,302

    1955

    1,640

    1956

    1,815

    1957

    1,940

    1958

    1,960

    1959

    2,028

    1960

    2,316

    1961

    2,588

    1962

    2,683

    1963

    2,938

    (b) where both the parties were age 16 or overbut under 18

    1954

    69

    1955

    113

    1956

    135

    1957

    132

    1958

    104

    1959

    113

    1960

    164

    1961

    189

    1962

    235

    1963

    304

    Rivers and Lochs (Fishing Rights)
    Mr. Doigasked the Secretary of State for Scotland if he will seek to take all the rivers and lochs in Scotland into public ownership, abolish exclusive fishing rights and ensure that fishing for salmon and trout is equally open to all.
    Mr. Willis: My right hon. Friend is considering the law relating to salmon and trout fisheries in Scotland in the light of the Report of the Hunter Committee and the comments he is receiving on it, but he is not yet in a position to make a further statement.
    Mr. Doig: Is my hon. Friend aware that salmon fishing is now almost exclusively confined to the very wealthy and poachers and that the angling associations now believe that if the Hunter recommendations are implemented by the Government there will be the same position in relation to all fishing in Scotland?
    Mr. Willis: The associations have been asked to submit their views on the Hunter Report to my right hon. Friend. They will, therefore, have the opportunity of putting their views at great length.

    Road Accidents (Warning Signs)
    Sir J. Gilmourasked the Secretary of State for Scotland if he will circularize police forces in Scotland to ensure that all police and public service vehicles which are called to the scene of road accidents carry warning signs which can be put out to give advance warning of any obstruction caused by accidents.
    Mr. Willis: It is already the general practice for police traffic patrol cars to carry warning signs. Emergency tenders of fire brigades also carry such signs.
    Sir J. Gilmonr: Would the hon. Gentleman also ask that ambulances should do the same? They often have to stand at

    1129
    scenes of accidents and if they carried these warning signs it might help to prevent further crashes from taking place.
    Mr. Willis: They do not carry them at present. Only those authorised by the chief constables to do so can erect these signs. However, the point is worthy of consideration.

    New Towns
    Sir J. Gilmourasked the Secretary of State for Scotland whether he will make a statement on the future management of new towns in Scotland after they have obtained borough status.
    Dr. Dickson Mabon: Burgh status does not affect the functions of a development corporation which, as at East Kilbride, retains the duty of developing the new town to its planned size. It is important, however, that at all stages in the life of a new town the development corporation and all interested local authorities should work closely together.
    Sir J, Gilmour: Have the Government any plans for the eventual handing over of these: new towns so that they are removed from the development corporations?
    Dr. Mabon: It is too early to make a statement on this.
    Mr. William Hamilton: Will my hon. Friend give an assurance that the terms of the New Towns Act, 1946, will be fully implemented and that we shall get full democratic control of these new towns by elecied authorities at the appropriate time?
    Dr. Mabon: In principle that is the policy of the Government, but there is a transitional stage during which we shall have to sort out how that position is to be reached.

    Civil Defence
    Sir W. Ansrruther-Grayasked the Secretary of State for Scotland whether he will make a statement regarding the future of civil defence; and whether the number of recruits keeps pace with the number of resignations.
    Mr. Willis: The review of home defence referred to in the Statement of Defence, 1965, is not yet complete, and I cannot
    1130
    anticipate the results. The active strength of the Civil Defence Corps in Scotland fell by 94 in the year ending 30th September, 1965, to a figure of 22,688.
    Sir W. Anstruther-Gray: Will the Minister of State bear in mind that the delay in publishing this review of civil defence is very discouraging to people who are giving voluntarily of their time to doing this work?
    Mr. Willis: I fully appreciate that, but I think the right hon. Gentleman would agree that this important matter should be given proper consideration and that we should not try to be too hasty about it.

    Departmental Staff
    Mr. Onslowasked the Secretary of State for Scotland what increase or decrease there was in the staff of the Department under his control in the period 16th October, 1964, to 15th October, 1965; and what increase or decrease he anticipates in the period up to 15th April, 1966.
    Mr. Ross: There was an increase of 448 in the staff of the Departments under my control between October 1964 and October 1965, and a further increase of 278 is expected by April 1966.

    Fort William-Mallaig Road (Dual Carriageway)
    Mr. Russell Johnstonasked the Secretary of State for Scotland when he will start work on the thirty miles of single carriageway still remaining between Fort William and Mallaig.
    Dr. Dickson Mabon: We intend to improve the worst sections as far as possible by using minor improvement funds, but I am afraid that comprehensive reconstruction cannot find a place in the road programme before 1970.
    Mr. Johnston: Is the hon. Gentleman aware that this is a narrow road which is causing very grave concern and great difficulty and is virtually endangering the whole future of Mallaig? There is also considerable doubt about the future of the railway. Can he assure us that he will bring pressure on the Minister of Transport to ensure that, if the railway goes, it will not go before the road is improved?
    Dr. Mabon: I can give the hon. Gentleman the assurance that he wants in the latter part of his supplementary Question, provided that he is willing to accept that, while traffic has increased on this road, it is much heavier on the single carriageway Invergary-Kyle road. This is a matter of priority, as he appreciates, and we naturally want to concentrate our efforts there.

    Hydro-Electric Development
    Mr. Russell Johnstonasked the Secretary of State for Scotland when he will make a statement on the Government's policy concerning the future of hydro-electric development.
    Mr. Buchanan-Smithasked the Secretary of State for Scotland when he will make a statement concerning the future programme of hydro-electric projects in Scotland.
    Dr. Dickson Mabon: My right hon. Friend hopes to make a statement very shortly.
    Mr. Johnston: I welcome this announcement very much.
    Mr. Buchanan-Smith: Is not this one other example of procrastination? We have waited a year for a reply and there is a hold-up of potential investment in the Highlands of £144- million as a result of the delay.
    Dr. Mabon: I understand why the hon. Gentleman blushes when he says that in view of the past record of his own Government, which to a large extent caused this delay. Fortunately, my right hon. Friend will be in a position very shortly to make a statement which I hope will find acceptance throughout the House.

    Edinburgh (Traffic Conditions)
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what assistance or advice his Department is giving to Edinburgh Corporation on traffic problems.
    Dr. Dickson Mabon: My Department is represented at meetings of the working party which the corporation has set up to advise on the future traffic pattern in the city. The corporation also consults
    1132
    the Department about short-term traffic measures.
    Mr. Clark Hutchison: Is the hon. Gentleman aware that the traffic problems in Edinburgh are getting worse every day? What has happened to the ring road? Will he take up with the Minister of Transport the question of retaining the surburban railways, particularly in the light of experience in Canada and the United States, where they are being brought back? Will he see that we retain Caledonian Station, which is a valuable asset for railway purposes?
    Dr. Mabon: I appreciate the point, but the problem hinges on the submission of the quinquennial review by the corporation, which is at liberty to commission any transportation study it wishes, but at the moment my Department is concerned about the procedure under the review. When that review comes forward will be the time to make decisions in principle on a comprehensive assessment of the situation, including the position of suburban commuters and the railways.

    Rates
    Mr. Edward M. Taylorasked the Secretary of State for Scotland how many Scottish local authorities have now announced their rate poundages for the year 1965–66; and what percentage increase there will be in the total amount raised in rates by these authorities in the year 1965–66 compared with amounts raised in the year 1964–65.
    Dr. Dickson Mabon: All Scottish local authorities have now, by Statute, fixed their rate poundages for 1965–66. There is likely to be an increase of slightly over 9 per cent. in rate income, or 7 per cent. increase in average rate poundages.
    Mr. Taylor: Does the hon. Gentleman recall saying in Committee on 29th June that the probable increase in rates this year would be 4 per cent.? Why is it that, on housing and roads and other vital matters, he is proving to be such a bad prophet all the time?
    Dr. Mabon: This is the only assessment that has ever gone wrong. But I would point out that it compares not unfavourably with the 8·6 per cent. increase in 1963–64 and the 19 per cent. increase in

    1133
    1961–62. He must await the Government's next steps in this matter, including, of course, the legislation which we have promised will be introduced this Session.

    Housing
    Mr. Edward M. Taylorasked the Secretary of State for Scotland how many houses were completed in Scotland in the 10 months ended Ocotber 1965; and how many it is estimated will be completed in the year 1965.
    Dr. Dickson Mabon: About 28,500 in the ten months and around 35,000 in the full year.
    Mr. Taylor: Does not the hon. Gentleman appreciate that this means a fall in the house-building programme this year of over 2,000? Does he also recall stating on the 1st June that it was wrong to say that house building this year would be less than last? Why has this further forecast of his gone wrong?
    Dr. Mabon: The hon. Gentleman is committing a grave error. He must read again what has been said. There are several factors, and we have always stated them in the House. The principal factor in the number of house completions this year—and he and his right hon. Friends cannot escape responsibility for that—was the dramatic fall in tender approvals during the period April-September, 1964. It is worthy of note that at the end of last September houses under construction in Scotland by all agencies totalled 50,554 —an all-time record.
    Mr. G. Campbell: Why, then, was the hon. Gentleman's estimate in the summer of a total of 37,000 so wrong, considering that it has been reduced to 35,000?
    Dr. Mabon: Because it has proved far too difficult to get over the initial errors for which the hon. Gentleman himself was primarily responsible, when he was in my position, by failing to see that the rate of tender approvals was at the level of the preceding first quarter as compared with the second and third quarters over which he presided in his final six months of office.
    Mr. Hendryasked the Secretary of State for Scotland what is the number of houses being erected in Scotland by
    1134
    private enterprise at the latest convenient date; and what was the comparative number being erected on the corresponding date last year.
    Dr. Dickson Mabon: At 30th September, 8,100 houses were under construction for private owners, compared with 7,132 a year earlier.
    Mr. Hendry: I congratulate the hon. Gentleman on the success of his policy in encouraging private ownership. Is he aware that many hundreds of young couples who had set their hopes on being able to buy these houses now find themselves unable to do so because of the financial policies of his right hon. Friend the First Secretary? What does the hon. Gentleman intend to do about it?
    Dr. Mabon: I much appreciate the natural enthusiasm which the hon. Gentleman shows for the success with which the Government are reaching their housing targets. There is no short-fall of requests by young people for private builders' houses. The total of 6,051 houses already built in the first nine months of this year compares with the 5,559 built in the last year of the previous Administration.

    Salmon and Trout Fisheries (Report)
    Mr. Buchanan-Smithasked the Secretary of State for Scotland when he will bring forward proposals following the Hunter Committee Report on Scottish Salmon and Trout Fisheries.
    Mr. Willis: My right hon. Friend is awaiting the observations of many of the organisations he invited to comment and he will be studying the Report further once these observations have been received.
    Mr. Buchanan-Smith: Is the hon. Gentleman aware of the extreme concern about these proposals among all sections of the industry, and particularly among those employed in it? Would he, therefore, bear in mind that a decision about the proposals should not be delayed if uncertainty is to be avoided?
    Mr. Willis: I am aware of the concern, but I am also aware of the importance of the decision, and I should have thought that the importance of the decision warranted the matter being given proper and not hurried consideration.

    A.74 (Dual Carriageway)
    Mr. Monroasked the Secretary of State for Scotland what are now the estimated starting dates for the reconstruction to dual-carriageway standard of the Underwoodhouse to Hill Tollbar section and the Hill Tollbar to Mossband railway bridge section of the A.74.
    Dr. Dickson Mabon: Providing the necessary orders can be made in time, my right hon. Friend hopes that work will start on the Underwoodhouse-Hill Tollbar scheme in the spring of 1967 and on the Hill Tollbar-Mossband scheme a few months later.
    Mr. Monro: Is the Under-Secretary aware that traffic conditions on this road are now intolerable? Why cannot he revert to the Conservative target of the summer of 1966?
    Dr. Mabon: Because the last Administration set targets but did very little work. The fact is that on the Underwoodhouse to Hill Tollbar scheme it has been necessary to vary the line to achieve better engineering standards. The reason with the second scheme is that we hope that the junction arrangements at Gretna will turn out to be better than our predecessors tried to arrange.

    Technical Colleges
    Mr. Monroasked the Secretary of State for Scotland to what extent the programmes in Scotland of building and extending technical colleges has been postponed or reduced by the Government' economic measures this year.
    Mrs. Hart: The following two new further education colleges have been deferred for six months and will now start next spring: Telford District College, Edinburgh; Esk Valley Technical College, Midlothian.
    Mr. Monro: Is the hon. Lady aware that any postponement of technical education in Scotland could have a serious effect on industry in the years to come?
    Mrs, Hart: Yes, of course. But the point is that we think—in fact, we are quite certain—that the effect can be minimised, because the buildings can be partially occupied as they are completed. We are quite satisfied that there will be no serious repercussions from the delaying of these two projects.
    Mr. Edward M. Taylor: Would the hon. Lady care to convey those comments to the Secretary of State for Economic Affairs who, in the debate on the National Plan, advised the House that Scotland was unaffected by the credit squeeze and cuts?
    Mrs. Hart: As the hon. Gentleman knows perfectly well, Scotland is relatively unaffected. Indeed, most of Scotland is protected under the present Government against the kind of thing that happened under the last Government because of our recognition of the needs of areas of unemployment.

    Local Authorities (House Purchase Schemes)
    Mr. Hendryasked the Secretary of State for Scotland how many local authorities in Scotland operate mortgage schemes for private houses; and how many have ceased such schemes during the past 12 months.
    Dr. Dickson Mabon: Out of 108 local authorities which operate schemes of loans for house purchase, 96 have made loans during the past year. I have no knowledge of any decision to cease making loans.
    Mr. Hendry: Will the hon. Gentleman do everything he can to encourage local authorities to operate these schemes to help the hundreds of young couples in Scotland who find themselves not able to buy houses for themselves? Will he do everything he can to encourage his right hon. Friend the First Secretary to make mortgages available at rates which people can afford to pay?
    Dr. Mabon: I am sure that the hon. gentleman is not unaware of what the Prime Minister has said and of what both Housing Ministers have declared to be their policy. He will no doubt read that when the White Papers are published shortly. The 12 authorities in Scotland whom I have not included as making regular loans are mostly small burghs and lend only from time to time. However, we take the point. The hon. Gentleman is quite right, and it is the policy of the Government, and we shall pursue it much more energetically than our predecessors did.

    Forth Road Bridge
    Mr. Campbellasked the Secretary of State for Scotland if he will now make a statement on the question of tolls on the Forth Road Bridge, following the experimental period of one year.
    Dr. Dickson Mabon: I have nothing to add to the reply I gave to the right hon. Member for Berwick and East Lothian (Sir W. Anstruther-Gray) on 2nd November.
    Mr. Campbell: Does the hon. Gentleman consider that the present rate of toll is likely to prove a handicap to plans for industrial expansion?
    Dr. Mabon: The present toll? No. There is no such evidence. As for future arrangements, I indicated in my reply that there would be discussions. The Joint Board met on 27th October and considered the inescapable financial effects of the first year. In the 12 months starting 1st October, 1964, 4·6 million vehicles crossed the bridge—excluding the initial surge of traffic in the earlier month. In the nine months to 28th May, 1965, tine Joint Board was due to make payments to the Secretary of State's Department of £569,059. The payment it was able to make amounted to £248,359. Therefore, £320,700 has to be carried forward and added to the capital debt of £14.5 million. With those facts in mind, it is difficult to go further than I went in answer to the right hon. Member for Berwick and East Lothian (Sir W. Anstruther-Gray).

    Oxgang Primary School, Kirkintilloch
    Mr. Benceasked the Secretary of State for Scotland how many new primary school places will be provided by the proposed Oxgang Primary School, Kirkintilloch.
    Mrs. Hart: The school will provide 680 places.
    Mr. Bence: Is my hon. Friend aware that in the burgh of Kirkintilloch it is feared that we may be repeating the errors of the previous Administration over the last 14 years and providing school accommodation to meet current needs and forgetting to provide for the future? Can my hon. Friend give an assurance
    1138
    that she will not repeat the terrible blunders of the previous Administration but will see that school accommodation provides for future as well as present requirements?
    Mrs. Hart: My hon. Friend will know of the study which we have sponsored during the last year into methods of forecasting need for school places arising from population movement. This study is now going on. It is concentrated on the Scottish new towns and the Cumbernauld Development Corporation and the education authority concerned is giving a great deal of help. That will indicate the importance the Government attach to the issue which my hon. Friend has raised.

    Cumbernauld (Maternity Unit)
    Mr. Benceasked the Secretary of State for Scotland what plans he has for the provision of a maternity unit in the new town of Cumbernauld.
    Mrs. Hart: The Western Regional Hospital Board's long-term plans for Cumbernauld's hospital services include the provision of a materntiy unit with facilities for both specialists and general practitioners.
    Mr. Bence: Can my hon. Friend give an assurance that the provision of the maternity unit will precede the building of the hospital, as, with a birth rate of 28 per 1,000, there is an immediate and urgent need for maternity facilities in the new town? Will she do all she can to urge forward the building of this maternity unit?
    Mrs. Hart: The exact starting date will, of course, be a matter for the regional hospital board's own assessment, but I understand that the general practitioners' maternity unit will be provided ahead of the consultant unit to which my hon. Friend refers. That should enable the immediate need to be met more quickly than would otherwise be possible.

    Higher School Bursaries
    Mr. Dempseyasked the Secretary of State for Scotland if he is aware of the large number of higher school bursaries which have been refused; and, to avoid any further hardship, if he will

    1139
    increase the ceiling value of these bursaries.
    Mrs. Hart: My right hon. Friend has no evidence that education authorities are refusing higher school bursaries to pupils entitled to receive them. The rates are kept under review and we will be glad to consider any evidence of hardship the hon. Member may have.
    Mr. Dempsey: Is my hon. Friend aware that it is estimated that nearly half the applicants for higher school bursaries in Lanarkshire this year have been refused? Will she bear in mind that that is due not to parental incomes being too high—because these are the incomes of ordinary people—but because the ceiling for bursaries is too low? Will she and the Secretary of State look into the matter?
    Mrs. Hart: I am looking into it at the moment, as is my right hon. Friend. A number of factors are involved when secondary school children leave school earlier than they otherwise might. The economic factor is certainly very important.However, any particular evidence of hardship which my hon. Friend can supply will be very welcome in the study which we are making.

    Education (Gaelic Courses)
    Mr. Dempseyasked the Secretary of State for Scotland if, in view of the introduction of foreign languages into Scottish primary schools, he will approve the introduction of the Gaelic language with a view to preserving Scottish culture; and if he will make a statement.
    Mrs. Hart: It is open to any education authority to provide Gaelic courses in primary as in secondary schools. In Gaelic-speaking areas education authorities have a duty to ensure that adequate provision is made for the teaching of Gaelic language and literature and 4,125 primary pupils are studying it in these areas.
    Mr. Dempsey: Can my hon. Friend see whether that information can be made known to all Scottish local education authorities? Is she aware that while French, for example, is being taught— and we welcome the introduction of the teaching of French in primary schools— in many primary schools in my district
    1140
    Gaelic is not taught as a subject of instruction? Therefore, in the interests of her Scottish culture, will my hon. Friend make sure that this information is available to the education authority concerned?
    Mrs. Hart: A number of pupils outside the area which normally speaks it are studying it. For example, at Glasgow, Edinburgh, Lanark and Renfrewshire just under 500 secondary pupils are taking it. Certainly the education authorities know their duties and power.
    Mr. Russell Johnston: Is the hon. Lady aware that restricted experiments in Gaelic teaching in primary schools in the county of Inverness have been going on for some time? Would she take steps to make some money directly available and, if this is possible, to extend the area where this is being done? At present it is relatively restricted and the restriction is primarily financial.
    Mrs. Hart: This is a matter for the education authorities concerned. They have a duty in it. The allocations of money which they have are supposed to provide for this, but I would be very glad to look at the particular point if the hon. Member will write to me about it.

    Road Programme
    Mr. G. Campbellasked the Secretary of State for Scotland to what extent the road programme in Scotland has been reduced or postponed, outside development districts, as a result of the economic measures announced on 27th July.
    Dr. Dickson Mabon: With minor exceptions, all road schemes outside development districts which were due to start in the six months from August, 1965 to January, 1966 are subject to deferment under the measures announced on 27th July. It is worthy of note that, of the whole Scottish road programme, 96·6 per cent. is unaffected.
    Mr. Campbell: With nine trunk road schemes postponed, in addition to these local authority schemes, is it not deplorable that there should be any interruption of the Scottish road programme, which is so important to the development of all parts of Scotland, not just development districts?
    Dr. Mabon: Obviously the hon. Gentleman has prepared his supplementary question before he heard my Answer. The fact is that 96·6 per cent. of the Scottish road programme is unaffected by these cuts. Scotland has been exempted to this degree because of the large incidence of development districts. We accept, as does the rest of the country, the sacrifices that must be made with regard to general policy to solve a situation which, after all, hon. Members opposite left to us.

    Taxicabs (Licences)
    Mr. Garrowasked the Secretary of State for Scotland if he is aware of wide spread trafficking in taxi licences; and if he will seek power to take action to eliminate this practice.
    Dr. Dickson Mabon: The control of taxicabs in Scottish burghs is entirely a matter for the magistrates and I do not think that further legislation is necessary.
    Mr. Garrow: Is my hon. Friend aware that in the Glasgow region sums in excess of £1,000 are being paid, ostensibly for the purpose of buying a taxicab? In fact the major proportion of the sum is for the licence, because the vehicle in question has a market value somewhere in the region of £150 or £200. Does my hon. Friend conside: that this black market is a desirable state of affairs, or does he think that there should be action?
    Dr. Mabon: If such a black market exists, then, of course, it is not desirable. But I think that the point is whether or not magistrates consider their powers adequate to deal with this. This is the substance of the question, and the answer is that the Secretary of State has no knowledge that the present powers are inadequate.

    Unlicensed Clubs
    Mr. Garrowasked the Secretary of State for Scotland if he will now introduce legislation in order that unlicensed clubs may be brought under proper police supervision.
    Mr. Willis: It would be difficult to justify making all clubs subject to police supervision; but, as I explained on 14th April, the operation of the Betting, Gaming and Lotteries Act, 1963, in its application to gaming clubs is under review.
    Mr. Garrow: Is my hon. Friend aware that in Glasgow and other major cities of Scotland, in addition to gaming clubs, there are many clubs springing up, in attics and basements, which present a fire hazard to the general public? Is my hon. Friend further aware that the police and the fire service in Glasgow have expressed great concern about the upsurge of these clubs? Will he give the House an assurance that he will give further consideration to this matter?
    Mr. Willis: I am aware of these facts and, as I pointed out on 14th April, we are preparing fire legislation which will be introduced whenever it is possible to do so. The wider issues such as the question of interfering with social clubs are very complex, but these are also under consideration.

    Scottish-English Schools (Joint Projects)
    Mr. Hamlingasked the Secretary of State for Scotland what discussions he has had with local education authorities on joint educational projects of a residential nature between Scottish and English schools.
    Mrs. Hart: None, Sir. It would be for the promoters in England of such a project to canvass support direct from Scottish education authorities.
    Mr. Hamling: Will my hon. Friend be prepared to receive a deputation of teachers—
    Mr. Bence: From Woolwich.
    Mr. Hamling: From Woolwich—who are interested in the project in Argyllshire, which may well be of inestimable value to Scotland?
    Mrs. Hart: We are always delighted to help our friends over the Border, but on this occasion I would suggest that the best course for my hon. Friend to pursue would be to take it further with the education authorities in England and Scotland and then, if the point arises, I shall be only too glad to discuss it with him.

    River Don
    Mr. Hector Hughesasked the Secretary of State for Scotland what plans have been made to purify the estuary of

    1143
    the River Don at Aberdeen and to apply to it the new method of oxidation designed by the Shirley Institute, Didsbury, for cleaning up rivers which have been polluted by industrial waste from mills and factories.
    Dr. Dickson Mabon: These matters are the responsibility of the Dee and Don River Purification Board.
    Mr. Hughes: Surely the Minister has some power with regard to this river, which is not in my constituency alone; it borders another constituency. The new method of oxidation mentioned in my Question has been tried with great success elsewhere. To use it in the River Don would result in great benefit to trade, industry, commerce and to employment in Aberdeen city and county.
    Dr. Mabon: I quite accept what my hon. and learned Friend says in this regard. I would strongly suggest that if he contacts the Board itself he will obtain a thorough explanation of all its plans, both in this regard and in others. I have a lengthy submission here, but I do not wish to ascribe it to the OFFICIAL REPORT at this stage and weary the House with it.
    Mr. Hendry: Does the Under-Secretary of State not agree that this is a very complicated matter involving several local authorities, besides the river board, which I mentioned to him in detail at the beginning of last Session, in Committee? With a view to bringing an end to the procrastination between the Ministry and the local authorities, will he now—[HON. MEMBERS: "Speech."]— accept my invitation to visit the area for himself and see the extent of the nuisance—and smell the nuisance with his own nose?
    Mr. Speaker: Order. The hon. Gentleman's supplementary questions must be shorter.

    Large Estates (Sales)
    Mr. Buchanasked the Secretary of State for Scotland if he will refer to the Highlands and Islands Development Board recent sales of large estates, such as the Ben Alder Estate of 22,300 acres in Inverness-shire, with a view to using their powers to have such estates taken over by the Board and developed in the interests of the people of the Highlands.
    Mr. Willis: I think that the initiative in this matter can appropriately be left to the Board.
    Mr. Buchan: Will my hon. Friend bear in mind that many people in Scotland, particularly in the Highlands, are becoming outraged at this traffic in huge sections of our native land? Is it not time that this was brought to the attention of a public board in order to develop the full potential of this land, both in agriculture and forestry, in the interests of the people in this area where a real land hunger exists?
    Mr. Willis: I have no reason to doubt that the Highlands and Islands Development Board will keep its eye upon these things and will, if it requires land in order to carry out its development plans, put forward proposals to acquire it.
    Mr. Malcolm MacMillan: Is the Minister aware of a quite outrageous case at this moment which runs entirely counter to the Government's declared policy in setting up the Highland Development Board? A large part of the Island of Coll is being acquired by a Dutchman for the purpose, declared publicly by himself, of starting it as a sporting estate. Does not this run quite counter to everything for which the Government stand? Will he take some action?
    Mr. Willis: I am aware of this case. If the Board decides that something should be done in Coll, it has all the powers to do it, in spite of the Dutchman.

    Arbroath (A.92 Inner Relief Road)
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland what request he has received from Arbroath Town Council to be allowed to proceed with the proposed new inner relief road on the A.92 forthwith; and what reply he has sent.
    Dr. Dickson Mabon: The council asked last month to be allowed to start work, at a cost of about £20,000, on the first phase of the proposed inner relief road. My right hon. Friend has told the council to go ahead if it is fully satisfied that the road must proceed now.
    Mr. Bruce-Gardyne: I thank the hon. Gentleman for that reply, but is he aware

    1145
    that the delays imposed by the Departments have already involved the local authority in considerably increased costs, because of the purchase of property for the building of this road, and will he see that there are no further delays?
    Dr. Mabon: As the hon. Gentleman knows, I have met the town council on this matter and we have given it the go-ahead on the first phase as early as possible. For the remaining phases, we will have to see how the provisional programme for 1967–69 goes.

    Local Government Reorganisation
    Mr. Gregor Mackenzieasked the Secretary of State for Scotland, when the working party appointed to consider the reorganisation of local government will report; and if he will publish its findings.
    Dr. Dickson Mabon: The working party of officials has prepared a summary of its work since its first report was published, which is being circulated to the elected members of local authorities who form the steering committee. The summary is not in a form suitable for publication.
    Mr. Gregor Mackenzie: Perhaps the summary might be submitted to Members of this House who might wish to offer an opinion about it?
    Dr. Mabon: I accept that, but I am afraid that the report is inconclusive. It contains no formal recommendations as such. Once my right hon. Friend has consulted the local authorities, he wishes to proceed from that to see what should be done to take a wide consensus of opinion.

    Rating (Large Estates)
    Mr. Buchanasked the Secretary of State for Scotland whether he will refer to the Scottish Valuation Advisory Council the matter of the discrepancy whereby large estates in the Highlands with lucrative fishing and sporting rights are ratedat low levels.
    Dr. Dickson Mabon: The valuation of fishing and sporting rights is a matter for the local assessors acting in accordance with valuation law. There is to be a general revaluation in 1966, and I hope my hon. Friend will agree that it would
    1146
    be better to await the results of that before pursuing the matter further.
    Mr. Buchan: Will my hon. Friend keep in mind that within land which is normally regarded as exempt because it is not productive there is very valuable and remunerative land which is used for shooting and deer stalking? For example, in Inverness-shire there is an estate of 22,000 acres on which only £330 is paid in rates despite large and lucrative fishing and deer rights?
    Dr. Mabon: Yes, Sir. It would, however, be better to await the up-to-date 1966 figures before making a fresh evaluation of the position.

  QUESTION TIME
  Mr. Rankin: On a point of order— [HON. MEMBERS: "Oh."]—which I submit, with the greatest respect, to you, Mr. Speaker. We lost three minutes at the beginning of this sitting of the House. Would it be possible now to have them back?
  Mr. Speaker: As a Sassenach, I was about to congratulate my Scottish colleagues on their co-operation at Question Time. I appreciate the parsimonious economy of time on the Question of the hon. Gentleman. I have no power whatever to add three minutes to Question Time.

GAS AND ELECTRICITY SUPPLIES
Mr. Grieve(by Private Notice) asked the Minister of Power whether he is aware of the effects that the gas and electricity power cuts have now had on industrial firms and what action he is taking to remedy the situation.
The Minister of Power (Mr. Frederick
Lee): A number of firms in the area of the West Midlands Gas Board were asked yesterday to stop taking gas as a necessary measure in the interests of public safety. The Board is restoring normal supplies today, and all industry in the West Midlands should have full supplies for the night shift. The electricity boards were obliged in the late afternoons on Monday and Tuesday to disconnect some consumers in certain areas for short

1147
periods. Both the electricity and gas industries are making every possible effort to bring in the additional capacity which is currently being installed or overhauled and will thus be better able to deal with a repetition of severe weather and high demand later in the winter.
Mr. Grieve: While thanking the Minister for the hope that he holds out at the end of the present crisis, may I ask him whether he is aware that gas supplies were cut off from the great Midlands motor car manufacturers without any previous warning in the middle of yesterday, thereby causing many thousands of men to be put off? Will he tell the House what was the cause of this and what steps he is taking to ensure that this situation is not repeated?
Mr. Lee: The cause was a major breakdown at Coleshill gas works and the late commissioning of new plant at Tipton, which meant that the West Midlands Gas Board was unable to cope with an increased demand of 40 per cent. It is not the case that firms were not warned; they were warned. Only when there was no response to that warning was it necessary to cut certain supplies.
Mr. Gresham Cooke: Could not the Electricity Generating Board import electrical current from Germany? The German factories close at four o'clock in the afternoon and, by their more efficient economy, there is surplus electrical power at four or five o'clock in the afternoon. Could not that be imported here?
Mr. Lee: No matter what expedients one resorted to now, one would still be faced with the fact that there was a shortage of investment a few years ago when the Conservative Party was in power which has never been made up. The position would be even better if hon. Members opposite would get their friends in private enterprise to honour the contracts and the dates of them.
Mr. Geoffrey Lloyd: Is the right hon. Gentleman aware that a gas shut-down of this kind is much more serious nowadays than, for example, in 1947, because there are now so many gas-automated furnaces used in the engineering industry of the Midlands, some of which take two or three days to warm up again
1148
after such a shut-down, and that thousands of pounds worth of components will have to be thrown away and written off? Can the right hon. Gentleman say whether the gas boards will pay proper compensation to the firms concerned?
Mr. Lee: I cannot comment on compensation. I can promise a better performance than was done in 1962–63.
Mr. Lubbock: Will the Minister give a general direction to responsible boards and authorities to discontinue spending millions of pounds on encouraging members of the public to use appliances which are then not capable of being used because of these power cuts?
Mr. Lee: While I doubt whether I have power to intervene too far in this, may I say that I have a lot of sympathy with what the hon. Gentleman says, and I will do what I can to be of assistance.
Sir J. Langford-Holt: The Minister mentioned a major breakdown and lateness in commissioning. Could he tell the House exactly what these two items were?
Mr. Lee: I said that there was a major breakdown at Coleshill gasworks and the late commissioning of new plant at Tipton.
Sir J. Langford-Holt: That is where— not why.
Mr. Peyton: I must press the right hon. Gentleman on this. Does not he think that my hon. Friends and the rest of the House are entitled to a far more detailed statement of the causes of this very serious breakdown? He has made —I do not know with what backing— some aspersions about private enterprise concerns failing to keep to their contract dates. But do let us have full details about Tipton and about what happened at Coleshill. Does the right hon. Gentleman recall what his right hon. Friend the Minister of Transport asked my right hon. Friend the Member for Bridlington (Mr. Wood) in January, 1963, namely, whether he was telling the people that whenever we had a few days' cold weather in January we should immediately be short of gas? May I now ask the right hon. Gentleman: since there is a great deal more plant in operation.

1149
provision for which was made by the previous Administration, what on earth will happen in January under this Administration?
Mr. Lee: The hon. Gentleman has good reason to know of the shortcomings to which I have referred. If he wants a list of the failures of private enterprise to comply with delivery dates, if he will put down a Question I will try to provide him with a full answer.
Mr. William Hamilton: Can my right hon. Friend say to what extent these cuts were due to failures of private enterprise to fulfil contracts? Were there default clauses in those contracts to provide for a situation such as this? If so, will my right hon. Friend ensure that they are fully implemented?
Mr. Lee: I could not give my hon. Friend details of a penalty clause. [HON. MEMBERS:"Why not?"] If hon. Members opposite are saying that the failures of private enterprise should be considered so endemic that we must have penalty clauses, I will accept that. But, as far as I know, there are no such clauses for this situation.
Mr. William Hamilton: Well, there should be.
Mr. Gurden: Is the Minister aware that this is yet another deterrent to export orders and that we have had hundreds of unofficial strikes as well as the trouble at the docks? Is he taking this matter to Cabinet level, because it is terribly important?
Mr. Lee: If the Tory Government's record in exports were half as good as ours, our balance of payments situation would not be as bad as it is.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I suspect that there is matter for debate here. May we move on to the next business?

PHANTOM AIRCRAFT (SPEY ENGINES)
The Minister of Aviation (Mr. Roy Jenkins): With permission, I would like to make a statement about the future of the Spey engine for the Phantom aircraft.
The House will recall that the decision to adopt this aircraft for the Royal Navy
1150
was taken last year by the previous Administration following failure to achieve a version of the P. 1154 which would have been acceptable to both the Royal Navy and the Royal Air Force. At the time the engine had not been sufficiently defined for reliable estimates to be produced, and the cost assumptions which were then used have proved to be too low. When we took office, we became aware that the P. 1154 would not meet the R.A.F. time scale for a Hunter replacement, and in view also of the urgent need to contain the size of the Defence Budget, we decided to order the Spey engined Phantom for the R.A.F. as well.
The costs of developing and producing the version of the Spey required for the Phantom have increased substantially above the 1964 assumptions, and we have therefore found it necessary to carry out a most intensive examination of comparative cost and performance between Phantom aircraft with the Spey and aircraft with the existing American engine.
Although the aircraft with the American engine is adequate for Naval and R.A.F. requirements, the Spey offers a greatly enhanced performance and a greater potential for future improvement. In addition Rolls Royce have been prepared to negotiate guarantees on costs performance and time scale much firmer than have been achieved in the past. Against the greater cost of the Spey these considerations might not in themselves have justified its adoption. But we must also take into account the very great economic technological and industrial advantages of going ahead with the development and production of this very advanced engine, with its big export potential. In the Government's view these considerations are decisive.
I am therefore glad to inform the House that we have decided to continue with existing plans for the installation of the Spey in the Phantom.
Mr. R. Carr: May I first ask the right hon. Gentleman whether he is aware that a copy of his statement reached the Opposition only at 3.26 and that this really does make it very difficult to express any considered view? This is by no means an isolated example and applies not only to the Minister of Aviation but to Ministers generally.

1151
Having said that, may I say to the right hon. Gentleman that we on this side warmly welcome this decision. We hope this is only one of many decisions which the industry and the nation are awaiting in this field, and that this is only the first of a number of decisions which will do something to restore confidence in the procurement policy of the Government in these fields.
May I ask certain specific questions? First of all, can the right hon. Gentleman tell the House something about the total costs involved in the Phantom plus Spey engine such as now envisaged compared with the costs involved had the previous Government's plan been proceeded with? Can he tell us something about any escalation in the price of the Spey engine? He referred to this in his statement, but I was not quite clear about his meaning. Is it the case that Rolls Royce prices have now escalated compared with the estimates which they put in when they were asked to quote for this development? Will he tell us when production orders will be placed? Finally, will he tell us when he will be implementing the other half of the Prime Minister's promise in relation to British equipment in the Phantom aircraft, principally avionic equipment?
Mr. Jenkins: On the question of the time at which the hon. Gentleman was given the statement, we always, of course, endeavour to meet the convenience of the Front Bench opposite and the House. In this case, in view of some singularly misinformed rumours circulating in the Press this week, I thought it essential, outweighing even the advantages of giving a good deal of advance notice, to make this announcement to the House at the earliest possible opportunity. That precluded a large amount of notice being given.
An Hon. Member: Very poor.
Mr. Jenkins: Is the right hon. Gentleman really saying he would rather have had a little extra notice, even though holding up the industry for 24 hours or more?
As for the other questions which the hon. Gentleman put to me, there is no reason at all to think that the saving over the programme which we inherited
1152
from the previous Government will still not be substantial. Nevertheless, the reasons for cancelling the P. 1154 were not primarily those of cost, though the cost was great, and it was right at the beginning of the programme, but primarily those of the time scale. There was no prospect of the aircraft being ready when the R.A.F. needed it. As for escalation of Roll Royce costs, they were then found to be very substantially above the estimates which we inherited from the previous Government. We had decided, in the interests of the industry and the firm, to go ahead with this proposal, and I am glad the right hon. Gentleman welcomes that, but he should not under-estimate the inheritance which his right hon. Friends left us in this respect.
On the question of British equipment beyond the Spey in the Phantom, our policy remains as stated, and we are endeavouring, even at the cost of a premium, to keep as much British equipment as possible in, and I am hoping the results will be satisfactory.
Mr. R. Carr: Will the right hon. Gentleman answer somewhat further about when production orders will be placed and about the scale, because it is a fact that the aircraft industry has received virtually no production orders during the 12 months since the cuts were announced, and it is really a matter of great urgency that we move away from expressions of intent and get down to hard orders for purchasing, so that the industry can get down to cutting metal on a production scale.
Will he please also give the House, if not today, a little more information about this escalation of costs? Is it really a fact that Rolls Royce estimates have escalated compared with the specification of which we are now talking, or is it the case that the costs have gone up because the specification has changed? I think that this really is a matter of great importance to clear up, and we ought to be quite clear whether any reflection does fall on the efficiency of this great company.
Mr. Jenkins: So far as production orders are concerned, we will go straight ahead now with the Spey Phantom programme of development and production orders, because it is a very tight programme and we want the aircraft to be

1153
in service by 1968. We have every reason to believe it can and will be in service by 1968.
As to the question of responsibility, I of coarse wish to say nothing to damage the position of Rolls Royce. It is largely because we appreciate the great importance of the industrial value of this firm that we have taken this decision which we have announced at the present time, but there is no doubt at all that the position was that the previous Government took a decision on an engine required to perform a particular task and that the cost of this engine proved to be very much larger than was expected.
Mr. Dalyell: Is it realised that we welcome the concept of guarantees in relation to cost, performance and time scale, but, after all the Public Accounts Committee has said about cost estimates being loo low in the past, what is the Ministry doing to improve cost estimates in the future?
Mr. Jenkins: As I indicated in my Statement, we have in the case of the Spey programme now been able to secure guarantees about costs, about the time scale and about performance that are quite different from those which it has been possible to secure in the past.
Mr. Lubbock: While endorsing what the Minister said about the great advantage of going ahead with the Spey programme, may I ask him what he estimates will be the saving in our balance of payments in the period of this programme? Secondly, how many naval Phantoms is he ordering, bearing in mind the agreement with the French over variable geometry aircraft, which provides for a carrier-based version of it? Is he planning to replace all the Hunters with the Phantom or giving any consideration to a British specification of the COIN type such as they have in the United States?
Mr. Jenkins: A number of these matters are, of course, matters for the Secretary of State for Defence. So far as the Anglo-French variable geometry project is concerned, to which we attach the greatest importance, there is no reason to expect that the Phantom programme will in any way get in the way of this project. We shall pay the most careful attention to that aspect of the matter.
Mr. Philip Noel-Baker: May I congratulate my right hon. Friend on his Statement and on his decision to make it today, and may I thank him for what he said about my constituents, the firm of Rolls Royce? It will be greatly appreciated in Derby.
Mr. McMaster: While welcoming this statement, may I ask the right hon. Gentleman whether he can say when the sub-contract work on other frame parts, including the tail of the Phantom, will be placed, bearing in mind the responsibility placed on the Government, in their own firm of Short Bros., to fill the gap created by the cancellation of the H.S. 681 and to place some of the frame work with Short Bros.?
Mr. Jenkins: I will bear this in mind, and I am glad that Short Bros, have secured this sub-contract. There is no question of delay in the placing of this or other sub-contract orders.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I know we all like to debate Private Notice Questions, but there must be found other opportunities of doing so.

CONFERENCE ON ELECTORAL LAW
Mr. Speaker: On 12th May my predecessor announced that, at the request of the Prime Minister, he had agreed to preside over the Conference on Electoral Law, and on 23rd June he informed the House of the names of the Members who had accepted his invitation to serve on the Conference. The Prime Minister has invited me to take over the Conference in order that this work may continue. I have readily agreed to do so.
BILL PRESENTED
  POST OFFICE (SUBWAY)
  Bill to authorise the Postmaster General to construct a subway in the City of Birmingham, presented by Mr. Benn; supported by Mr. Boyden and Mr. Joseph Slater; read the First time; to be read a Second time tomorrow and to be printed. [Bill 16.]
QUEEN'S SPEECH

  DEBATE ON THE ADDRESS
  [SIXTH DAY]
  Order read for resuming adjourned debate on Question [9th November]:
  That an humble Address be presented to Her Majesty, as follows:
  Most Gracious Sovereign,
  We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
  Question again proposed

ECONOMIC AFFAIRS
Mr. Iain Macleod: I beg to move, at the end of the Question, to add:
But humbly regret that the Gracious Speech contains no measures likely to redeem the failure of Your Majesty's Government's economic policy and, in particular, of the policy on Productivity, Prices and Incomes, which imperils the standard of living and savings of Your people.
Mr. T. L. Iremonger: On a point of order. May I confirm, Mr. Speaker, that the Amendment in my name on steel nationalisation has not been selected?
Mr. Speaker: I can assure the hon. Member that his Amendment has not been selected.
Mr. Macleod: By tradition, no Opposition has any more confidence in the Government than the Government have in the Opposition, and at the end of the debate on the Gracious Speech it is customary for an Amendment to be moved by Her Majesty's Opposition which expresses that particular point of view. I should make it clear at once that this is an Amendment moved by the official Opposition. The Liberal Party will no doubt explain, as usual, at the appropriate moment, why it is going to support the Government, and I congratulate the Prime Minister on the cheapest piece of
1156
political horse-trading in this century. Yet he has not even had to pay the price, as I understand it, of the electoral pottage which the Liberal Party hoped for.
There are three Amendments referring to steel which are not being called but which are, of course, relevant to this debate. I was naturally delighted that steel had not been a feature in this Gracious Speech—
An Hon. Member: Oh, no.
Mr. Macleod: Oh, yes, I am; and we know the reason which was given, the reason of priorities, which echoes the famous Socialist phrase which we all remember, and it is not surprising, perhaps, that the hon. Member for Ebbw Vale (Mr. Michael Foot) found that rather hard to take; but the point I want to put to the Prime Minister—I know he has to go in a few moments, and I am grateful to him for giving me notice of that—is a sentence he used when he spoke on 9th November, when he said:
"Actions taken in good faith within the industry and in the normal course of business are unlikely to be challenged."—[OFFICIAL REPORT, 9th November, 1965; Vol. 720. c. 39.]
I hope he will take the opportunity, or that one of his Ministers will, to delete that word "unlikely". The steel industry is in quite enough uncertainty at the present time. He has said, if I correctly understand the exchanges he has had with his own side of the House, that steel nationalisation remains part of the policy of the Socialist Party.—[HON. MEMBERS: "Hear, hear."] Let us wait and see. I think he would agree that it is desirable that all the actions that can be taken and are taken in good faith should not conceivably attract any penalty in any circumstances in future.
The other point which my right hon. Friend the Leader of the Opposition mentioned, and which perhaps the Chancellor of the Exchequer might like to refer to when he winds up the debate, is in the paragraph in the Queen's Speech which says:
"Steps will be taken to improve the arrangements for providing incentives for industrial investment…"
I ask again the question which my right. hon. Friend asked. Are those words, "arrangements for providing" simply tautologous, in which case what will be

1157
improved—I hope they will be— are the incentives themselves, or is all that is planned some improvements in the arrangements? That is a small point which the Chancellor can make clear tonight, but I think it important.
I turn to our Amendment. I shall not spend too much time tramping over the ground we have debated so often, and will debate again no doubt when the next General Election comes, of the exact responsibility and where it lies for 1964 and 1965. I think the House will agree that the start of this particular period of reflation which came to a halt in the first quartet of this year—I think I am right in saying that the production figures for September were released a few minutes ago and are down again. [HON. MEMBERS: "Oh."] I think that is correct. The figure, I am informed, is 131, dropping from the 134 of January. This particular period of reflation clearly started. I think we will all agree, mainly with the Budget of 1963. That Budget stimulated consumer demand by about 2 per cent. The public investment programme was increased in line with the proposals made by the N.E.D.C. for its 1961–66 targets and private investment was at the time encouraged. Looking back, with of course hindsight, the verdict of the O.E.C.D. on the two years is as follows:
"In retrospect then, the expansionary policy measures taken at the beginning of the expansionary phase must clearly be judged to have been excessive. That they were so was not apparent to many observers at the time."
Indeed, that is so, and it is also true, as the O.E.C.D. admits, that it itself was amongst those who did not judge them excessive at the time, as the Report for 1963, the annual survey, makes clear.
At all stages, as the Prime Minister will know, he agreed with the analysis of my right hon. Friend the then Chancellor of the Exchequer when he said in April, 1963, that economic expansion would entail a temporary rise in imports. The Prime Minister then said:
"I think it is perfectly reasonable and sensible to finance such a movement out of our reserves or out of our borrowing facilities in the I.M.F. and elsewhere."
The Swansea speech endorsed that approach and when my right hon. Friend —turning now to the 1964 Budget—
1158
warned of the possibility of a deficit on the balance of payments and said:
Provided that it is temporary this should give rise neither to alarm nor dismay. … it is a predictable accompaniment to a vigorous rate of growth which all of us are committed to seek."
Over and over again the Prime Minister, in interviews, in speeches, in his speech, for example, to the T.U.C. on 7th September, endorsed that analysis. He said at the time:
"this trade gap means a deficit on our current balance of payments of £500 million a year."
In fact it turned out to be £412 million. The clear evidence of that is that the Prime Minister knew very well all the time what the figures were. He knew how the problem was being dealt with and he thought that the right methods were being selected to deal with the problem. He knew that there was no crisis and he said so, and called for no restrictive measures before the election. Nor did he scale down the Labour Parly's lavish preelection promises.
There is one small point which should be made. On two occasions the Prime Minister and my right hon. Friend the Member for Barnet (Mr. Maudling) have clashed in this House on the question of the issue by Her Majesty's Treasury in the middle of the election last year of the United Kingdom balance of payments, the article which was published in "Economic Trends". When my right hon. Friend said that he had published this in the middle of the election, the Prime Minister replied:
"Yes, and in the middle of the night."
If that meant anything it was an accusation either against an unnamed civil servant in the Treasury or against my right hon. Friend the then Chancellor of the Exchequer. He was asked to withdraw it and he refused to do so. Now we have the comparable paper for 1965. I have it in front of me. It was issued by Her Majesty's Treasury and it says, in red type:
"please note embargo. Not for publication broadcast or use on club tapes before 0030 hours.—
in the middle of the night.
We came to the General Election in 1964 without a crisis of confidence. As the Prime Minister knows very well, sterling held throughout the election and held

1159
throughout the immediate post-election period and on into November. Then the mistakes began. In our view, the first of those mistakes, although it did not affect confidence, was the formation of the Department of Economic Affairs.
I personally had no objection; indeed I think it an excellent thing to refresh the still waters of Whitehall from time to time with some people coming in from outside. I did not object on those grounds at all. But the result of this was that the Chancellor of the Exchequer was, for a time at least, reduced to counting candle-ends. He was removed from his chairmanship of the N.E.D.C. and removed even from membership of the N.E.D.C. He was the first Chancellor—his Budget in April was proof of this—who had no true responsibility for the economy. The Chancellor would be less than human if he did not resent this, and he is a very human man. I am bound to say that he was saved. He was saved partly by the pressure of events and also saved by the skill of his Department, because the Treasury knights slew the foreign dragons by one of the prettiest pieces of knifemanship we have seen for many years. I think the Chancellor would be less than human if he did not chuckle a little about that.
Secondly, there was the handling of the import surcharge. I understand that we are to have a day's debate on that in a few days' time and I need not develop my argument on that particular theme, but what the House as a whole must know beyond doubt is that, apart from the merits, the handling of it came as the gravest possible shock to confidence abroad.
Finally in this particular phase, we had the autumn Budget. That autumn Budget, as many of my hon. and right hon. Friends have pointed out, was basically inflationary. It was an inflationary Budget imposed upon a potentially inflationary situation. It was not inflationary in the figures and it may not have been inflationary in intent, but it was inflationary in effect.
The Chancellor, and indeed many hon. Members, will have read in the May issue of the National Economic Review an extremely interesting article which shows, I think with great clarity—the point was well made by my hon. Friend the Member
1160
for Scarborough and Whitby (Sir A. Spearman) in the first day's debate on the Address—that if in theory we balance consumption and taxation, they may be balanced for the first year, but immediately after that the inflationary effect becomes very marked.
The last point I want to make about the errors of those early months was the double-talk that went on from every single Minister at all times. The classic example of this was the Chancellor himself saying that he hoped the 7 per cent. Bank Rate would not work through to the domestic economy. One might well ask what the object of it was. The observations that he made helped to weaken confidence abroad.
So, via the Budget of April, we came to the July measures. It has never been cleared up yet, although the Chancellor and I have had at least one exchange on this in the House of Commons, why these appeared in their particular guise and with this particular timing. The Chancellor will remember the famous sentence he used when he said that he was restraining himself from taking further measures. He in fact restrained himself for about a fortnight and then we had the measures which came at the end of July. It was put around at the time that he had added this sentence as it were to his brief, or impromptu notes, because he was tired.
The Chancellor of the Exchequer (Mr. James Callaghan): The right hon. Member said that.
Mr. Macleod: I took it from the Press. [HON. MEMBERS: "Oh."] I thought it was the kindest explanation there was; I cannot think of any other. If the Chancellor has any, by all means let us have it.
What is quite clear is that that one unguarded sentence of his did the country a very great deal of damage indeed. There is no question that once more the tide of confidence turned in full measure against the £. It is my belief, and I have heard no refutation of this, that that stemmed exactly from that particular sentence in that particular speech.
We have had a very expensive year's education as far as the Chancellor is concerned, because there can be no doubt that part of the load which this country

1161
has to bear comes from the folly of the words and part from the fragmentation of the action that in this year the Chancellor has had to take. Let us see what the position is at the moment. I hope that when he speaks the First Secretary of State and Secretary of State for Economic Affairs will be able to confirm or deny the information I was given about the production figures.
The two main claims of the Government are that they have saved the£ and the balance of payments position has substantially improved. As far as the first is concerned, what they have been able to do is to obtain extended overdraft facilities. The Bank of England—and this is quite right—acting with the assistance of the American Treasury, persuaded the bankers of the world—I am delighted that they did—that devaluation was against international interests, and therefore these facilities were provided. The test comes now whether we can properly use that time so provided to strengthen our economy. When the Chancellor said that the battle for the £ was won but the battle of the economy still had to be won, I understood the distinction he was making, but I am sure he will agree that he cannot be confident about the first until the second objective is also secured.
What, therefore, of the second claim, that the Government have substantially improved the balance of payments situation? Here we must look at the two aspects of the balance of payments; the capital account and the current account. What is happening on current account is that the penal taxation which the Government are proposing to apply to our overseas investments has forced the sale of some of those investments and the money has come back to London. This is of immediate short-term help, but, of course, in the long term it weakens the nation. And the improvement on capital account is largely due to the Government forcing investors to sell part of the £11,000 million of overseas investments of which the Prime Minister boasted in New York last March. I wish he had boasted of those assets a year ago.
On current account, although month by month there is a considerable adverse balance of trade—our imports are far higher than our exports—the Government point to the improvement that has taken place. It is of the first importance that
1162
we should be clear just what the reasons are for that improvement. One of the main reasons is, of course, that the prices of our exports have gone up and the terms of trade have moved sharply in our favour. The price index of our imports in September was lower than in January, whereas the price index of our exports was nearly 2 per cent. higher—I calculate about £11 million for that month, on the sort of figures which we have seen in recent months—than in January. Even that— and that accounts for an enormous amount of the improvement—presents a precarious position because if the price index of exports continues to rise, the volume may some day start to fall.
Besides the improvement in the terms of trade, there is another matter which we must take into account. That is the position in relation to stockbuilding. The National Plan states on page 69:
"The current account deficit reflected a very rapid rise in domestic demand, which included … abnormally heavy stockbuilding."
In a year in which the Government have had the benefit of the abnormally heavy stockpiling of the previous year and the benefit of a considerable improvement in the terms of trade, we must see the general improvement in our balance of payments in a realistic light. This worries the Chancellor and all hon. Members who are concerned with the future of the economy, wherever they may sit in the House.
I therefore put this point to the Chancellor. One of the keys to this matter is, of course, the question of exports. At the meeting of the Institute of Directors the other day the Chancellor said that if people had ideas for improvement in this sphere they should put them forward. I appreciate that because, from my fairly short experience, I know that there is nothing more difficult than the task of finding ideas which one can use for export promotion.
Sir Donald Stokes, who has a wonderful record in this sphere, paid high tribute to the Government's export: rebate. I am sure that many firms have found that very welcome indeed, but I question whether it has led to additional export orders. This, of course, should be the objective of any money spent. I wonder if it would not be right for us to turn from the impersonal to the personal in this matter and see if we cannot find a

1163
more direct incentive which will encourage the sale of our exports abroad.
My hon. Friend the Member for Worcester (Mr. Peter Walker), in his speech at our Brighton conference, referred to this and it was also mentioned in a leading article in The Times two or three days ago. We have been studying whether it is possible for an Income Tax rebate to be given to export directors and salesmen for the period for which they are abroad. I am a great admirer of Harold Macmillan, but I do not think that the phrase "Exporting is fun "was the best of his slogans. Exporting is hard work and presents great inconvenience to many of the men, and their families, who are involved in these activities. If often means living out of a suitcase, going from 'plane to 'plane and hotel to hotel. An immense amount of personal inconvenience is attached to it.
I say frankly to the Chancellor and the First Secretary of State that we are not yet satisfied—and we have been studying this matter carefully—that such a scheme could be made watertight. The opportunities for abuse are obvious; one might consider the possibility of someone obtaining a rebate when he had not genuinely been seeking exports. However, the scheme sounds an attractive idea, for it would involve the giving of a very personal tax incentive to the men who really are spearheading our export drive. I hope that the Chancellor will consider this matter and will, in due course, give us his views. All I ask is that he should not rule it out at this stage simply because of the possibilities of abuse—which are, as I say, obvious to all hon. Members who are interested in this subject.
We refer particularly in the Amendment to the failure of the policy on productivity, prices and incomes. So far I have been dealing with the Chancellor of the Exchequer. I now turn to the First Secretary because while all this was going on—while this Socialist year was under way—there, down on the ranch, as they say, the First Secretary was hard at it putting forward his policy on productivity, prices and incomes.
Mr. W. A. Wilkins: Nobody has worked harder.
Mr. Macleod: That is true. The right hon. Gentleman has been to meeting after meeting and has come away from nearly every one triumphant; in each case with a scrap of paper. [Interruption.] We have seen how effective this policy has been in fact.
Let us start by looking at the figures. In the first quarter of 1965 the average percentage increase represented by wage settlements—and remember, this is since the Declaration of Intent—was 5·9. In the second quarter it was 6·2 per cent., and in the third quarter 6.7 per cent. I am sure that the Chancellor of the Exchequer must sometimes feel like saying, with Pyrrhus, "One more victory like this and we are undone."
While the Chancellor has been working hard during this time, Little Boy Brown has been blowing his horn up and down the country. We have had this long series of agreements which has led, in the end, to an utterly disastrous situation. [Interruption.] It is nice to see the Minister of Technology coming into the Chamber. On 13th December last the First Secretary said:
"We are on the brink of a break-through "
Seven months later, on 12th July, he right hon. Gentleman said:
"‖ I am convinced that we are on the verge of a major break-through …"
Was that the same break-through or were there two different break-throughs? And when he said on 16th December, at the signing ceremony of the Declaration of Intent,
"History is being made here today."
—it certainly was.
Mr. Archie Manuel: It was indeed.
Mr. Macleod: I agree with the hon. Gentleman. It was. We now have the biggest gap between productivity and earnings of any time in modern economic history. Certainly history was being made. The index figure of industrial production at 133 for January—revised on the latest figures to, I think, 134; and for December it is down to 131—is certainly history. I can find no period—and I have checked this all the way back, with the possible exception of 1952—when in 13 years there was a year when the gap was so wide between what we should be doing and we were in fact doing.

1165
We now have the worst of both worlds —not just inflation on the one side or stagnation on the other, but both of them together. We have a sort of "stagflation" situation and history in modern terms is indeed being made. There is another point behind the figures. As I say, production has fallen by 1 per cent. or ½per cent. while incomes have gone up, perhaps, by 8 per cent. This can result only in two things happening in the months ahead; either a considerable increase in our import bill to meet the increased consumer expenditure or a very real rise in our prices. But what the First Secretary is trying to do is to conceal the rises that are likely to take place.
London bus and train fares were to rise, so the Government provided a £51½million subsidy, which runs out at the end of the year—but what then? Coal prices were to rise, so the Government gave a £15 million subsidy, which runs out in April—but what then? I ask, because all that is happening is that one is building a dam that is bound to burst in an economy where incomes are swiftly rising while production is completely stagnant.
It was this that led to the Chancellor's famous speech in Scotland at the end of last month. Let me first read to the House what he said, and then what he meant to say. He said:
"In spite of injunctions and signatures on the Declaration of Intent, earnings are still going up much faster than productivity. In the first eight months of this year they went up by 8 per cent. and this is bound, unless it is controlled, to result in increases in prices."
Everyone had great difficulty in understanding this particular figure.
I talked to my right hon. and hon. Friends, and we assumed the Chancellor must have some figures of his own and must have known what he was talking about. It turns out that he did not. The most charming account of how this was finally resolved is given in the Financial Times of 5th November:
"It was discreetly admitted in Whitehall last night that Mr. Callaghan's notes for his weekend speech had referred correctly to wage rates and not earnings, and to an annual rate of increase ' rather than an actual increase … Mr. Callaghan, it seems, is not challenging the Press reports of what he said, but it is stressed that he had intended to say something quite different."
I will hand this cutting to the Chancellor in a minute—but I want it back. The
1166
right hon. Gentleman should look into this, because what, in fact, was "discreetly admitted in Whitehall last night" was that "we gave him the right figures —but, of course, the fellow cannot read ". If the Chancellor would now like the quotation, I hand it to him—on the strict understanding that I have it back.
We are told that although there is some conflict between the two right hon. Gentlemen, there is no personal animus. I read this in five newspapers, so it must be right[Interruption.] Well, that is nice, is it not? I will go further and say that I have no personal animus against either right hon. Gentlemen, but what I want to know is which of them is steering this boat, and in which direction is it supposed to be going?
The standard of living is mentioned specifically in our Amendment, and the record over the last 13 years is this. The standard of living—just one figure only—went up—we want to be precise —by 48·74 per cent. in the 13 years of Tory Government. That is defining the standard of living as the rise in personal incomes per head as reduced by the fall in the value of money. That rise is almost identical with the rise in the whole of the previous 50 years under many different Administrations and all three political parties.
We say that this is being imperilled, and I want to start with one particular example. We all talked a great deal at the last election about the "brain drain" about the need of the younger executive, and I am quite certain that all three parties were sincere when we said that this was the sort of man to be encouraged. Let us see what has happened to this man's bills as a result of the year of Socialism we are considering. The figures are given in an excellent article in the Financial Times of 7th May, as the outgoings of a successful executive in his mid-thirties, with a salary of £3,500 a year, a wife and two children.
The ordinary plain calculation alone is that his bills have gone up by £206 in the year. But, of course, that £206 is only part of the amount he has had to pay, because his tax bill has gone up by no less than £52 in the year, coming to a total of £258. Even if he had a rise of £258, he still would not be back where he was a year ago because of the tax element at 6s. 5d. in the £—that is,

1167
standard rate less earned-income relief. This one man, in order to cancel a year of Socialism, would need an increase of no less than £380. That shows what has happened to these people. It shows what has happened in absolute defiance of everything the Socialist Party said to these men at the time of the election.
Let me turn from the particular example I have given, to the general example. What one has to say really needs no embellishment, because the cold list alone is indictment enough. In one year we have increased taxation by £623 million. We have moved into a period of what I call "stagflation". The cost of living has gone up by 5 points in 10 months. We have lost one-third more days in industrial disputes. We have cut the road programme and many other vital investment programmes in the social services. For most of that period, we have seen all forms of national savings doing less well than a year ago. The value of the £ in that period has dropped by a shilling. We have suffered an intense and prolonged credit squeeze. We have a formidable load of debt.
It would be easy to extend the list, but each and every item on it is in direct contradiction to the promises of the Government as a whole, and to the pledges which the Socialist Members gave to their constituents. Such a record demands the censure of the House today and of the country at the General Election.
4.29 p.m.
The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown): The kindest thing that one can say of the speech just made by the right hon. Member for Enfield, West (Mr. Iain Macleod) is that it was a bit better than last time. As far as I could discover, where it was not inaccurate it was exaggerated, and where it was neither it was just a tatty going over of the fill-ins we read every week in "Quoodle".
I must say one word of appreciation and kind thanks to the right hon. Gentleman. It is becoming really helpful to us that we can always rely on Opposition spokesmen to bring up the question of the economic and financial inheritance that was ours, and digging out all the
1168
figures again. It saves us doing the work of making sure that that fact stays before the country. I am quite sure that his hon. Friends will agree that the more often they bring that up, the more firmly they plant it, and the less likely they are to explain it away.
The right hon. Gentleman had a little fun about steel. I was not clear whether he was deploring the absence of it from the Queen's Speech, applauding the absence of it, or what the purpose of his comments was. As my right hon. Friend the Prime Minister told the Opposition the other day, if the right interpretation to put upon their solicitous care for steel nationalisation is that they think it wrong that we should not now be doing this, the usual channels can have their conversations about the facilities the Opposition would provide us with to get it through.
I shall be saying a few words in the ordinary course of my speech on the question of investments and incentives. In the same way, I shall deal with the index of production as I come to it in my speech. The old fill-in about the relationships between the D.E.A. and the Treasury and the other economic production departments we have heard so often, but it gets no better and no nearer to the truth.
On the question of the surcharge which the right hon. Gentleman mentioned, may I put this thought to him? If imports had continued to rise at the rate at which they were rising under our predecessors, the gap this year would not be £800 million. It would be £450 million more. Something had to be done about it, as the right hon. Member for Barnet (Mr. Maudling) said in his Budget speech in April of last year, but he then proceeded to waste the next six months doing absolutely nothing about it.
I, like the right hon. Gentleman, will not go again over the whole of the field which we traversed only a fortnight ago. I will start by trying to restate the major objectives of the Government's economic policies. The first one is to get rid of the balance of payments deficit with which the Tories left us. The second one is to achieve a faster annual rate of increase in output as soon as we can, leading to a 25 per cent. increase by 1970 over 1964. The third is to encourage and to bring about a substantial

1169
improvement in industrial and commercial techniques and equipment. The fourth is, by an agreed policy for productivity, prices and incomes—agreed, that is, with industry and those who care about affairs, not agreed with the party opposite—to bring about an early and substantial improvement in Britain's competitive position. The fifth is to correct the gross imbalance which existed when we took over between the regions of the country, both in industrial terms and in social terms. The final one is to change the priorities governing our social expenditure so that the rewards from increased output and earnings are more justly and fairly distributed and used.
Just as we saw in the debate on the National Plan two weeks ago, which hon. and right hon. Members opposite had condemned before they read it but thereafter had, rather humiliatingly, to acquiesce in a Motion welcoming what they condemned, so, it was clear from the right hon. Gentleman's speech today, will the position be on our economic policy in general. They have been too busy, too soon, shouting "Failure" even to note; what the objectives of that policy are. When they finally take them on board, they will be in the same position as they were with the Plan. They will then find that what they have been shouting so loudly is failing will, in fact, be succeeding, and they will again have to welcome what is happening.
It was absolutely fascinating to watch hon. Members opposite today. The only time they cheered up was when they thought that the right hon. Gentleman was applauding some decline in the country's position. At every stage when he was talking about something which might go well they looked as miserable as sin.
I will make a present of this point to the right hon. Gentleman for use, with suitable acknowledgements, in the Spectator this week. [HON. MEMBERS: "Oh late."] He can have it for next week. Of course it is not our claim that all our objectives have been successfully completed in the first year. For what it is worth, that point can be had. But they will not all be total failures at the end of 13 years. By its very nature, a programme of that size, apart from having to clear up so much mess at the beginning— (HON. MEMBERS:" Oh."] The right hon. Gentleman took 35 minutes explaining all
1170
this. I have made only one reference to it. Apart from that, such an exercise is a long-term and continuing one. Some of the objectives will be harder to achieve than others.
I will come to the one which the right hon. Gentleman thinks is so difficult. He is quite right. It is difficult and is not made any easier by the challenges made by hon. Members opposite to managements and to workpeople not to cooperate. Some of the objectives will be harder to achieve than others. Action which is required to achieve some of them will have a deleterious effect on some of the others. It is true that having to take action on the balance of payments has a consequential effect on the objective of getting faster and larger growth.
Quite apart from that and quite apart from the inherited difficulties, the need to lay the plans to achieve these objectives, to forge the new policies to carry them out, and to create the machinery to carry them out, all in this year was bound to make this a very difficult year indeed. It is always harder to reverse things and to get started in a new direction than it is to maintain momentum once started. Against that background, let us examine the objectives and see how much justification there is for the charge of failure. Let us see which ones we are progressing with more swiftly than the others. Let us see what substance there was in the general political speech made by the right hon. Gentleman. What justification was there for it?
On the question of the balance of payments, we all know—even the right hon. Gentleman could not dispute it—the dramatic change which has been achieved in this year. I thought that one of the most fascinating operations I have ever listened to was when the right hon. Gentleman did not dispute that it had happened, but every reason why we had achieved a reduction in the balance of payments deficit was either a bad reason or one we could not help or one that did not count.
The point is that, unlike the Tories, we have brought about a very substantial reduction in the balance of payments deficit. If hon. Members opposite are not pleased about it, the country outside is, and nobody more than the business community. It is not simply the reduction

1171
which we have achieved that is the outstanding thing. I believe that the outstanding thing is that 1965, in relation to the balance of payments, has been a year of steady progress towards getting out of the red, whereas 1964 was a year of rapid deterioration right the way through.
As the right hon. Gentleman quite fairly said, we have had this considerable reduction and improvement, not only in global terms overall. The right hon. Gentleman was kind enough to say that we have had it both on capital and on current account. We are very grateful to the right hon. Gentleman for drawing attention to that. Again, I was not clear whether the right hon. Gentleman thought that it was a good thing or a bad thing that we have achieved a reduction on capital account. It is time that one Front Bench spokesman for the Opposition, at any rate, got it into the others' heads that there are times when the country can afford to do things in terms of overseas expenditure and investment. There are other times when other priorities force the Government to hold their hand on that for a bit. It is very much because the Tories would not face that last year that the position snowballed as much as it did.
After what the right hon. Gentleman said, I am not clear whether they are glad that there has been a reduction or whether they claim that not enough has happened. I think that the right hon. Gentleman who will be winding up the debate tonight, and who was having a little trouble with his facial expressions during that part of his right hon. Friend's speech, might tell us whether he is glad and whether he thinks that we should have done more. If it is the latter, it is very odd when one considers the record of hon. Members opposite when they were in office and how they have criticised everything that we have achieved. They pretended that they could spend more and cut taxes, but references to extravagant pre-election promises came oddly indeed from the right hon. Member for Enfield, West. We did our best, but we never came within streets of them and when I saw the papers which they left behind and I found how they were kidding themselves I was surprised that they were as honest as they were.
1172
Just as in the field of Government expenditure they pretended that they could spend more and still cut taxes—and they go on with this piece of duplicity—so in the field of the balance of payments, to judge from what the right hon. Gentleman said, they consider that in their case they could have cut the deficit quicker while doing less about it. That was no more practical than the other proposals which they made.
Within the various constrictions placed upon us by our international obligations —and when the right hon. Gentleman was telling us about the interesting exercise on which his hon. Friend the Member for Worcester (Mr- Peter Walker) and others are engaged I do not know whether he was keeping in mind what was practical and could be policed—we have adopted measures which have been designed to make the maximum impact on the balance of payments with the least threat of damage to the prospects of growth. In particular, we have taken a number of measures to deal directly with the balance of payments.
First, there is the export rebate. It may be that the right hon. Gentleman was not sure what Donald Stokes said, but I think he will find that he is much more representative of those who have engaged in this business than the rather grudging remarks made by the right hon. Gentleman. The rebate has had a considerable impact both on our competitiveness and our ability to get on with the job, and it is showing a surprising degree of success in a short space of time.
We also had the temporary surcharge on imports. As the right hon. Gentleman well knows, there were other possible ways. The Leader of the Opposition left quite a well-documented exercise behind him. Whichever course we took was going to be very hurtful to those whose imports we were going to keep out and, although if we had used some other method the importers would not have had the surcharge, they would not have thrown their hats in the air with joy if we had used a different and more autocratic form of machinery to achieve a different result.
When the party opposite went out of office we had to do something in this field, and whatever we did was bound to be difficult to accept because it had to reduce imports. The party opposite shied off

1173
making a choice every time. We made the choice. It is open for hon. and right hon. Members opposite to say that if they had stayed in office they would have come out of their coma and they would have made a choice and it would have been different from ours. That is a legitimate point of view, but they should now tell us which choice they would have made and how they would have reduced the deficit since they could not have gone on in the way in which they had been going on in the last nine months of office.
We also introduced tighter exchange control. The introduction of the Corporation Tax has had effects on private investment overseas. Restraints on Government expenditure overseas have been considerable. All these have been ways in which we have operated directly to get the maximum effect in the shortest time on the balance of payments situation while having the minimum impact on our need for growth here at home. We went further than hon. Members opposite were ever prepared to go to achieve this result, while they attack us both for taking these measures and for the impact of the measures on our home economy. It is no use right hon. Members opposite muttering about it. There were disagreeable consequences, but we had to take disagreeable measures in part to deal with a highly disagreeable situation which had been brought about by their unwillingness to take action.
It is quite clear that if they had had to tackle this problem this year and had rejected all these measures and had relied on their traditional weapons, the amount of deflation and the consequent loss of output and high unemployment which would have followed would have been far more than anything that the country would have dreamed of during the year when we have been in office. These would have been very substantial, and when the muttering has to stop and more audible comments have to be made from the Front Bench opposite I hope that the right hon. Member for Barnet will give an estimate of what would have been the situation if they had tried to meet it with the old measures of deflation, mass unemployment and general shut-down.
Considerable progress has been made in improving the balance of payments. The trade deficit in the first ten months
1174
of this year has averaged £25 million a month, compared with £46 million a month in the corresponding period of the right hon. Gentleman's last year in office. The right hon. Gentleman sought to explain that away. It was apparently all due to a sleight of hand about values. The answer is that it is not. Exports in this period were 6½ per cent. higher in value. The right hon. Gentleman mentioned this but, since it might have spoilt the gloom into which he was determined to sink, he did not say that they were about 4 per cent. higher in volume than they were in the same period of last year. If a right hon. Gentleman opposite thinks that that is good, as well he might, he might notice that both the outriders outflanking him shake their heads and say, "What a pity ".
On the other hand, the value of imports has been less than 1 per cent. higher than for the same period last year, and the volume over 3 per cent. lower. I have already given the right hon. Gentleman my estimate of what that import bill would have been had we carried on with no weapons other than those which the party opposite were using last year. Therefore, with this reduction in imports and increase in exports we have avoided what otherwise would have been a vastly accelerating trend. Hon. Members opposite seek to explain away this increase in exports and decrease in imports, but they show that industry is making a very encouraging response to the various measures which we have taken to enable it to do so and that industry feels very differently about this compared with the attitude adopted by the party opposite.
Mr. John Bitten: In order that we may fully understand the position, will the right hon. Gentleman give us the figures, based on the latest Board of Trade publication, of net new export orders for the engineering industry, and tell us how these figures for the past five months compare with the corresponding five months of the preceding year?
Mr. Brown: That is the very same point that the right hon. Gentleman made. I did not interrupt him, and interruptions about it now only lengthen my speech. The figures will be readily available. I did not know that the hon. Gentleman would ask me for them or I should have brought them with me. If he will put

1175
down a Question, I will give him the answer.
I turn now to output and the rate of growth at home. Clearly—I make a present of this point to the Opposition, for what it is worth; they can nag about it for as long as they like—the steps we have taken to deal with the balance of payments deficit have affected the rate of growth and have affected output here at home. The two Budgets and the July measures have had their part to play in this. Our justification is that we could not have done the one without incurring the risk, or, if one likes, the actuality, of the other. But let us not exaggerate the situation as the right hon. Gentleman did today.
There are several indicators here. They are all in official publications and I shall not bore the House by going through them. Right hon. Gentlemen opposite can look them up for themselves. One indicator is the continuing level of fixed investment, and another is the clear way in which most of British industry is maintaining its investment programmes ahead. No one would do that if the economy and industry were in the state which the right hon. Gentleman tried to show in his speech.
Second, there is the index of industrial production, to which the right hon. Gentleman referred. As far as he went, he was right: the figure for September, published today, is one point down. But the right hon. Gentleman knows that there always are fluctuations month by month. No one bases decisions or assessments on any particular month's figures. If the right hon. Gentleman had gone a little further in his researches, he would have seen what the comparison was with the period when he and his right hon. Friends left office. In the third quarter of last year, the last one for which they were responsible, the index of industrial production was 128. The graph in "Economic Trends", produced by their own statisticians when they were responsible, shows that not only was it at 128 in the third quarter of last year but it had been practically stagnant during all the nine months before that.
What has been the situation since? In the fourth quarter, which, I suppose, we can nominally claim credit for though it must reflect a good deal that had gone
1176
before, production went from 128 to 130. It has gone up steadily this year, with the single exception of the second quarter when, obviously, some of the measures we took were having their effect. But, with the exception of the second quarter, the index has stood at 132. It was 132 in the first quarter and it was 132 again in the third. So that we are, in fact, 2½per cent. up on the last quarter for which right hon. Gentlemen opposite were responsible, and all the so-called stagnation this year for which the Chancellor is supposed to be responsible has meant that we have had no reduction at all. True the expansion was checked in the second quarter, but it has been resumed in the third quarter. There has only been one quarter's check, not a nine months' check such as it had under the previous Government last year.
Mr. Anthony Barber: What was the figure for January and what was the figure for September?
Mr. Brown: The right hon. Gentleman said that we had published a corrected figure. I do not know about that. The figure I have for January is 133 and for September 131. In between, it has fluctuated from month to month, but it is the quarterly figures that are significant. The right hon. Member for Barnet can explain to his right hon. Friends how important it is in this connection to look at a period longer than one month by itself. For the first quarter of the year, the index of production was 132. It fell to 131 in the second quarter, but it is back to 132 now and, clearly, as the investment and other indicators show, the expansion has been resumed.
Mr. Iain Macleod: Purely to clarify this point, will the right hon. Gentleman agree that the figures for the first nine months last year started at 126 and climbed to 128, and they have this year dropped from 134 to 131? That is the comparison.
Mr. Brown: No. These constant interruptions only serve to lengthen the time which one must take. I did not interrupt the right hon. Gentleman on a single point although there was much in his speech that I should like to have clarified. However, I am glad he has clarified this. His figures are totally wrong. In the first quarter of 1964, when

1177
they were responsible, the figure was 126·7, for the second quarter it was 127·5, and for the third quarter it was 127·9. That is a rise of 1 per cent. in nine months. Now, after a year in which we are supposed to have done so much to damp down the economy, we are ½per cent. up on the position where they left it. I am very glad to have the point clarified in that way.
There are other indicators. Despite some reports which we hear, the demand for labour in general remains high. The October count was 317,000 unemployed in Great Britain, or 1·4 per cent. of total employees. It is very hard to make that match the canvas which the right hon. Gentleman tried to paint today. It is the lowest figure for October in seven years, and I do not think that there will be a major change in the position during the current month of November. The level of unfilled vacancies was correspondingly higher than for many months past.
It is absurd for right hon. Gentlemen to talk as though the Government's measures are having a catastrophic or even a seriously depressing effect on the economy. Whatever effect they have, they are not doing that. Moreover—this cannot be said too often—not only is the charge of failure unreal in national terms, as any of the indicators will show, but it is plainly unreal when one looks at the country through regional eyes. In order to avoid hurting investment projects or the development of regions with unemployed resources, the Government's measures this year have all been highly selective both in their impact on different parts of the country and as between projects of differing degrees of importance.
The six months' moratorium—I want to make this clear again because the right hon. Gentleman once more got it wrong— on starting new projects in the public sector specifically excluded the programme for housing, for schools and for hospitals, and the need to obtain building licences for private projects costing more than £100,000 will not apply to housing or to industrial building. In addition, neither of these restraints will apply at all to projects in development districts and areas which have experienced high unemployment.
1178
By cutting out some of the less essential demands on the building industry, we are, far from depressing the economy, making it possible for more essential projects to be completed more quickly. The restraints on commercial projects in certain parts of the country, together with the controls on office building in London and Birmingham, will not hinder progress but will help to encourage commercial development of this kind in those areas which at the moment have no worthwhile commercial development at all.
As a result of this policy, the less prosperous regions have not been affected as they used to be by the unselective measures which the Opposition always adopted to deal with a situation similar to the one we inherited. Seasonal movements apart, unemployment has not risen significantly in any of those places. As regards skilled labour, there are substantial shortages now in those regions where there used to be considerable over-supply and migration away by people of this very kind. Even in Scotland and other regions where relatively high unemployment has been the order of the day, the shortages of skilled labour are becoming a matter of very great concern.
Business confidence in the less prosperous regions remains high. This does not fit the pattern which the right hon. Gentleman tried to show. It is reflected in a high level of new orders for industrial construction in those regions and also in the increased level of approvals for industrial development certificates in those regions. The latest figures for industrial development certificates approved show that Scotland, Wales, the North-Western and Northern Regions account for a substantially higher proportion of the total certificates approved than they did before. In the second and third quarters of this year these four regions accounted for 52 per cent. of the total projects approved.
This means that we are beginning to overcome the regional imbalance. It means that even in a period of restriction, expansion can go ahead where the labour and materials are available without affecting those regions which are heavily overstrained. This is what right hon. Gentlemen opposite must try to get into their heads. People outside the House know what is happening. Hon. Members opposite may be able to kid people here

1179
but they cannot kid people outside the House who see the effects of this policy in new factories and in jobs. The main burden in postponement of starts resulting from the July measures relating to public expenditure has fallen outside the development districts, and this has no doubt contributed to the maintenance of demand and employment in those districts. Let us consider housing and, again, the same four regions. They have increased their share of starts to 33 per cent. compared with a figure of well under 30 per cent. for the same period in 1961.
Many things remain to be done in industrial and regional development. The Liberal Party in its Amendment refers to the need for more incentives, and the right hon. Gentleman also referred to this need. I am talking about incentives for investment and not incentives for export. I want to repeat what I have said both about industrial investment incentives and about regional development incentives. The existing system of investment allowances was first introduced over 10 years ago by our predecessors; it was suspended for a time in 1956 and the rates of the allowances have been varied from time to time. There have been suggestions from various quarters that for one reason or another this system is not operating as effectively as it should in relation to the considerable sums of money which are involved.
Last Session we carried through sweeping changes in the tax code, and, as the Chancellor explained in his Budget statement, we felt that it was time for a thoroughgoing review of the whole system of investment allowances. We are conducting that review now and are looking at the whole pattern of incentives, both national and regional, to see whether there is a better way of doing things. For obvious reasons I can go no further than that today and until the exercise has been completed and various other consultations and inquiries have taken place. But the exercise is being conducted, and I recognise its importance.
What is clearly essential is to drive on, both with the work which the E.D.C.'s are doing on industrial efficiency and modernisation and with regional development policy so that the country as a whole is fully engaged and the overstrained
1180
areas are eased. Here we have—and we did not have them a year ago—the regional economic bodies, which are beginning to make an impact. No one should underrate the impact which they are having. I hope soon to announce the new East Anglian and South-East Councils. To the right hon. Gentleman this is failure or defeat. I repeat, that is not the view held by people outside the House, nor is it the view of The Times as we saw from the second leader in The Times yesterday which was headed," What Manchester thinks today …" They show how well this is working and how completely different it looks to informed and rational men outside the House from the way in which it looks to frightened and irrational men inside it.
Let me turn to the other half of the official Opposition Amendment, about which the right hon. Gentleman smacked his lips with such relish today—the question of productivity, prices and incomes policy. First let me put the question, this time to the right hon. Member for Barnet, which I put to the right hon. Member for Enfield, West the other day. I have so far had no answer. Do they believe that we should have a prices and incomes policy and that it should be an agreed and effective policy? Do they believe that or do they not? Do they believe that we can have such a policy or do they not? The Government not only believe that we can have it but are working hard to get it. Indeed, the right hon. Gentleman's complaint was that we were working too hard, not that we were not trying to get it. Do they believe that we should? Do they think that the exercise is possible or do they not?
We ought to know what is the view of the would-be alternative Government. Or do they believe, as frankly I think they do—and here the right hon. Member for Wolverhampton, South-West (Mr. Powell) has been much more open about their thinking than has the right hon. Member for Enfield, West—that this can be achieved only by the old, anarchic and I think cruel and unfair alternative of sporadic mass deflation and unemployment, reinforced every time that it does not work by even more unfair pay pauses operating on people in the public sector and on others who can least well defend themselves?

1181
It is anybody's guess, but I am pretty sure that the nation as a whole is anxious for our policy to succeed. But let us be clear and let the nation be clear: there is a long way to go yet before we have the degree of success which we need. That may make the right hon. Gentleman smile. But in my view it only reinforces the importance of getting on with the job. There are many people outside who want the policy to succeed but who have still to recognise—and I put it frankly to them —that they are themselves the people who are holding it back. There are too many who think that it is a matter for the other chap.
But, having said that, let us get some things into perspective. Again there were exaggerations and inaccuracies written into the right hon. Gentleman's speech. It is less than a year since there was even the first glimmer of an intention, with which we so irritated the right hon. Gentleman by succeeding when all before us had failed. It is less than a year. We did not have an agreement on machinery with which to operate it, or criteria by which the machinery should operate, until April of this year. That is less than seven months back. We did not set up the Board until the very end of April. Clearly it could not start to work until well into May. What was happening before that could not possibly have been affected by what the policy was supposed to be doing. We have had the policy and the machinery to make it effective and the criteria on which to base it only since some period in May, and we are now only at the middle of November.
Right hon. Gentlemen opposite also forget the number of claims which were already in the pipeline when we came into office. What happened in the first six months of this year was very largely the result of what had been happening in the six months before we came into power. That was inevitable. I have the figures. At the beginning of this year the Government knew of agreements for pay increases or hours reductions or both in the course of 1965 for nearly seven million manual workers, or 55 per cent. of the total of all manual workers in sectors employing 10,000 or more, and for well over 1 million non-manual workers. They were covered by agreements made in the Conservative Party's term of office and which came
1182
into operation in this year There was nothing that we could do about that.
The alleged high rate of increase for a large part of this year—certainly the first six months—was due to operative dates for agreement on pay rates and on reduction of hours; although the operative dates were agreed in the time of the Conservative Party, the dates themselves were in 1965. If we add those 8 million people covered by agreements to the millions of others—I gave the figure to the House some time ago; I believe it was about 4 million or 5 million—whose claims were already in the pipeline before the policy ever got started, we shall see what an inaccurate and exaggerated picture the right hon. Gentleman is painting.
Not surprisingly, if a movement of that order is already on, other workers feel that they have a right to an increase in any case, even though they support the policy for prices and incomes. They say, "There must be a catching up period, otherwise we shall be behind when the new policy starts." The motive for this was quite natural—it was catching up other people who had benefited under agreements which had already been made. This has had an effect on the periods between settlements and the size of the increase which those settlements reflected in hourly wages.
The Government have made it clear to management and unions that this rate of increase in negotiated settlements is much too high. But it does not mean that the policy failed before it started. It means, now that the policy is going, that these rates of increase are rates which we cannot support under the new policy. It is to the credit of management and unions, both the F.B.I. and the T.U.C., that they are co-operating with us to bring this about.
The right hon. Gentleman had a good deal to say about prices. The position on prices is better than at any time during the year for which we have been responsible and a good deal better than in the years before that. There has been hardly any increase at all in the average level of retail prices for some months. There is evidence that many firms are reluctant to risk the scrutiny of the N.B.P.I. which may follow if they put up their prices, and the early warning system, in which they

1183
are co-operating with us—even though the Conservative Party are not—will enhance this deterrent effect and will ensure that we have much more adequate information and can take action about price rises which are proposed.
Despite all that the right hon. Gentleman said about the rise in wage rate settlements and the reductions in hours, I would emphasise that we have held the price level. The Conservative Party did not hold the price level even when the wage level was being held. We have held the price level despite all that they have said about increased earnings. Something must have been absorbed somewhere in higher productivity, reduced profit margins or reduced selling prices to bring that result about.
I hope that right hon. Gentlemen opposite will get into their heads the major reason why they so signally failed in all their attempts—although from what the right hon. Gentleman said today we might imagine that there had been no attempts. The reason why the right hon. Gentleman did not have success with his attempt and why others before him did not succeed is that they kept on doing what he did today—talk about incomes but mean only wages and salaries. They did not accept that this incomes policy must apply to all incomes. This is what brought about their downfall, and it is one of the reasons why I hope to succeed.
Mr. Reginald Maudling: Nonsense.
Mr. Brown: The right hon. Gentleman does not make it nonsense merely by saying so. We shall listen to the right hon. Gentleman with interest.
Mr. Maudling: If the right hon. Gentleman will be kind enough to read what has been said by Mr. Harold Macmillan and successive Chancellors of the Exchequer he will discover that what he is saying is absolute nonsense.
Mr. Brown: I have a feeling that if I read anything by any Conservative leader I shall read some nonsense. Let the right hon. Gentleman ask the leaders of the two sides of industry why these policies broke down before. We know. Some of us were there. We are making some progress, even though we have a
1184
lot more to do. But we shall not get more done if we keep going round and telling people either that they should not do this, as the right hon. Member for Wolverhampton, South-West tells them, or that they cannot do it. This is why the Conservative Party should make up their minds and come into line with industry so that we may say that we shall try to make the policy succeed. They might try to help it to succeed.
There are many different ways of comparing wages and salaries and of comparing earnings. This is one of the reasons why we have such a multiplicity of different figures which are exceedingly difficult to follow. From the point of view of the prices and incomes policy, it is the rate of increase in earnings per head which matters most.
We have not a single or simple comprehensive up-to-date index of earnings per head. It was not part of the apparatus of information bequeathed to us. This and many other gaps in our apparatus of statistical information will have to be filled soon if we are to do the job properly. But taking all available statistics into account, it seems to us that the weekly earnings per head have been rising on average this year at an annual rate of 7 per cent. as against the rise in productivity.
That is insupportable—there is no question of that. But from the start we all knew that 1965 would be a difficult year. There was already the heavy pressure which built up before we took office. The demand for labour was high and we preferred to keep it high. The movement towards a 40-hour week was well under way. All these factors were bound to make 1965 a difficult year.
But clearly the prices and incomes policy is now having an impact. There is an increasing recognition of the importance of productivity in the whole operation. The word "break-through "does not seem to appeal to the Opposition, but we have nevertheless seen some break-throughs this year in the abandonment of traditional demarcation disputes in shipyards on the Clyde and the Tyne and in the electricity supply industry, the petroleum industry and a number of other industries where collective bargaining has brought agreement on greater flexibility of labour. We are trying to encourage and hasten the process by

1185
taking direct action ourselves—following up the Devlin Report, for instance, by the introduction of the liner trains and by our meetings with the car industry. Through the "little Neddies" we are trying to bring it about by gaining the co-operation and understanding of both sides of industry.
I know that many of my hon. Friends are concerned about the question of dividends. In July, I said that the rate of increase of dividends in the first quarter of the year was excessive and that I was keeping a careful watch on the position. The increase in the quarter was 28 per cent. There were, however, some special factors and that is why I decided not to take further action then. In the second quarter there was a very considerable fall-back in the rate of dividends. They were increasing at the rate of only 3 per cent. compared with the situation of a year before.
I put this out so that everyone on both sides of the House and on both sides of industry will recognise that this is not a matter of wages and salaries alone, much less of salaries for teachers and dockers and nurses. It is -a matter for all incomes. I repeat my pledge that we will take fiscal action if the dividend area proves to be unaffected by the general policy.
The National Economic Development Council will be having its general review of trends and movements in prices and incomes soon and that will give us an opportunity in an independent atmosphere to appraise the situation. I think that there should be a smaller growth of income in the year ahead, because of the lower pressure of demand, because the pressure for the 40-hour week is coming to an end, because the "catching up" movement will be losing momentum and because the prices and incomes policy is having a greater impact. We are determined that it shall be applied much more vigorously and with greater urgency. Hence our proposal on 2nd September to put the Prices and Incomes Board on to a statutory basis with power to call witnesses to give evidence and to seek statutory powers to enable us, if we need to or wish to, to introduce—after coming back to this House, of course—a compulsory early warning system for pay and prices.
1186
Against that background we have agreed with both sides of industry on a voluntary early warning system which we are starting to operate. I want to emphasise, so that any fears on this score can be laid at rest—they are unjustified —that the statutory system would only be put into effect with the approval of the House and if the voluntary arrangements should prove ineffective. Even then, it would be done only after the fullest consultation with the T.U.C. and the C.B.I. We want to make it effective and I am convinced that they do. If we can do so there will be no need for statutory backing but there will have to be a very widespread will to make it successful in the time scale we want.
Whatever the Opposition feel about it we, in co-operation with both sides of industry, will do our darnedest to make it work. We are further along the road than anyone with experience—and some of us have had a long experience in these matters and know a great deal about the snags and about the traditions we are disturbing and the delicate mechanisms that have been built up—could reasonably have expected a year ago.
Mr. Frank Tomney: The rate of dividend my right hon. Friend has in mind seems to work out at an average of about 16 per cent. This appears to be about twice any dividend that the United States gets for its overseas investors. Is it intended to hold the figure at that level in view of the 7 per cent. my right hon. Friend quoted for wages and salaries?
Mr. Brown: I am not sure that I recognise the figure of 16 per cent. as arising from what I have been saying. Perhaps my hon. Friend and I can discuss this later.
It is our intention to make sure that this policy shall have an impact on dividends and every other form of personal income as well as wages and salaries. We believe that this must be pressed on because it is a critical key to the whole drive for productivity, for price competitiveness abroad, for curbing inflation at home, and for getting a real rise in our real standard of living.
So long as the Opposition go round denigrating it, then so long must it be clear that they have not grasped the critical nature of this key to the very things

1187
that they say they would want to do. Any fool can show that this is a difficult operation. One does not need to be a Member of Parliament to be as foolish as that. Any idiot can just sit around and giggle at the struggle. But this is work for real people who are willing to have a go—and they are not lacking, despite the carping criticisms from the benches opposite.
Who, a year ago, would have believed that today the T.U.C. would not only be scrutinising pay claims for which its individual units have some responsibility but would also be operating on them? No one a year ago would have believed that this would happen. Who, a year ago, would have thought that the C.B.I. —not even born then—would within a year be co-operating in an early warning system for prices of its thousands of members?
I cannot pay too high a tribute to the vision of the leaders of both sides of industry, men of all political persuasions and none, for their participation in this great tripartite adventure. I can understand those who say that it cannot be done, or that we cannot do it in this way. But I have nothing but contempt for the idiots and gigglers and sneerers in a matter where real men are trying to achieve such an objective.
We would never have been where we are now had industry—including supporters of the party opposite—been confined by the blinkers through which the Opposition squint at this policy. The Opposition's censure move last night was a flop. This one must be rated a fiasco.
5.10 p.m.
Sir Douglas Glover: If the Censure debate yesterday was a flop, the right hon. Gentleman's speech today makes it certain that he will not go down in history as "Capability Brown". It was a poor speech and the first part was much worse than the last.
I know how very sincere and how determined he is in the views he holds and about the things he is trying to do. I admire him for it. But I wish he would get out of his mind the idea that any criticism is unjustified and unfair. I say this because these are the problems that, quite rightly, the nation should debate both inside and outside Parliament, but
1188
the right hon. Gentleman speaks with a "holier than thou" voice as though any word of criticism of anything he says must be wrong.
Mr. George Brown: The hon. Gentleman knows that that is not so. In my closing words I said that I welcomed those who said that our prices and incomes policy could not be done or could not be done in the way we are trying to carry it out but that I have contempt for the idiots, gigglers and sneerers who do not even criticise and do nothing to help.
Sir D. Glover: The right hon. Gentleman must put a brake on himself. He used to have a certain sense of humour. Now it has gone. This is not what the House likes. It does not like being lectured. Even in bitter debate we have some fun across the Floor of the House and I have seen Members of the Government laugh at something cynical said on this side. The right hon. Gentleman should not take it so much to heart.
I want to deal first with the question of stable prices. I would like to know how the right hon. Gentleman reconciles the fact that the cost-of-living index shows a rise of 5 per cent. with his claim that we have stable prices. My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) showed from the Financial Times the increased cost of living for a person with £3,500 a year. But do not let us forget that such a person is not the only one affected. It goes right down to every family. It has been estimated that it means something like £1 a week for every family of a couple with one child.
Mr. Albert Murray: This is from the Tory Central Office.
Sir D. Glover: No, it is not.
Mr. Murray Mr. Murray rose—
Sir D. Glover: No. I cannot give way now.
I want now to deal with the so called crisis which is said to have bedevilled the Government's actions from the time they took office. It is rather like smashing the teapot and expecting the housewife to praise what one has done. The crisis that the right hon. Gentleman talked about was created by the Government. The more time passes and the

1189
more reports we get from O.E.C.D. and other organisations, the more it becomes clear that the policy pursued by my right hon. Friend the Member for Barnet (Mr. Maudling) was right. What did he say all through 1964? He made no bones about the fact that we were going to run into a balance of payments problem. My right hon. Friend said that we should be under severe pressure. He said that our reserves were sufficient to weather the storm and the right hon. Member for Huyton (Mr. Harold Wilson), who is now the Prime Minister, agreed with and supported him.
As time has gone on, most of my right hon. Friend's forecasts have been borne out. Exports this year are up by 5½ per cent. In 1964, my right hon. Friend said that exports in 1965 would rise considerably. Right hon. Gentlemen opposite cannot take all the credit for this export rise because they know, as well as I do, that the great bulk of exports, because of the way industry and commerce work, were booked last year. The bulk of the orders now being exported were booked when the Conservatives were in power.
The right hon. Gentleman was not prepared to give the figures to my hon. Friend the Member for Oswestry (Mr. Biffen). However, my hon. Friend has them and in the last five months engineering export orders have dropped by 7 per cent. compared with last year. The improvement in the figures this year is the result of Conservative policy last year and has nothing to do with what the Government are now doing. If the orders for engineering goods now being booked are down by 7 per cent., next year there will be a drop in engineering exports, unless the Government are very careful.
Every hon. Member knows that in the cut and thrust of party strife, which is so much the democratic process, one gets blamed for what the other party has done and takes the credit for what the other party has done—because of the leads and lags. In the export total of £4,500 million, orders for ships and locomotives and aero engines and aeroplanes, probably worth about £1,000 million, will have been booked not last year or even the year before, but in 1961 and 1962. They take all that time to flow through the pipeline.
When the Conservative Party was in power and various financial crises
1190
occurred from time to time, I was never certain when supporting the Government whether, because of the leads and lags, we should not have been reinflating when we were deflating and deflating when we were reinflating. We were often doing things at the wrong time because of the leads and lags, because we were only dealing with what had passed, not realising that the course of events had changed. The situation was sometimes made worse when the economy was squeezed when it should have been boosted.
As a result of our experience, all of us from 1945—and let us include all parties in this—have learned a great deal about running the economy. Let us face the fact that for many years this country's economy will be on a knife edge. However successful we are, we shall never be able not to need to worry about what is going on overseas and what our export performance is. We shall always be balanced on a knife edge.
What I blame the present Government for more than anything else is that deep down right hon. Gentlemen opposite even now have not learned the lesson that confidence is the most delicate flower ever to be grown in any industrial horticultural garden. Anybody who has been in business or commerce knows that a whisper can alter the atmosphere which sweeps across a country. If for some reason people suddenly say, "It is too good ", or a rumour spreads and people do not place orders, contraction sets in.
The Government cannot get away from the fact, whether it was lack of experience—and I will give them credit for that, because right hon. Gentlemen opposite have been out of power for 13 years and there were very few of them left who had experience of administration—
Mr. Callaghan indicated dissent.
Sir D. Glover: The First Secretary and the Prime Minister had experience and the Chancellor of the Exchequer had a limited amount of experience, but the number of right hon. Gentlemen opposite with that experience could be counted on the fingers of one hand. With that and the crush of the General Election— for during a General Election we say bitter and unwise things about our opponents from time to time and the mood still existed when right hon. Gentlemen

1191
opposite formed a Government—two-thirds to three-quarters of the financial problems with which we were faced were created by the Government themselves. They would not have existed without Government action. My right hon. Friend the Member for Barnet forecast what would happen to the economy and in broad outline events have proved him right.
Mr. Tomney: He did not check it, did he?
Sir D. Glover: How could he check it? He had to wait for time to make it fact. However, in the following 12 months all the export performance and the reduction in the adverse trade balance which he forecast took place.
Mr. Callaghan: Is the hon. Gentleman saying that if his party had won the election, right hon. Gentlemen opposite would not have taken steps to correct the deficit in the balance of payments but would have allowed the situation to continue?
Sir D. Glover: I am going a long way to saying it.
Mr. Callaghan: In that case, thank God they lost.
Sir D. Glover: It is all right to talk about taking steps, but what steps did the right hon. Gentleman, take with the exception of the import charge which has had a very small effect on imports because of stockpiling and so on? What single action has he taken which has reduced the balance of payments? Will he tell me?
Mr. Callaghan: Certainly. There is the import charge, which is worth at least upwards of £200 million in the balance of payments. There is the capital account reduction, which is certainly worth upwards of £150 million in a full year. There is the export rebate, which has certainly helped exports. There are all the additional credits which have been put at the disposal of exports. If the hon. Gentleman is not careful, this will be not an interruption but a speech, because there is so much to tell him about what we have done.
Sir D. Glover: I am grateful for that intervention. The Chancellor said that in his Budget he introduced capital control, which I welcome. Does he suggest that that will save £100 million this year? I doubt whether it will save £5 million. I will willingly give way to the right hon Gentleman again.
Mr. Callaghan: From what I gather, the House is not particularly keen on my prolonging the hon. Gentleman's speech.
Sir D. Glover: I agree that the measures of our capital investment overseas will bite at some time and reduce our deficit, but is the right hon. Gentleman saying that they have done so now? Of course not. They have been in operation only for three months and these things do not work as quickly as all that. The balance of payments deficit was about to come down before any of these measures were taken. The Government themselves said that the balance of payments deficit would be halved in 1965 and it is working out that way.
When he was Chancellor of the Exchequer and after the election, my right hon. Friend the Member for Barnet said that there was a problem. Of course I am not saying that we would not have taken any action. What I am saying is that the enormous measures which the Chancellor had to take were largely a result of the atmosphere which he and his right hon. Friends created in November and December, followed by hasty action and ill-thought-out measures which made the problem even worse. As a result of that, he has had to go on right through this year. I was delighted in July when he got further support from the banks and I hope and believe that as a result of that further support —and this is where I return to the issue of confidence—our reserves will be increased by between £400 million and £500 million by the end of February or March.
When one gets a return of confidence, an assurance that in the near future there is going to be no devaluation, we will automatically, as the leads and the lags work out, get back nearly half of all that we have lost. I am delighted that this should happen, but I think that we

1193
should realise that it is jolly nearly automatic. When there is a fear of devaluation the leads and the lags work very much against the balance of payments, but as soon as the position is stabilised there is an automatic flow back into the country. When my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) was Chancellor of the Exchequer, he paid off all our borrowings in 12 months. Once confidence was re-established, the money flowed back again because it is needed in a great trading community such as ours is.
I do not think that the National Plan ought to be called a plan at all. It is a forecast. I do not blame the First Secretary for producing only a forecast—it is a very difficult thing indeed to produce a plan intended to work for five years ahead. A great deal of the plan is based on entirely false premises. Many of the figures were produced by saying, "If we increase our productivity by 25 per cent. by 1970 what is the output in a certain industry expected to be? "That is a very different thing to saying "What is your forecast for the output of your industry "and finding out whether that forecast adds up to 25 per cent.
Industry is trying to build into its forecast the proposition put to it by the Government as a result of the studies made by the Chancellor this year. Is this figure still the target for 1970, when we have this drop in production which means that we have to increase it to 26½ per cent.? Are we still going to increase by 25 per cent. by 1970? Is this a phased programme like the road programme? Is it going to be stretched, to take longer to achieve this figure, or are we still working on this target? It is an extraordinary plan. I thought that a plan was meant to produce a coherency—a matching of one's resources, manpower, wealth and technology, used to the maximum in order to produce the maximum wealth and benefit for the nation.
After having been examined and worked on by a great number of people the plan emerges with 200,000 men short. I am tempted to say that I am very glad that the First Secretary is producing this plan, and not building the Forth Bridge, because it would look a pretty funny bridge if, at the end of the day he was 200 ft. short of the other side.
1194
Surely any plan should result in two and two equalling four. All that this plan works out is that our guesses have turned out wrongly, and that we have to find 200,000 men from somewhere else. The plan talks of the saving in manpower, but with all that saving, we still expect to be 200,000 men short. I hope, for the sake of the right hon. Gentleman and of the country, that we do not find that we are short. I hope that the growth of technology in five years will achieve the 25 per cent. increase without the additional manpower.
There are one or two points I would like to make which I think may help. I would like the Chancellor to have another look at the whole system of P.A.Y.E. I am sure that he must realise that one of the greatest disincentives to increased effort is the amount of money taken out of a person's pay packet, or his monthly or quarterly cheque. If a chap thinks that he is earning £20 a week and he only gets £18, he stops thinking that he is earning £20 and thinks that he is only earning £18. One of the great disadvantages of P.A.Y.E. is that if a person works overtime he is then presumed to be earning what he has earned in overtime for 52 weeks of the year, and he pays a large amount of increased tax. Before the war we paid our tax one year in arrear. Could the Chancellor have a look at the possibility of our paying one year in arrears again and therefore paying exactly the same amount each week throughout the year? If we can get back to that system we would find that it was a greater incentive to increased effort than the present system.
Mr. Joel Barnett (Heywood and Roy-ton)Mr. Joel Barnett (Heywood and Roy-ton) rose—
Sir D. Glover: I will not give way at the moment.
The reason that it would be so much of an incentive is that people do not work overtime 52 weeks of the year. The First Secretary has talked about the 40-hour week and we all know that although the official working week has gone down to 40 hours, people are still working to within 1 per cent., 47·6 hours a week, as they were doing 15 or 20 years ago. But they do not do seven hours overtime every week throughout the year. They work a lot of overtime for perhaps three or four months

1195
then go down to a standard wage for a while and then up again. The system I propose would be a far greater incentive to people to put in the extra effort for which we are asking.
For many years our arguments have been on the question of increasing exports, to increase the standard of living of the British people. We already export 15½ per cent. of the gross national product. No other nation with the exception of West Germany exports a greater proportion of the gross national product. Japan, America and France are all less. It is going to be pretty hard to increase our exports every year, except as the growth of world trade increases, if we want anything like a slightly bigger slice than we now have, of 15½ per cent.
This is where I part company with a great deal of what the Chancellor has done. I know that for temporary reasons he might have felt justified in hitting at overseas investments. But in the world as it is developing, I am sure that the long-term advantage to this country would be very much greater if we could build up our overseas investment from £11,000 million to £20,000 million. [Interruption.] Exactly, but the attitude which is creeping in with all the developing countries, namely, that they want the assembly factories there otherwise we cannot send the basic parts, will increase more keenly every year. Therefore, it is very important and almost essential, that increased investment flows overseas, otherwise these countries will not allow us to send our goods to their markets. We must encourage overseas investment.
Secondly, if the export position is, inevitably, not to get any easier, would it not be money very well spent if we spent more on encouraging the tourist industry, which is one of the unrequited exports, which costs us very little in overseas currency, except for advertising, and which does not place an additional strain on the resources we have in this country? Perhaps the Chancellor of the Exchequer could get the Minister of Public Building and Works, who is responsible for ancient monuments, to go into this matter.
I was horrified to find last year when I went to see Hadrian's Wall that it was almost impossible to look at it without going for a half-mile tramp. There were
1196
about three car parks over the whole length of the wall, and there was nowhere to get a cup of tea. This is one of the biggest draws for Americans. The biggest attraction after the Great Wall of China is Hadrian's Wall. Many Americans would visit it if it were made easier to do so. The tourist industry, which does not involve the transit of goods over frontiers, is one of the things which we have to consider more seriously if we are to achieve the increased standard of living that we want.
We are living in an ever-increasingly competitive world in which more and more nations are industrialising and therefore are demanding that their products should be bought in their country rather than in ours. This means that overseas investment must have priority. Indirect exports are just as valuable, if not more valuable, than sending goods across frontiers. I hope that the Chancellor of the Exchequer will consider these matters because I am sure that they are part of the problem which we in this country have to solve.
5.53 p.m.
Mr. A. E. P. Duffy: I have been in the House long enough to know that the hon. Member for Ormskirk (Sir D. Glover) likes nothing better than a bout of in-fighting in the Chamber. But he has a very generous side to his nature. Therefore, I thought that his description of the speech of my right hon. Friend the First Secretary of State as a poor one was entirely out of character.
I enjoyed listening to the speech of the right hon. Member for Enfield, West (Mr. Iain Macleod). It was a good speech, and certainly a distinct improvement on the speech which he made a fortnight ago in the debate on the National Plan. The right hon. Gentleman was perfectly right to dwell on what I regard as the weaker, more disturbing aspects of the present behaviour of our economy, the changing character of our terms of trade and the widening gap between earnings and productivity. Although he may not have satisfied the hon. Member for Ormskirk, my right hon. Friend the First Secretary of State replied at length. His was altogether a much more substantial speech, and I am taking nothing away from the speech of the right hon. Member for Enfield, West. My right hon. Friend

1197
made a very well-structured speech and I am sorry that the hon. Gentleman, although he did not pay tribute to it— we can hardly expect that from him—did not at least do a little more justice to it. I thought that the hon. Gentleman, like the right hon. Member for Enfield, West, was concerned, perhaps more than anything else, to acquit his party of responsibility for the crisis of confidence a year ago.
Sir D. Glover: Then the hon. Gentleman does admit that it was a crisis of confidence?
Mr. Duffy: Yes, indeed. One can hardly say otherwise in view of the great efforts which my right hon. Friend the Chancellor of the Exchequer has had to make this year to try to overcome that crisis of confidence.
It is important that we should briefly review some of the key economic indicators not touched on in the debate so that we can assess the Opposition's performance during the last, say, 10 years. I want primarily to contrast the position of a year ago, on the eve of the election, with the present position so as to bring out the corrective actions demanded by that crisis—a balance of payments crisis as well as a confidence crisis—which the Government inherited or which was certainly in existence, whether or not it was coincidental with our coming to power. I want to consider how far they have been, first, implemented by the Government, and, secondly, related to the Government's long-term objectives.
I want to do that against the background of a remarkable speech by my right hon. Friend the Prime Minister in New York on 14th April to which many Americans referred while I was touring the United States only recently for seven weeks, when I had the fortune and pleasure to meet many American businessmen, economists and journalists. They were almost at one in their admiration of what they had seen of the Prime Minister, not only on 14th May, but subsequently. They have since by Telstar seen him meet the Press. His speech in Wall Street in April stuck in their minds, and I want to refer to it later because it will help me in dealing with the Liberal Party's Amendment to the Gracious Speech and to make some sort of
1198
appraisal of the Government's programme, its objectives and its chances of success.
The right hon. Member for Enfield, West was right to emphasise the way in which, while his party was in office, the living standards of the people increased. He said that they had gone up by 49 per cent. over the last 13 years. Even if he had not mentioned that figure, I was ready to say that the gross domestic product per head of population has increased over the last 10 years by about 25 per cent., which was sufficient to double the G.D.P. over a comparatively short period of 30 years, which is a good performance by any standard. Of course, no one can deny that because it is so obviously reflected in the average consumption level in this country.
But what the right hon. Member for Enfield, West did not say in order to give a balanced picture was that the retail price level in the same period went up 36 per cent.
Mr. Peter Walker: My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) also gave the adjusted figure after taking into account the rise which had taken place in the retail price index. The 49 per cent. figure is a real figure.
Mr. Duffy: Yes, that is so. I was going on to make that point. Nevertheless, the significance of this continued rise in the price level over the period for other reasons, which I need not go into because of what my right hon. Friend is trying to do through the National Board for Prices and Incomes, cannot be overlooked. These increased resources were used by the Opposition when they were in government to raise the rate of fixed capital formation in the economy. The cumulative effect of 10 years of investment is a rise in capital stock by about one-third. Despite this, home costs per unit of output have risen by 37 per cent., which shows that we have not been getting the full benefit of this investment and the right level of productivity during those years which the Opposition properly remind us now we are not achieving.
The volume of exports of goods and services increased faster than the G.D.P. for which the Oppposition can take credit —37 per cent. as against 33 per cent.

1199
on the other hand, Britain's share of world's exports of manufactures over this period fell from 20 to 13·7 per cent. The amount of imports which these exports would buy rose by 48 per cent. with the aid of improved terms of trade. It might also have been said, by way of balancing the picture, that the volume of imports has grown faster than the purchasing power of exports—56 per cent. as against 48 per cent. and much faster than the G.D.P., namely, 33 per cent.
I think it is not surprising, in view of this, that the balance of payments on current account at the end of this period, though favourable for most years, gave us only an aggregate of £389 million by way of surplus, and this, as we know, was achieved only at the cost of exchange control, at the cost of "stop" policies, at the cost of a certain amount of growth. Moreover, the reserves of gold and convertible currencies were consistently lower in relation to our short-term liabilities and we had at the end of the period a net deficiency of nearly £600 million.
I am not saying that at the end of this period, about which the right hon. Gentleman was talking with such pride an hour ago, there were not achievements, substantial achievements, to the credit of his party, but the fact that a man has added to his net assets during a period does not mean he had not some difficulty in living within his income during that period, and that pretty well sums up, I think, the record of the Opposition over the last decade.
If we now come to the position at the eve of the election we find that the cumulative current account was just in balance, but it was making no contribution—and this is something of which the hon. Member for Ormskirk needs to be reminded— to the financing of long-term capital exports which were averaging then about £175 million a year, and, indeed, had done for some years. The reason why this current account was only just in balance was that our export performance was not satisfactory. It was not satisfactory when we recall the comparative cost position of this country at the time, and when we recall the difficulties of other countries in Western Europe on account of the scarcity of labour. It was not satisfactory, either, when we remember that the exports of manufactured goods, which make up the
1200
bulk of United Kingdom exports, were rising less than those of other industrial countries taken as a whole. It was not satisfactory, also, of course, when we remember that our gold and foreign currency reserves were under £1,000 million for the previous seven years. It certainly was not satisfactory when we also recall that the United Kingdom, the United States apart, was the only industrial country not to increase its reserves during that period.
I wonder, therefore, how the right hon. Member for Enfield, West could possibly have said during his speech And so we came to the election of 1964 without any crisis of confidence." Of course, there was a latent crisis of confidence. We felt it all that year. We all knew that corrective measures were not being taken sooner. No one was in any doubt at all that there was a need for corrective measures and that the delay in taking them, as we all know, was due to the need for careful election timing.
Sir D. Glover Sir D. Glover rose—
Mr. Duffy: I ought not to give way because I want to sit down within 20 minutes if I can.
My right hon. Friend the Secretary of State for Economic Affairs described 1964 as a year of rapid deterioration throughout, and I do not see how we can possibly get away from that in view of what I have just said. I have been at pains to come up with an objective picture. I have not been selective in my indicators. These are key ones. No doubt following speakers —and as far as I can judge there are Members who are very well qualified to do so—can come up with more significant indicators—if there are any—if they catch the eye of the Chair. But in view of all this, I think my right hon. Friend was perfectly entitled to ask that during the speech of the right hon. Member for Barnet (Mr. Maudling), who will wind up the debate for the Opposition, he will say what he and what his party would have done had they won the election.
Now, to come up to date and compare the position I have just described a year ago with the position today, and we look at the reserves, balance of payments, exports, investment, savings. I shall not go over the ground already covered, but it is important to stress a marked improvement in the reserves this year.

1201
When we look at the balance of payments we note a marked improvement in the second quarter. We have these figures, and I shall not delay the House or take up time by detailing them. As to exports, I am not giving figures which the hon. Member for Ormskirk has rightly given, but I will give figures which have not been given. During the period August to October this year exports were nearly 10 per cent. higher than a year ago, while imports were precisely the same. I am not going to say that we shall keep that up. I hope we shall. Happily, the trend is significantly upwards. But it is nevertheless a most striking improvement.
When we look at investment, and particularly at what the Prime Minister said in his speech on the National Plan a fortnight ago, we see fixed investment by manufacturing industry in the first six months; of this year compared with the second half of 1964 is 7 per cent. up, and he gave us the optimistic picture for 1965 as well as 1966 so far as one can determine the intentions of manufacturers according to Board of Trade returns.
That again is most heartening, and yet the Opposition Amendment, as my right hon. Friend reminded us, refers to the failure of the Government's economic policies. I do not see how Members opposite can possibly sustain that indictment during the rest of this debate.
I was worried, I must confess, in recent weeks, about local savings, not merely for the short-term position but also the long-term position. I was worried about the implications of the National Plan for savings and investments and how it would be possible to get the requisite levels of both to give us our targets by 1970. However, I was considerably heartened at the weekend by a reply to a Written Question to my right hon. Friend the Chancellor of the Exchequer, on the basis of the seasonally adjusted figures, that personal savings are estimated in the second quarter of this year to have been 9 per cent. of personal disposable income, which compares with 7–6 per cent. in the first quarter of 1965, and the level so far in the first half of this year is clearly above that for 1964 and certainly 1963.
This is most heartening. I do not want to be unfair to some Members opposite. I know they are interested in this, and
1202
there is certainly one of them wanting to catch your eye, Mr. Speaker, and I know he has been even more pessimistic over this than I have been in recent months. I hope that he and some of his hon. Friends will share the joy which we feel about this striking improvement, because we know that without this we cannot possibly sustain not merely the Plan but the present position.
Yet the right hon. Gentleman the Member for Enfield, West in a sense was right. He is usually right most of the time because he is so careful in what he says, but it very often means that he has not given the whole picture. For example, he said that we had seen last year national savings doing less well than a year ago. That was only part of the picture, and I suspect he knew it.
Now what of the future? I think the Secretary of State for Economic Affairs was quite right to dwell upon the need for balance of payments equilibrium and the defence of sterling, because without either we cannot possibly hope to achieve all the wide programme of social reform which makes up the Queen's Speech. I want to touch briefly upon the balance of payments in order to show, as I have said I would like to, what steps I think will be needed and relate them to the Government's economic objectives.
I do not think there is any doubt whatsoever when we look back on the experience of the past that the balance of payments has always tended to be a major constraint on economic growth. On the other hand, many of the difficulties of the past can be attributed to failures of demand management policy. For example, in 1963 the expansion, like the previous upswing in 1959–60, led to crisis. This was undoubtedly due to excessive expansionary measures. I recall that during the Budget of 1963 Members of this House warned the then Chancellor of this.
I think that this is even more significant when I recall that the recent expansion was shorter than the previous upswing. Demand management is clearly of vital importance. But what is crucial is that the persistence of an unsatisfactory underlying balance of payments position, on an average of fair years and bad, points to more deep-seated factors. There is a need, therefore, for planning, for

1203
more skilful management of demand within the economy, and for a tougher competitive climate to help maintain an upward trend of exports.
As for planning, we are going to get this now, as we know from the evidence of recent weeks and which my right hon. Friend repeated only an hour or so ago. It is absolutely imperative to encourage steadier as well as faster growth as part of our long-term strategy.
I think, however, that more skilful demand management is needed to help us pay more attention to the main secondary effects of reflationary policies. If the competitive position of the United Kingdom is to be improved, then a prices and incomes policy is clearly called for. Such a policy is being developed by this Government, though no one can possibly mistake the difficulties in the path of such a policy, especially in a free society.
Productivity is also of importance because, as I have said, and as I think is clear, we have not yet felt the benefits of all the investment already made. Other longer-term reforms of a structural character are highly desirable therefore, and the Government have already some of these in hand. For example, there is a number of measures to improve the quality and flexibility of labour supply, and the little "Neddies" are studying ways of improving the efficiency of firms, and regional development schemes are being brought forward for major areas of the country. In turn, they should facilitate the adoption of a more differentiated approach to the problems of each region than has been the case in the past. In certain basic sectors, particularly rail transport and the docks, the Government have announced rationalisation and modernisation schemes. Legislation on monopolistic and restrictive trading practices is being extended and reinforced.
That does not mean that the Government's goal of reaching a balance of payments equilibrium by the end of 1966 is going to be an easy one. The margin for manoeuvre is limited, and large external obligations have been contracted. Servicing of the debt to the I.M.F. calls for an annual surplus of some £200 million in the years 1967–70. It was really about those external obliga-
1204
tions and our ability to meet these new debts that the Prime Minister spoke in New York on 14th April and American businessmen were heartened by what he said. He described simply how this could be done by a tougher competitive climate. In a most impressive speech he brought together the Government's objectives for a new Britain and a comprehensive picture of a dynamic economy in which good incomes could be fairly earned by hard, intelligent work, or constructive enterprise in a tough, competitive environment, and in which the Government will assist in the process of modernisation, largely by securing a cooperative approach based on planning by consent, but by a readiness to penalise or prevent anti-social practices, and also by a readiness to look after the weaker members of society. In this way he believed—I found American businessmen a good deal more convinced than formerly—that the national output would rise much more rapidly, and that its allocation between people and uses could and would follow a more acceptable set of social priorities.
I wonder, in view of this and in view of the Prime Minister's assurances as well as the content of the Gracious Speech, how the Liberals can possibly have put down their Amendment. I do not doubt that the hon. Member for Caithness and Sutherland (Mr. George Y. Mackie) will try to catch your eye, Mr. Deputy Speaker, but I should like to remind him that I probably represent more Liberals than he does. I know what some of them are thinking about the Queen's Speech. I know from my experience that a surprisingly large number over the past ten days have been heartened by our announced policies. They welcome and accept the contents of the Queen's Speech; like the Liberal candidate for Harrogate who, according to today's Yorkshire Post, has resigned from the Liberal Party and taken steps to join the Labour Party. That was for the reasons I have just given, because he accepts the Queen's Speech.
The fruits of this new Government's conduct of our economy are already evident in the balance of payments position and in the recovered strength of sterling. It is also to the credit of this Government that they have been able to

1205
keep the boom going for so long without having recourse to large-scale unemployment. I do not know that we have managed the trick this time, I do not know that we have established the right Keynesian balance—only time will tell— but I do know that in his management of the economy the Chancellor of the Exchequer has been more successful so far than any of his predecessors. The proof of this can be seen in the prolongation of the present boom.
My right hon. Friend the First Secretary of State and Secretary of State for Economic Affairs was perfectly right to claim credit in his remarks for the way in which his selective policies, notably in the regions, have also helped to keep the boom going. I want to be fair about this. On the evidence and the face of things there is a much more skilful conduct of the economy by the Chancellor and by the First Secretary. I do not see, therefore, how the House can possibly accept these two Amendments.
6.16 p.m.
Mr. John Bitten: Although the debate has ranged over pretty well the full spectrum of economic policy, I wish to try to confine my remarks mainly to one aspect, the incomes policy, not least because it is specifically mentioned in the Amendment moved by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod).
I invite the House to recall with me 11th February when the First Secretary of State and Secretary of State for Economic Affairs told us that he now had machinery established on which the prices and incomes policy could work. This, in a sense, was an historic occasion. The right hon. Gentleman on that occasion was feeling in a fairly fraternal mood, I think, because I was rash enough to comment that very many people would regard the quest for an incomes policy as illusory and, indeed, undesirable. I also asked about statistical machinery, and I shall come back to that later. On that occasion, we did not have comments about idiots, gigglers or sneerers, but the right hon. Gentleman in a great state of fraternal feeling accused me of courage. Whether it was the courage of the Minister of Technology's convictions, I do not know. I
1206
did not claim that at all. Perhaps I was entitled to say that I was sceptical, and I hope to show that my scepticism has been more than justified.
I ask the House to consider three points which now seem worth considering on the development of the incomes policy. I put them under the headings of confusion, danger, and yet again a concern with the statistical machinery which must touch upon the very practicability of such a policy. I hope to return to the point I made in questions on 11th February, a point which has been made subsequently by a number of my hon. Friends, about the statistical machinery by which we are asked to evaluate whether or not the policy is succeeding and also to determine whether or not the First Secretary and the Chancellor himself can determine whether such a policy is succeeding.
I comment first on the confusion. I think we are seeing a considerable amount of confusion about the incomes policy. As evidence for that, I consider the statement which was issued by the First Secretary's Department on 3rd September. There was then the comment put out by the Department of Economic Affairs that—
"There is a general understanding of the need of the situation but it is not being reflected in a satisfactory movement of productivity, prices and incomes. Prices are still rising and pay claims are being settled well above the norm."
Clearly this is a statement which is incontrovertible, but what I find confusing and, I suspect, a great many others find confusing, is that just short of a fortnight later the Department of Economic Affairs with a great flourish produced the National Plan which says, on page 67, on the incomes policy:
"An encouraging start has been made." I find it somewhat difficult to reconcile those two statements.
I shall now consider the question of the danger which I believe to be inherent in this policy. I think the danger is that the Government have "gone nap "on an incomes policy. Their whole economic programme to some extent rests on the success of an incomes policy. This is no exaggeration on my part. I think one could find ample quotations to show that the arch stone, as it were, of their economic policy is the success of this venture.

1207
It seems that as the difficulties and, as I believe, the inherent contradictions of such a policy become apparent there will be a growing disposition to cast around to blame others. At the moment the blame to some extent is focused pretty sharply—as it was by the Secretary of State this afternoon—on my hon. and right hon. Friends who are taking a somewhat sceptical attitude towards it, but I think that as time goes by others may find that they are accused of not co-operating in this great venture. I have always distrusted the idea of consensus in politics and consensus in Government. This may be a highly unfashionable thing to say, but I believe that one of the results of this will be increasing concern on the part of the Government that they have been let down by those whom they invited to be their agents, the Confederation of British Industries or the vetting sub-committee of the Trades Union Congress.
If I understood the Secretary of State correctly, he said that these bodies must make the policy effective, when he was referring to the early warning system. That was a clear indication that if they did not make it effective statutory power would be taken. I do not think that an unfair condensation of the remarks he made. I believe there is an inherent slide towards increasing control of prices and incomes. I believe this is a return to the philosophy of the 1945 Labour Government which set great store by these kind of controls. This is no exaggeration; it is there in the Statist article published some months ago when the President of the Board of Trade talked about the Tories dismantling the fine planning machinery left behind by the outgoing Labour Government in 1951. Therefore I do not regard it in any sense as scare politics to talk about the slide towards statutory controls implicit in this incomes policy.
I wish to conform with my intention to be brief, and I will now talk about what seems to be the confidence trick nature of this exercise. I hope that it is understood that I do not use this term in any pejorative sense. There is a degree of nonsense in all our politics. We must acknowledge this to ourselves. There is a degree to which we hope we can sell
1208
things to the people without them necessarily understanding the full implications or extent. I do not want to prate on this particular line. [Laughter.]An hon. Member laughs as if this were something like pas devant les enfants. We may adopt these postures, it seems, but not on the Floor of the House. What I am saying this afternoon is not particularly agreeable. It is perhaps a distinctive view, but I am saying it on the Floor of the House because I believe that it is here that it should be said.
Where the nonsense calls for more than the permissible degree of credibility is in the attempt of the Government to establish that an incomes policy can succeed. As I understand—and I shall be happy to be corrected by the Chancellor on this point—the development of an incomes policy is seen as trying to determine the general level of activity by identifying and then selecting individual components and subsequently controlling them rather than relying on what he would call the old crude overall tools for the management of the economy.
As the Chancellor does not intervene to correct me, I think I may take it that he assumes that to be a fair interpretation of the philosophy behind the policy. The Chancellor has not interrupted me and I move on comforted. Therefore, when I question the statistics of an incomes policy, this is not a sort of esoteric touch or a clever dick kind of intervention. It must touch on the whole feasibility of an incomes policy, because if we are unable to identify as the prerequisite of our measure of selectivity the whole exercise to my mind is severely questioned, to put it no higher. This was the point which prompted me to ask my questions of the First Secretary of State. I am sorry that I am gunning for him when he is not present to take account of this, but the Chancellor will be answering the debate and I hope that he will assure me on these points.
When I asked the First Secretary about the machinery which would be employed for measuring the success of the incomes policy, that was a question which he declined to answer. I make no complaint about that, but I hoped that as time went on we would see developed an answer to the question. The answer has come, not from the First Secretary of State but from the Ministry of Labour in its publication,

1209
the September issue of Statistics of Incomes, Prices, Employment and Production That says:
"Information is not generally available about the rates of wages actually paid by employers, commonly called ' market rates', nor of the extent to which these may be different from negotiated or statutory rates." If that is conceded by the Ministry of Labour, it throws very considerable doubt on the whole credibility of this exercise.
I go a stage further. We are all too prone to talk about wages as though wages were the overwhelming component of the wages and salaries section of the gross national product, but that is not so. Wages admittedly account for 60 per cent., but salaries account for 40 per cent. A number of my hon. Friends, the hon. Member for Woking (Mr. Onslow), the hon. Member for Worthing (Mr. Higgins), the hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) and myself, asked some questions relating to salaries because we felt that salaries must be vital to the credibility of the whole exercise. The Secretary of State on that day was feeling rather less fraternal. It was called a venomous intervention. What did we have against salary earners? This was touchiness against any kind of examination of his policy which augurs ill for those who are the voluntary participants in this exercise. If it goes ill they may get the same rough handling as was meted out to me on one or two occasions, but maybe they are better able to look after themselves.
No Government Department has been able to offer very much in the way of a trend in salaries, and there is no such thing as drift in salaries as in wages. We have only to look at the heavyweight weekend Press to realise that there is a fantastic movement around of young salary workers throughout industry. Therefore, the measure of the drift in salaries is really what is paid to refill a job which has become vacant because someone has moved on to better himself elsewhere.
Though entirely reliant on outside sources for information, it is worth quoting from the Hay-M.S.L. report which appears in the November edition of The Director. From the sampling carried out, of salaries in the range £1,250-£2,000 a year, it was found that the increase had amounted to between 8 per cent. and 9 per cent. over this time last
1210
year. This may be so, and I think that it probably is. But, as far as I can judge from speaking with people in industry, this may not be the whole picture. Are the Government able to confirm this rate of increase? Can they deny it, or is their answer simply, "We do not know "? If it is the latter, then, to put it mildly, this casts considerable doubt on the credibility of this kind of exercise.
In the attitude which I have struck, particularly about the statistics of an incomes policy, it must be made clear that what I have said is not pedantry at all. Indeed, it runs to the very heart of the problem, for a great deal of nonsense is talked these days about this subject—not least by the New Statesman, in which John Morgan wrote on 5th November:
"… at the Economic Ministry … the understanding of the movement of wages and prices reaches unparalleled heights of sophistication."
What sophistication? I wrote to the New Statesman, but my letter was not published, and I have heard not a word from Mr. Morgan. Perhaps the Chancellor will tonight tell us whether he agrees that unparalleled heights of sophistication have been reached. If they have, perhaps he will let us know what they are.
Let us return to the significant day in February when the First Secretary made his statement. I admit at once that there has been a lot of history reviewing, which, I have tried not to do. There may be another occasion when I can go into that in greater detail. Suppose that at that stage, in February, we had known that during the following few months retail prices would be rising at an annual rate of 5 per cent. I take that figure from the Government's own statistics. Suppose, too, that we had known that the rate of productivity—such as it may be calculated from the index in the Economist— was rising at a mere 1½ per cent. annual rate, and that the index of industrial production would be lower than it was in February. I suspect that we would all have felt that the incomes policy was not living up to the fairly rich reputation which was being accorded to it.
It is no good the First Secretary saying, "It did not start until May ", because I believe that the whole idea was that the climate should be set for it to come into

1211
being. Certainly that applied to the Budget in April. I recall that a great deal of argument centred around the fact that that Budget was designed to create such a social climate. If we had known or could have been told that in the months to follow—and such figures were available from the Board of Trade—that the volume of net new engineering orders would fall by as much as 7 per cent. over the corresponding period of 1964, we would indeed have been shaken.
When I raise these questions, it is no good the First Secretary trying to fob me off as if I were impertinent to be asking them. It is a reflection on his ineptitude that he did not talk about our balance of payments position and our prospects for next year in terms of the current balance without these figures, particularly since they are available in the Board of Trade Journal.
I do not want to be accused of knocking Britain because I am drawing attention to this volume of figures. Indeed, the value of orders may come out somewhat better. None the less, I imagine that the engineering sphere accounts for about 25 per cent. of our total exports. I do not imagine that this sort of thing is susceptible to a precise definition, although the Chancellor may wish to correct me. Nevertheless, this must have implications on our current trade balance for next year.
What I now have to say may be considered controversial, although I make no apology for saying it. When one looks at the economic indicators it must be through a glass darkly—and I speak as an economist. There is far too great a disposition these days to give to economic forecasters or preachers a kind of astrological importance. Let us, therefore, be modest in our forecasting.
On the existing evidence, I think the economy is still over-heated. I say this in view of the continuing shortage of skilled labour and evidence that the wage drift is continuing. I believe, therefore, that we are confronted with the quite serious possibility of renewed balance of payments difficulties next year on the current trade balance. We must, at the same time, remember that it is on the current trade balance that most overseas attention will be focused. Having said that, I again
1212
reiterate that I hope I will not be accused of knocking Britain in making these comments. The First Secretary appears to be in a fairly robust mood today, so I must make my position clear.
I make these remarks on this occasion in view of four items which appear in the Gracious Speech; legislation on Exchequer subsidies for local authority housing, legislation to lessen injustices in the rating system, measures to provide supplementary National Insurance benefits relating to earnings, and measures concerning the pensions of retired members of the public services. We know that in the latter case there will be a cost of about £25 million a year. I do not wish to argue the merits of these items. There will be other occasions to do that.
Suffice to say at this stage that in every case there will be an addition to consumption, because I think I am correct ing saying that the whole purpose of those four items will be conceived in terms of social legislation to aid those who are more likely to spend the money they get than to put it in the bank. That being so, we are moving to a situation which must result in increased consumption, the full measure of which I do not know, although I would be grateful if the Chancellor would tell me.
I suspect that we need deflationary policies in addition to those announced by the Government. This may sound like harsh reality, but it must be said in a debate of this sort and in the kind of speech I am making. The cost of these pieces of legislation must, I suggest, be matched by increased taxation designed to fall on consumption; and it could well be that additional measures should be under consideration. These things must be said, and it is no good saying them in the smoking room. Perhaps the Chancellor may even get some vicarious benefit from my saying them. I would rather these points were made here than elsewhere. Government measures must measure up to the reality of the situation, and while, as I say, it may sound like harsh reality, I prefer it to the fiction of an incomes policy and the fiction of a National Plan.
Mr. Callaghan: Would the hon. Gentleman conclude what I think is a realistic and logical analysis of the situation by telling us whether he thinks

1213
we should pursue the incomes policy? If so, how does he consider that we should strengthen it? If he thinks that we should abandon it because it will not work, what does he suggest we put in its place?
Mr. Bitten: I think that it should be abandoned, and I have never tried to disguise that belief. I believe that the alternative is much stricter overall control—if one likes, a reversion to the system operated, or the system that was sought to be operated, by my right hon. Friend the Member for Monmouth (Mr. Thorneycroft) before he resigned. I have never hidden my identification with that view.
If it will give the Chancellor any encouragement, when my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), speaking of the incomes policy, said that it was a nonsense, a transparent nonsense and a dangerous nonsense, I would only conclude that, on the evidence so far available, the magnitude of that nonsense, its transparency and its danger have become apparent even sooner than someone as sceptical as myself had imagined.
6.40 p.m.
Mr. Leslie Hale: I have always said that I embark on economic seas without much confidence, but I am grateful to the Opposition Front Bench for the framing of this Amendment because they have given me the chance to become more politically conformist by defending the Government on those particular heads on which they are most deserving of support. I have read the Amendment. There is some reference to savings in it, and I can well understand why that subject has now been avoided. One of the other problems of being a Member for a highly sophisticated constituency like Oldham—indeed, the only problem for me—is that a great many of my constituents are much better educated and informed than I am. I should, therefore, like to thank the right hon. Member for Enfield, West (Mr. Iain MacLeod), whose knowledge and experience I usually respect, for ending the debate on a slightly juvenile note, a slightly slap-happy note, because that is more suited to my own particular style and limitations.
When the hon. Member for Oswestry (Mr. Biffen) was speaking I reached the
1214
point where I turned and used the one flattering phrase used in this House, saying, "This chap is talking good sense." I agree with what he said about the economists. I was happy that the right hon. Gentleman mentioned the introduction of economic advisers, on which there is the old precedent of Montagu Norman, not now generally regarded as a very happy one. I was pleased that there were two of them. I should not like to turn to the hackneyed attack on a former Leader of the Opposition and his use of matches to help him on this subject. Why they got rid of him, I do not know —I think he was nobbled in the stable.
I was impressed as anyone who, like myself, can get understanding from a little manual process such as that which I used over geography. I could never remember which side Omsk was from Tomsk. I used to say, "Skegness to the right and Pembroke to the left", and when I looked again it did not seem to be on the left at all. When we had two new economists, I tried to find out which was the rive droite or gauche of the Danube, and which was Buda and which Pest. My constitutents assured me that the Danube had not had a rive droite for a very long time, just as Threadneedle Street does not have a Left Bank.
I made the suggestion at the time, before the business had developed, that if these two very distinguished gentlemen were to act as economic navigational buoys, they should be lit up, and labelled "larboard "and "starboard", so that one could safely drive an economic course right through the middle without obvious danger. I rather think that my right hon. Friend did that in the end, and he should be congratulated on it.
Some of the arguments put forward today would not do for Oldham, and are rather juvenile for the House of Commons. We have had, in substance, the famous old defence in the divorce case in which counsel said: "The respondent pleads that he has not committed adultery on this or any other occasion. Secondly, if he has committed adultery, which is denied, the respondent committed contributory negligence." I do not want to bring a blush to the cheek of Miss Mary McCarthy—I have to be careful in these censorious days. "Thirdly, if he has committed adultery, which is again

1215
denied, the husband condoned it by his absence at the material time."This has been the case that has been put today, and previously.
I must say that the right hon. Member for Barnet (Mr. Maudling) is a little more honest about it. He said:"The Chancellor has done what I would have done myself." Today we have heard, first, that there never was a crisis. Secondly, we have been told that if there was one, it was not caused by the defendants in the course of their previous government but by what happened in the course of the first week of the Labour Government, by means not specified at all. We have heard, thirdly, that if there was a crisis, which is denied, we pinched our ideas off the right hon. Gentleman, and used precisely the same measures that he would have used. Fourthly, the measures which in his hands would have worked, did not work in the hands of my right hon. Friend. That has been substantially the case put forward in the course of the day.
I did not quite hear something said by the hon. Member for Oswestry but I think that he said something with which I am in complete agreement, though perhaps I misunderstood him. I think that one should say things frankly to the public. I have a great respect for British public opinion. I do not expect all of my constituents to be passionate about the problems of Rhodesia, but I believe in the ultimate judgment of the people, and I believe that in every constituency the political workers have a great wealth of information and talent which could well be appreciated to the advantage of this House. I say that the Chancellor used socially undesirable methods to deal with a terribly dangerous situation; and that he had to use socially undesirable methods because, in the time limit imposed on him, no other methods were available.
One is always tempted to look back to 1931, but that is a long time ago. That was a world in which there was no G.A.T.T., and in which one reads the economic advice given by the Treasury with appreciation of something so extraordinary in the Keynesian era, that one regards it almost as a curiosity. The Chancellor had to take those measures. Nobody who casts his mind back can
1216
fairly say that in the then situation there was any other course to be taken. I fail to see that he could have taken any other steps, although, obviously, the use of Bank Rate is one that one would not have wished.
It is the object of the Labour Party to try to return to a low-interest policy. When the Labour Government in 1951 left an unhappy balance-of-payments situation, the present noble Lord, the Master of Trinity, then Chancellor of the Exchequer, doubled Bank Rate in two short operations in a period of about six months, although he was left with stocks high enough to enable him to take economic measures not available to my right hon. Friend. There is no question that these measures had to be taken in 1965.
The hon. Member for Oswestry again comes up for favourable selection, because he expressed a perfectly fair criticism when he asked: are the Government placing too much hope on the economic plan? Is this really their sole immediate objective of planning? Have they no alternatives possible? If this fails, will there not be a very serious situation? Frankly, I remember many of us talking —and much more distinguished people than I working—on the possibility of a wages and incomes policy, or of a prices and productivity policy, which I think this really is, as I shall explain a little later, and most of us came to the conclusion that, however desirable, it was hopelessly impracticable.
Therefore, when my right hon. Friend embarked upon this policy I viewed it with a certain amount of scepticism. It seemed to me that he was pursuing the unattainable. Although I regard it as a highly reputable political occupation for a Minister to risk his career in the pursuit of what may appear to be unattainable but is obviously desirable, I really cannot think of anyone in the House who would get up now and say, "If this is practicable, if it can be made to work, it is not obviously desirable". Clearly it is in everybody's interests.
Mr. Biffen: I will not make a lengthy intervention. Perhaps the hon. Gentleman and I can discuss this afterwards. There is a perfectly legitimate argument to the effect that this kind of policy is undesirable, that the central allocation

1217
which affects to superimpose the working of market forces is undesirable. However, we can argue this on another occasion."
Mr. Hale: I do not know that I want to argue it on another occasion. I have shown that I listened to the hon. Gentleman with attention. I can understand the argument that the means which may be necessary to enforce such a policy may have some unattractive, and indeed undesirable, features. This is a legitimate argument, but I would have thought it absolute nonsense not to concede at once that, if such a policy can be attained, it is of the utmost value to the community, and probably to this community more than any other in the world because of our dependence upon exports and the desirability of trying to perfect our export position.
Mr. Will Griffiths: I am inclined to agree with my hon. Friend in what he is saying now. Like myself, he was a Member of the House when after the war the Economic Survey used to be published, which most hon. Members awaited with bated breath. It was published showing the out-turn for the past year and forecasts for the forthcoming year, illustrated by little men holding cubes. For. most of us, all our political actions were determined by that Treasury publication. It took many of us some years to realise that each year it was wildly inaccurate and wrong. Therefore, although I agree with my hon. Friend in—
Mr. Speaker: Order. An intervention cannot be a speech. Mr. Hale.
Mr. Will Griffiths: I apologise, Mr. Speaker. May I say that I agree with what my hon. Friend is saying, but he should not underestimate the difficulties?
Mr. Hale: I am obliged to my hon. Friend for telling me that he agrees with what I say and for taking up some of my time to tell me so. We dealt with the problem of the inaccuracy of economists some time ago. Perhaps I could say that we are more or less agreed that quot economines tot sententiae and that they are at their best in expounding the ignorance of other economists. No one has failed to say that. We are expressing just a little doubt that the
1218
means to secure this policy may have a certain amount of political dynamite in it.
I have watched my right hon. Friend the First Secretary of State pursuing this policy. The right hon. Member for Enfield, West spoke very good naturedly on this matter and talked about running here and there—it is not a bad thing to run here and there when one can; I could not do it now—and working very hard and toiling very faithfully in pursuit of this policy, as indeed my right hon. Friend is. I do not believe that there is anyone in the House who does not believe that my right hon. Friend has achieved much more in a limited time than was expected. My right hon. Friend had a wonderful demonstration of support from the trade union movement. He scored an astonishing success against the predictions of all the Press in his handling of the trade union movement. He has got a substantial measure of support.
Let us adopt the method of trying to be honest about this. My right hon. Friend, for obvious reasons, calls this a prices and incomes policy. I call it a prices and productivity policy at the moment. It cannot yet be an incomes policy. Everybody knows that my right hon. Friend cannot persuade doctors to postpone claims for increased salaries merely because he says that he has a policy that he hopes he will be able to put over a little better after a couple of years' hard work. Nobody will postpone their social claims for the moment. The proposition that wages may have risen or that incomes may have risen out of proportion to the figures suggested is not a relevant statement.
The real attack upon right hon. Members opposite, which has been made already, is not only that they did not take steps to remedy the crisis, not only that they postponed dealing with the crisis for electoral reasons, but that for six solid months the country was kept in an electoral uncertainty. I was assured that the election must be in May. I said, "You do not know the Tories. It will not be until the last moment. They will be defeated anyhow and they will hang on in the hope that something will turn up "—the political policy of Mr. Micawber, which has a good deal to be said for it in economics.

1219
Therefore, my right hon. friend has got increased confidence in the country. I do not yet want to see legislation to enforce this. I do not believe that my right hon. Friend does. There may come a point when, if he can develop confidence, he does command so much support from so many sections of the community that it may be necessary to take some steps to deal with those who have not come in and who have made it clear that they are unwilling to do so, provided that that is a reasonably small portion of the community. This is how I see it. I sincerely congratulate my right hon. Friend on the courage and initiative he has shown.
Both my right hon. Friend the First Secretary and my right hon. Friend the Chancellor of the Exchequer have sufficient perspicacity to know that I would not stop at that and that the encomiums may be followed by a few criticisms in detail. Indeed, had there not been the statement today by my right hon. Friend the Minister of Aviation dealing with this morning's article in The Times, one might have had a good deal more to say. I am in the hands of these very able constituents of mine. They ask me a lot of awkward questions. They ask me, "How do you balance your payments by buying foreign aeroplanes? "I have never been able to find the answer. Indeed, I felt that that particular item of policy was the most regrettable of all, from every point of view.
Let me return for a moment to a single general classification. I had intended to say that there are items in the First Secretary's economic plan—clearly it cannot be an economic plan at this stage in detail—which worries many of us on this side. There is the failure to mention any possibility in regard to steel's political future. There is the rather sad general omission of any reference to women. What is to happen about equal pay for equal work? When my lady constituents mention this, I say, with complete sincerity, that in my view my right hon. Friend has got to achieve his prices and productivity policy before it is possible to adumbrate a reasonable hope of a successful incomes policy.
I quote one of my right hon. Friends in his absence who is constantly talking
1220
about our aspirations for a more egalitarian society. There is not much about an approach to an egalitarian society in the plan as adumbrated at the moment. I do not attack it for that, because I say that I do not believe it can be done at the moment. I believe that we must establish the prices and productivity policy first. We must get a maintained financial equilibrium.
I return for a moment to my right hon. Friend the Chancellor of the Exchequer. I have said with complete sincerity that I think that he took the means at his disposal and I think that he saved the £ in the process. It is rather sad to hear hon. Members opposite point out that there was much help from the Bank of England, since I can remember what they said about the nationalisation of the Bank of England and about Labour's policy of placing the Bank at the service of the community. Some of their comments are a little out of place in this regard. Perhaps their memories are shorter than mine.
Having said that, my right hon. Friend must some time face the fact that we cannot go on like this. The Prime Minister, in the course of the election, made rather a lot of play with the "stop and go" joke, which on the whole is one of those things which at the moment does not seem quite so funny as it was. If we are to have a future plan we must deal with the balance of payments problem, as it effects this country probably more than any other nation.
We must try to take measures to isolate ourselves from the sort of operations, whether by the wicked bankers of 1931 or by the intelligent gnomes of Zurich of 1965, which are in essence the buying of currency by those who have most to profit by the devaluation of currency in any part of the world, if they see it coming in time, rather than the normal operations of finance. They may be good business men and good ratepayers but they are a danger to our arrangements and our security.
Their operations, perfectly properly, are conducted in the hope of prosperity and profit, and we are in a situation in which, when virtually there are only two world currencies, the £ and the dollar, their operations must be against either the dollar or the £ at any given

1221
moment. When the Reichsmark was revalued, largely because defence in Germany was being wholly financed by the Tories out of British finances, it was said that dealings in the Reichsmark were beginning to imperil the £, and, even more, there was a rumour that the lira was likely to be revalued, involving even a larger operation which would remove large sums of investment and support from sterling.
I always remember Herbert Morrison saying that the political indicators never pointed in the same direction at one and the same time and that if they ever did we would have reached a position in which we could claim a little certitude. The political indicators have been pointing for a long time in the direction of the need for an international trading currency. I remember saying many years ago that countries should pay for their exports and not their imports, which really is the financial situation which for a long time has been forced over the large surplus trading nations by implication.
The economic plan contains one paragraph with which I do not disagree and it is a serious one for the Prime Minister himself. I worked with him very intimately and closely for some years on the question of war on want and economic aid for the unprosperous countries. We have set up a Ministry of Overseas Development and populate it with economists. Now the economic plan comes out and says that we shall have to consider the whole question of economic aid in view of the balance of payments situation and that we cannot go on like this.
I have always said this. I have always been treated by friends of high ideals and great ethics as something of a reactionary because I have said that we cannot go on without some sort of control. We cannot be issuing surplus money to Angola for aid to be spent in Portugal and unless there is a real hope of international trading which will balance it in the end. There are serious objections to blocked sterling. There are serious objections to political discrimination in handling a policy which should be motivated more by a sense of Christian duty and our belief in the ultimate welfare of man.
There are all these difficulties and I do not believe that some of them can be avoided. There is, for instance, the
1222
making of provision for Ethiopia where poverty is great when personally, on political grounds, I should like to see more given to Tunisia where poverty is also great but where a brilliant and dynamic political ruler has tried to keep himself independent and to keep out of controversies and have the rule of order and decency in North Africa which, God knows, needs preserving and making more effective.
As Andrew Schonfield has been pointing out, the amount of aid in terms of world aid, not in terms of England, is rather less per head for the poorest countries, a little more for the not quite so poor, and still more for the better developed. The poverty of some of the tragically poor countries is imposed by irresponsible dictatorships or rulers who cannot be relied upon to see that the aid ever gets to their people. Nevertheless we must consider this. I hope that there will be no question of diminishing the aid which we give to the peoples of the world. Here again my constituents say, "Look here, Leslie. It is all very well to lecture us pompously about this, but why can you buy military aircraft abroad and you cannot give money for food?" That is a question which I cannot answer. On the face of it, it seems to be a difficult question to answer.
As I have said, the incomes policy is to come. I hope that the First Secretary will continue as he has done. I think that he has done extremely well. I think that he has come measurably nearer the objective, which I did not think that he would reach. If we refrain from factious criticism and offer only helpful comments. I think that he may pull it off, and in the process we shall have done much for savings.
I used frequently to be a trustee for savings. I used to rely upon the bank to advise me and they said, "Put the money in 3½ per cent. War Loan". This was the thing in accordance with the trustee regulations. But what happened to savings in the last 13 years? I never like referring to the last 13 years. It is rather like being a brute to a prisoner after he has served his sentence and come out. Consols ended by standing at 37 instead of 100. They were near to 100 under a Labour Government. I think that they reached 100, and certainly

1223
they were over the 90 mark. What we have been doing economically over the years is swindling people out of their savings. The one reason why we cannot get savings now is that people cannot go on paying for a War Loan Certificate which when they get their money back is of less purchasing power than when they put it in.
British insurance companies have a high international reputation for honesty. It is the politicians who let them down. I started paying an insurance policy in 1926. I used to boast that I had made provision for my old age and I would be able to walk out of here, triumphant and independent without worrying too much whether a Member had a pension. I have been drawing it now in my advanced years. There is no longer adequate provision for old age. It has gone. The rentiers have been swindled by inflation. There may have been a reason to swindle then after the war and say to them, "You cannot retain the value of your assets when people come out of the war disabled for life." There has been no protection for savings, but I believe that my right hon. Friend's policy gives the best hope of all of securing savings.
I recall a conversation with the late Nye Bevan in which he propounded the view that a Labour Government ought, first of all, to protect poor people's savings, to start by saying, for instance, that Post Office Savings would pay interest in the real value of money. He said that if we did that the Chancellor might himself be compelled to produce a policy to preserve the value of money because he would otherwise have to pay out so much.
I have spent all my time in encomiums. I feel that the Chancellor has done well and the First Secretary of State has done well. In my constituency, I constantly hear immense approval of the Prime Minister's labours, largely from people who have never voted Labour. Recently, when I was told by a constituent that the Prime Minister had scarcely put a foot wrong, I replied, rather tartly, that that was probably true but that although he seldom put a foot wrong, whenever he did he trod on me. However, I should add that, whatever may be the economic and political consequences of
1224
the Rhodesian situation, I very much doubt that they will redound to the advantage of the British economy.
I believe that the Prime Minister has ceased to give the appearance of being just an astute politician and has become a statesman. I support everything he has done. He has done magnificently and has given a great lesson to the world in being prepared to accept sacrifice of face in a way that few politicians have ever done. He has said," I shall make every effort I can. I shall satisfy the world that we have made every effort, and then I shall take whatever disagreeable measures are necessary, but no more, and I shall try to deal with the situation with magnanimity ".
I have reservations about what the Government are doing in other spheres, and it would be wrong of me not to say so. One of the Amendments down on the Order Paper today is signed by me. I do not know what happened on the bloody field of Bosworth, but some future historian may tell us that the voice which was heard to call "A helicopter, a helicopter, my Queen's Speech for a helicopter ", was not that of Richard III. Recalling, as I do, the politics and history of the past. I am worried. I do not know why 80 or 90 of my colleagues should gather in the corridor to sign approval of the Prime Minister for saying something in qualified terms that he said in most definite terms a year ago, and, apparently, decide that they would put it down every St. Valentine's Day until he carried it out.
I am reminded of what happened to a friend of mine, an American by birth and the son of one of the most unsuccessful prospectors in the State of Texas. He found himself having to consult a distinguished solicitor who was known as a "wise old bird" in matrimonial cases. His father, as I say, had been unsuccessful. The son was rather a withdrawn person, and, in his youth, he looked rather as though he might end as a member of the C.I.A. Then, on his father's premature death, they struck oil in sinking the grave, and from that time on he never looked back. He qualified as a mortician's cosmetician in the University of Omaha, Pa, and became famous for his introduction of pastel shades. Then he fell in love with an English girl, married and settled down

1225
here, acquiring English domicile for matrimonial purposes, though not for Estate Duty. He found himself in this unhappy plight, which is very similar to my own in politics.
When he broached the word "divorce ", the solicitor was a little taken aback and said, "I thought you were happily married ", to which he replied, "1 am, but it is the ' missus'. She has changed sex ". The wise old bird said that this was most distressing but he had to tell him that he saw therein no cause whatever for divorce. My friend said, "You don't say?—that's a fine thing ", to which the old solicitor replied, "I hardly think so. There must be a matrimonial offence committed by him or her, as the case may be, and I see here no such matrimonial offence ", and he added that it might be a question for moral advice.
As I have said, my friend had acquired English domicile, and he was living here. He had got his grouse moor in Yorkshire, his penthouse in Park Lane, his mistress in Brighton, his yacht at Cowes, a beach in the Bahamas, a villa on the Costa Brava, and, of course, a registered office in Jersey, and settled to the humdrum life of the haute bourgeoisie.The solicitor asked "That is your archiepiscopate?" He replied "Both."The solicitor replied, "Try York," and then as a final word of advice, "Try to be adaptable yourself. Try to be conciliatory. The best thing you can do is to change sex yourself and show yourself adaptable."
I am anxious to be adaptable, and there are certain matters on which I am prepared to be. But on byssinosis, the White Paper on immigration, and the statement on steel, I might have difficulty in falling completely into conformity with the advice which is constantly offered to me.
7.15 p.m.
Mr. John Page: It is always a handicap to follow the hon. Member for Oldham, West (Mr. Hale), the most entertaining speaker in the House, and I hope that he will forgive me if I do not follow him in arbitrage, adultery or changes of various kinds. I hope also that the House will forgive me if I do not continue to follow the pure and, I think, in some speeches today, flashing stream of economic affairs
1226
but turn to the related subject of industrial affairs.
We are today discussing plans and policies to give this country greater economic efficiency and stability. In his speech last Wednesday—I hope that we shall examine it a little more closely today as it was a winding-up speech and this is the first opportunity to do so in the House—the Minister of Labour said that it is
"… the problems which arise from restrictive practices and unofficial action that impede the greater productivity that we want."— [OFFICIAL REPORT, 10th November, 1965; Vol. 720, c. 302.]
The Gracious Speech tells us very little about the steps which the Government propose to take to create greater industrial productivity. I welcome their actions in connection with the docks and the new emergency "fire brigade "for the motor industry, but, despite the Prime Minister's assertion that there is an all-out attack on restrictive practices, all the Government seem to have done is set up a couple more committees for the shipbuilding and printing industries.
The Minister of Labour's speech was in marked contrast to that of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), who spelt out the Conservative Party's policies on industrial relations and its general policy for industry as a whole, industry which, as the hon. Member for Oldham, West said, provides the means whereby we can give people in this country and in other countries a better way of life.
The Minister of Labour took up his usual attitude in debate, which we on this side of the House always regard with affection, of laughing whenever anyone does not agree with him and saying, like a jovial uncle, "They do not know what they are talking about". This is his constant technique, but I think that his devoted nieces and nephews are inclined to think that the old boy is only saying it because he does not know what he ought to do himself.
Much of the right hon. Gentleman's speech last Wednesday was devoted to pouring cold water on one aspect of industrial policy which had been mentioned by my right hon. Friend, that is, our proposal, which we are rather disappointed not to see reproduced in the Gracious Speech, that some legal enforceability should be given to agreements in

1227
industry come to under the negotiating procedure. I was happier earlier this afternoon when there was no lawyer sitting on the Government Front Bench. Now we have a distinguished lawyer present, and I am fishing in deep waters. If he cares to interrupt me I doubt whether I shall be able to give a lawyer's answer to many of the problems which are aroused by enforceability. But as one who has been engaged in manufacturing industries for 20 years, I have some practical knowledge of the subject.
The Minister of Labour considered this single aspect of making procedure agreements legal without considering it in a wider context, but when the Conservative Government are returned to power again a policy will be introduced. First, there will be a new code of industrial behaviour, increased power for a new register of trade unions and a range of industrial courts, which can spring easily from the tribunals which will be or have been set up under the Redundancy Payments Act.
Hon. Members opposite may be inclined to laugh off these policies, but they will find it difficult to do so, particularly the Minister, when they examine the evidence which has been presented to the Royal Commission on Trade Unions by the right hon. Gentleman's own Ministry. That evidence accepts that there is much to be said both for industrial courts and for unions becoming responsible for unofficial action by their members.
Today we have had a new statement on the whole problem by the C.B.I. I will quote one part in which it recommends the setting up of a registrar of trade unions, and presumably of employers' associations, too.It says:
"The registrar is not to be an anonymous legal official administering a limited set of regulations but a public figure counselling and prodding unions or employers' organisations into action, including action against breaches of agreement and unofficial strikes, which have turned public opinion against much of the industrial relations system."
I am not with the C.B.I, on this. I see the new registrar as someone with a quasi-judicial position. Although I am a great admirer of Lord Robens, who seems to be the best advocate for the benefits of private enterprise among ex-Labour Cabinet Ministers since Lord Shawcross, I do not agree with the sug-
1228
gestion that he would be the type of man to take on this new job and to become very active in promoting ideas of industrial relations, himself going round to deal with unofficial strikes. The registrar must stand withdrawn from the immediate field of industrial activity.
The second point made by the Minister of Labour was that if negotiating pro cedure were to be made legally enforceable, this would lead automatically to a closed shop throughout industry.I speak personally, but my right hon. Friend the Member for Grantham (Mr. Godber), a former Minister of Labour, and Lord Blakenham have said that they and the Conservative Party have always supported full voluntary trade union membership. If our new policies lead to increased membership of trade unions, provided that it is voluntary, I see no harm in that at all. Part of the object of our industrial policies should be to have strong and responsible trade unions dealing with strong and responsible employers, but always seeing that the individual employee has the protection which our suggested industrial courts would provide for him in any difficulties which he might have either with his trade union of with his employer.
In using the expression "closed shop "the Minister was trying to scare hon. Members and the public away from any legislation about trade unions. I do not believe that he has a case to make in saying that legal enforceability of negotiating procedures would lead to a closed shop. We are not blazing any new trails. Such agreements are legally enforceable in virtually every industrial country in the world, and this has not led to closed shops there. I understand that 16 per cent. of our working population or 3½ million people already work in conditions of a closed shop. I doubt whether that is a larger proportion than in other industrial countries such as the United States, Germany or France.
The right hon. Gentleman's final argument was that legal enforceability of negotiating procedures would not work unless all individuals concerned were union members. I see no logic in this argument, which he put very forcibly. Let us say that there is a shop with 50 per cent. union members and 50 per cent. non-union members. In the event of a breach of negotiating procedure or

1229
an unofficial strike by trade unionists, the union would be legally and financially responsible to a known extent, but it would have no responsibility for the non-unionists employed in that shop. Let us assume that because of good leadership by their trade union representatives, the unionists refuse to go on an unofficial strike, but that the 50 per cent. nonunion members go on strike. The union would have no responsibility, financially or otherwise, for the position of the nonunion members. In the same way, even if the whole shop went on unofficial strike, there would be nothing to state that a union would be responsible in any way for the activities of non-union members who went on unofficial strike.
I do not wish to speak for long. I hope that the bogy raised by the Minister of Labour about a closed shop can now be set aside. There is no foundation for his fears, and the public should not be frightened by them. I believe that the public are longing for legislation and firm action about industrial relations, and particularly about unofficial strikes. Right hon. Gentlemen opposite are unwilling and incapable of producing the answer in this respect, and they will shuffle it off as long as they can. That will be one of the main reasons why after the next election, which I hope will come soon, we shall have another strong Conservative Government dedicated to the kind of reforms which I have mentioned.
7.28 p.m.
Mr. Joel Barnett: The speech of the hon. Member for Harrow, West (Mr. John Page) had one thing in common with all other speeches by hon. Members opposite— they all lacked constructive comment. We had an odd speech from the hon. Member for Ormskirk (Sir D. Glover) in which he seemed to suggest that as a solution to all our problems we should have cups of tea on Hadrian's Wall—apart from another odd suggestion about P.A.Y.E. being paid in respect of the previous year. Equally the right hon. Member for Enfield, West (Mr. Iain Macleod) was wholly lacking in constructive comment, except for one proposal that there should be some personal tax incentives for exporters. He said that this view had been expressed by the hon. Member for Worcester (Mr. Peter Walker) recently, but I hope he will
1230
not mind my saying that I had made similar suggestions in this House, early in the last Session.
There is much in the Gracious Speech which one can welcome, but to achieve what is in it we shall need a sound economy, and therefore we need the National Plan to succeed, although, even if we succeed, the National Plan shows one thing above all else—how little we achieve even if we meet all the targets set out. Then it would be foolish not to be aware that the plan has in it many assumptions. One has only to look at some of them to realise the difficulties.
In the Plan we require exports to grow by 5½ per cent. a year, imports to grow by no more than an average of 5 per cent. a year and a productivity growth rate of 3–8 per cent. We need to redeploy manpower and to increase investment in plant by 7 per cent. a year. We need the success of an incomes policy, to limit the growth of public expenditure to 4¼ per cent. per year and to increase savings. We need more mergers to improve efficiency, and to deal with restrictive practices, and we need more women to be employed in industry and so on. It is very easy to pick holes in all or any of these assumptions. Right hon. Gentlemen opposite have been doing so but with hardly a constructive alternative. The Plan is quite right to set targets and to show the difficulties in the way of reaching those targets. It is easy to be critical, but it is not so easy to find the answer. Unlike most critics I am prepared to confess that I do not know all the answers to the economic problems facing the country.
We have only to listen to some of the criticism which we have heard in the House and elsewhere to know that others do not know all the answers either. We have had criticism of the imports surcharge, but what alternative would the critics suggest? Personally, I should have preferred then, and I would prefer now, the certainty of selective quotas, but would the critics prefer this? We had criticism today of an incomes policy, delivered very effectively, consistently and honestly by the hon. Member for Oswestry (Mr. Biffen). He is always honest with the House, and today he was equally honest and consistent, as is his right hon. Friend the Member for Wolverhampton,

1231
South-West (Mr. Powell). But he had only one alternative to offer to the House and that was to revert to the 1957 policy of his right hon. Friend the Member for Monmouth (Mr. Thorneycroft). This he has told us clearly today and on other occasions.
I ask those who are worried about the effects of the incomes policy what alternative they want? Do they want the old-fashioned deflation of Conservative Chancellors? Or do they want the type of economy which we had even earlier? We have also had Opposition criticism of the Corporation Tax, in particular its effect on overseas investment. But if we do not take this sort of action at a time when we are, as it were, investing overseas on hire purchase, what should we do? The right hon. Member for Enfield, West, at the Conservative Party conference said that a Conservative Government would change this aspect of the tax. In other words, they would delete the help we are getting in our balance of payments by this tax. There is criticism also of export incentives but the critics must be aware of the difficulties before any Government in this matter because of international obligations.
But perhaps the most irresponsible criticism of all is by those who bemoan the insufficiency of expenditure on the social services. The hon. Member for Oswestry was at least honest. He suggested four items of the Queen's Speech that he would not have included. He did suggest ways in which to reduce Government expenditure, although I would not agree with him.
The most peculiar criticism is that made by the right hon. Member for Enfield, West. On the one hand he said, rightly, that industrialists were told to assume a growth rate of 25 per cent. but he doubted whether they themselves would have forecast such a rate. Then he ridiculed the figure as being worse than stagnation when compared with the 25–3 per cent. in what he described as a comparable period. Such cynicism is no substitute for constructive criticism, and that is all we have had from him and other right hon. and hon. Gentlemen opposite. How would he deal with this aspect of our economic problems? Would he leave the targets at the levels that industrialists feel they can achieve?
1232
Perhaps even worse than the irresponsibility of the Front Bench opposite is that of back benchers opposite. I have been particularly disappointed by some of them in their speeches on the National Plan. They should know better than to follow their leaders in destructive criticism of that sort. I think in this connection of the hon. Member for Horsham (Mr. Hordern) in particular. He said we were experiencing the most stringent credit squeeze in living memory. Perhaps some people have longer living memories but I cannot accept his statement.
Of course it is true that we have a credit squeeze and I accept that it has not worked, at least in the sense that there is still great pressure on resources. But I do not go along with the disappointment he expressed at the low level of unemployment. He went on to say—and I am not prepared now to argue the rights or wrongs of it—that production is static. The point was argued earlier today. I accept that it is static this year. No one would dispute it. But I was sorry to see the happy, smiling faces of hon. Members opposite when told today that production was static.
A most disturbing fact is that, despite all we are doing, productivity is static this year. I have never accepted the logic of the need for a pool of unemployment to deal with that situation. It is an odd way to increase production and bridge a manpower gap. In effect, we are told we should bridge the manpower gap by having less people employed. The hon. Member for Horsham had only one practical suggestion. He said that we should reduce the growth rate to match the number of workers available. But surely it is right to set a target and then strive to achieve it, difficult though it may be.
In fairness to the Opposition, one must admit that they have put forward one positive solution. They talk of personal incentives, and talk of it as though this would be a magical solution. The Liberal Party, in its own Amendment, uses the word "incentives ". Never have I heard, in this House or anywhere else, a serious analysis of whether personal tax incentives really can do the job. Because I believe we should try to give some direct incentives by way of direct taxation, I think such an analysis to be worthy of careful consideration. But I do not

1233
believe that we should exaggerate the value of incentives, nor should we shirk the fact that we must decide how to balance the books if we are prepared to give these incentives.
There are only two ways of doing it at present. The first is by cutting Government expenditure and the other is by increasing some other forms of taxation. Nigel Lawson, who will shortly succeed the right hon. Member for Enfield, West at The Spectator, wrote an interesting article in the Financial Times recently in which lie discussed this aspect of Conservative policy and considered whether it could be done by cuts in Government expenditure or by increasing other forms of taxation.
Personally, I would opt for cuts in Government expenditure but not in the social services. I would save about £500 million a year by cutting defence expenditure and commitments in the area east of Suez. But I must admit that I have my own difficulties in my party in achieving this, policy just as the right hon. Member for Wolverhampton, South-West has in the Conservative Party. For my part, I shall go on trying to persuade my party that what I and some of my colleagues are saying is right, and I hope that the right hon. Gentleman will do likewise—although I am becoming a little disillusioned about that.
In the short term, the only way of making these cuts in direct taxation is by an increase in some other forms of taxation. One must accept the logic of that and be prepared to make such a redistribution. I am prepared for it but one must ask to whom these personal tax incentives should be given.
We could give them to those earning £10,000-plus a year, as was suggested in an article by Mr. Vince in the Sunday Times in August. Or they could be given to what have been called the "pacemakers" —presumably those on £2,000 to £10,000 a year. Or we could give these incentives to all taxpayers.
Of course, it would cost little to give this to the £10,000-plus taxpayers but it would antagonise all those who would not be getting such an incentive. People I speak to, earning £10,000-plus, of course complain bitterly about their tax liabilities, but it would be a gross slander to suggest that they would work harder or
1234
longer if we gave them an extra few hundreds a year in tax relief. Some might play a little less golf, but I doubt it. A really successful man or a man of real worth has never been stopped in his tracks by the level of taxation. What applies to the £10,000-plus a year man applies even more so to the "pacemakers ", although they too complain about the level of taxation.
Mr. George Y. Mackie: Does not the hon. Gentleman think that the man with £10,000-plus a year might be pushed a little harder by the man coming from below if such incentives were offered?
Mr. Barnett: I do not quite follow the hon. Gentleman. I did not suggest that the £10,000-plus a year man might not be pushed by people below. I am considering whether tax incentives would push him. I gather that the Liberal Party considers that a direct tax incentive will push such a man. Perhaps the hon. Gentleman would do me the courtesy of following my argument.
I have not met many young men and women of worth in the "pacemaker" section who would work harder or longer for the sake of an extra few pounds or even a larger amount by way of tax incentive. I think that to suggest that they would is getting close to an insult to our young executives.
Then there is the suggestion that we should give the incentives to all. Anyone with experience of industry knows that there are men and women, particularly women, who work perhaps from 10 a.m. to 3 p.m. or only three or four days a week, saying that they do so because of the high levels of taxation. Old-age pensioners tell us that one of their reasons for not working longer is high taxation. Yet in the latter case I elicited recently, by a question to the Chancellor of the Exchequer, the information that it would cost only £7 million if we were to exempt from taxation National Insurance retirement pensioners earning up to £10 a week inclusive of pension.
The National Plan talks about activity rates as a method of bridging the manpower gap. We could make a contribution if not to making people work harder then at least to encouraging a certain

1235
number to put in extra hours, which would go a certain way towards bridging the gap. One must recognise that cuts in direct taxation, however, can only be comparatively modest and such an incentive would not be an incentive in the real sense of the word as one understands it because a man would not be paying less as he earned more. Because of the system of reduced rates of personal taxation less is paid lower down the scale and higher rates the more one earns. I am not sure that one would wish to change that system even if one could.
It would be dishonest to suggest that cuts in taxation could be substantial and I hope that hon. Members opposite will not try to suggest to the public that such cuts could be substantial in the immediate future. It is vital to understand that the importance may lie not so much in the amount—for example, a married pensioner earning £10 a week at present has only 5s. deducted under P.A.Y.E., although this is not, of course, insignificant to a pensioner—but in the psychological effect, which might be great. While direct cuts in taxation cannot be other than small, they might help to solve some of our problems. Of course, it cannot be the answer to all our problems. These can be solved only by Government action to turn the assumptions of the National Plan into reality.
I therefore welcome the National Plan in the sense that it shows that the Government are aware of the difficulties and are trying to do something about them. While tax incentives are not themselves the whole answer, they can make an important psychological contribution, and I hope that the Government will consider carefully selective cuts in direct taxation as one method of helping to bridge the manpower gap.
7.50 p.m.
Mr. Donald Box: The hon. Member for Heywood and Royton (Mr. Barnett) brings to the House an expert knowledge through his occupation as a professional accountant. I must say that it is rather more pleasant to listen to him at a reasonable hour after memories of his speaking in the early hours during the Committee debates on the Finance Bill. Later, I shall have something to say about accountancy and I hope
1236
that if he disagrees with me then, he will take an opportunity to raise the matter.
I note that the Government's first aim mentioned in the Gracious Speech is that we should develop a soundly-based economy. That is a sentiment with which most of us would agree. I cannot help feeling that had we had a Conservative Administration in this past 12 months or so we might have written "maintain and develop a sound economy ", for as time goes on it becomes more and more evident that the economy was basically sound when it was handed over to right hon. and hon. Gentlemen opposite.
In support of this I remind hon. Members of the speech of the hon. Member for Colne Valley (Mr. Duffy), who told us at great length how pleased he was with the reception which the Prime Minister received when making his speech to the Wall Street bankers on 14th April. Hon. Members opposite cannot have it both ways. The Prime Minister boasted on that occasion of the strength of sterling in April and, of course, that strength existed last autumn as well.
There is no need for me to repeat the wearisome details of how half the £750 million deficit on capital and current account was largely accounted for by the fact that we were helping under-developed countries and placing investment abroad which in due course would yield handsome returns by way of dividends. The position was further aggravated, of course, by stockpiling by industrialists in this country in anticipation of the return of a Labour Government and, in consequence, a return of control.
But today even the most gullible of the electorate—and I am referring to that section of the electorate which votes Labour, nationally or locally—despite the protestations of their leaders, are beginning to understand that the basic position was sound. Possibly in support of that they are recalling the fact that in a White Paper on 26th October last year the Government made the forecast that even if there were no basic change in policy, there would be a considerable improvement during 1965. Despite this, some right hon. and hon. Gentlemen opposite will persist in spreading false accusations about this deficit. They do so on the basis that if enough mud is

1237
thrown, some of it will stick. They must remember if they are to pursue this sort of policy that they are bound to aggravate both their own and their country's difficulties.
It is obvious from this sort of behaviour that there is very little business experience incorporated on the Government Front Bench. If they had had business experience, right hon. Gentlemen opposite would have learned long ago that in business it is not good policy to exaggerate one's difficulties. It is certainly not good policy to exaggerate those difficulties when they are financial and it is even more important not to exaggerate them if they can reasonably be expected to be temporary financial difficulties. Such exaggeration encourages doubt, arouses unnecessary suspicions about the financial integrity of the business or country, and reduces good will. This in turn makes borrowing both more difficult and more expensive in the long run. I therefore claim that the evidence of the first 10 months of the Labour Government proves that the crisis in confidence of last autumn and early spring was a self-inflicted wound which at times was crippling and at other times very nearly fatal.
It is obvious that by adopting and very correctly following the policies dictated by the Governor of the Bank of England—and I use the word "dictated" advisely, for surely no hon. Member opposite would claim that a self-respecting Labour Government would willingly introduce unpopular measures like high Bank Rate and a surcharge, however temporary, and a widespread credit squeeze, unless they were under extreme pressure to do so—there has been some improvement in the situation.
History will reveal exactly what role the Governor of the Bank of England has played in the financial affairs of the country in recent months and how his influence and his personalty persuaded the bankers of the world to come to the rescue of this country and, incidentally, to the rescue of the Government on two occasions in 12 months. A more generous Government would acknowledge the great part played by the Governor of the Bank of England in this respect and might in future prescribe for their patients that a little more "Cromer" and a little less
1238
"Kaldor "would act as a tonic for the nation.
It is obvious that the strength of sterling has shown some improvement in recent months, but the question we have to ask is whether this improvement is temporary or permanent. I am afraid that it appears to be temporary. I think that I am supported in this conclusion by the fact that although large amounts of foreign money are now flooding into the country, the Chancellor of the Exchequer consistently refuses to reduce Bank Rate until he is absolutely certain that the position is secure. This, of course, is an action with which I am in absolute agreement.
It must also be remembered that much of the restored confidence, the feeling that things are a little better, stems from the inevitable relief, a breathing space, obtained from borrowing large amounts of money from overseas. But borrowed money has to be repaid and I am afraid that this borrowed money will probably have to be repaid and taken into account by a Conservative Government. This is something which will not have escaped the notice of my right hon. and hon. Friends.
In order to maintain the improvement in the balance of payments and the terms of trade, we are also told that more incentives to encourage industrial investment are to be introduced before long. I hope that this means the restoration of the investment allowances in one form or another. If I am right in that supposition, this can be claimed as something of a triumph for those hon. Members of the Opposition who, in a spirited debate which lasted five hours in the Committee stage of the Finance Bill last June, put their case very forcefully. In his devious and particular way, the Chief Secretary did his best at that time to justify the devaluation of the investment allowances which had resulted from the introduction of Corporation Tax. He gave the rather lame excuse that a full list of alternative methods was under examination, but he had no alternative to offer when he was discussing the matter.
During that speech he speculated whether methods used for investment incentives should be more direct, whether they should be like a grant or subsidy,

1239
or for a more specific purpose, or whether they should be varied by rate or by region. We can all claim to be a little disappointed that the First Secretary today was not more encouraging and did not give us more information about how these investment allowances were likely to be introduced. Presumably we will now have to wait until the Government publish a White Paper on the subject. Before they prepare that, the Government would be well advised to give due attention to the words of my right hon. Friend the Leader of the Opposition, who, during the Committee stage on investment allowances, related his experience, when he was at the Board of Trade, stressing the need for more general modernisation of mechanical equipment generally. He warned that the case for discrimination as to types of machinery has not been proved so far. I hope that any allowances which are proposed will be as broadly-based as possible throughout the manufacturing industries, and that a great deal of discretion will be given to individual industrialists to decide just how those allowances should best be used.
It would be absolutely disastrous if the Inland Revenue, the Treasury, or in other words, the men from Whitehall, were to attempt to dictate how, when and where investment allowances were to be used. If it was decided that some manufactured articles were unsuitable for allowances—and I have one-armed bandits in mind, as they were raised on Committee stage—it should be possible to induce some scheme on disallowed manufactured articles. The right hon. Gentleman the Chief Secretary indicated during his speech on the Committee stage that there might be scope for regional variations in the investment allowances, with the object of helping selected areas, particularly those which had high rate of unemployment. To some extent this is already being done. We see it in the shipping industries and the developing areas. This is presumably what he had in mind.
The more recent Government decision to speed up the closure of the uneconomic coal mines makes the matter one of great urgency now. What we need is some sort of dramatic gesture which will attract the attention of industrialists and encour-
1240
age them to bring industries to these areas of prospective high unemployment. We know that the Government have designated a number of development areas— many of them in South Wales—and that they have authorised the building of advance factories. One cannot escape the feeling, in many cases, that something extra special will be required to get industrialists to take the risk of bringing new industries to these areas, especially in a period when there is a fairly tough credit squeeze in operation.
One scandalous omission of the right hon. Gentleman the Chancellor—although I am not sure that it would have been appropriate to include it in the Queen's Speech—is any reference to the rate of Corporation Tax to be charged next year. Boards of directors, firms of accountants and members of the Inland Revenue have been thrown in a state of complete indecision and confusion as to the future rate. This is a state of indecision which is quite unnecessary. We must remember that this tax was foreshadowed by the right hon. Gentleman nearly a year ago and yet the rate is not even known today. We know it is not likely to be known until next April, when the Budget is announced, so that a period of some 18 months will have elapsed since the time it was announced and the time we know the actual rate to be made. I maintain that this delay is quite unjustified.
Another result of the Government's disastrous taxation policy has been brought to our attention by the renewed activity of Mr. Charles Clore in the takeover field recently. I am not suggesting that the particular company which he has under observation at the present time has been materially affected by this Government's financial policies in recent months, but it serves to spotlight the Government's mistaken idea, that by relieving tax on retained profits managements will automatically spend more on modernisation. This is something of a fallacy. The go-ahead managements will modernise whatever the cost, whatever the risks, and however difficult it may be. It is the undecided managements which we need to reach, to give them the incentives of investment allowances, to urge them to modernise more. It is the indolent and lazy managements—and I regret to say there are still some—who perhaps

1241
earn their money rather too easily, and are more likely to use the new taxation regulations as an excuse to accumulate funds. Sooner or later they are going to become sitting ducks for the take-over kings like Charles Clore. I am quite certain that the Chancellor will agree that there is some limit to the amount of modernisation which one can carry out in certain industries. When that limit is reached it is surely more sensible to encourage firms and industries to pay out the money, to their shareholders if one likes, so that the money is available for other capital requirements by industry, which need extra capital in order to carry out modernisation programmes.
We might also have reasonably expected a more enlightened policy on money circulation as a whole. Money circulation remains a vital element in the bloodstream of industry. We require a good circulation of the bloodstream; it is essential if we are to have a lively and effective economy. Equally, if the Chancellor wants a lively and effective economy it is not sufficient for him to go billing and cooing to the Institute of Directors, to industry, or to the City, unless he gives a clear indication that his intentions are entirely honourable. By this I mean that if, by some mischance, a Labour Government were ever to get back into office with an increased majority, he would still be as amenable as he now appears to be. I am afraid that there are many people in the City and financial circles, who suspect that the right hon. Gentleman is only "all sweet reasonableness" because of the very narrow majority of the Government. It is feared that if he had a bigger majority he would be far more dictatorial.
If he is really sincere, and wants to co-operate with financial circles, I am hoping that he will consider very carefully indeed the suggestion which I understand is to be submitted to him within the next few days by the Council of the London Stock Exchange, that there should be an exemption of the first £500 Capital Gains Tax in any one tax year. While I freely admit that no Chancellor likes to part with any revenue that he can get his hands on, if he does not introduce something of this sort I fear that he is running a grave risk of bringing the taxation system of this country into ridicule and making a large section of
1242
the community into a section of tax dodgers. As he knows, I have seen Capital Gains Tax working at first hand, and in recent months it has resulted in a tremendous fall in turnover on the Stock Exchange with the resultant scarcity of shares and the difficulties of raising fresh capital for new issues. However much this may attract hon. Members opposite, they must remember that this is an essential part of the fabric of the best-known capital-raising city in the world, which is the envy of many other capitals in the free world.
If investors forget—and I use the term in the widest possible sense—to return their capital gains, especially if those capital gains are small, then the chances of the Revenue recovering those amounts are very remote indeed. The Revenue has neither the time nor the staff to do it, and it possibly does not have the inclination. Certainly the tax they might get would not be worth the effort. To give one example, a few weeks ago there was a very successful issue of £50 million of convertible loan stock by I.C.I. There must be thousands of people up and down the country who had a capital gain of about £5 or under. Can the Chancellor honestly tell me that it is going to be worth the Inland Revenue's while to try and trace these small amounts?
Mr. Callaghan: It is not a typical example.
Mr. Box: It is a typical example, at the present time, of the difficulties of the Inland Revenue in tracing small amounts. It is beyond the Revenue's capacity. Already the Inland Revenue is under very severe strain. I am receiving an increasing number of tax queries from people locally—it started as a trickle, but the number is increasing all the time —which I think indicates the difficulties under which the Inland Revenue staff are working. We must remember that the real impact of the last Finance Act has yet to be felt by this Government Department. If the Chancellor of the Exchequer is not very careful, I fear that there is a real danger of a breakdown of the Inland Revenue system. Certainly we are faced with very serious delays which can be damaging, costly and harmful to relations between industry and individuals and the tax inspectors.

1243
I turn briefly to the Government's prices and incomes policy. It seems to me that, however worthy and well in-tentioned this policy is, it is surely the classic example of shutting the gate after half the horses have left. We heard this afternoon that the policy of some unions has been apparently, "The Labour Government are not likely to last long and, therefore, let us jump on the band wagon, get as big an increase as we can and we will be all right for a year or two". I think that the concern which the Chancellor of the Exchequer expressed recently is hardly surprising in these circumstances.
While we can commend the Government for making the nationalised industries subject to the National Board for Prices and Incomes, they might treat that as rather a left-handed compliment because there would have been a tremendous storm if they had been excluded from examination. We know that an increase is forecast in the price of coal, and presumably that will be placed before the Board. The electricity price has been reviewed from time to time, and the gas industry is already subject to examination.
I would, however, remind the Government that they have not yet explained the very mysterious circumstances leading to the reference to the Board of a recent price increase application by the Wales Gas Board. The Wales Gas Board asked for an increase of l½d. per therm but was told by somebody in authority— presumably the Minister of Power—to put in for an increase of 2d. a therm so that the target performance of the Gas Board as a whole might be improved. This delay has already cost the Wales Gas Board about £250,000, and the cost is going up all the time.
Finally, having examined the White Paper on "Prices and Incomes Policy, An ' Early Warning ' System ", and having examined Parts A, B and C of the Appendix, there is, I think, only one obvious omission and that refers to the Post Office. We all know that the Post Office increased its charges by the unprecedented amount of 33⅓ per cent. in May this year. This is one of the largest increases we have suffered for a very long time. Who can say whether a further rise is contemplated? I hope that the Chancel-
1244
lor of the Exchequer will give us an assurance that any further increases in postal charges which may be contemplated will be referred to the National Board for Prices and Incomes for thorough examination.
8.15 p.m.
Mr. Frank Tomney: We have just listened to a remarkable speech, in some ways, from the hon. Member for Cardiff, North (Mr. Box). As far as I could make out, it was nothing more nor less than bare-faced special pleading on investment allowances, Corporation Tax, ploughed back dividends in industry, and so on.
I want to deal first, without knowing what is in the mind of my right hon. Friend the Chancellor of the Exchequer, with the proposed new investment allowances. I do not know, and nobody can know, what the Chancellor will do about this matter. In our present economic situation, unless these allowances go, and are seen to go, to those industries with an untapped export potential, then to spread them across the range of British consumer industries which are already over-capitalised is asking for more trouble than we have. I hope that the Chancellor will resist any such proposals and will concentrate on those growth capital industries which reflect in exports overseas earning capacity which will come back to the Treasury. To do anything else would be asking for trouble in the long run.
I come to the main point of this debate. Some politicians take a flight from reality at some time in their political lives. The flight from reality of the Conservative Party has lasted a long time. It has seen during its 13 years' life at least four successive crises on which no positive action was taken, on which no economic philosophy was seen to be apparent to the electorate and in respect of which no forceful plan was presented to the nation for it to judge its capacity to climb out of the dilemma of deficit finance. This has gone on constantly year after year.
It does not do any politician any good to hide his own conscience from the facts of life, no matter to which party he belongs. The crisis of 1931 was seen to be

1245
a crisis and was known to be a crisis by the people of this country. Unemployment was rife and widespread. Investment was down and industry was at a standstill. These factors are not apparent today. But the crisis is just as real. The population in general is apt to think that things are all right, or that they are not quite so bad, or that it is newspaper talk, or that most of it is above their heads. This is not so. This is why the Plan advocated by the Government through the First Secretary of State is a very courageous plan indeed. It has taken us down avenues of industrial and political philosophy which have never been trodden before. For any Minister, while not openly advocating statutory control of prices and incomes, to ask the nation to give the matter serious consideration if the voluntary early warning system does not work is an act of great political courage.
The Government deserve the greatest credit for thinking out these policies and for advocating them. This should have been done before. If we fail to get any cohereni: planning in our economic system, then as a nation we shall quite quickly get into difficulties from which we cannot recover. This has been said many times before, but year by year the difficulties become greater. The two big trading blocs with which we are competing—the United States and the Common Market—are, with reducing tariffs in Europe and a surfeit of capital in the United States, much too heavy and specialised for us to match, and the Common Market, with its policy of reducing tariff barriers between member nations, has a bigger market for internal consumption. We have our own Commonwealth export markets.
But the facts of this situation are changing, and changing quickly, and the facts are beginning to speak for themselves, such as the drop in our share of Commonwealth trade. They tell us of the need for forward, purposeful planning to find other markets and other industries, and what we have to decide is where the markets are and what the industries and the products are to be. That is why I said at the outset that investment allowances must be seen to operate where they will make the greatest impact.
1246
Great Britain's position is unique in that we were a capitalised and industrialised country before any other nation in the world, and we had an established pattern of capital formation, an established production of established industries which did not change for many years although there were new methods, new materials, new techniques. But our ways have not changed as quickly as they should have done. We had also an established pattern of trade unions built on a political philosophy at the turn of the century. It had become established, and it was jealously guarded.
These attitudes are not changed very easily, and, of course, the people to whom we are making an appeal to go along with this Plan are those broad sections of the employed as a whole who are, in the main, very conscious of their hard-earned rewards and the standards they have obtained and maintained.
Reading carefully through the Plan one finds no direct reference to the distribution of national income in salaries or wages. It is in abeyance. Of course, it has got to be till we see the lines on which the Plan works. Let us assume that the Plan gets off the ground; let us assume that it is successful. Let us assume we get a gross national product in this country increased by £4,800 million, which is some 25 per cent. At this stage the Government of the day, of whichever party it is, have got to decide—and there are at least some Members on the Front Bench opposite who are becoming more convinced of the necessity for long-term, year-by-year, national, Government planning. Let us assume we can get it, and let us assume that the British industrial position, with the special allowances, ploughed back dividends, and so on, is changed. What do we do? We can make our decisions only on the basis of what our competitors do.
We must look, for instance, at United States industry. The United States are great competitors of ours, and very efficient competitors. Their net return per employee on capital investment is 3½ times that of Great Britain. Remember also that Great Britain's social insurance schemes are one of the first charges on the Treasury and a charge on exports. When one considers this, one gets some idea of the kind of path we have to tread and the dedicated purposes which will be

1247
necessary for our workpeople and management all the way through, with the Government, to achieve the kind of system which will make our balance of payments in future of manageable proportions.
I do not think that the figure of £400 million is manageable. I think this country has to have a £400 million surplus in our position as a fully exporting nation and a high food importing country, which places us at a disadvantage compared with the Common Market countries or the United States or, indeed, the newly developing countries.
When one considers that the economic growth was only 2–4 per cent. in 1960–64 we see that that is where the stagnation took place. That was known on those benches opposite and nothing was done about it. The position was allowed to grow until the moment this party took office, and we found the debt of the size we did—and it was a debt around the nation's neck, and not just the Government's.
It has got to be dealt with. It cannot just be left, and there is no point in hon. Members saying here or elsewhere that there was a loss of confidence. Confidence is hard to maintain in the kind of world in which we have to live. It is in the interests of all of us to see that it is maintained.
But the act of the Government was an act of high courage. If we consider what kind of capital investment we have to get in industry, it has got to be of the order of a 55 per cent. increase by 1970, a net increase of 7 per cent. per annum. It is not going to be very easy to achieve, because alongside existing capital investment provision must be made for all the types of markets we are going to need.
This brings me straight on to the organisation of British industry. I have been looking at a survey recently made of the firms in this country. Only one firm is absolutely economical in its organisation and efficiency to take full advantage of those markets, and that firm is I.C.I. When one considers the fragmentation of the British exporting industries into small sectors throughout the nation one realises what a tremendous job there is of association and re-formation which has got to be undertaken under Government guidance before every one of those
1248
industries can be proved to be organised to top efficiency in producing good dividends for the nation as it should. There is such a complexity of firms in industry. The Radcliffe Report on Monetary Reform came out a few years ago when even the Treasury did not know the full mechanisation of many markets. I did not fully understand it and I do not fully understand it even now, but at least it gave me an understanding of the industrial complex and the financial system.
Luckily, European countries in the Common Market have not been associating in monopoly structure across the market. This is to our advantage. We should be in great trouble if it were otherwise. They have set up subsidiary industries in the different countries. It may seem to be an argument for a greater association of firms, and this is something industrialists and trade unionists have to look at.
I should like to see a concentration of unions, with smaller numbers of them, and of managements, too. On the other hand, I should like to see more units of capital formation in this country as industrial export leaders. This is the only way to become more intense in export markets against the size of the competition we are encountering.
It is instructive to look at the premier industries of the United States, chemicals, aircraft, electronics and computers. Compare that with the output of the United Kingdom firms and the prospects of United Kingdom firms, and realise that it is in these industries in the future in which most of the pure and applied research will be done and from which new methods and new materials will be derived, and one sees quite quickly the enormous lead which the United States have got. The European countries are now fast catching up on this basis.
Take the chemical industry of the United States alone. It has a gigantic turnover of over 33·5 million dollars a year. This is 50 per cent. higher than that of the whole of Europe itself, and it is the leader scientific industry. The employees in the industry total 55,000, and the total employable force is only half of the chemical organisation and firms of Europe, including the United Kingdom.
If one looks at productivity per worker —and here is where the startling figure

1249
arises—one sees it is 55,000 dollars per annum, which is twice as high as that of any comparable performance in Europe or the United Kingdom.
These nations are competitors in the capital field. This is why this Plan which we have today is a plan of great courage and foresight by my right hon. Friend the First Secretary, a plan to which he has devoted tremendous energy, and which he and which the nation want to see established, and adopted by the insured population of this country, as the greatest single act of faith since the formation of the trade unions for organised labour. What we are asking for is an early warning system to keep the economy in line, in tempo, with the nation's capacity. Indeed, we are asking people to forgo certain wages, which industry can afford, on behalf of the nation. This in itself is a tremendous act of faith and courage, if the country is prepared to adopt this Plan and to give the First Secretary the backing he wants.
Certainly something of this character is needed. The control of prime costs is important if any industry is to know where it is going year by year. Only by this method, by conscious planning over a period of years, can be shown what our position is to be and whether it can be held vis-a-vis that of other countries. This is being done by the Government with a very slender majority indeed. I do not want anyone on the benches opposite to be under a misapprehension that what we are asking for, and which we ask them to support, is not specious speeches here or anywhere else on the concept of the Plan, because they know that something of this order is needed. We ask for their support just because something of this order is needed if this country is once again to be what it was at the turn of the century—one of the prime manufacturing and exporting countries of the world.
8.32 p.m.
Mr. George Y. Mackie: I shall be brief as by this time of night hon. Members called upon to speak have a great fellow feeling for those hon. Members who are still left. I do not at this time have a great deal to say.
1250
I have been gratified by the attacks on the Liberal Party made by the right hon. Member for Enfield, West (Mr. Iain Macleod). I was very pleased that the attack was in this House because outside the House he has been threatening homicide to the Liberals and encouraging his troops into battle to that effect. I cannot quite see why he is getting so angry. It is not as though he were like the hon. Member for Colne Valley (Mr. Duffy) who has a Liberal opponent with only 200 votes behind him. Admittedly in Enfield, West the Liberal candidate jumped to second place. This may make the right hon. Gentleman very apprehensive indeed of the Liberal Party.
I could not quite get the right hon. Member's reference to the Liberal Party selling itself into bondage. What appeared to hurt the right hon. Member was the fact that we had not extracted a price. This he could not understand. I can assure him that the Liberal Party has looked at the programme and does not specifically need a price to approve the sort of policies which it has been preaching for some time. My right hon. Friend the Leader of the Liberal Party has said quite clearly that the Queen's Speech has many Liberal policies in it. Of large parts of it we approve. Of course, we shall examine it and vote on the virtues of the measures as they come forward in this House. We shall vote on whether they are right or wrong without the fear that we may bring the Government down, which appears to influence the poll figures of members of the Tory Party voting in the Divisions we have so far had.
The Amendment we are discussing appears to be a most curious one in that it humbly regrets that the Gracious Speech contains no measures likely to redeem the failure of the Government's economic policy. We cannot accept this. There are many measures in the Speech which are bound to be and have been accepted by the Conservative Party— special attention to regions, efficient working of the Boards of little N.E.D.C.s, improved export facilities, agricultural expansion. All these are obviously measures which must improve the economy.
The reference to the policy on prices and incomes is curious because I had understood that Conservative Chancellors have themselves endeavoured to

1251
work out an incomes policy. Why they should disapprove of such a policy I do not know. It is obvious that one could criticise, and criticise very hard, a number of the first results of the incomes policy. It is, of course, disturbing that wages have risen by such a large percentage. People are disturbed about this, but it does not invalidate the policy on prices and incomes.
I want to put our position in regard to this Amendment. The Amendment itself we regard as a silly one, not relevant to the occasion, and we see no reason why we should vote for or against it. We do not regard it as relevant and there-we propose to ignore it. We have on the Order Paper what we consider to be a constructive Amendment to the Address. There are certain things which, of course, we in the Liberal Party have criticised. We criticise, and have done before, the lack of any intention on the part of the Government to produce competition in this country. In a few days we shall be debating an Order to retain the 10 per cent. charge on imports. That is a temporary charge which has now been on for a year. This is an extremely disturbing position.
For the Government to talk about competitive efficiency in exports and then to admit that industry cannot compete at home, appears to be quite wrong. I cannot see that investment allowances inside this country will make industries efficient. The industries which require capital should be willing to spend in order to make larger profits. If they can make profits and have to be driven to spend money on equipment which will raise their profits, there is something wrong with competition in this country. This the Government must recognise.
Another matter on which we have constantly criticised the Government is the lack of any reference to a commitment to go into Europe in a proper way. The Gracious Speech says that we should continue our efforts, but the efforts have not been good enough. If we are to be competitive it is absolutely necessary for this Government to declare their intention of joining the European Community, and doing that as soon as conditions are right. If they did this they would create a new climate in industry and would do a great deal to persuade industry to pull up its
1252
socks and prepare to tackle the new challenge which would come along.
We in the Liberal Party have also said —and have been criticised for saying it— that more incentives are necessary. This is true today and many hon. Members have spoken of the taxation position in other countries to show how our competitors operate, many of them in an extremely successful way. We feel certain that the answer is to make profits harder to earn but a great deal easier to keep in a competitive economy. This is sound common sense and has been proved to be correct in other countries.
The Government must, first of all, see that we get into Europe and so obtain the advantages of scale and so on which membership of the Common Market would bring about. Is this not a more suitable subject for hon. Members of the Conservative Party to consider for amendment to the Gracious Speech? It has been at the centre of their policy and the Leader of the Opposition has been closely associated with efforts to get into the Common Market. I should have thought that that was the most glaring omission from the Gracious Speech to which they should have drawn attention.
In short, we will vote for or against the Government on specific measures according to their virtues when they are brought before Parliament. We will not vote at the behest of the Government or the Opposition. We see no necessity to vote on this entirely irrelevant Amendment.
8.43 p.m.
Mr. Stanley Orme: The hon. Member for Caithness and Sutherland (Mr. George Y. Mackie) said that he was putting the Liberal Party's view before the House. I am still not clear just was that view is on this matter, although I assume that he and his hon. Friends intend to vote with the Government tonight.
Mr. George Y. Mackie indicated dissent.
Mr. Orme: If that is not his intention, then he put his case extremely badly. That was the impression I got and I am sure that other hon. Members had the same impression.
I wish to concentrate on certain aspects of the National Plan and some of the

1253
economic consequences which flow from it. In doing so, I will look a little beyond the Plan itself and into a few Socialist concepts as I see them. As has been stated many times, our economy is balanced on a knife edge. The Opposition left us a deficit and the more hon. Gentlemen opposite protest when we say that, the more people in the country believe we are right.
Unless we obtain increased productivity and export more we will not gain economic salvation. The trouble is that while we are attempting to do these things we are spending more than £2,000 million a year on arms. This has not been mentioned in the debate today. Nor is it mentioned in the National Plan— although it is relevant to the problems which my right hon. Friend the Chancellor faces today.
We must tackle these problems in what I would describe as a mixed economy, 80 per cent. of which is privately owned and 20 per cent. publicly owned. It is on the public sector that I particularly wish to comment.
Certain recommendations were made by the Devlin Committee for the improvement of the dock system and, particularly, for facilitating exports. It is one of those anomalies that the Manchester Docks are in Salford, but they came in for very little criticism by the Devlin Committee, primarily, of course, because they are run by one employer, and not by a multifarious conglomeration of employers as exists at the Liverpool and the London Docks. The Manchester Docks are not perfect, and much remains to be done for the dockers there, but the Manchester Docks represent one of the most important and highly efficient inland dock systems in the world. I hope that the reference in the Queen's Speech to the docks means that, if necessary, the Government will not hesitate to take them under public control. If there is one industry that cries out for some form of public control it is the docks industry, and I would advocate such a step.
The Plowden Committee is at present considering the aircraft industry. My union—the A.E.U.—along with the T.U.C. has submitted evidence to that Committee calling for public ownership of the airframe section of the industry.
1254
We are expecting the Report within the next two or three weeks, and it is quite possible that it will recommend the public ownership, not only of the airframe section but of the aero-engine section as well. I have heard a lot in this House about the shortcomings of the industry, and the problems created by Government orders being cancelled, and so on, but as the Government, along with the nationalised industries, are among the largest purchasers, I can see no logical reason for this industry not being brought under public control.
Public ownership of the steel industry is not mentioned in the Queen's Speech. I and a number of my hon. Friends tabled an Amendment drawing attention to this and calling for early or immediate implementation of public ownership, because we feel that this step is relevant to our economy. We believe that if it is necessary for the First Secretary, the Chancellor and the Government as a whole to be in a position to plan our economy, they must have control of industries that are at present basic to the economy.
Many of my constituents work in the steel industry. There is no plant in the constituency itself, but there are plants very close to its border. The Guardian today reports that 300 men are to be laid off at the State-owned firm of Richard Thomas and Baldwins at Ebbw Vale, and I have been told by workers at the Lancashire Steel Corporation, which is privately-owned, that redundancy could result from difficulties and problems existing there. If that is the sort of thing that can happen in the steel industry, it calls for an overall plan. It is possible that in the foreseeable future the steel industry will consist of only five or six units. Possibly by the late 1970s or 1980s those units will be virtually computer-controlled. This will mean complete reorganisation.
The coal industry is being reorganised. My right hon. Friend the Minister of Power has to employ public money to ensure that redundancies are not created. He is ensuring that other industries are created so that people can be moved to suitable employment. This must happen in relation to the steel industry, too. It is therefore essential that the industry be publicly owned.
Having tabled the Amendment, which I support as drafted, and having taken

1255
part in discussions with my hon. Friends, I am confident that the steel industry will be publicly-owned at the earliest possible moment. [Laughter.] The Opposition can laugh. They should draw no comfort from this, least of all the Liberals. It was not the Liberal Party that prevented public ownership. It will be the Labour Government who eventually bring the industry into public ownership. The industry will be brought into public ownership. The right hon. Member for Enfield, West (Mr. Iain Macleod) may smile, but in a Parliament of the not too distant future, with a far larger Labour majority, he will be fighting to stop steel nationalisation.
I have referred to our mixed economy and to the difficulties involved in trying to implement the necessary policies within it. I am very pleased that my right hon. Friend the First Secretary has seen fit not to introduce legislation to force trade unions to do anything at present. Such action would be disastrous. I think my right hon. Friend has seen the wisdom, and he will continue to see the wisdom, of trying to persuade people, not to compel them.
My reading of the situation inside the Parliamentary Labour Party and inside the Labour movement as a whole is that it is coming out firmly and clearly, not only for the public ownership of steel but for a further extension of public ownership to industries which have been neglected by the party opposite and by the country as a whole and which will have to be taken into public ownership if we are to have the steady economy we need. Hon. Members opposite can draw little comfort from that.
Much criticism can be made of the National Plan, particularly the fact that the targets appear to be too low. It is not satisfactory for the Labour Government to be expected to do in six years what the Tories did not do in 13 years. But a start has been made. It will be possible to make an assessment from that and to take action which can transform our society. The battle must be fought on whether a mixed economy and capitalism can succeed here.
The answer of the Liberals and of the Tories is to run to the Common Market. I believe that there is another
1256
answer. I believe that the wealth of our industrial experience and skill can provide the goods that the world needs in return for the raw materials which we purchase to make those goods. We can redress our balance of payments situation. What we can produce the world wants and will continue to want. I therefore hope that after today's debate, and following actions to be taken by the Government in the future, we can set our sights on that course.
8.55 p.m.
Mr. Evelyn King: After waiting six hours to make a speech I have had to listen to the hon. Member for Salford, West (Mr. Orme) who blames all our troubles upon a mixed economy, advocates the nationalisation of steel and then goes on to advocate the nationalisation of the docks and finally of the aircraft industry. If I understood his concluding sentences, he was advocating the nationalisation of everything and I have three minutes in which to answer him. I think that even hon. Members opposite might think it preferable if I left that task to the Chancellor of the Exchequer.
Today has been an economists' debate. That is inevitable in the terms of the Amendment. One of the troubles of such a debate is that the atmosphere becomes a little rarefied. The terms used become esoteric and statistics become larded in the paragraphs to such an extent that in the end I feel that I want to go back and ask what is the object of the exercise.
I hope to say quite briefly what I believe should be the target to which the whole debate should be directed. I have the good fortune to represent South Dorset, and the target is particularly appropriate to that county where there are 50,000 people, or 15 per cent, of the population who are over the age of 65. We have heard from both sides of the House—and there was some discrepancy in what we heard—about rising wages. According to the Chancellor earnings had risen 8 per cent, in eight months. According to the First Secretary they had risen 7 per cent, in 12 months. In parenthesis I should have thought that it was a reasonable request that the Government spokesman in reply might clear up the figures and tell us which are correct. Right hon. Gentlemen should not contradict each other.

1257
But if there has been a wage increase of either of these percentages it is very little use to constituents so huge a proportion of whom draw no wages at all. This is where the real hardship comes, and this is the simple point which no Front Bencher opposite and, to be fair, few on this side of the House, have attempted to deal with. However wages may have gone up, prices have gone up by 4·7 per cent. One thinks of a retired farmworker or seaman or petty officer, of an army of retired persons in villages in Dorset and indeed all over England who have been living in a cottage on £5 a week. In the last 12 months that sum has been reduced to £4 15s. That is not an uncommon example.
In the few minutes at my disposal that is the only point that I seek to make. Whatever may be the relation between earnings and income, I urge right hon. Members opposite not to forget those who have had no rise in income, for the retired earn no wage. If I went back to my constituency and asked my constituents what they most wished to see, the first priority would not be extra money on education, housing, roads or hospitals. They would say to me, "Make £1 equal £1."
9.0 p.m.
Mr. Reginald Maudling: The debate has closed, I think all will agree, on a very good note with the remarks of my hon. Friend the Member for Dorset, South (Mr. Evelyn King), which were so well worth listening to and brought our minds back to a problem which we have tended to overlook in the arguments which we have had.
The debate has, of course, been overshadowed by the problem of Rhodesia. It led to an interruption of our normal procedure and, for many of us, it has distracted our thoughts from other problems. This is bound to have had its effect on the whole discussion of the Gracious Speach. This evening, I do not intend to refer at all to the Rhodesian situation. References in passing are unwise and add nothing helpful. I shall refer to a number of the problems and questions which have been raised in the debate but which, on the whole, have been left unanswered by the Government's spokesmen. No doubt, the Chancellor of the Exchequer, who casts his eye over the
1258
whole field of Government activity, will be able to answer all the points and questions which have been put.
The first feature of note in this Gracious Speech is the tactical exercise which it contains. Its object is to ensure the support of the Liberal Party—all of them—in the Division Lobby whenever necessary. I do not know why the Prime Minister thought it so important to do this. There is very little danger of the Liberal Party voting in such a way as to endanger the Government at the present moment. Considering the results at the recent by-elections, they would be very bold men—-I do not say brave—if they courted an election now. The Leader of the Liberal Party is rather fond of saying that he leads his troops towards the sound of gunfire. I have no doubt that he makes sure, before he leads them, that their weapons are loaded only with blank cartridges.
Mr. George Y. Mackie: I remind the right hon. Gentleman that Liberal by-election results just before Roxburgh were not very good, but he will remember the result there.
Mr. Maudling: The hon. Gentleman's intervention exactly confirms what I said about blank cartridges. A blanker cartridge I have never heard.
The omission of steel nationalisation from the Queen's Speech is the most significant part of the whole tactical exercise by the Government. The Prime Minister has made a good deal of reference to it. He tried to explain away why he had not put steel into the programme on this occasion. If I may say so in his absence, I thought that I had never seen him more uneasy, like a mouse on hot bricks, jumping about all over the place and not knowing what to do or say next. This was before he had to answer the questions from the hon. Member for Ebbw Vale (Mr. Michael Foot), of course, and now we want to know the answers to those questions. Although the debate on the Queen's Speech has gone on for several days, there has been no response from the Government Front Bench, as far as I know, to the questions which the hon. Gentleman asked about steel.
His questions were simple and clear. First, was the account of the reason for the omission of steel nationalisation given by the correspondent of The Times

1259
accurate? Second, could the hon. Gentleman take it for certain that steel nationalisation would be included in the next Labour Party election manifesto if his Government had not succeeded in nationalising it before then? Those were his direct and simple questions, but he received no answer.
It is important that an answer should be given because upon it depends whether the Government will get away with their attempt to bamboozle the Liberal Party and the country as a whole into thinking that they are, as a Labour Government, adopting a moderate programme. The omission of steel is designed to persuade people that they are now a middle-of-the-road, moderate Left-wing, radical Government. Yet the true answer to the question put by the hon. Member for Ebbw Vale must be that the only reason for the postponement of the nationalisation of steel is simply that they have not at present got an adequate Parliamentary majority to carry it through. If ever they had an adequate majority for that purpose I presume that this would be one of their first measures.
There are other examples in the Gracious Speech, under a certain amount of obscure language, of their tendency to nationalisation, if I may use that word. We read,
"Legislation will be introduced to remove statutory limitations impeding the proper use of the manufacturing resources of the nationalised industries "
and
"A Bill will be introduced to regulate priorities in privately sponsored construction ".
What these two rather obscure phrases mean, in effect, is giving power to the nationalised industries to indulge in a form of creeping nationalisation over an unlimited field and also to impose upon a large section of an important industry licensing controls and rationing once again on a permanent basis.
The point is made about the limitation on the powers of the nationalised industries. The simple fact is that there is no limitation whatever on the ability of the nationalised industries to carry out their proper duty in accordance with the statutes and duties laid upon them by Parliament. What the limitations are entirely designed to do is to ensure that they do not use their privileged position
1260
of a monopoly in their own field and access to Government finance to compete on an unfair basis with private enterprise. The purpose of these Government proposals must be to ensure that nationalised industries can extend their activities without any regard to an abuse of proper competition with private enterprise which, after all, provides by far the overwhelming part of the export trade of this country.
The Gracious Speech is designed to obscure in every possible way the consequences of the policies pursued by the Government in the last 12 months. Nowhere do we read in the Speech of these consequences in the form of higher taxes, higher interest rates, a credit squeeze of a character and duration never seen before and cuts in public expenditure of a savage nature.
I should like to ask the Chancellor of the Exchequer some definite questions about the levels of public expenditure and the proposals which the Government have in mind. What about the hospitals? My right hon. Friend the Member for Altrincham and Sale (Mr. Barber) put forward some cogent points on this matter. The hospitals were told in August that the Chancellor's July measures would have no effect whatever upon the hospitals, either in maintenance or in new construction. The Prime Minister said the same thing a few days ago. He said that he had excepted hospitals, schools and houses from the measures of restriction.
But what are the facts which are slowly beginning to emerge? We have heard already that the hospital at Exeter, a very large proposal, is to be shelved indefinitely. We have heard about St. Thomas's Hospital extension scheme, which has been put back, if necessary, indefinitely. What are the facts? Is there a cut back in the hospital programme? Are these important projects being cut back or is it true, as the Government have said, that all hospital building has been exempted from the cuts imposed by the Government? I hope that the Chancellor will explain this in his reply, because it is an important matter to which he must know the answer.
The next questions are about education. My right hon. Friend the Member for Altrincham and Sale gave an example

1261
of a school which had been held back by lack of finance. We have been told in the Gracious Speech that the Government
"will continue to develop higher education ".
How much development of higher education have we seen? In the measures of July we saw a severe cut back in the development of higher education in this country. The Minister of Education has announced that the reduction in the size of classes to 30 pupils, which has been talked about so much in Labour Party propaganda, will be deferred until 1983. All these are examples of the cut back in public expenditure which has occurred as a result of the Government's policy. They have been announced but they have been glossed over in the Gracious Speech.
Mr. Tam Dalyell: Would the right hon. Gentleman accept that there are 29,000 students entering training colleges this year, which is double the number of seven years ago?
Mr. Maudling: I would accept that with pleasure. It seems to me one more example of what we have always said— that the process of development under Conservative Governments has proved to be immensely rapid.
I turn to the road programme. In March the Minister of Transport told us, "We are determined not to cut the road programme ". We should have been warned. In July £30 million of the road programme was postponed. In December £25 million of the classified road schemes were deferred. The Prime Minister argued that cutting back on all these things was cutting back on luxury building. He said," We are cutting back on luxury building in order to promote the building of houses in this country ". Hospitals have been cut back, and schools. I gather that the Chancellor now says that hospital building has been increased. If the building of St. Thomas's and Exeter has been increased, we should like to hear. Was expenditure on roads increased or cut back? Was expenditure on higher education increased or cut back? If the Prime Minister says that all these were increased, let him explain how. I do not think that the message which the Chancellor gave the House in July was a message of increasing; it was a message of cutting back. The Prime Minister said it was
1262
necessary to cut back on luxuries in order to build more houses. This is the Prime Minister's own argument—the "candy floss "argument that he talked so much about as Leader of the Opposition. It is nonsense now, as it was then.
The Prime Minister knows that the amount of so-called luxury building is tiny. [HON. MEMBERS: "Oh."] Offices account possibly for 3 to 4 per cent. of the total building effort; shops a good deal less than that. In any case, investment in new shops is probably a better way of saving labour in this economy than anything else one can think of. The truth is that the Government are having to cut back on hospitals, education and roads in order to achieve a house-building programme of less than 400,000 a year.
The Prime Minister (Mr. Harold Wilson): The right hon. Gentleman knows the facts.
Mr. Maudling: If the Prime Minister thinks I am wrong, perhaps he will get up and say so. If he thinks that the Government have increased these things, he should say so. But he is not very forthcoming this evening and I can well imagine why. It is because the answer is the opposite to what he is muttering.
Let us consider the proposals of the Labour Party about social welfare. What has happened to the income guarantee and the half pay on retirement proposals? There is no sign of them in the Gracious Speech nor in the National Plan. The Plan clearly lays out that neither the income guarantee nor the half pay on retirement are expected by the Government to have any effect upon the level of consumption between now and 1970.
We have not heard much about mortgage rates today but we heard a lot about them from the First Secretary of State during the election campaign.
Mr. George Brown: No one except me?
Mr. Maudling: We still have not heard anything about this fairly clear undertaking that, under a Labour Government, the rate or interest charged upon mortgages to house-owners would be reduced. In fact, it has been increased and maintained at record levels and solely because of the policy of the Government. That

1263
is the point we make, but we have received no answer. We have received only vague promises about something in the future. The Prime Minister himself has made such a vague promise. But nothing has ben done and nothing emerges in the Gracious Speech to meet one of the most concrete promises ever given to the electorate.
Then there is the Ministry of Technology—another of the great promises of the party opposite. Under the dispensation of right hon. Gentlemen opposite we were to have great advantages, a great movement forward and great progress in technology. What has happened? Lord Beeching has been sacked, so we were told last night, although I gather that there is a certain amount of doubt as to whether or not he was sacked. However, the Minister of Technology said last night that Lord Beeching had been sacked. In Lord Beeching's place we have the Minister of Technology, whose contribution to the subject is not of the most outstanding. Finally, we have the level of increased taxation. It has increased by over £600 million a year in less than a year.
All these factors are the consequence of 12 months of Labour Government and they did not appear in the Gracious Speech. They constitute the reason for our Amendment.
At the moment the Government can rightly claim that the level of employment is high and that the balance of payments position has been improved. This is precisely as we expected. [HON. MEMBERS: "Oh."] If hon. Members opposite want a justification for that statement, they should look at the Government White Paper of 26th October, which said precisely what I have just said. But what we have with the improved balance of payments and the high level of employment is the highest level of taxation, the highest level of interest rates, a strict credit squeeze and pressure on prices.
Either the measures which the Chancellor has introduced to deflate the economy will result in higher unemployment, which is what may happen, or, if that does not happen, the level of imports will remain far too high. I agree that exports have done well. The right hon.
1264
Gentleman himself referred to that today. But does he really think that the increase in exports in the first few months of this year had anything to do with the Government? He claimed that the first part of the year showed an improvement in our export trade and so it did. But no one who knows anything about trade or industry would imagine that the level of exports in the first months of the year had anything to do with the policy of the present Government.
The truth, as we have said on more than one occasion, is that the Labour Party inherited a situation in which the level of exports was already beginning to increase and to increase substantially, precisely as we said. The gap between the delivery of exports and their ordering is one of several months and, when we said during 1964 that the winter of 1964–65 would show a substantial increase in the level of our export trade, that is precisely what happened.
We have heard so often now the excuse by Labour Members about the gap of £800 million with which they were supposed to have been faced. They faced a gap of £800 million only if they were looking backwards. The simple fact is that by the time they came into power the problem of 1964 had been handled and, as the Prime Minister himself said, handled without any loss of confidence in sterling whatever. It was only in November, 1964, only after a month of Labour Government and only after the weeks of the muddle about the surcharge and muddle about the Bank Rate and the inflationary Budget in November, 1964, that confidence in sterling collapsed at a time when the Prime Minister himself admitted that a new development had arisen from confidence factors in the middle of November, 1964.
Mr. Sydney Silverman: Was not the Government policy which the right hon. Gentleman has just said was the cause of the loss of confidence in November last year the policy which at that very time the right hon. Gentleman was saying he would have followed if his party had been returned to power?
Mr. Maudling: When I said that the Government inherited both our problems and our solutions, I did not realise what a hash they would make of them.

1265
The handling of the surcharge was inept beyond belief. The handling of the Bank Rate, the announcement of Capital Gains and Corporation Taxes, which did great harm to the movement of money across the exchanges and great harm to the capital side of our balance of payments, and the inflationary November Budget were clearly, as admitted by the Prime Minister in his speech of 23rd November, last year, the cause of the confidence crisis from which the Government have been trying to extricate themselves from then onwards.
The problem now obviously is to maintain the level of prices as competitively as possible and the main danger which has arisen in the last year of Labour Government has been the immense pressure on prices. We have seen a rise in the level of prices far higher than the economy can sustain if we intend to maintain our export trade. The source of this rise in prices is fairly clear to see. First, there is the increase in the level of taxation. Secondly, there is the increase in the level of incomes. In both cases it is clear that the policy of Ministers has made a major contribution to the increasing level of costs and, therefore, the increase in level of prices.
About 70 per cent. of the constituents of prices is added in this country. If the First Secretary wants to see why his own incomes policy has been driven through on so many occasions, he need look no further than his own colleagues. The level of prices has risen by about 5 per cent. over the last 12 months and the main contributor has been the Chancellor of the Exchequer himself with the taxes which he has imposed, taxes falling on the level of prices of things consumed in this country. The other main problem has been the level of incomes. We were asked about an incomes policy.
Mr. George Brown: Which incomes?
Mr. Maudling: All incomes. As I said to the First Secretary earlier this afternoon, any policy on incomes must be a policy to deal with all incomes, from whatever source. What is absolutely clear is that one cannot sustain an incomes policy on the basis of suppressing prices alone. This is where the First Secretary is making one of his great
1266
mistakes. His other mistake is to assume that, when one has a document signed in principle, one has a policy. A document and a policy are entirely different things. One can only sustain a policy of incomes if one sustains it with action and determination. It is no good taking action to consider at a Government level, the price of instant coffee, meat pies or, pickles, or whatever appears in this White Paper. If one tries to maintain a level of prices on a statutory or compulsory basis one erodes the level of profits and makes it absolutely impossible to sustain the level of investment, the level that is necessary, all that one does is to achieve a level of prices in which competition becomes ineffective.
One cannot maintain a prices policy by concentrating on prices and ignoring costs. By far the most important element in costs is the element of personal income. This is where the First Secretary's policy is going overboard, because while he is concentrating on prices the level of incomes is moving up and moving up faster than the level of productivity. The other day the Chancellor said that the level of earnings had risen by 8 per cent, in the last year. The level of production has risen not one single bit in a year. I hope that the Chancellor will comment on this when he replies. It is an extraordinary thing that the level of production for the last recorded month is two points below what it was in January of this year. Not only has production been stagnant, it has, if anything, been falling, and with the level of employment recorded, productivity has also been falling.
We therefore have a situation in which productivity has been falling and in which incomes have been rising something like 8 per cent. from the Chancellor's own figures. Has there ever been a greater threat to price stability in this country? It may be said that last year also the production index showed very little advance between the early part of the year and the later part of the year. But last year we were seeing a very large build-up of work in progress in industry, particularly in engineering. This year work in progress for the first time for several years, has been falling. The fact is that output, effort and production in this country have been falling over the months since January, 1965.

1267
Production has been falling and incomes have been rising at a very rapid rate indeed. The result of this can only be a rapid increase in prices and a rapid increase in prices can only result in our competitive position being impeded and our balance of payment situation being undermined. [Interruption.] This is the sort of silly remark that the First Secretary often makes. I have tried very hard, as did my predecessor, to establish an incomes policy in this country. We know that an incomes policy is not a matter of talk and waving papers and declaring that a new dawn has appeared. An incomes policy is a matter of persuasion, effort and political courage. That is what we do not see at the present moment. We have heard much talk about an incomes policy, but we have seen very little action. We have seen the results working out as badly for the economy and for the level of costs and prices as ever it has done in the experience of this country. That is why in the Amendment we have laid stress on the failure of the incomes policy. We believe that the level of prices and of costs and the competitive position of British industry are of fundamental importance.
Everything proposed by the Government depends on their ability to maintain a competitive level of prices and on their policy for Government expenditure. I would ask the Chancellor of the Exchequer, by the way, how much new Government expenditure is included in the Gracious Speech. There are many proposals, all of them involving Government expenditure. Will the right hon. Gentleman tell us how much additional expenditure is involved in the proposals laid before the House? Both in their proposals for Government expenditure and in their inability to deal with the problem of income they have shown themselves quite incapable of tackling the main problem of the economy, which must be to maintain the level of prices for the sake of our export achievement and for the value of the savings of the people. It is for that reason that we ask the House to censure the Government this evening.
9.30 p.m.
The Chancellor of the Exchequer (Mr. James Callaghan): I listened with very great interest to what the right hon. Member for Barnet (Mr. Maudling) said about
1268
prices and incomes. He said much with which I agreed. But there is one simple question to which I heard no answer: does he still adhere to the necessity for a prices and incomes policy?
Mr. Maudling: Yes.
Mr. Callaghan: I am glad to hear that. I will return to it. I am sure that it will have been heard with interest by the hon. Member for Oswestry (Mr. Biffen). The mantle of Enoch has fallen upon Oswestry today.
I agree with the right hon. Gentleman that the shadow of Rhodesia has hung heavily over this debate, and I think that it has been partly the reason why it has been a scrappy and sporadic debate. Some of the attacks which we were promised certainly have not materialised. For example, the merciless attack which we were told would come from the right hon. Member for Taunton (Mr. du Cann) does not seem to have shown over the horizon—and no more has he.
But there is another reason why the debate on the Gracious Speech has been sporadic and the attack has appeared so unco-ordinated, and that is simply the inability of the Opposition to deploy any central theme from which they could attack the Government's policy. We have had a great deal of destructive criticism of what the Government are doing. Until the right hon. Gentleman's intervention at the very last moment just now, we did not know whether there was even one vital aspect of our policies which they supported. But I gather that they support us on a prices and incomes policy. [Interruption.]Do they not?
The official spokesman for the Opposition—I beg his pardon; I do not think that he is the official spokesman for the Opposition on this matter. I had better be careful. The official spokesman for the Opposition was very careful not to say whether he agreed with the prices and incomes policy. The unofficial spokesman for the Opposition, who has a degree of intellectual honesty which makes him say what he really believes on these matters, does believe in an incomes policy. He wants to make it work, and he tried to make it work. I wish that the same were true of the rest of his colleagues.

1269
I am choosing my words very carefully about this, because every Member opposite, including the right hon. Member for Wolverhampton, South-West (Mr. Powell) and the hon. Member for Oswestry, fought the election on the Tory Party manifesto, which said:
"An effective and fair incomes policy is crucial to the achievement of sustained growth without inflation."
The hon. Member for Oswestry now thinks that this is transparent nonsense, and I respect him for his opinion.
But right hon. and hon. Members opposite went further. The hon. Member for Oswestry was attacking the fact that he thinks that we shall have to take further action. That is right. My right hon. Friend has announced, and the Gracious Speech makes clear, that we are taking further action. But the hon. Gentleman fought the election on the same principle. His manifesto said:
"We shall take a further initiative to secure wider acceptance and effective implementation of such a policy."
Does the party opposite still stand by that. Of course, any party in opposition is entitled to rethink its position, whether it be on the east of Suez policy, or whether it be on incomes and prices, but we are entitled to know, I think, from the Opposition, and from the Leader of the Opposition, who has given no clear lead in this matter, where they stand on this issue of an incomes policy at the present time.
The hon. Member for Oswestry was both courageous and accurate—including the point at which he said that this was the nub of our policy. I readily agree with him, and, indeed, we have all said this, and he said it as clearly as anybody. And when I put the specific question to him he was absolutely frank in his answer. He said he believed it ought to be abandoned; he did not think this was the sort of thing which should be whispered about in the Smoking Room but the sort of thing to be said on the Floor of the House. The hon. Gentleman knows I am being perfectly sincere. He believed that this should be answered and debated in this House.
He said the incomes policy should be abandoned, that it could not succeed, and that he himself would go back to the policies followed by his right hon. Friend
1270
the Member for Monmouth (Mr. Thorneycroft) when he was Chancellor of the Exchequer. I think I am interpreting the hon. Gentleman accurately.
I think that that is a perfectly logical and tenable position. It is one perfectly open to the Opposition to take up. It would present a very clear issue of principle for the people of this country to decide. They can decide whether they want to fight through an incomes policy and a prices policy with all the difficulties found in these unexplored and uncharted seas. The Opposition have not been backward in pointing out the difficulties.
Both parties fought the election on it, and therefore it was nationally agreed policy—at least, up to tonight. I do not know where the right hon. Gentleman stands in relation to the rest of the policy. It was agreed policy. We should all try to work this, because we do not want as a nation to go back to those policies under which we had growing unemployment, under which we sacrificed growth in perpetuity, as we seem to have done by the measure of growth which other countries have been able to sustain.
We have been trying to carry the incomes policy one stage further through the accent on productivity. Hence the National Plan. Hence the positive proposals put forward. Again, it is perfectly open to hon. Gentlemen to say, "We dismiss the National Plan as a tissue of the imagination which cannot possibly be fulfilled." They can perfectly well stand up and say this, and it is perfectly open to hon. Gentlemen to argue that the forces of the market should be allowed to determine the way the country should go. I would like a debate on this—and my right hon. Friend was referring to this this afternoon in language which got across to some hon. Gentlemen opposite. I agree with my right hon. Friend. What I think is the most despicable course of all is to damn with faint praise, and that is what the Opposition have done and that is why the Opposition are not presenting a credible picture and not presenting any credible opposition to the Gracious Speech. They are willing to wound but afraid to strike. They do not know. Well, they know, and many of them secretly would like to abandon the struggle for an incomes policy; many of them would secretly like to abandon the idea that we should have a

1271
National Plan in order to secure increased productivity; many of them genuinely think it would be far better to let prices rip. I am getting nods of assent from the other side even as I say it. But why should it be left to me to say it? Why do they not stand up and say, "That is what we believe in"? But they are afraid to say it until the right hon. Gentleman got up this afternoon and that is why they are not presenting a credible and coherent policy.
Mr. Edward Heath: What the Chancellor is saying is that what he and his right hon. Friends propound as an incomes policy is the only incomes policy, and that the way in which they handle it is the only way in which it can be handled. Neither of those things do we accept. What we do remember is that he and his right hon. Friends and their supporters sabotaged every attempt to get an incomes policy. That is what they did. They did it in this House and they did it in "Neddy ".
Mr. Callaghan: I do not think we could have done more to sabotage an incomes policy than the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) as Chancellor of the Exchequer, who in one and the same breath, reduced the Surtax and denied nurses another 6d. a week. That is not likely to get assistance with an incomes policy. I think one of the things we can claim that this Government have tried to do—and heaven knows in these things nobody is going to pretend to be perfect, and I would welcome honest and constructive criticism from hon. Gentleman opposite—but one of the things we have tried not to do is to create two classes in this country. We have endeavoured to ensure that justice which is secured through the fiscal system shall apply to all.
Hon. Gentlemen opposite opposed the Capital Gains Tax. To us this was essentially a weapon in trying to secure the climate for an incomes policy. But they opposed it, and so long as they oppose this kind of Measure then I believe, in all honesty, they ought to cast aside this pretence that they believe in it, and they should stand up and be counted. Then we shall know what we are fighting and we shall strip away a lot of the pretence.
1272
There are some measures on which the Opposition are in agreement. They are in agreement with us about the need to balance our payments. They agree with us that there is a formidable and substantial deficit to be overcome. They disagree with us about the nature and cause of it, and whether we could have avoided it, and all the rest, but they do agree that there is a problem here, and I am glad they do. There was a time, way back about June or July, when, if anybody on this side of the House talked about an £800 million deficit, there were jeers and groans from the other side of the House. Now they have returned to their own vomit. The right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) spent the first 20 minutes of his speech talking about it. I am very grateful to him. I hope he will go on reminding the country of the deficit which existed, which exists now, which is being overcome, which is being halved this year, and will be eliminated next year.
The other interesting thing about the debate we have had over the last few days is that there seems to have been more interest and excitement on the part of the Opposition about what has been left out of the Speech than what is in it. There are certain measures which, if I were to judge from their speeches, they would like to have seen in it; but there has been very little discussion about some of the things which are in it. I wish to rehearse some of them again and to ask whether the Opposition supports us on these measures or not—in principle; I do not ask them to commit themselves to the full legislation.
Do they agree with the proposal to introduce a Bill to assist the financing of the coal industry and to redeploy its manpower? Do they agree with the proposal to take powers to acquire land for the community and to recover a part of the development value realised in land transactions, or are they against it? Do they agree with the proposal to introduce legislation to reform the leasehold system, including provision for leasehold enfranchisement?
The right hon. Member for Bexley (Mr. Heath), when he spoke at the beginning of the debate, said that this was one of the old faces that was reintroduced. I have been listening to 13

1273
Queen's Speeches before the last one and never heard it in any of them. This is the occasion on which legislation is going to be introduced. Can we rely in principle on the support of the right hon. Member? I hope he says yes, because otherwise he will put some of his friends from South Wales in some difficulty.
What about the Bill to regulate priorities in privately-sponsored construction? Do they agree with that or not? If so, why on earth did not some one say so during the debate? I shall not go through the other Measures now. I take it that the Opposition are obviously in agreement with the proposal to increase public service pensions, although, with that usual dichotomy which distinguishes them, while one right hon. Member says he wants to see it introduced, the other starts to count the cost and to say, "Can we be sure that we have included it in the estimates of public expenditure?"
The right hon. Member for Barnet will know from his experience the difficulty that any Chancellor of the Exchequer has in these particular matters. I have said that we are going to try —and this, if we succeed, will be the first time it has been done—to get the increase in public sector expenditure in this country down to 4¼ per cent. a year in real terms from now until 1970. This is our ambition. I say this to the right hon. Member. On every one of the proposals included in this programme, namely the proposal for the rebate on rate relief, the proposal for public service pensions and the other proposals that will not come into effect next year, but will be introduced next year, namely the reform of the rating system and the new system for Exchequer contributions, the proposals on wage-related unemployment benefits—all of these have been included in the public sector expenditure review and they come at the moment within the definition of 4¼ per cent. a year increase in real terms.
Mr. Arthur Jones (Northants, South): Will the right hon. Gentleman include in those figures what his estimate of the increase in housing subsidy will amount to?
Mr. Callaghan: The increase in housing subsidies will form part of the reform of local government financial
1274
arrangements to which I referred in what I said a moment ago. It is all part of it and included in it.
On a great many of these Measures there is no doubt that the Opposition has no substantial objection to raise. The only objection they have raised so far as I see on the Queen's Speech as a whole is that we have not included steel. They could have included it in their Amendment. It might have been slightly embarrassing if they had done so. It is a demonstration of the phoneyness and falseness of the opposition with which we have been faced over the last few days that this should be so.
Mr. Box Mr. Box rose—
Mr. Speaker: Order. The right hon. Gentleman obviously has not given way.
Mr. Callaghan: I should like to give way—[Interruption.]If the hon. Member wants to wave my election address at me he can do so.
Mr. Box: Will the right hon. Gentleman give way?
Mr. Callaghan: If the hon. Member would only be patient I should say what I was about to say, but now I am not sure whether I will. I should like to give way to an hon. Member for a Cardiff constituency, whom I congratulate on being elected as vice-chairman of the Conservative Party's finance committee, but if he is to interrupt me I hope that he will say something worth while—and if he goes on reading my election address I am sure that it will be worth while.
Mr. Box: The right hon. Gentleman has been very anxious to point out what other hon. Members had in their election addresses. Is he aware that he had nationalisation of steel in his? Is he also aware that he warned that one of the most important contributions for steel workers in the constituency was that we should escape from what he described as successive stop-go Conservative policies?
Mr. Callaghan: Yes, Sir, and I should not be at all surprised if the hon. Member reads my next election address if he will not see the first part of that there again. I do not know what the right hon. Member for Enfield, West is slapping his knee about. If he really

1275
thinks that we do not intend to take the major part of the steel industry into public ownership, he had better think again. [HON. MEMBERS: "When?"] I do not mind very much whether or not the hon. Gentleman believes me. The simple truth about this industry—and this must be faced—is that it is in need of substantial reorganisation and that it will need substantial public money to carry it out. Nobody can dodge this question.
Hon. Members: When?
Mr. William Yates Mr. William Yates (The Wrekin) rose—
Hon. Members: Sit down.
Mr. Callaghan: I have been asked a specific question and I would like to get on with my speech.
Hon. Members: When?
Mr. Callaghan: I very much regret that it is not possible at this moment to make the major changes in the steel industry that are necessary for the health of the nation, but—
Several Hon. Members Several Hon. Members rose—
Mr. Callaghan: I have less than 10 minutes in which to complete my speech. Anyone who does not believe that these changes will be made is living in a fool's paradise. Of course, if the Opposition will offer us facilities—[HON. MEMBERS: "No."] If they will not offer us facilities then we shall undertake the necessary reorganisation of this industry when we have got the majority to do it. [Interruption.]
Mr. William Yates Mr. William Yates rose—
Mr. Speaker: Order. The hon. Member for The Wrekin (Mr. William Yates) has no prescriptive right to bob up and down.
Mr. Callaghan: At least, I can say this. We are not dodging the question.
Mr. William Yates: Really!
Mr. Callaghan: I would very much like to know whether the Conservative Party stands on a number of issues—for example, prices. It is essential to keep prices down, is it not?
Mr. William Yates: On a point of order.
Hon. Members: Sit down.
Mr. Speaker: Order. I am listening to the hon. Member for The Wrekin putting a point of order. I hope it is a real one.
Mr. William Yates: I hope so, too, Mr. Speaker. In view of what we have heard from the Chancellor of the Exchequer, I should like to move, That this House do now adjourn.
Mr. Speaker: There is no point in the hon. Gentleman raising a ridiculous alleged point of order.
Mr. Callaghan: Perhaps I could now clear up the question which the right hon. Member for Barnet asked me about hospitals because he put this point to me and I should like to answer him now. The programme was not reduced by the measures brought in in July. Indeed, it is true to say that in the spring of this year we found an extra £5 million of capital—that is, for 1965–66—for hospital building. My right hon. Friend the Minister of Health has had, as have other of my right hon. Friends, to cast a realistic and appraising eye over the programmes which were left behind by the former Administration. It is in this sense that the programmes have been made realistic to the capacity of industry to carry them out.
Several Hon. Members Several Hon. Members rose—
Mr. Callaghan: With respect to hon. Gentlemen opposite, I will not give way any further. Only about six minutes remain for me to complete my speech.
The former Chancellor of the Exchequer knows better than any hon. Gentleman opposite that what happened during the last 18 months of Tory Government was a disgrace to any sensible Administration. Burdens were piled on the Exchequer and on the construction industry, and it was impossible to carry them out. One of the things for which the country can be grateful is that now at last a realistic programme has been put forward and contained in the National Plan which can be maintained and carried out between now and 1970.
Mr. Maudling: If the burdens proposed in the Conservative Government's programme were too heavy, why did the party opposite promise so much more?
Mr. Callaghan: The right Gentleman will know, if he read our manifesto, that we specifically warned the country about the burdens which the Conservative Party was placing on it, and we gave first priority in the short run to closing the balance -of-payments gap we said would exist. It is all very well for the party opposite to say, "Rubbish ", but this is true. Let hon. Members opposite read our manifesto. I read theirs; let them read ours. The right hon. Gentleman will find it there.
We have borrowed a very great deal. The total is £900 million—that is from the I.M.F. That is £100 million more than the deficit for last year. Hon. Members will recognise that we are still running a deficit this year. I have never attempted to disguise that fact from the House, but I say that, by contrast with 12 months ago, whereas then the balance-of-payments deficit was getting worse every month, this year it is getting better every month.
If we are to judge the performance, whereas in September and October of 1964, gold and dollars were flowing out of the country, in September and October, 1965 they have been flowing into the country. Whereas at that time the £ was at pretty well its lowest basement level, today it is standing higher than parity. Whereas last year exports were pretty well flat, this year they are running at a level of nearly 6 per cent. higher. And I would remind hon. Gentlemen opposite that the flow of imports has been staunched by some of the measures which hon. Members opposite have condemned right from their inception.
Therefore, because of these measures, because of the improvement on the capital account—which in the full year
is at least £150 million—we are able to say to the House and the country that now we can see our way clear to having a balance-of-payments deficit that will certainly be no more than half of last year's—but still a deficit; there is still a lot to do—towards the end of next year, if we continue with our existing policies —and I emphasise this, whatever fun hon. Members opposite make about them —we can see the deficit being removed. This is a target worth putting in front of the country.
What the Opposition have failed to demonstrate during the last week is any constructive alternative to the Government's policy which is resulting in a broad economic, social and political advance. For the first time in his political life the right hon. Gentleman finds himself out of sympathy and out of tune with a great deal of industrial thinking in this country. There is a salutary lesson for the Conservative Party here. Right hon. and hon. Members opposite have lost the allegiance of a great many industrialists, who are impatient with the kind of unconstructive criticism of the Government—a Government which, whatever their shortcomings, have at least presented a coherent plan for social, economic and political progress.
That is why, in my view and in my judgment, this Government are destined for a long period of office and—especially as long as hon. Members opposite go on quarrelling among themselves—the Tories are destined for a long period of opposition. The hon. Member for The Wrekin probably knows the latest Conservative sticker: "Don't blame me—I voted Maudling". I ask the House to reject the Amendment by an overwhelming majority.
Question put, That those words be there added: —
The House divided: Ayes 268, Noes 280.

Division No. 2.]

AYES

[10.0 p.m.

Agnew, Commander Sir Peter

Barber, Rt. Hn. Anthony

Birch, Rt. Hn. Nigel

Alison, Michael (Barkston Ash)

Barlow, Sir John

Black, Sir Cyril

Allan, Robert (Paddington, s.)

Batsford, Brian

Blaker, Peter

Allason, James (Hemel Hempstead)

Beamish, Col. Sir Tufton

Bossom, Sir Clive

Amery, Rt. Hn. Julian

Bennett, Sir Frederic (Torquay)

Box, Donald

Anstruther-Gray, Rt. Hn. Sir W.

Bennett, Dr. Reginald (Gos. & Fhm)

Boyd-Carpenter, Rt. Hn. J.

Astor, John

Berkeley, Humphry

Boyle, Rt. Hn. Sir Edward

Atkins, Humphrey

Berry, Hn. Anthony

Brewis, John

Awdry, Daniel

Biffen, John

Brinton, Sir Tatton

Baker, W. H. K.

Biggs-Davison, John

Bromley-Davenport,Lt.-Col.SirWalter

Balniel, Lord

Bingham, R. M.

Brooke, Rt. Hn. Henry

Brown, Sir Edward (Bath)

Harrison, Col. Sir Harwood (Eye)

Orr, Capt. L. P. s.

Bruce-Gardyne, J.

Harvey, Sir Arthur Vere (Macclesf'd)

Orr-Ewing, Sir Ian

Buchanan-Smith, Alick

Harvey, John (Walthamstow, E.)

Osborn, John (Hallam)

Buck, Antony

Hastings, Stephen

Page, John (Harrow, W.)

Bullus, Sir Eric

Hawkins, Paul

Page, R. Graham (Crosby)

Burden, F. A.

Hay, John

Percival, Ian

Butcher, Sir Herbert

Heald, Rt. Hn. Sir Lionel

Peyton, John

Buxton, Ronald

Heath, Rt. Hn. Edward

Pickthorn, Rt. Hn. Sir Kenneth

Campbell, Cordon

Hendry, Forbes

Pike, Miss Mervyn

Carlisle, Mark

Higgins, Terence L.

Pitt, Dame Edith

Carr, Rt. Hn. Robert

Hiley, Joseph

Price, David (Eastleigh)

Cary, Sir Robert

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

Prior, J. M. L.

Channon, H. P. G.

Hirst, Geoffrey

Quennell, Miss J. M.

Chataway, Christopher

Hobson, Rt. Hn. Sir John

Ramsden, Rt. Hn. James

Chichester-Clark, R.

Hogg, Rt. Hn. Quintin

Rawlinson, Rt. Hn. Sir Peter

Clarke, Brig. Terence (Portsmth, w.)

Hopkins, Alan

Redmayne, Rt. Hn. Sir Martin

Cole, Norman

Hordern, Peter

Rees-Davies, W. R.

Cooke, Robert

Hornby, Richard

Renton, Rt. Hn. Sir David

Cooper, A. E.

Hornsby-Smith, Rt. Hn. Dame P.

Ridsdale, Julian

Cooper-Key, Sir Neill

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

Roberts, Sir Peter (Heeley)

Cordle, John

Howe, Geoffrey (Bebington)

Rodgers, Sir John (Sevenoaks)

Corfleld, F. V.

Hunt, John (Bromley)

Roots, William

Costain, A. P.

Hutchison, Michael Clark

Russell, Sir Ronald

Courtney, Cdr. Anthony

Iremonger, T. L.

St. John-Stevas, Norman

Craddock, Sir Beresford (Spelthorne)

Irvine, Bryant Godman (Rye)

Scott-Hopkins, James

Crawley, Aldan

Jenkin, Patrick (Woodford)

Sharpies, Richard

Crosthwaite-Eyre, Col. Sir Oliver

Jennings, J. C.

Shepherd, William

Crowder, F. P.

Johnson Smith, G. (East Grinstead)

Sinclair, Sir George

Cunningham, Sir Knox

Jones, Arthur (Northants, S.)

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

Curran, Charles

Jopling, Michael

Smith, J. L. E. (London, W'minster)

Currie, G. B. H.

Joseph, Rt. Hn. Sir Keith

Smyth, Rt. Hn. Brig. Sir John

Dalkeith, Earl of

Kaberry, Sir Donald

Spearman, Sir Alexander

Dance, James

Kerby, Capt. Henry

Speir, Sir Rupert

Davles, Dr. Wyndham (Perry Barr)

Kerr, Sir Hamilton (Cambridge)

Stainton, Keith

d'Avigdor-Goldsmid, Sir Henry

Kllfedder, James A.

Stanley, Hn. Richard

Dean, Paul

Kimball, Marcus

Stodart, Anthony

Deedes, Rt. Hn. TV. F.

King, Evelyn (Dorset, S.)

Stoddart-Scott, Col. Sir Malcolm

Digby, Simon Winglield

Kirk, Peter

Studholme, Sir Henry

Doughty, Charles

Kitson, Timothy

Summers, Sir Spencer

Douglas-Home, Rt. Hn. Sir Alec

Lagden, Godfrey

Talbot, John E.

Drayson, G. B.

Lambton, Viscount

Taylor, Sir Charles (Eastbourne)

du Cann, Rt. Hn. Edward

Lancaster, Col. C. G.

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

Eden, Sir John

Langford-Holt, Sir John

Taylor, Frank (Moss Side)

Elliot, Capt. Walter (Carshalton)

Legge-Bourke, Sir Harry

Teeling, Sir William

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

Lewis, Kenneth (Rutland)

Temple, John M.

Emery, Peter

Lloyd,Rt.t-ln.Ceoffrey(Sut'nC'dfiela)

Thatcher, Mrs. Margaret

Eyre, Reginald

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

Thomas, Sir Leslie (Canterbury)

Farr, John

Lloyd, Rt. Hn. Selwyn (Wirral)

Thomas, Rt. Hn. Peter (Conway)

Fell, Anthony

Longbottom, Charles

Thompson, Sir Richard (Croydon, S.)

Fisher, Nigel

Longden, Gilbert

Thorneycroft, Rt. Hn. Peter

Fletcher-Cooke, Charles (Darwen)

Loveys, W. H.

Tilney, John (Wavertree)

Foster, Sir John

Lucas, Sir Jocelyn

Turton, Rt. Hn. R. H.

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

McAdden, Sir Stephen

Tweedsmuir, Lady

Fraser, Ian (Plymouth, Sutton)

MacArthur, Ian

van Straubenzee, W. R.

Gammans, Lady

Maclean, Sir Fitzroy

Vaughan-Morgan, Rt. Hn. Sir John

Gardner, Edward

Macleod, Rt. Hn. lain

Walder, David (High Peak)

Gibson-Watt, David

McMaster, Stanley

Walker, Peter (Worcester)

Giles, Rear-Admiral Morgan

McNair-Wilson, Patrick

Walker-Smith, Rt. Hn. Sir Derek

Gilmour, Ian (Norfolk, Central)

Maddan, W. F. M.

Wall, Patrick

Gilmour, Sir John (East Fife)

Maginnis, John E.

Walters, Dennis

Glover, Sir Douglas

Maude, Angus

Weatherill, Bernard

Glyn, Sir Richard

Maudling, Rt. Hn. Reginald

Webster, David

Godber, Rt. Hn. J. B.

Mawby, Ray

Wells, John (Maidstone)

Goodhart, Philip

Maxwell-Hyslop, R. J.

Whitelaw, William

Goodhew, Victor

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

Williams, Sir Rolf Dudley (Exeter)

Gower, Raymond

Meyer, Sir Anthony

Wills, Sir Gerald (Bridgwater)

Grant, Anthony

Mills, Stratton (Belfast, N.)

Wilson, Geoffrey (Truro)

Grant-Ferris, R.

Miscampbell, Norman

Wise, A. R.

Gresham Cooke, R.

Mitchell, David

Wolrige-Gordon, Patrick

Grieve, Percy

Monro, Hector

Wood, Rt. Hn. Richard

Griffiths, Eldon (Bury St. Edmunds)

More, Jasper

Woodhouse, Hon. Christopher

Griffiths, Peter (Smethwick)

Morgan, W. G.

Woodnutt, Mark

Gurden, Harold

Morrison, Charles (Devizes)

Wylie, N. R.

Hall, John (Wycombe)

Mott-Radclyffe, Sir Charles

Yates, William (The Wrekin)

Hall-Davis, A. G. F.

Munro-Lucas-Tooth, Sir Hugh

Younger, Hn. George

Hamilton, Marquess of (Fermanagh)

Murton, Oscar

Hamilton, M. (Salisbury)

Neave, Airey

TELLERS FOR THE AYES:

Harris, Frederic (Croydon, N.W.)

Nicholls, Sir Harmar

Mr. Martin McLaren and

Harris, Reader (Heston)

Nugent, Rt. Hn. Sir Richard

Mr. Francis Pym.

Harrison, Brian (Maldon)

Onslow, Cranley

1280

1281

NOES

Abse, Leo

Greenwood, Rt. Hn. Anthony

Mellish, Robert

Albu, Austen

Gregory, Arnold

Mendelson, J. J,

Allaun, Frank (Salford, E.)

Grey, Charles

Mikardo, Ian

Alldritt, Walter

Griffiths, David (Rother Valley)

Millan, Bruce

Allen, Scholefield (Crewe)

Griffiths, Rt. Hn. James (Llanelly)

Miller, Dr. M. S,

Armstrong, Ernest

Griffiths, Will (M'chester, Exchange)

Molloy, William

Atkinson, Norman

Gunter, Rt. Hn. R. J.

Monslow, Waiter

Bacon, Miss Alice

Hale, Leslie

Morris, Alfred (Wythenshawe)

Bagier, Gordon A. T.

Hamilton, James (Bothwell)

Morris, Charles (Openshaw)

Barnett, Joel

Hamilton, William (West Fife)

Morris, John (Aberavon)

Beaney, Alan

Hamling, William (Woolwich, W.)

Mulley,Rt.Hn.Frederick(SheffieldPk)

Bence, Cyril

Harper, Joseph

Murray, Albert

Benn, Rt. Hn. Anthony Wedgwood

Harrison, Walter (Wakefield)

Neal, Harold

Bennett, J. (Glasgow, Bridgeton)

Hart, Mrs. Judith

Newens, Stall

Binns, John

Hattersley, Roy

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

Bishop, E. s.

Hazell, Bert

Norwood, Christopher

Blenkinsop, Arthur

Herbison, Rt. Hn. Margaret

Oakes, Gordon

Boardman H.

Hobden, Dennis (Brighton, K'town)

Ogden, Eric

Boston, Terence

Holman, Percy

O'Malley, Brian

Bottomley, Rt. Hn. Arthur

Horner, John

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

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

Houghton, Rt. Hn. Douglas

Orbach, Maurice

Boyden, James

Howarth, Harry (Wellingborough)

Orme, Stanley

Braddock, Mrs. E. M.

Howell, Denis (Small Heath)

Oswald, Thomas

Bradley, Tom

Howie, W.

Owen, Will

Bray, Dr. Jeremy

Hoy, James

Padley, Walter

Broughton, Dr. A. D. D.

Hughes, Cledwyn (Anglesey)

Page, Derek (King's Lynn)

Brown, Rt. Hn. George (Belper)

Hughes, Emrys (S. Ayrshire)

Paget, R. T.

Brown, Hugh D. (Glasgow, Provan)

Hughes, Hector (Aberdeen, N.)

Palmer, Arthur

Buchan, Norman (Renfrewshire, W.)

Hunter, Adam (Dunfermline)

Pannell, Rt. Hn. Charles

Butler, Herbert (Hackney, C.)

Hunter, A. E. (Feltham)

Pargiter, G. A.

Butler, Mrs. Joyce (Wood Green)

Hynd, H. (Accrington)

Park, Trevor (Derbyshire, S.E.)

Callaghan, Rt. Hn. James

Hynd, John (Attercliffe)

Parker, John

Carmichael, Neil

Irvine, A. J. (Edge Hill)

Pavitt, Laurence

Carter-Jones, Lewis

Jackson, Colin

Pearson, Arthur (Pontypridd)

Castle, Rt. Hn. Barbara

Janner, Sir Barnett

Peart, Rt. Hn. Fred

Chapman, Donald

Jay, Rt. Hn. Douglas

Pentland, Norman

Coleman, Donald

Jeger, George (Goole)

Perry, Ernest G.

Conlan, Bernard

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

Popplewell, Ernest

Corbet, Mrs. Freda

Jenkins, Hugh (Putney)

Prentice, R. E.

Cousins, Rt. Hn. Frank

Jenkins, Rt. Hn. Roy (Stechford)

Price, J. T. (Westhoughton)

Craddock, George (Bradford, S.)

Johnson, Carol (Lewisham, S.)

Probert, Arthur

Crawshaw, Richard

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

Pursey, Cmdr. Harry

Cronin, John

Jones, Dan (Burnley)

Randall, Harry

Crosland, Rt. Hn. Anthony

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

Rankin, John

Crossman, Rt. Hn. R. H. S.

Jones, J. Idwal (Wrexham)

Redhead, Edward

Cullen, Mrs. Alice

Jones, T. W. (Merioneth)

Rees, Merlyn

Dalyell, Tam

Kelley, Richard

Reynolds, G. W.

Darling, George

Kenyon, Clifford

Rhodes, Geoffrey

Davies, C. Elfed (Rhondda, E.)

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

Richard, Ivor

Davies, Harold (Leek)

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

Roberts, Albert (Normanton)

Davies, lfor (Gower)

Leadbitter, Ted

Roberts, Goronwy (Caernarvon)

Davies, S. 0. (Merthyr)

Ledger, Ron

Robertson, John (Paisley)

Delargy, Hugh

Lee, Rt. Hn. Frederick (Newton)

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

Dell, Edmund

Lee, Miss Jennie (Cannock)

Rodgers, William (Stockton)

Dempsey. James

Lever, Harold (Cheetham)

Rose, Paul B.

Diamond, Rt. Hn. John

Lever, L. M. (Ardwick)

Ross, Rt. Hn. William

Doig, Peter

Lewis, Arthur (West Ham, N.)

Rowland, Christopher

Donnelly, Desmond

Lewis, Ron (Carlisle)

Sheldon, Robert

Driberg, Tom

Lipton, Marcus

Shore, Peter (Stepney)

Duffy, Dr. A. E. P.

Lomas, Kenneth

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

Dunn, James A.

Loughlin, Charles

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

Dunnett, Jack

Mabon, Dr. J. Dickson

Silkin, John (Deptford)

English, Michael

McCann, J.

Silkin, S. C. (Camberwell, Dulwich)

Ennals, David

MacColl, James

Silverman, Sydney (Nelson)

Ensor, David

MacDermot, Niall

Skeffington, Arthur

Evans, Alhert (Islington, S.W.)

McGuire, Micheel

Slater, Mrs. Harriet (Stoke, N.)

Evans, loan (Birmingham, Yardley)

Mclnnes, James

Slater, Joseph (Sedgefield)

Finch, Harold (Bedwellty)

McKay, Mrs. Margaret

Small, William

Fitch, Alan (Wigan)

Mackenzie, Gregor (Rutherglen)

Smith, Ellis (Stoke, S.)

Fletcher, Sir Eric (Islington, E.)

Mackie, John (Enfield, E.)

Soskice, Rt. Hn. Sir Frank

Fletcher, Ted (Darlington)

McLeavy, Frank

Sprlggs, Leslie

Fletcher, Raymond (Ilkeston)

MacMillan, Malcolm

Stonehouse, John

Floud, Bernard

MacPherson, Malcolm

Stones, William

Foley, Maurice

Mahon, Peter (Preston, S.)

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

Foot, Sir Dingle (Ipswich)

Mahon, Simon (Bootle)

Stross,SlrBarnett(Stoke-on-Trent,C.)

Foot, Michael (Ebbw Vale)

Mallalieu, E. L. (Brigg)

Summerskill, Hn. Dr. Shirley

Fraser, Rt. Hn. Tom (Hamilton)

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

Swain, Thomas

Freeson, Reginald

Manuel, Archie

Swingler, Stephen

Galpern, Sir Myer

Mapp, Charles

Symonds, J. B.

Garrett, W. E.

Marsh, Richard

Taylor, Bernard (Mansfield)

Garrow, Alex

Mason, Roy

Thomas, George (Cardiff, W.)

Ginsburg, David

Maxwell, Robert

Thomas, lorwerth (Rhondda, W.)

Gourlay, Harry

Mayhew, Christopher

Thomson, George (Dundee, E.)

1282

1283

Thornton, Ernest

Wellbeloved, J.

Wilson, Rt. Hn. Harold (Huyton)

Tinn, James

Wells, William (Walsall, N.)

Wilson, William (Coventry, S.)

Tomney, Frank

White, Mrs. Eirene

Winterbottom, R. E.

Tuck, Raphael

Whitlock, William

Woodburn, Rt. Hn. A.

Urwin, T. W.

Wigg, Rt. Hn. George

Woof, Robert

Varley, Eric G.

Wilkins, W. A.

Wyatt, Woodrow

Wainwright, Edwin

Willey, Rt. Hn. Frederick

Zilliacus, K.

Walker, Harold (Doncaster)

Williams, Alan (Swansea, W.)

Wallace, George

Williams, Clifford (Abertillery)

TELLERS FOR THE NOES:

Warbey, William

Williams, Mrs. Shirley (Hitchin)

Mr. Sydney Irving and

Watkins, Tudor

Williams, W. T. (Warrington)

Mr. George Lawson.

Weitzman, David

Willis, George (Edinburgh, E.)

Main Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, as follows:
Most Gracious Sovereign,
We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
To be presented by Privy Councillors or Members of Her Majesty's Household.

ECONOMIC AFFAIRS
  Committee to consider of the Supply to be granted to Her Majesty, Tomorrow. —[Mr. Short.]
  Committee to consider of the Ways and Means for raising the Supply to be granted to Her Majesty, Tomorrow. [Mr. Short.]

CENSUS OF DISTRIBUTION
10.15 p.m.
The Minister of State, Board of Trade (Mr. George Darling)The Minister of State, Board of Trade (Mr. George Darling) rose—
Mr. Speaker: Order. Will hon. Members leave the Chamber quietly?
Mr. Darling: I beg to move.
That the Census of Distribution (1967) (Restriction on Disclosure) Order 1965, a draft of which was laid before this House on 22nd July, in the last session of Parliament, be approved.
This Order relates to the Census of Distribution which is to be taken by the Board of Trade in 1967 in respect of trade done in 1966. It is concerned with one limited aspect of that census—the non-disclosure of information about particular undertakings. Under the Statistics of Trade Act, disclosure of particulars about individual undertakings is generally prohibited, but there are exceptions. The President of the Board of Trade may direct information to be passed to other Government Departments for the purpose of exercising their functions and information may also be disclosed for the purpose of proceeding in respect of offences under the Statistics of Trade Act.
The Act empowers the Board of Trade to impose further restrictions on the disclosure of information about particular undertakings, and the present Order is submitted as a proposed exercise of those powers. In effect, it prohibits the disclosure of information obtained from individual undertakings to other Government Departments except with the written permission of the firms concerned. It does this by prohibiting all disclosure of information about particular undertakings except for the immediate purpose of census returns and for the purpose of prosecuting offences under the Act, for instance the furnishing of false returns. In this way everyone can be sure that the information which they give will be treated in the strictest confidence. The Order is on the same lines as those made in connection with all the three previous censuses, and I therefore hope that the House will approve it.
10.18 p.m.
Mr. Patrick Jenkin: It is comforting that my first appearance at the Dispatch Box should
1286
be on a matter which is wholly uncon-troversial and should also be accompanied by the virtue of total evacuation of the Chamber.
As the Minister of State said, this Order is confined to one very limited aspect of the provisions of the Statistics of Trade Act, 1947, but I agree with him that it is a very important aspect. It is interesting to note that on the last two occasions on which very similar Orders were debated before the censuses took place, the debates were extremely short, in no case exceeding more than half a column of the OFFICIAL REPORT, and on one occasion the Order went through this House on the nod. I will, therefore, be extremely brief.
There is a need, indeed a growing need, for full, up-to-date and accurate statistics of trade. Whatever one's view may be on central Government planning, everyone must agree that there is a need for more information in our modern and highly complex economy. It is, therefore, of the highest importance that the business community should co-operate to the full in giving this information, because it is they and only they who have it within their power to provide this information. They are the only source of the figures upon which this information may be based. This applies particularly to distribution. The 1961 census showed that there were nearly 600,000 different establishments carrying on a trade to a value of nearly £9,000 million and employing over 2½ million people—by far the biggest sector of our economy. If this cooperation from the business community is to be procured, the figures which they provide must be treated as confidential. Indeed, I would say that not only must they be treated as confidential; they must manifestly be known to be treated as confidential.
Section 9(1) of the 1947 Act allowed disclosure to other Government Departments. As the Minister of State said, subsection (3) gave the Board of Trade power by Order to extend this restriction, and this is what the Order which we are debating in fact does. There is to be no disclosure of individual returns except for the purpose of taking the census and providing any report or survey following on it. That seems to me to be absolutely right. I would say that it is essential.

1287
But I have for the Minister of State— and I should be grateful if he would deal with them—one question and one request. The question is this: Section 9(5) of the 1947 Act deals with the use of the information provided by the census for the purpose of preparing reports, summaries and other communications to the public. That subsection, too, provides the restrictions which must be observed. In the first place, there is to be no disclosure about concerns if the number of returns is fewer than five. The reason for this is obvious: it would give away information, possibly valuable commercial information, to competitors. Secondly, there must be no identification of the particulars relating to any one person or undertaking.
This is the question which I should be most grateful if the Minister of State would answer: would he confirm that the Order which we are discussing in no way overrides the provisions of subsection (5). Paragraph 1(a) of the Order provides for one of the exceptions to the rule against disclosure
"for the purpose of preparing or providing, in relation to or in connection with that census, any survey, report, summary or other communication required by fee said Act.—"
I am sure that this is right, but I should be grateful for his confirmation that the restrictions to which I referred, contained in subsection (5), are in fact left entirely unaffected, that they still stand and will apply.
My request is for an assurance, which I am certain the hon. Gentleman is able to give, that the requirements both of the Act and of the Orders passed under it are strictly observed in practice. I am sure that this is so but it is right that it should be publicly stated by a Minister at the Department responsible and should be stated on the Floor of this House.
The whole exercise rests on trust— the trust which those who make the returns have in the secrecy with which those returns are treated—and they are
1288
entitled to be reassured publicly that their trust is indeed well placed.
With these few remarks, I conclude by welcoming the Order as a necessary and entirely proper piece of machinery relating to the forthcoming census of distribution.
10.23 p.m.
Mr. Darling: With permission, Mr. Deputy Speaker, I will reply to the hon. Gentleman, but to begin with I should like to congratulate him on his first appearance at the Dispatch Box. I think that over the years ahead he and I will be facing each other in some capacity or other, but from our present positions, and no doubt we shall cross swords about many contentious things. But this Order is non-contentious. The hon. Gentleman asked for an undertaking about what will happen under subsection (5). I give him a categorical assurance that the provisions under that subsection will be scrupulously observed in the preparation of the reports, as in the past.
I also welcome this opportunity on the Floor of the House to make it clear to the traders that there will be no disclosure of individual information that would identify firms or any disclosure of information outside the scope of the Act and the Order. In addition, when we have the Order in operation—and this is the purpose of the exercise—it will enable the Board of Trade to give traders who receive the forms for the census the strongest possible assurance that their returns will be treated in the strictest confidence.
Thus, we are giving them two public assurances. The first is in this House through the opportunity that the hon. Gentleman has given us and the other will be in the forms sent out.
Question put and agreed to.
Resolved,
That the Census of Distribution (1967) (Restriction on Disclosure) Order 1965, a draft of which was laid before this House on 22nd July, in the last Session of Parliament, be approved.

ANTI-DUMPING ORDER (SACCHARIN)
10.27 p.m.
The Minister of State, Board of Trade (Mr. George Darling): I beg to move,
That the Anti-Dumping Duty Order 1965 (Si, 1965, No. 1599), dated 16th August 1965, a copy of which was laid before this House on 23rd August, in the last Session of Parliament, be approved.
I hope; that this Motion will be equally non-contentious.
This Order has been made under the Customs Duties (Dumping and Subsidies) Act, 1957, and is concerned with saccharin, an artificial sweetener mainly used in the production of soft drinks. Hon. Members may not have appreciated that. I understand that the saccharin that we who are trying to slim put in our tea or coffee forms a fairly small part of total consumption.
The Order imposes anti-dumping duties of l0d. per lb, on saccharin originating in Japan and 5s. per lb. on saccharin originating in the Republic of Korea. In accordance with normal practice, the Order also provides for importers to obtain relief from the duties under Section 3 of the Act in respect of consignments which the importers can show are not dumped or are not dumped to the full extent of the duty.
As the House knows, before duties can be imposed under the Act the Board of Trade must be satisfied not only that dumping is taking place but also that it is causing or threatening material injury to a British industry and that the antidumping action would be in the national interest. In this case, the application was made by Boots Pure Drug Company Ltd., and Monsanto Chemicals Ltd., which are responsible for all the saccharin produced in Britain.
When the Board of Trade was satisfied that there was prima facie evidence that imports from Japan and the Republic of Korea were dumped and were threatening material injury, a public announcement was made on 5th March inviting representations from interested parties. Then, after a detailed investigation, in which all the evidence submitted was fully taken into acount, my right hon. Friend the President of the Board of Trade was satisfied that imports of
1290
saccharin originating in Japan and the Republic of Korea were dumped, that these dumped imports constituted a clear and imminent threat of material injury to the British industry and that the imposition of anti-dumping duties would be in the national interest.
The House will appreciate that it is impossible to give detailed reasons for our findings, since these were based on commercial and financial information given to the Board of Trade in the strictest confidence, and, in the same way as the previous Order imposed confidence upon us, so it is with this operation. But I assure the House that the Board has investigated the case very carefully, including the costs and returns of the British producers, and is satisfied that, if no action had been taken, the British industry would have had to make substantial and seriously uneconomic price reductions in order to avoid losing a large part of the domestic market to dumped imports. The duties came into force under this procedure on 24th August. In announcing the decision, the Board of Trade gave a general warning that if imports of saccharin originating in other countries were found to be dumped, they, too, would be liable to anti-dumping action.
10.30 p.m.
Mr. Peter Emery: I join with the Minister of State in congratulating my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) on his first appearance at the Dispatch Box. There are many hon. Members who would have been only too delighted to have made the progression from back benches to the Dispatch Box in 12 months, that is to say, as quickly as my hon. Friend. I, too, expect to be crossing swords with the Minister of State for a number of years, but I believe that his hope about present positions is an artificial sweetener. He is much more likely to find himself on this side of the House than staying where he is.
Can the Minister tell the House approximately how much of the saccharin and salts had been brought into the country, or, if that is confidential information, the approximate percentage of overall production? That is important so that it can be seen that anti-dumping action is taken only when

1291
necessary and not when imports are just a small irritation to domestic producers.
There seems to be a vast divergence between the rates of duty. Can the Minister say that the rates of duty are likely to bring the products of the two countries concerned to approximately the same sale price once unloaded in this country?
The obvious thing about the Order is that the Government are following a policy brought about by the Conservative Government, but as a bipartisan policy, to ensure that there should be no unfair dumping of chemicals in this country. The policy was in furtherance of the British chemical industry, but neither side wants to ensure that we build up barriers or that there is featherbedding or protection. We on this side of the House would not want that in any way. If we can have answers to my questions, we shall be more than happy to support the Order.
Mr. Darling: By leave of the House; I do not think that giving the percentage of saccharin and salts which are dumped as against total production in this country would meet the case. This is industrial saccharin and not that which is sold retail to domestic consumers. The method of selling is on contract a long period ahead. The difficulty which the industry faced was the prospect of further dumping when contracts were being made over a period of time. I do not have the figures with me in a form in which they could be disclosed, but we might be able to answer the hon. Gentleman's question in a way which does not disclose confidential information, and I will certainly look into that.
The reason for the difference between the two duties is quite simple. It is the different margins by which the imports from the two countries were found to be dumped. In other words, it is due to the difference between the Japanese and the Korean domestic and export prices. The third point is really a question of efficiency of the industry. Because there is an element of monopoly
1292
here, the Board of Trade has looked into this very carefully indeed.
Mr. Peter Emery: Duopoly.
Mr. Darling: The hon. Member can put it that way if he likes. I have always found, when there are two firms, that it is best to talk of monopoly, but I will not quarrel with the hon. Member. Because there is this duopoly, or monopoly, the Board of Trade has looked at the efficiency of the industry very carefully, particularly its cost of production, and the prices which it charges. We have no reason at all to believe that British producers are not efficient. They are constantly improving their plant—and we have evidence of this. We have had to take some measurement as to what the prices should be, but we understand that the saccharin prices in this country are just about the same as those in the United States of America, and we thought that, in view of the American industry's efficiency, this was a good yardstick.
I am quite confident, from the discussions the Board of Trade has had with the two firms concerned, that they are not hiding behind this anti-dumping law and that nothing will be done by either firm to increase prices to the consumer. The whole purpose of the exercise is to keep prices stable, and thus to see if benefits can be passed on to the customer by the increasing efficiency of the two firms. I am sure that from the assurances that we have had we need have no qualms about this.
Question put and agreed to.
Resolved,
That the Anti-Dumping Duty Order 1965 (S.I., 1965, No. 1599), dated 16th August 1965, a copy of which was laid before this House on 23rd August, in the last Session of Parliament, be approved.

ANTI-DUMPING ORDER (SACCHARIN)

  UNIVERSITIES (SCOTLAND) BILL
  Order for Second Reading read.
  Bill referred to the Scottish Grand Committee.—[Mrs. Hart.]

PORTBURY DOCK SCHEME
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fitch.]
10.38 p.m.
Mr. Martin McLaren: Portbury is a place in the constituency of my hon. Friend the Member for Somerset, North (Mr. Dean) and I have naturally consulted him before initiating this debate. I am the Member for Avonmouth, one of the dock Members on this side of the House. The Port of Bristol Authority, which owns the Avon-mouth Docks, has made a proposal for the construction of a new dock system across the River Avon at Portbury, which would mean an extension of Avonmouth and of the Port of Bristol.
This scheme is technically a "harbour scheme", within the meaning of the Harbours Act, 1964 and it is necessary to apply for, and to obtain the consent of, the Minister of Transport to it. My object in raising the matter is to ask for that consent, and to ask for it without delay. May I first set out the national advantages which I believe the scheme has to offer?
In the first place, it will offer exceptional communications by motorway. It will be on the M.5, the Birmingham to Exeter motorway, close to its junction with the M.4, London to South Wales motorway, and there will be excellent motorway communications to the Midlands and to the North, to South Wales over the Severn Bridge, and to London and the Home Counties. The result of this is that the hinterland of the port, that is, the area to and from which trade will be attracted, will be much wider than anything that the Port of Bristol has hitherto commanded, and this means that our export potential will be increased. A quick traffic flow will be assured. One can envisage quite a new situation such as we have never before seen in this country, of heavy lorries flowing along the motorways through the countryside right into the dock system instead of having to thread their way through congested streets, as they would have to do, for example, in the case of any of the South Wales ports.
Secondly, a new port on this side of the country should draw off traffic which
1294
ought naturally to flow in that direction, but which at present clogs the London docks and contributes to the heavy traffic problem in the London area. Thirdly, Bristol has the advantage over London of about 200 miles shorter distance on all ocean routes.
Fourthly, Portbury would be a natural part of the development plan for the South-West. Bristol is becoming a regional centre and is developing rapidly as an administrative and commercial headquarters, and decentralisation from London would be assisted. Fifthly, at Portbury there is available undeveloped meadowland offering a unique opportunity for the layout of a new dock on the most modern lines, with plenty of space for further development and for all the ancillary purposes and industrial trading estates which should be associated with a modern dock.
Mr. Paul Dean: Would my hon. Friend agree also that there is a very substantial residential development not very far away from the proposed dock and that another very good reason for an early decision on this is that the people who live in this vicinity are extremely worried about their future prospects in the state of indecision which exists at the moment?
Mr. McLaren: I quite agree with my hon. Friend. He has made a perfectly valid point. People who live in that part of the world naturally want to know what will happen. That is why we are pressing for an early decision.
I was saying that this really ought to be a planners' paradise, untrammelled by any kind of existing development. It is essential for a modern port to have ample space for assembly areas, for components and unitised loads, particularly in the export trade. Portbury offers two or three times as much space per berth as some other projects, and yet Portbury would have the advantage of being close to Avonmouth with its existing supply of skilled dock labour and efficient port management. The whole scheme is the brain child of a port authority with an assured record of success behind it. So that in that way one would combine the asset of the open countryside with the asset of having a complex of facilities needed by an efficient port.

1295
Sixthly, the undertaking would be financially self-supporting and would cast no burden on the rates or on the Exchequer. I hope that this list will show how many advantages the scheme possesses.
Now I turn, briefly, to the past history of the matter. I will take as my starting point the appointment in 1961 of the Rochdale Committee by my right hon. Friend the Member for Wallasey (Mr. Marples). That Committee reported in July, 1962. One of the main points which it brought out was the need for a properly planned programme of port development which could provide additional deep-water berths, in view of the rapidly increasing size of ships.
In the Bristol Channel, one of the facts of geography from which one cannot escape is that the deep water happens to run close to the Somerset side, whereas on the South Wales side it is shallow, and a great deal of dredging would be needed for a dock to accommodate large modern ships. This is a main reason why the dock development should go to Portbury rather than to any of the South Wales ports. The fears which have been expressed in South Wales about Portbury have been misplaced because surely a successful Portbury will bring prosperity to the whole region and to both sides of the Bristol Channel.
I now look at the way in which the point about deep-water berths was expressed in the Rochdale Committee Report. I quote from paragraphs 616 and 617:
"One thing that seems to us beyond doubt— we make no apology for repeating this—is that this country needs more deep water berths. … There is a danger that British ports will become inadequate to cater for modern vessels which … are steadily increasing in size; indeed, their adequacy is already in doubt. The seriousness of this danger cannot be overemphasised."
The Committee went out of its way to say some agreeable things about the port of Bristol.It said:
"Bristol has expanded its trade considerably in recent years and we should like to pay tribute to this achievement which reflects great credit on the zeal and efficiency of the Authority itself and its permanent staff. One of the results of their enterprise is that the port's deep water berths are working at or near capacity already. There is a prospect of even
1296
more business in the area, including an increase in exports, as a result of such developments as the improvement of road communications with the Midlands and I.C.I.'s new petro-chemicals plant at Severnside, north of Avonmouth. This has led the port authority to consider providing completely new dock facilities at Portbury on the Bristol Channel between Avonmouth and Portishead."
Following the main recommendations of that Committee, the National Ports Council was set up and the Harbours Act was passed. It was to the National Ports Council that the report on the Portbury scheme was submitted by Bristol in May, 1964, 18 months ago. Later some further information was asked for by the Council and eventually, in July this year, the scheme was included with a favourable recommendation in the interim plan for port development submitted by the National Ports Council to the Minister.
This is my best quotation, the blessing of the National Ports Council, which is to be found in paragraph 139 of its interim plan. It says:
"The proposal for constructing a new dock at Portbury is the subject of a separate submission by the Council to the Minister of Transport, in which the Council recommend that the Minister's approval for the scheme should be given. The Council are of the opinion that the advantages of the scheme are that it would produce a number of really deep water berths at which completely new facilities could be constructed incorporating modern ideas, that development at Bristol would provide useful relief for the pressures on London and Liverpool which can be expected to emerge by the time that the first stage of the Portbury scheme can be brought into operation, and that the new dock would have unrivalled road communications when the Severn Bridge, M4 and M5 are complete."
In the synopsis the interim plan says:
"In the Council's view the schemes …"
Schemes including Portbury—
"are urgently necessary and should go ahead as quickly as possible. Even so it will be some time before many of them bear fruit. It is virtually certain that additional schemes will have to be put forward during the next few years as the need for improved and extended port facilities becomes more clearly seen."
This warning is added:
"The Council are satisfied that there is no danger of over-investment in these proposals. The arrears are serious and the prospective growth of traffic considerable."
In the National Plan—which is the holy of holies—the interim plan is adopted and accepted. The Plan states that major

1297
investment in 14 ports, including Port-bury, has been recommended and adds:
"Much other investment will also be needed ".
That implies that the programme for at least 14 ports can go forward without delay.
Against that background we had every reason to think that the approval of the Minister would shortly follow, but our complaint is that it has still not been given. The National Ports Council is the body set up by the Government to be experts on the subject. It has gone into all these schemes in great detail— from a financial, economic and commercial point of view—and has assessed the relative merits of one scheme against another.
I suggest that one may apply the homely maxim; if one has a dog one need not bark oneself. In other words, if the work has already been done by the National Ports Council, why should the Government go all over it again? Meanwhile, what has been happening since the interim plan was submitted? What was going on all through July, August, September, October and November and how much longer must we wait?
In a recent Answer to a Question from my hon. Friend the Member for Bristol, West (Mr. Robert Cooke), it was stated that it was hoped to announce a decision shortly. The word "shortly" is a favourite with civil servants and in their vocabulary it means "Whenever we feel inclined ". It might mean a week or a year.
There are urgent reasons why early approval should be given. The longer the Government delay the more we will have to face increasing costs and competition for the technical resources, which will be strained to the limit in coping with all the major works recommended in the interim plan and which will be going on more or less simultaneously.
Avonmouth is now bursting at the seams, so to speak, and there is not an acre of land available for further development on that side of the river. It is all the more important, therefore, that we should have Portbury to cope with our expanding trade. The trend towards larger bulk carriers—of 30,000 tons or more— means that these ships are too large to get through the lock gates at Avon-
1298
mouth or to be accommodated anywhere in the existing port.
We are not supposed to know what goes on while the Government are considering the matter, but I can lift the veil to some extent and tell the House that an inter-departmental committee was set up, with representatives of the Ministry of Transport, the Department of Economic Affairs, the Board of Trade and the Treasury, and that they have been examining the project in a somewhat leisurely style, asking the National Ports Council at intervals for further statistics. We know what happens at these sort of meetings. At the end of them they get out their diaries, find there is no early day convenient to them all and a date two or three weeks further on is fixed.
That sort of thing is not good enough. These were not the methods which made Bristol the city of merchant adventurers in the past.
Mr. Robert Cooke: Hear, hear.
Mr. McLaren: It is a shame that our initiative and enterprise should be shackled by this lack of decision in Whitehall. Indignation is mounting in Bristol in all quarters—in the Chamber of Commerce and even in the Government's own recently appointed Regional Economic Planning Council, the chairman of which, Professor Tress, was recently reported as saying that he and his colleagues had not accepted membership just for the fun of drawing up plans which were not likely to be turned into action. The Press has been critical. The time has come when we demand and deserve a decision.
It all comes back to what was referred to in yesterday's debate—the inability of the Minister of Transport to take decisions. As my right hon. Friend the Member for Ashford (Mr. Deedes) put it, the Minister of Transport has been overtaken by events and is not even aware of that fact. He ought to recapture the power to make decisions, or he should go. The whole national Press sees him as one of the weakest links in the Treasury Bench chain. To do justice to an old friend of mine, the Parliamentary Secretary, I believe that he would do the job a lot better himself.
10.56 p.m.
Mr. W. A. Wilkins: I imagine that this is one of those rare

1299
occasions when hon. Members representing the Bristol constituencies find themselves in some degree of harmony. In that remark I might include the hon. Member for Somerset, North (Mr. Dean) and the hon. Member for Weston-super-Mare (Mr. Webster). I do not know whether the hon. Member for Weston-super-Mare wants us to build deep-water docks there; if so, a lot of mud will have to be cleared out of the way. Nevertheless, we welcome his interest.
I do not at all dissent from the statements of the hon. Member for Bristol, North-West (Mr. McLaren), but I have always had some doubt about the best way of achieving what one really wants. I believe that one can press a Minister so hard as to make him commit himself to just the kind of thing one does not want. In other words, I have usually thought it better to go about things quietly rather than bring them into the light of day.
The former Minister of Transport, the right hon. Member for Wallasey (Mr. Marples), presented the Rochdale Report to this House almost with a flourish of trumpets. Strangely enough, after all the criticism to which we have listened in the last few days about planning, the right hon. Gentleman referred to that Report as a major national plan. I have with me the notes I made on that occasion, among which the following appears: "When someone is converted to a new faith he strangely becomes more fervent than the missionaries who converted him." That was my comment on the Minister's presentation of the Rochdale Report.
My hon. Friend the Parliamentary Secretary can take it as perfectly true that there is concern—a sort of restlessness amounting almost to anxiety—in the City of Bristol about this development we want at Portbury. Some of that concern arises from the fact that the Bristol Channel—or the estuary, as the Rochdale Report calls it—ports such as Liverpool have suddenly come to life when they have seen the possibilities of some proposal for new deep-water berths, which the Report emphasise again and again are a vital necessity for our economic needs in the exporting and importing of goods.
1300
It is rather surprising that such ports should now be making representations to my right hon. Friend and telling him how very well suited they are for the provision of deep-water berths. The people of Bristol feel just a little hurt about it, because we were making these plans five years ago. Five years ago, this scheme was on the drawing board. It is reasonable to suggest that, if it had not been for the Rochdale Committee's findings and the introduction of the Measure which vested authority in someone to suggest what the plan should be, it might well have been that Bristol would have presented this to the House of Commons and asked for permission to build these deep-water berths. It is almost certain that the Minister would have conceded that permission, had it not been for the promulgation of the new idea suggested by the Rochdale Committee.
I want to make only one reference to the Rochdale Report. Although it is only five lines, it is an all-embracing passage which emphasises or proves why Bristol is such a desirable place for these deep-water berths. I hope that it will be the full half-dozen and not merely two. Paragraph 62 of the Report says:
"In selecting particular ports for development certain factors must of course be borne in mind. e.g. the particular needs of certain areas, the absolute necessity of good communications, development potential "—
that is a very important factor in Port-bury—
"the cost of impounding and dredging, etc. One most important factor, as we have suggested in the previous paragraph, is the possibility of providing deep water berths."
In short, all these facilities are freely available in this area. There is no compensation to be paid. The land is there. Every opportunity for carrying through the project is there. There is no necessity for compensation. It is an ideal site for deep-water berths. I hope that the Minister will come to his decision very shortly.
11.2 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler): I was worried about getting over-generous to Bristol. First, I want to pay my tribute to the municipally owned port of Bristol. I yield to nobody in my admiration of successful public

1301
enterprise. We ought on all possible occasions to encourage successful public enterprise such as has been shown at Bristol. The hon. Member for Bristol, North-West (Mr. McLaren) speaks quite rightly against the perspective of grossly inadequate capital investment in ports and docks over the last few years. That is the basis from which this scheme springs. Under the previous Administration there was a totally inadequate rate of capital investment in ports and docks.
The case for Portbury, put by the hon. Member for Bristol, North-West and as recommended to us by the N.P.C., is an attractive case. We have urgently to consider it. It must not be assumed that it is a cast-iron case. There are other possibilities. My right hon. Friend, who is responsible for the policy of capital investment in ports and docks throughout the country, must consider and evaluate all possibilities. He must consider the relationship between the Portbury scheme as suggested and other ports in the area— for example, the South Wales ports. We must weigh the claims made by Cardiff. Some of the supporters of Cardiff maintain that that port could be developed into an up-to-date liner terminal at a cost many millions less than the Portbury scheme.
I am not tonight pronouncing on the merits of these various claims. What I am emphasising is that the Government would not be doing their duty if they did not very seriously examine all aspects of the differing proposals which are put forward.
The case for Portbury in essence is the need for a third major liner terminal port to help us in handling the large increase in our imports and exports which might otherwise keep London and Liverpool in a permanent state of congestion.
If we accept this need—I accept it— we must ask ourselves if Portbury is the right place to do it, if we should accept the recommendation of the N.P.C. There is Southampton, one of our most important passenger and cargo ports. Its claims cannot be overlooked. We have, with the
1302
Department of Economic Affairs and other Departments, to look at the recommendation made to us by the N.P.C, at future traffic trends, at road and rail access, at room for the development of facilities for handling traffic in containers, and so on. We have to study all these considerations in judging the various claims which are put forward and recommended to us by the N.P.C, which was the body appointed for the purpose.
The scheme for Portbury is undoubtedly imaginative and forward-looking. We do not doubt that it would meet an important need. Nor do we underestimate in any way the understandable impatience of Bristolians because of the time which has elapsed since the scheme was first put forward. To a large extent that has been because of the appointment of the National Ports Council and the reference of the scheme to that Council. But we have been considering the scheme only since July, a comparatively short time when one thinks of the commitment to a very large sum which we are considering. It is a very important capital investment which would commit us to a certain kind of development and no doubt exclude developments in other places.
This is therefore a decision of considerable magnitude, not to be under estimated when we think of the millionsof pounds which would be involved. It is natural that a few months are required to study the recommendations of the National Ports Council, to consult its experts and to establish the proper relationship between its recommendation and other recommendations. But there will not be very much delay, and nothing like the delay of years which there has been during which totally inadequate—
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at eight minutes past Eleven o'clock.

SCOTLAND
  National Health Service (Medical Certificates)
  National Health Service (Medical Certificates)
  Countryside Commission
  Countryside Commission
  Royal Hospital for Sick Children, Glasgow
  Royal Hospital for Sick Children, Glasgow
  Students (Awards)
  Students (Awards)
  A/
  A/
MINISTRY OF DEFENCE
  Phantom Aircraft
  Phantom Aircraft
  Strike Aircraft (Royal Navy)
  Strike Aircraft (Royal Navy)
  Leave Warrants (Great Britain and A.8 Northern Ireland)
  Leave Warrants (Great Britain and A.8 Northern Ireland)
  Naval Establishments, Petersfield
  Naval Establishments, Petersfield
  B.A.O.R. (Strength)
  B.A.O.R. (Strength)
  Army (Recruiting)
  Army (Recruiting)
  Overseas Graves (Visits by Relatives)
  Overseas Graves (Visits by Relatives)
  R.A.F., Church Fenton
  R.A.F., Church Fenton
ROADS
  Fog (Safety Precautions)
  Fog (Safety Precautions)
  Borrowash By-Pass
  Borrowash By-Pass
  M.1 Motorway Construction, West Riding of Yorkshire
  M.1 Motorway Construction, West Riding of Yorkshire
  Traffic Delays, London
  Traffic Delays, London
TRANSPORT
  Motor Vehicles (Spray)
  Motor Vehicles (Spray)
  Bad Weather (Speed Limits)
  Bad Weather (Speed Limits)
  Road Vehicle Brakes (Code of Practice)
  Road Vehicle Brakes (Code of Practice)
  Carriage of Iron Ore (Road and Rail)
  Carriage of Iron Ore (Road and Rail)
  Public Service Vehicles Certificates of Fitness (Appeals)
  Public Service Vehicles Certificates of Fitness (Appeals)
  Transport Holding Company (Acquisitions)
  Transport Holding Company (Acquisitions)
RAILWAYS
  High-speed Trains
  High-speed Trains
  Fixed Capital Formation
  Fixed Capital Formation
SHIPPING
  Docks and Stevedoring Services, Scotland
  Docks and Stevedoring Services, Scotland
POST OFFICE
  Envelopes (Standard Size)
  Envelopes (Standard Size)
  Christmas and New Year Cards (Postage)
  Christmas and New Year Cards (Postage)
  Postal Services, Leeds
  Postal Services, Leeds
  Postal Delays, Cambridge
  Postal Delays, Cambridge
TELEPHONE SERVICE
  Automatic Exchange, Ascot
  Automatic Exchange, Ascot
  Concessionary Charges
  Concessionary Charges
WIRELESS AND TELEVISION
  British Broadcasting Corporation (Programme Complaints)
  British Broadcasting Corporation (Programme Complaints)
AGRICULTURE, FISHERIES AND FOOD
  Ponies (Export)
  Ponies (Export)
  Water Resources Act, 1963 (Licences)
  Water Resources Act, 1963 (Licences)
  Industrial Effluent, The Hartlepools
  Industrial Effluent, The Hartlepools
HOME DEPARTMENT
  Abortion (Law Reform)
  Abortion (Law Reform)
  Disqualification from Driving (Variation of Order)
  Disqualification from Driving (Variation of Order)
  Prison Officers (Award for Injuries)
  Prison Officers (Award for Injuries)
  Magistrates' Courts Act, 1957
  Magistrates' Courts Act, 1957
  Commonwealth Immigrants (Crime Rate)
  Commonwealth Immigrants (Crime Rate)
  Immigration (Legislation)
  Immigration (Legislation)
HOUSING
  Privately-Owned Vacant Houses
  Privately-Owned Vacant Houses
LOCAL GOVERNMENT
  New Town Staffs (Pension Regulations)
  New Town Staffs (Pension Regulations)
MINISTRY OF AVIATION
  B.O.A.C. and Forte's Limited (Joint Company)
  B.O.A.C. and Forte's Limited (Joint Company)
LAND AND NATURAL RESOURCES
  Land Commission (Levy)
  Land Commission (Levy)
COLONIAL TERRITORIES
  Secretary of State's Responsibility
  Secretary of State's Responsibility
  PRICES AND INCOMES, NORTHERN IRELAND (ADVANCE NOTIFICATION)
  PRICES AND INCOMES, NORTHERN IRELAND (ADVANCE NOTIFICATION)
PENSIONS AND NATIONAL INSURANCE
  National Assistance (Commonwealth Immigrants)
  National Assistance (Commonwealth Immigrants)
GAS
  Gas Council (Membership)
  Gas Council (Membership)
COAL
  Mines (Losses and Closures)
  Mines (Losses and Closures)
PUBLIC BUILDING AND WORKS
  Restrictions on Building
  Restrictions on Building
BOARD OF TRADE
  Apples (Import Quota)
  Apples (Import Quota)
  North-East Scotland (European Trade)
  North-East Scotland (European Trade)
  Depopulated Areas, Scotland
  Depopulated Areas, Scotland

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark
The Earl of Cottenham—Took the Oath

KENYA: THE STAMP REPORT
2.35 p.m.
THE MARQUESS OF SALISBURY: 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—

(1) Whether any Report has yet been received from the Stamp Mission to Kenya;

(2) Whether it is intended to publish this Report;

(3) Whether Her Majesty's Government have decided in principle to adopt its recommendations as a basis for their future policy towards the European mixed farming community in Kenya.]

THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD WALSTON): My Lords, the Stamp Mission presented its Report on October 12. It is a confidential Report to Her Majesty's Government and will not be published. Her Majesty's Government believe that the broad conclusions of the Stamp Mission provide a sound basis for co-operation with the Kenya Government in dealing with the problems of land and agriculture. My right honourable friend the Minister of Overseas Development hopes to make an early Statement which will explain the reasons lying behind Her Majesty's Government's new offer to the Kenya Government which was announced on November 15 and which the Kenya Government has accepted. I hope to
558
place a copy of this Statement in the Library later in the week.
THE MARQUESS OF SALISBURY: My Lords, I am sure there must be many people who will regret that the Stamp Report is not to be published. After all, it is an important document and has a great bearing on the position of European farmers in Kenya. I should like to ask one question arising out of the latter part of the noble Lord's Answer. Are the farmers whose farms are to be taken over as part of the second million-acre scheme to be paid on the same basis as those whose farms are taken over under the first million-acre scheme?
LORD WALSTON: My Lords, the short answer to that is, Yes. The farms will be paid for on the basis of valuation, which will be carried out in the appropriate manner as agreed between the two Governments.
THE MARQUESS OF SALISBURY: But, my Lords, will they be taken over at a value based on the European profitability or on the African profitability of the farms concerned?
LORD WALSTON: My Lords, that is a matter for the valuers.
LORD HURD: My Lords, can the noble Lord tell us whether all the European farmers who wish to leave Kenya in the course of the next five years will now get the chance of having their farms taken over, at a fair and independent valuation, by the Kenya Government? Can he also say whether the sum of £18 million, which was mentioned by the Minister in the House of Commons yesterday as the total to be disbursed, is being found by the United Kingdom Government, or partly by the Government of Kenya?
LORD WALSTON: My Lords, the £18 million comes from Her Majesty's Government. Whether all the farmers who wish to leave will in the next four years be able to sell their farms is a question to which I cannot give a categorical answer. It depends on the valuation of the land of the farms by the valuers. It is, however, expected that something like 100,000 acres per year will be taken over during the next four years, and this is unlikely to cover the total amount of

559
mixed farms now in the hands of European farmers.
LORD OAKSHOTT: My Lords, is there in fact a second million-acre scheme at all? And does not the figure that the noble Lord's right honourable friend mentioned in another place indicate that the period of resettlement now involved is far too long: that it is at least twelve or fifteen years? Ought we not all to try to aim at a second million-acre scheme which would, I hope, be completed within five years and so give the people there greater security?
LORD WALSTON: My Lords, there is no mystical significance in a figure of one million, half a million, or two million acres. The object of the exercise is, in the first place, to promote the economic development of Kenya and, in the second place, to see that justice is done to the European farmers who will be giving up their land. Without in any way anticipating the Statement of my right honourable friend, I can say that it is natural that the speed of this development should be geared to the speed at which the land can be absorbed. I am sure the noble Lord will agree that it is far better to go rather more slowly and to hand over a smaller amount of land which will be properly utilised, with properly trained and equipped farmers, than to go in for a large fine-sounding scheme which will result in valuable assets being wasted?
LORD COLYTON: My Lords, may I ask the noble Lord whether it is not the fact that, in addition to the £18 million (or, as I understand it, £20 million) that is required for the purchase of the mixed farms, there is now an additional £15 million required for African resettlement which is essential to the success of the operation? Where is that money going to come from? Secondly, is it not a fact that the offers for farms have been, recently, so low that they are quite unacceptable, that they are often half the 1959 value, and that this is mainly due to political decisions by the British Government in 1960? Thirdly, if there is no organised scheme to cover the mixed farms as a whole with fair prices at the end, may there not be a breakdown of confidence among the European farmers which will lead to a scramble to
560
get out and a collapse of the economy of Kenya?
LORD WALSTON: My Lords, it is true that, in addition to the £18 million available for land and other development, there is a further commitment over the next four years of £11 million for general technical aid and other forms of aid. How that will be used is largely a question to be arranged between my right honourable friend's Department and the Kenya Government. It is also true that there are many European farmers who are not receiving, and have not received, offers for their land which they consider reasonable. Of course, if one is a hard-hearted believer in laissez faire, one can say that that results from the market mechanism. If they are unfortunate enough to have assets which other people do not at the moment want, or assets which those who do want them have not the money to pay a high price for, then they have, perhaps, to keep their assets or accept a lower price. We do not accept that entirely, and that is the reason why Her Majesty's Government are giving this very substantial sum of £18 million to help maintain a reasonable level of market prices for the land.
With regard to the third part of the noble Lord's question, I hope sincerely that there will not be a lack of confidence among those European mixed farmers who remain in Kenya. They are, as I know from experience, responsible and high-minded people. I think they realise that both the Keneya Government and Her Majesty's Government are acting to the best of their ability in this matter and holding the balance between their own just interests and ambitions and the interests of the Kenya Government and the development of Kenya, and the interests also of British taxpayers who, in the final analysis, have to foot a large part of the Bill.
LORD COLYTON: My Lords, the noble Lord, Lord Walston, has not answered one important question of mine. Is he not aware that this position is the result of political decisions by the British Government in 1960? Is it not a fact that the treatment of mixed farmers in Kenya is one of the things which has built up the apprehensions among the Rhodesian mixed farmers and others and led to the tragic situation which exists in Rhodesia to-day?
LORD WALSTON: My Lords, of course the situation does arise from a political decision of 1960: there is no doubt about that. While Her Majesty's present Government in no way wish to run away from the commitments entered into by previous Governments, it is true, as many noble Lords on both sides of the House continually point out to us, that we must safeguard the interests of the British taxpayer. We cannot throw out unlimited quantities of our taxpayers' money. We must act with discretion and hold this very difficult balance. With regard to the second part of the noble Lord's question it is true that there are some Rhodesian farmers who are frightened about what they think has been happening in Kenya. It is also true, as the noble Lord will remember, that many prominent Europeans, English Kenyans, have stated that those fears are entirely unwarranted, as the noble Lord will remember from the quotation read out by my noble and learned friend the Lord Chancellor in the debate a few days ago.
LORD COLYTON: I am sorry, my Lords, to pursue this point, but I am bound to ask the noble Lord whether he is not aware that that statement was made by the ranchers and by the plantation farmers and not by the mixed farmers, of whom 1,300 are now longing to get out of Kenya?
LORD WALSTON: My own information, very largely from personal sources, is that although some of the mixed farmers have left, many are prepared to go and some are anxious to go, it is not putting a true interpretation of the picture to say that there are now 1,300 English European mixed farmers who are anxious to get out of Kenya as quickly as possible. I think that would be giving a very false impression.
LORD COLERAINE: My Lords, when my noble friend Lord Salisbury asked whether the basis of compensation was to be on the basis of European profitability or African profitability, the noble Lord gave a reply which seemed to me,
562
and I think must seem to the whole House, to be most extraordinary—
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): Speech!
LORD COLERAINE: Does the noble Lord, Lord Walston, really mean that the only person who will decide on the basis of compensation will be the valuer? Does he really mean that the valuer will not be given any basis on which to act? Does he really mean that the Kenya Government will just wash its hands of the whole thing and leave it entirely to the valuer? He cannot mean that.
LORD WALSTON: No, my Lords, of course it is not as simple as that. The noble Lord, Lord Coleraine, knows perfectly well that there are many conflicting interests in this matter and it is a very complicated one. I do not wish to duck the question in any way, but I suggest that if the noble Lord would like to pursue what I agree is an important question, he might care to put down an Unstarred Question or raise the matter in some other way, so that we should have more time in which to discuss it.
LORD LLOYD: My Lords, may I ask one question arising out of what has been said? It is this. Does not the noble Lord think that this is really a matter of great embarrassment not only to Kenya farmers but to the Kenya Government? After all, it is essential from the point of view of the Kenya Government that more land is found for the Kikuyu. If more land must be found, and it is, I think, unreasonable to expect farmers to go without adequate compensation, does not the noble Lord think that he has raised a great problem for the Kenya Government?
LORD WALSTON: My Lords, I repeat the suggestion that I made to the noble Lord, Lord Coleraine. These are all involved and complicated questions which I suggest might be better dealt with at some other time than by means of a Starred Question to-day.

STANSTED AIRPORT DEVELOPMENT AND CHURCH COLLEGE
2.46 p.m.
THE LORD BISHOP OF ST. ALBANS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have considered the future of the Church College of Education at Hockerill (Herts.) which is situated less than three miles from the proposed runway of Stansted Airport; and whether, before deciding upon any development of this Airport, they will bear in mind the needs of the College of Education at Hockerill, which in accordance with Government educational policy, is in process of trebling its numbers, and of any other educational establishment in the immediate neighbourhood which would be affected by noise from the Airport.]
THE MINISTER OF DEFENCE FOR THE ROYAL AIR FORCE (LORD SHACKLETON): My Lords, a public inquiry into the proposal that Stansted should be developed as London's third major international airport will open on December 6 in Chelmsford. The primary purpose of this inquiry is to hear objections to the proposal, and evidence as to its effects on local interests; it will therefore be open to the ecclesiastical authorities to make their views known on matters such as that raised in this Question. A final Government decision on the proposed development of Stansted will be taken only in the light of the outcome of the public inquiry, and we shall certainly seek to take into account all relevant factors in reaching that decision.
THE LORD BISHOP OF ST. ALBANS: My Lords, I am grateful to the noble Lord, Lord Shackleton, for his reply. I wonder whether he has consulted the Department of Education and Science about the particular problem of this school, or if any further information must wait until the inquiry has been held?
LORD SHACKLETON: The Department of Education and Science is of course very well aware of this college
564
and the part it has played in increasing its numbers, but I think it would be right for the Church authorities themselves to make representations at the inquiry if they wish. It is open to them to do so. Although the closing date for those wishing to make representations was November 5, I am sure that no obstacle would be put in the way of the ecclesiastical authorities if they want to make representations.
LORD MERRIVALE: My Lords, would the noble Lord say what proposals the Government have with regard to improving the transport facilities between the centre of London and Stansted, which at the moment is most inaccessible as a third airport to serve the London area?
LORD SHACKLETON: My Lords, that does not arise out of this Question.

TENTS IN CARAVAN PARKS
2.50 p.m.
THE EARL OF CROMARTIE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will, within a reasonable period, introduce legislation to limit the number of teats at present allowed in unlimited numbers to occupy space in registered caravan parks where, by the Caravan Sites and Control of Development Act 1960, the number of caravans is strictly limited in the interests of public health.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY of LAND AND NATURAL RESOURCES (LORD MITCHISON): My Lords, tents placed on licensed caravan sites can already be regulated in the same way as caravans by conditions attached to the site licences. This power should be adequate, and my right honourable friends the Minister of Housing and Local Government and the Secretary of State for Scotland are not aware of any difficulties which have occurred where it has been used. I understand, however, that difficulties do occur when campers pitch their tents on land near to licensed caravan sites and make use of the site facilities on them. My

565
right honourable friends are now considering what steps can be taken to remedy this problem.
THE EARL OF CROMARTIE: My Lords, I thank the noble Lord for his Answer, which is partly satisfactory. I know that these regulations exist, but they are not effective, and I would ask Her Majesty's Government to consider this matter again, because the people responsible for health in my county and a very experienced medical officer of health have been alarmed at the state of affairs which is arising, and will arise, with the added number of people who come up to my part of the world every summer.
LORD MITCHISON: My Lords, I think that the regulations as to camp sites are primarily a matter for the local authorities, but if the noble Earl would let me have particulars of what he has been complaining about I will certainly see that they are investigated. There are really two questions—first of all, what is happening on the sites, and, secondly, what is happening near the sites? It is the latter that may need some consideration by the Ministers concerned.
THE EARL OF CROMARTIE: My Lords, I thank the noble Lord.
LORD BOOTHBY: My Lords, may I ask the noble Lord whether he does not think that the immediate solution to this problem is to prohibit the use of tents? They are very unhealthy.
LORD MITCHISON: No, my Lords. I personally meet a lot of people who camp in tents and they seem the better for it rather than the worse.

CLOCK ON B.O.A.C. OFFICES
2.53 p.m.
LORD AMULREE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will use their good offices to persuade B.O.A.C. to repair the clock on the central tower of their offices in Buckingham Palace Road or remove it altogether.]
LORD SHACKLETON: My Lords, I am told that the clock is not in need of repair. It has been stopped temporarily
566
while the stonework on the tower is being cleaned, because the movement of the very large hands might mean a danger to the men working in cradles on the tower.
LORD AMULREE: My Lords, I thank the noble Lord for his satisfactory reply, but I would ask him whether he will use his further good offices to get the work completed as quickly as possible, because it does not look a very good advertisement for B.O.A.C. when one sees that the clock on that big tower has stopped.
LORD SHACKLETON: My Lords, the noble Lord may well feel tempus irreparabile fugit, but I understand that the clock will be working again on November 29. I share his detestation of public clocks that are not working.
LORD AMULREE: My Lords, I would thank the noble Lord for his very satisfactory reply.
LORD PEDDIE: My Lords, can my noble friend give an assurance, in regard to B.E.A. as well as B.O.A.C., that there is no connection between the condition of their clocks and the standard of their flight time-keeping?
LORD SHACKLETON: My Lords, I think that that is another question.
TIME LORD BISHOP OF SOUTHWARK: My Lords, I wonder whether the noble Lord's Answer also applies to the clock at Westminster Abbey, which I understand has not worked for many years?
VISCOUNT BARRINGTON: My Lords, returning, finally, to the clock in question, may I ask whether it is operated by electric power and, if so, whether steps will be taken in time to make sure that it will operate without interruption?

POWER CUTS AND INDUSTRY
THE EARL OF DUNDEE: My Lords, I beg leave to ask Her Majesty's Government a Question of which I have given Private Notice—namely:
To ask Her Majesty's Government if they are aware of the effect which gas and electricity power cuts have now had on industrial firms and what action is being taken to remedy the situation?
LORD SORENSEN: My Lords, my noble friend Lord Shackleton hopes to make a Statement as soon as convenient after half past three, so perhaps the noble Earl will wait until then.
While I am on my feet, I would add that my noble friend Lord Shackleton also hopes to make a Statement this afternoon in regard to Spey engines for Phantom aircraft.
ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
2.56 p.m.
Debate resumed (according to Order) on the Motion moved on Tuesday, November 9, by Lord Francis-Williams—namely, That an humble Address be presented to Her Majesty as follows:—
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal, in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
LORD HASTINGS: My Lords, I apologise for not having my name on the list of speakers yesterday, when it might have seemed more appropriate that I should be on my feet, but your Lordships will remember that originally the debate on Home Affairs was to last only one day; then it was extended to two days. As there were a number of important speeches on housing yesterday, we thought it appropriate that I should say something on this subject at the start of proceedings this afternoon, although I realise that none of the speakers who will follow will be dealing with this subject. But the noble Lord, Lord Champion, indicated yesterday that the noble and learned Lord the Lord Chancellor would be prepared to say some words upon housing, if necessary, at the end of to-day's debate. Therefore, if I say anything with which he disagrees, it will be open to him to say so, and he will also be able to answer any questions which I may put to him. In view of the number of speakers, I should add that I do not intend to make a full-scale Front Bench speech. I shall be as brief as possible.
568
The noble Lord, Lord Champion, started off yesterday by describing the gracious Speech as a first-class programme for this Session of Parliament. My noble friend Lord Derwent indicated that more probably it was a first-class programme for a General Election. I hope that the Government will make up their minds about whichever it is, because if this is really to be the programme for this Session of Parliament, we have a lot of hard work ahead of us.
I should like to refer immediately to the remarks made by the noble Lord, Lord Silkin, on the Business of this House, and I am very glad that they were made. Obviously, if we are to get through at all, we must have Bills started in this House. There are plenty of precedents for this, including the Water Resources Bill, which I remember well. Your Lordships' House does its work efficiently and expeditiously. I would suggest that it is for the other place to do the same as we do. If, by any chance, we are refused the possibility of dealing with Bills in the first place, it can be due only to two reasons: a quite needless and foolish jealousy on the part of the other place—though I hope that such a feeling does not exist—or an act of deliberate cynicism towards this House on the part of the Prime Minister; and that would be unworthy of a man who is trying to build a national, as opposed to a purely Party, political image.
I was struck by another phrase used by the noble Lord, Lord Champion: he used it more than once, and it also found a place in some other speeches. It was that the purpose of the Government policies set out in the gracious Speech was to make the country more civilised and more humane. It has always intrigued me how successive generations of Labour politicians invariably fall into the trap of indulging in this particular self-delusion: that they, and they only, are the keepers of the public conscience. I suppose it is deeply rooted in the Fabian origins of Socialism, but it seems to me that the Labour Party are having as much difficulty in ridding themselves of this outworn psychological outlook as they are in ridding themselves of their outworn attitude towards nationalisation and so-called class warfare. I should have thought that during the thirteen so-called "wasted years" of Conservative

569
rule, the incredible increase in the standard of living, the enormously increased opportunities for education and the huge increase in the numbers of those owning their own houses were all milestones on the road to civilisation and more humanity.
Now let me turn to the gracious Speech. The noble Lord, Lord Champion, referred to local government finance, and in particular to the forthcoming Rating Bill and the reorganisation of the system of local authority grants and Exchequer subsidies. Of course we are all looking forward to the Rating Bill. Perhaps this will be a suitable candidate for starting in your Lordships' House. I do not fancy that it will be very controversial. We brought in an interim relief Rating Bill, and we set up the Allen Committee. We all realise that there has to be a rearrangement of the incidence of the rates upon various households in this country. I think that this idea of monthly instalments is most helpful; and we expect to see rebates for certain sections of the population.
I should like to ask the noble Lord about this change in the question of Exchequer subsidies and, I believe, the intended abolition of the general grant. This matter is not mentioned in the gracious Speech, although I think that it was mentioned in the gracious Speech of last year. It amounts to the reorganisation of central and local government finance. To this the Conservative Party were also committed, and we had already set up inquiries. I take it that the change in the housing subsidies mentioned in the gracious Speech does not come into this Bill concerning the reorganisation of local government finance, but will be a separate thing.
In connection with the change of the housing subsidies, which we on this side of the House are anxious to see, I would remind your Lordships, especially in view of some of the remarks of the noble Lord, Lord Cohen of Brighton, about what the Government have done, and what the Conservatives have done and have not done, of a few excerpts from a leading article in The Times sometime in the summer. I thought that the article was worth keeping, and I am glad now that I kept it. It said:
"It is not to be supposed that the scheme to be presented to Parliament"—
570
that refers to housing subsidies—
"has sprung, fully armed, from the department during Mr. Crossman's brief ministry. It will be the fruit of the inquiry launched by his predecessor, Sir Keith Joseph, rather more than two years ago."
After discussing the problems that would arise out of this change, which is intended to give local authorities the subsidies they need to enable them to let houses at rents that tenants can afford, the article ends up with these words:
"The suspicion, in the meantime"—
this was written after the Labour Party Conference, when Mr. Crossman made the announcement—
"must remain that the scheme will involve a general increase in subsidy in an area of economy where too much is already misspent."
We shall have to examine this Bill, when it conies before us, in the light of those comments, and make sure that the subsidies will be to the best advantage of the people of the country and will not lead to an increasing waste of money.
I must mention the Land Commission, but not at too great length. The noble Lord, Lord Silkin, dwelt upon this, and I was interested to find that he put forward an entirely new reason for creating this Land Commission. We have always understood hitherto that its purpose was to be, first, that of taking betterment in values for the community and for the State; secondly, to bring about cheaper housing, and thirdly, consequent upon this, presumably, more housing. The noble Lord, Lord Silkin, thought that its prime use would be to facilitate positive planning. The noble Lord always produces interesting ideas. Sometimes I wonder why the noble Lord is no longer on the Front Bench, because he often seems to be far ahead of his own Ministers. We believe that this Land Commission will not make houses cheaper, and will not do any of the things it is really setting out to do.
There are one or two points in the White Paper, which we never had the chance to discuss but which I think are rather curious. One deals with the powers of compulsory purchase. It says:
"… the Commission will be required to seek confirmation of a compulsory purchase order from a Minister when an objection to it is made."
In the next paragraph but one it says:
"a more rapid compulsory purchase procedure in which there will be some modification of the

571
requirements relating to the service of notices and the holding of inquiries into objections."
will be brought about. If this means a short-circuiting of democratic procedures, again we shall have to go into this matter in great detail and with great care. I am not at all sure that the people of this country are going to be too pleased if this is the way in which the Government's mind is working. Another sentence in the White Paper says:
"When land is made available to local authorities or other public bodies normally the freehold will be sold."
I know that there is a choice in other forms of disposal, but this is clearly indicative of the fact that it is all right for local authorities or public bodies to have freeholds but not right for private people or private enterprise to do so. There are all sorts of complications in this Land Commission which we believe will need careful discussion. Frankly, I do not think the Land Commission is in the least necessary; and it is going to build up to a quite ghastly bureaucracy, which in about one or two years will beat all records by making itself even more unpopular than the Inland Revenue have become over the last one hundred years.
I pass on from the Land Commission, and come to the speech of the noble Lord, Lord Cohen of Brighton. He made an interesting, long and forceful speech, but there are some things which I cannot allow to be said without making some comment on them. He reminded us on this side of the House that more houses would be completed this year than last year, and he put in parentheses:
"I hope it will be appreciated on the Benches Opposite."—[OFFICIAL REPORT, Vol. 270 (No. 5), col. 499, 16/11/65.]
It is very much appreciated, my Lords. In fact, this time last year, on a similar occasion, I said that we had left the Labour Government with 431,000 houses under construction when we went out of office, and that we had intended to complete 400,000 houses this year. And I then said that if they failed to do so it would be a disgrace. I am glad to hear that they will build more than we did—though only a few more, apparently; and they are not going to achieve the 400,000 target. I do not think there is a great deal of credit to be had there.
572
The noble Lord also talked at great length about the target of 500,000 houses a year. He did not say when this was going to happen. Of course, we all want to see it. The noble Lord, Lord Silkin, pointed out that we must cut our cloth according to what is available. This was the view of the previous Government. We have always said that we should get our priorities right, and aim eventually at 500,000 houses. I believe that this is the target aimed at by 1970—and a very good thing, too—but the noble Lord did not say so. He spoke as if this were all going to happen to-morrow, and of course it is not.
He pointed out that the building societies have been brought into consultation to carry out this National Plan. I do not mind whether the plan is national or not: the point is whether it is going to work. As yet, we have no knowledge of whether or not it is going to work, and that is what the Labour Government have to prove to the people of this country. The noble Lord said that a friend of his remarked to him that it was the first time the building societies had been consulted on a housing plan, but that is not quite true, because I would remind all noble Lords that we consulted building societies very early, officially and privately, when we set up the new Housing Corporation. We could not have set it up without their undertaking to provide the necessary two-thirds of the finance. In that connection, I hope that, when the noble and learned Lord the Lord Chancellor winds up this debate, he will be able to give us a progress report on the Housing Corporation, because I have a feeling that it should be issuing an annual report fairly soon.
LORD COHEN OF BRIGHTON: My Lords, as the noble Lord has referred to my speech, may I intervene to point out that I said that it was the first time the building societies had been called into consultation with the Minister. When the executive left the Minister on that day, one of the members, who had been a member for many years, said to me: "That was the first time"—there may have been correspondence in the past "the building societies have been called officially to the Minister to discuss the question of the housing plan." I am glad to think that it arose under a Labour Government.
LORD HASTINGS: I do not want to take away the credit from the Minister in this matter; I merely wished to point out that we had consulted the building societies and got their co-operation on this very important matter of the Housing Corporation; and I hope that we shall have a report of what is going on in that direction, because it is now over a year since the Corporation was set up.
The noble Lord referred to factory building and to the Committee on what we usually call "industrialised system building"—the Committee of which I am delighted to hear he was chairman. I would remind him that a tremendous amount of work has been done in this respect before. The National Building Agency was set up by the Minister of Public Building and Works, and, before that Ministry was created, the Ministry of Housing and Local Government had also been working on this problem in their research department, who, I can assure noble Lords, are of a very high standard. A great deal of progress had been made, and it is all to the good that there should be, if it is considered necessary, a high-powered Committee concentrating solely on this aspect, arising no doubt out of the creation of the National Building Agency in the first place.
In that connection, I have another question to ask and a point to make. We set up a great many consortia of local authorities for the mass ordering of their building requirements. I reminded the House last year that 70 of these local authorities were already formed into such consortia, and 400 others were discussing the possibility. I should like to know what progress has been made in that field and how many of that 400 have been formed into yet further consortia in the year the Labour Government have been in office.
Finally, the point about the National House-Building Registration Council and the coupling of guarantees of sound building with loans from building societies. I think that this idea, particularly the guarantees of sound building, again originated with Sir Keith Joseph and the setting-up of a committee to examine this question. Sir Keith Joseph said that he would be prepared, if necessary, to introduce legislation to that effect. Therefore, all these things that
574
the noble Lord has mentioned, and all the things that have been mentioned by the noble Lords, Lord Silkin and Lord Champion—apart, I am thankful to say, from the Land Commission—have all stemmed from previous Conservative policy, and have been laid on Conservative foundation stones. But when we come to examine them we shall hope to build well and truly, cutting out the faulty cement and mortar which the Labour Government may attempt to insert, and smoothing away the rough edges and making a really good job of what, after all, is our policy.
I should mention briefly the speech of the noble Lord, Lord Leatherland, but I am in some difficulty, because he reminded me of a person who was participating in a selective obstacle race. He took the jumps that he found he could get over very easily, and avoided the others which he thought were insurmountable. He used a great many figures, all of which I have used myself in the past: figures on which he fought the last General Election, and the one before that, and the one before that, and the two Labour ones before that. If I could use these figures, I could turn them and twist them in any way I pleased, and use them against him. I do not think there would be any value in doing so now.
His speech ranged between what he himself described, in his own words, in referring to the slums, as "sob-stuff" and another paragraph which on my reading (and I regret that I was not here to listen to his speech) became a rather violent attack on the unfortunate land-owner—yet another example of this peculiar hallucination that only noble Lords sitting on that side of the House are either civilised or humane. I must reject that suggestion entirely, and in rejecting it I feel that I need say no more and can leave it to my noble friend, at the end, to cross the "t's" and dot the "i's", and to make it quite clear that we believe the Labour Government are not only deluding themselves but deluding this country as well.
LORD LEATHERLAND: My Lords, the noble Lord has done me the honour of mentioning my speech, and he mentioned that he would be able to twist my figures. Let me please assure the House that that is something to which I myself would never stoop.
3.18 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I would apologise to the noble Lord, Lord Hastings, although I do not intend to follow him in his speech, for not having been here at the beginning of the debate. As a matter of fact, I was in the Chair at a conference, and had no idea that I had been elevated to so early a place on the list of speakers. The only thing I should like to say to the noble Lord, Lord Hastings, is that I want to jump a couple of difficult hurdles and, if I can, to persuade the Government to jump them with me, because it was something that the previous Government did not feel able to do.
First of all, I should like to say a few words, if I may, about the Parliamentary Commissioner. I should like to say how very pleased I was to see in the gracious Speech that a Bill will be introduced which would appoint a Parliamentary Commissioner for Administration, with powers to investigate individual grievances. I should have hoped that this would be uncontroversial legislation in general, although obviously we might differ in details of implementation. I would agree that the title "Parliamentary Commissioner for Administration "is a trifle unwieldy. I would prefer the colloquial (if that is the correct term) "Ombudsman", and I think it is one that has found general acceptance in this country.
But I am wondering, having looked into it in some very slight manner, whether perhaps there is not a point in this title, because it would seem to me, looking at the position in this country, that emphasis on administration is probably necessary. So far as I can gather, we have not any system of administrative law such as the French possess on these particular matters and while, as will be perfectly obvious to the House and certainly to my noble and learned friend on the Woolsack, I am no student of the law, I should have thought that a comment in The Times of October 13th last was correct, when they said, speaking of the position in this country
"redress through the courts is impeded by technical and procedural snags, by the settled reluctance of the judiciary to be drawn into pronouncing on the merits of administrative disputes, and by the sheer expense of the process."
576
I am sure we have all always felt that the last one, the sheer expense of the process, would deter most of us from going to law even if we felt we were in the right.
I believe that a Member of Parliament, with limited administrative resources, cannot match those of Whitehall, and I think he can well find himself baffled by a Government Department with such resources. I do not know what my colleagues here feel, but during my ten years in another place I found Government Departments helpful. Indeed, I found them on the whole to be most helpful, quite irrespective, as we would expect, of which Government was in power. I think they went to an enormous lot of trouble to try to help Members of Parliament, but wherever this was not the case—and there can occasionally be such cases—an Ombudsman would strengthen the powers of Members of Parliament to protect individuals. I would accept the position, for the time being anyway, that any such complaints must reach the Commissioner through a Member of Parliament, which I know excludes Members of your Lordships' House.
NOBLE LORDS: No! We are Members of Parliament.
BARONESS BURTON OF COVENTRY: My Lords, I quite accept the correction, but as I understand it Members of the House of Commons are the only people through whom a complaint may be directed to the Commissioner.
SEVERAL NOBLE LORDS: No; that is not so.
BARONESS BURTON OF COVENTRY: My Lords, I think it is so, according to the White Paper.
SEVERAL NOBLE LORDS: No.
BARONESS BURTON OF COVENTRY: Well, perhaps some noble Lord will interrupt me when he finds I am wrong, but I think that is the position and I will give way if somebody reads it and finds I am not right.
My Lords, what I have never been able to discover, and I do not know whether any Member of this House—perhaps the noble and learned Lord, the Lord Chancellor—could tell us, is the source of the story which is going around, that if we take New Zealand as an example we may expect some 14,000 complaints

577
annually. I have no idea of the number of complaints we may expect, but I cannot find any source for this story. In his last report, made to the New Zealand Parliament by Sir Guy Powles, the Ombudsman, early this year, it is stated that in the period covering eighteen months 1,100 complaints were lodged, 760 of them in the last year. I cannot make 14,000 out of 760.
It seems to me that even more important than the extent of the power wielded is the person who will be appointed as our Ombudsman. Quite obviously, this Commissioner, or Ombudsman, must command the highest respect from Parliament, from the Civil Service and the general public alike. I think that to do his job well he will need co-operation from all of these. Equally, of course, this paragon will not only have to be held in high respect by all those three estates, if I may call them that, but he will have to have a knowledge of how all three work. I think this is quite essential.
When this White Paper was published in October last I felt that here was at least a chance to experiment. It seemed to me, looking at what was in the White Paper, that the details had not been drawn too tightly, and that the proposed scheme would give us an opportunity of changing or developing in the light of what happened. Here I should like to leave one thought for possible consideration; and I shall be glad to know what the noble and learned Lord, the Lord Chancellor feels about this. I certainly want an Ombudsman, or a Commissioner, but I would ask my noble and learned friend: do we want one at local level, either as well as, or instead of, at national level? We may find, of course, in the way we do things in this country, in what I think is so irritating to foreigners—what we describe as our "middle of the road" way—that the Commissioner will deal with matters not only at national but at local level as well. However, I should like to know what progressive local authorities are likely to feel about this.
Your Lordships will be aware that in recent months progressive local authorities have been making entirely new types of appointment. I refer, for example, to the city manager. I should like to know whether those who are expert in local
578
authority matters, including possibly some among your Lordships, feel it will not be too long before the local Ombudsman joins the local city manager.
Having said that, I would come on to merchandise marks. I listened very carefully and enjoyed, as the rest of the House did, the speech of my noble friend Lord Addison when he seconded the Address in reply to the gracious Speech, and I read with great interest what my noble friend Lord Champion had to say yesterday on this matter. It occurred to me when Lord Addison was speaking that, quite obviously—as I think he himself would be the first to admit, consumer affairs are not necessarily a prime consideration of his—he had secured expert information on this matter from the Government, and therefore I am taking what my noble friend said as being indicative of Government feeling, and indeed I think this was borne out by my noble friend Lord Champion yesterday.
In speaking of consumer proposals, Lord Addison said that legislation
"is likely to go beyond the Molony Committee proposals in certain important respects".—[OFFICIAL REPORT, Vol. 270 (No. 1), col. 14, 9/11/65.]
Of course, anything that will strengthen the law on misleading trade descriptions this House would quite obviously say was to be greatly welcomed, but I do not see my job here to-day purely as being pleasant—at least I hope I shall not be unpleasant—and I would go on from having been pleasant and approving to suggest to the Government that, in the respects in which they going beyond Molony, I disagree with them and think they are wrong, and in the respect where they are not going beyond Molony I think they should. But I promise to be brief on these matters.
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): That is difficult.
BARONESS BURTON OF COVENTRY: The noble Earl the Leader of the House says it is difficult: I hope he does not mean that about my being brief. I really will try, my Lords.
In the first place, I want to refer to oral misdescription. I realise, of course, that the debate to-day is not the time to go into detail; we shall have an opportunity for this on the Committee stage of the Bill. But I do want to make some remarks on these two points in general.

579
I think I am right in these consumer matters, but when I say that, I always go back to the noble Lord, Lord Cones-ford, who I see is not in his place at the moment but who in another place had the job of dealing with me when I was very troublesome, I am sure, on various matters relating to the Board of Trade when he was the Parliamentary Secretary. I remember on one occasion when Mr. Strauss, as he then was, had borne with me for as long as he possibly could—he is an exceedingly polite individual—and when I said, "I am sure I am right", he got up and said, "I never knew the honourable Lady when she was not sure she was right". I make these remarks with some humility, bearing that in mind.
Now I am back to oral misdescription. It it quite explicitly stated in Government speeches in this Parliament that they intend to make oral as well as written misrepresentation an offence. I think this would be marvellous, if you could do it. The Molony Committee, at paragraph 600, took it as settled law that a description wholly by word of mouth did not fall within the definition of a false trade description as stated in the Acts, although nowhere was it stated that application is confined to written application.
I have not looked it up, but I think I am right; I believe that in their evidence to the Molony Committee the Trades Union Congress, probably among others, put forward in written evidence the suggestion that oral misdescription should be an offence and should be dealt with legally. Quite honestly I do not believe this is feasible. I did not believe it then; I do not believe it now. And although I have the very greatest respect for my noble and learned friend on the Woolsack, it would require all his erudition to convince me that it is feasible. Whose word is going to be taken on this? It is all right if you have five or six witnesses listening, but anybody who has dealt with problems of consumer matters knows that the snag is you do not have witnesses and it is a case of somebody's word against another's. I think this is not going to work.
For the purpose of the Record, I should like to read paragraph 658 of the Molony Report, because I think this will show
580
I am not just saying this is a problem that does not exist or one we can ignore when in fact it is very real. That paragraph says:
"The most fundamental proposal canvassed in relation to what constitutes the 'application' of a trade description was that oral misdescription should be brought within the Act. This proposal merited close consideration because we do not doubt that oral misdescription is widespread. Some of it is merely careless, much of it is reckless, and a proportion consciously dishonest. We have equally little doubt that the consumer is frequently misled in this fashion as to the qualities of the goods bought and encounters difficulty in getting any form of redress. The Weights and Measures and Food and Drugs legislation and, additionally, the Fabrics (Misdescription) Act, 1913, do not hesitate to put the shopkeeper at risk for oral statements. On the whole, however, the utterances giving rise to complaint under these Acts are simpler and not so open to factual dispute as under Merchandise Marks law."
I am not saying this problem does not exist; I think it does. But I think we bring the law and ourselves into contempt if we set out to do something impossible to achieve.
When I saw this T.U.C. evidence long before Molony reported, I think they probably thought I was being rather tiresome but I did not agree with it and said so on these grounds—I just could not see how it would work. Surely a better understanding of the law may lead consumers to ask for written confirmation of material points in the information given about the goods. The Molony Report reminded us that there is a substantial safeguard here in that inspectors can obtain written confirmation of the oral misdescription of a test purchase made after a shopper's complaint. I would make a plea in this House, and I think all sides of the House will agree with me: Do let us educate all of us shoppers rather than legislate on what cannot be enforced.
I have chided my own Government for doing something I do not think is feasible. Now I want to chide them for not doing something which I think is feasible, although they may not. We come to the question of guarantees. On general matters like this, I have a very great respect for the ordinary lay opinion of people like your Lordships and myself—in fact all consumers—and I think at times we who do the shopping (I am separating us from the legal experts) feel strongly that something should be

581
dealt with. If this feeling is widespread, then it is up to the Government of the day to decide how best to do it. I venture to suggest to your Lordships that this matter of guarantees should be dealt with. Nobody is going to convince me that it is beyond my noble and learned friend on the Woolsack—I keep referring to him, but I want to get something out of him on both these particular matters—to frame such regulations, if he thinks they are necessary; and I should like to convince him they are.
In this House in November, 1962, we had a debate on Molony. During that debate, obviously the question of guarantees came up. I am not proposing to weary the House with what everybody said on that occasion. However, I remember saying to the House that, having studied what Molony had to say on this matter, I felt the Committee had condemned guarantees as then existing in as strong words as any of us in this House could have used. They said in effect—and, although I am generalising, I think it is fair—that a good many of the guarantees were not worth the paper they were written on; not only that, but they took away from the customers' rights at Common Law and they were completely misleading. That was splendid. What I took exception to was the fact that the Molony Committee after that went on, at Recommendation 90, to say:
"The difficulties and demerits of any system of control requiring registration or approval would outweigh the benefits."
They followed that, at Recommendation 91, by saying:
"In view of the potential value of guarantees for the consumer the proper course is for manufacturers to amend their terms so as to match legitimate consumer expectations."
I was very scornful about that; I thought it was a lot of well-wishing that meant nothing. I did not think that was worth the paper it was written on.
In common with your Lordships, at the time Molony came out in 1962, obviously we all had conversations with all sorts of people, and the people with whom I talked—consumers, shoppers, I think, responsible people—took the view that this really had reflected trade opinions; I am not saying that Molony was unfairly influenced, but trade influence saying that this could not be done seemed to be taken strongly into account. I
582
am not myself competent to say whether it was trade influence or not, but I think something has got to be done now. I am wondering whether the noble and learned Lord the Lord Chancellor would feel able to comment on a suggestion that all guarantees should be registered and approved by the Board of Trade. I am perfectly prepared to be told that this raises difficulties, but I have made one suggestion and I am hoping that perhaps others will make alternative ones.
This morning I was in the chair at a conference of the Institute of British Launderers and Cleaners and the question of guarantees came up. I should like to read to the House what I certainly did not know I was going to get, the Good Laundering Guarantee. All of us, perhaps, have difficulties with laundries and dry cleaners from time to time—not always the laundries' fault, but we feel very often it is. I will read this guarantee to see what the House thinks. It is headed "Good Laundering Guarantee":
"We accept full responsibility for every article entrusted to our care. We undertake to re-process, free of charge, any article considered unsatisfactory, and to compensate fairly in any case of loss or damage."
That is the guarantee recommended by the Institute of British Launderers and Cleaners to all its members. On seeing that this morning, it struck me that it is the type of guarantee that one can understand and that means what it says. I should like this Government to consider whether we cannot demand that, before guarantees are issued to customers for any merchandise whatsoever, they should be registered and approved by the Board of Trade. I think it is quite wrong to leave them in the position in which they are to-day.
I really have been brief. For me, I have been very brief. But in another place, in common with other Members on both sides, I spent years on the Merchandise Marks Acts. I think we have a considerable measure of agreement, and I do not think it is necessary to say that anything that I can contribute towards more informative and better labelling will be done very gladly. But I do not want to attempt something that will bring the law into contempt—I do not think any of us does. Legislation which cannot be enforced is, I think,

583
worse than no legislation at all; I am quite convinced of that.
I am not sure what noble Lords here feel about that. Looking back into the past, I am quite convinced that the trouble was not only, indeed I doubt if it was mainly, that these Acts were inadequate, but that they were not enforced. This has been one of the great problems. It has been my cry against the Party opposite for a great many years (I am quite sure they will disagree with me on this) that they were not really in earnest about these particular things. They can get up and quote a list to me. But, while not being offensive, I think this is the difference in our philosophy. I know perfectly well that certain things were done by noble Lords opposite. I know that we had the Hire-Purchase Act. But that was not a fundamental Act; it never got down to the fundamentals of the problem. We had the Resale Prices Act, concerned with restriction of prices. In my submission, this would have been worth a great deal more if resale price maintenance had been removed as from a certain date and traders enabled to make application for it to be restored, instead of it lasting until the case had been heard—perhaps two or three years. I think there is a fundamental difference of approach on this.
I thought it might be different this afternoon with the present Government, believing that they care about these things; and I am hoping that, when the noble and learned Lord on the Woolsack comes to reply, he may perhaps find something to say on this matter of oral misdescription to convince me that I am wrong, or, if I am not wrong, say that he will look into it. But more than that, on this question of guarantees I want to assure him, (although I do not think he needs such an assurance) that it is something which causes great hardship to shoppers of every type who have come to rely on these guarantees, which are not effective. I should like this Government to do something about it. I hope that they will not think me too troublesome. I hope that, under the present Government, we shall get much further on this matter of consumer protection.

SPEY ENGINE FOR PHANTOM AIRCRAFT
3.45 p.m.
LORD SHACKLETON: My Lords, with your Lordships' permission, I should like to intervene to repeat a Statement which is being made by my right honourable friend the Minister of Aviation in another place, on the future of the Spey engine for the Phantom aircraft.
My Lords, the House will recall that the decision to adopt this aircraft for the Royal Navy was taken last year by the previous Administration, following failure to achieve a version of the P.1154 which would have been acceptable to both the Royal Navy and the Royal Air Force. At the time the engine had not been sufficiently defined for reliable estimates to be produced, and the cost assumptions which were then used have proved to be too low. When we took office, we became aware that the P.1154 would not meet the Royal Air Force timescale for a Hunter replacement, and also, in view of the urgent need to contain the size of the Defence Budget, we decided to order the Spey-engined Phantom for the Royal Air Force as well.
The costs of developing and producing the version of the Spey required for the Phantom have increased substantially above the 1964 assumptions, and we have therefore found it necessary to carry out a most intensive examination of comparative cost and performance between Phantom aircraft with the Spey and aircraft with the existing American engine. Although the aircraft with the American engine is adequate for Naval and Royal Air Force requirements, the Spey offers a greatly enhanced performance and a greater potential for future improvement. In addition, Rolls Royce have been prepared to negotiate guarantees on costs, performance and timescale much firmer than have been achieved in the past. Against the greater cost of the Spey, these considerations might not in themselves have justified its adoption. But we must also take into account the very great economic, technological and industrial advantages of going ahead with the development and production of this very advanced engine, with its big export potential. In the Government's view, these considerations are decisive. I am,

585
therefore, glad to inform the House that we have decided to continue with existing plans for the installation of the Spey in the Phantom.
LORD ST. OSWALD: My Lords, I should like to thank the noble Lord for repeating this Statement. The House and the country will receive it with some relief, and will be glad to discover that the assurances given by the Prime Minister on February 2 and the Minister of Aviation on August 4 last have not been withdrawn, although it seems clear from the Statement that it took some considerable political soul-searching before it was decided that they should be implemented. It comes as a great relief that the Government have not decided upon the emasculation of the aero-engine industry as well as the airframe industry of this country.
I should like to ask the noble Lord two questions, which I hope he will be able to answer. The first is, how many of these engines is it expected will be ordered—that is, both for the Royal Navy and for the Royal Air Force? Secondly, what other equipment will be British, again in pursuance of the assurances given, in particular by the Prime Minister on February 2?
LORD SHACKLETON: My Lords, it is not the practice, as the noble Lord well knows, to disclose numbers of aircraft, and therefore of engines to be ordered, or information of that kind. The question about other equipment does not arise directly out of this Statement. I would, however, say to the noble Lord that we are proceeding on the basis which I announced in the House previously—certain criteria and the 20 per cent. advantage. If the noble Lord would like to pursue that on another occasion, I should be glad to deal with it.
LORD MERRIVALE: My Lords, is there any basis for the comment in the Daily Express this morning, to the effect that there would be 800 Spey engines ordered, costing £175,000 each, including spares, to be fitted to 300 Phantom aircraft in the Royal Air Force and the Royal Navy?
LORD SHACKLETON: My Lords, I am sure the noble Lord does not in fact expect me to comment on that. But it was a good try.
ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
3.50 p.m.
Debate resumed.
LORD LUCAS OF CHILWORTH: My Lords, as I listened with intense interest to the gracious Speech from the Throne and read the White Paper following it, I could not help thinking what a wide field it gave for the analytical, the enquiring, and sometimes perhaps the critical mind. I have come to the conclusion—a conclusion I have held for a long time—that in spite of all the matters of moment and interest set out in the gracious Speech and reflected in speeches of noble Lords on all sides of the House, we are faced with one overwhelming problem. That is to earn our daily bread so that we may pay our way by our own efforts, not on borrowed money, and increase our productivity. This is paramount, and, in my view, calls for a difference in emphasis on the part of Her Majesty's Government.
I am not so worried about their incomes and wages policies. I myself have never thought that there should be restraint of either wages or incomes as a general principle. I think the emphasis is wrong. The main emphasis—and this is where I thoroughly agree with the Chancellor of the Exchequer—should be on productivity. That is the only thing that matters. We in this country are not going to come out of these dire straits to-day by policies of restraint and restriction. We shall do so only by expansion, by increasing our ability to earn our daily bread.
I intend to concentrate my remarks this afternoon on one aspect on which I consider that Government policy is wrong and where it will have the direst effects. It is no good the Government belabouring industry to modernise its plant and equipment, to bring in automation, and so on, when one of the cruellest blows they have struck at industry is to curtail one of its vital lines of communication—the construction of new roads.
I sometimes wonder whether the Government really appreciate the make-up of British industry. I will take as an example one of this country's great industries, the motor industry, an industry of which I happen to know something,

587
having spent my life in it. It is an industry which, directly and indirectly, fills the stomachs and clothes the backs of 28 per cent. of the population of this country. The manufacture of its products is not centred in the assembly plants of Birmingham, Coventry, Dagenham, Oxford and Luton, but is spread over 600 ancillary suppliers. All these supplies have to be channelled through to these centres, mostly by road. And what is true of the motor industry is true of every other industry. The products of British industry are not manufactured in one central spot, and it is the Government's policy—a policy with which I entirely agree—to diversify, to decentralise to those areas where employment is so badly needed.
The one great disadvantage which always faces the producer of the article is the distance these sources of supply are from his assembly plant and the lack of communications to them. Therefore, the road programme should be accelerated and increased rather than cut down. One of the biggest areas one finds around any factory in the Midlands—and the noble Baroness, Lady Burton of Coventry, who lived a good part of her life in Coventry will bear me out—is not the factory building, but the car park for the employees' motor cars. The motor car is the one method of going backwards and forwards. For a considerable part of my life I lived not far from the great plant at Cowley, and some of the employees at Cowley, of whom there are 25,000 to 30,000, lived thirty miles away. The only way they could get to their work was in their motor cars.
So this process goes on. At present there are 13 million vehicles on the roads of this country, and the experts tell us that by 1970 the number will increase to 25 million. Even the National Plan does not deny that. What are they going to use for roads? The road programme of this country in that time should be trebled and quadrupled. Even the Minister, in a public speech opening one of these new highways, said this:
"We cannot let up; we all know that more investment in roads is needed. It is up to all of us to demonstrate that the investment would give the country a maximum rate of return on its money".
I know of no capital investment which the Government can make which would
588
bring greater dividends in the way of productivity.
There is another problem involved here, a problem which has been highlighted by the events of the last two or three weeks. It is no good building motorways—roads which, in essence, are built for high speeds, with no speed limits; that is why they are built—unless one is going to bring on to them some degree of discipline. The high speeds which are encouraged by the design of these roads can be carried out with safety only if there is proper enforcement of the law. Every mile of motorway that is built in this country must take into consideration the question of the number of police which has to be added to the force. It is no good letting people loose on the roads of this country at these very high speeds, and then going to bed and thinking, "They are all God-fearing citizens, and will not do anything silly". What in fact do we do? All over the country we put up speed limit signs and then go to our beds thinking that they are all being honoured.
I suggest to the Government—and I address my remarks principally to the noble and learned Lord upon the Woolsack; I know he will not mind my saying that upon his shoulders rests responsibility for the due enforcement and honouring of the law of this country—that there is no law which has been brought into such disrepute as the road traffic law. It is absolutely in disrepute and the police are making no efforts to enforce it. It is no good being mealy-mouthed about this. The Ministry of Transport have told your Lordships for years, "It is not our responsibility to enforce the law". The Home Office have said, "We cannot instruct the police. It is their responsibility". So when we get the state of affairs which exists on the roads of this country to-day, upon whose shoulders should the blame be put? I am going to tell the noble and learned Lord on the Woolsack that if there had been a modicum of anticipatory intelligence used by the Staffordshire Police and the Lancashire Police, those tragic pileups on the M.6 would never have happened.
There is plenty of law. The Road Traffic Act 1960, Section 54, gives the police the authority to close any road they think fit, at any time, for any

589
circumstances. Section 14 of the same Act makes it a penal offence for anybody to disregard the instructions of the police in that regard. Section 117 of the Highways Act 1959 makes it an offence to remove or damage any sign that is put up by the police. Yet we have the pitiable example of a chief of police giving an interview to a TV reporter on the verge of the M.4, bewailing the fact that he "put the bollards out, and they came and took them away and drove on. What am I to do? The only thing I can rely upon", he went on to say, "is some good sense on the part of the motorist". If every motorist on the roads of this country had good sense that man would be out of a job. They do not have good sense.
There is plenty of law, if your Lordships will study it. The Road Traffic Act has been my "Bible" for years. But what have I been doing? I have asked about this many times. I have asked the police and they have some very good answers. The best answer they have is, "What is the good? We take all our officers' time and we prosecute. We take these people to court and then what do they get? They get a derisory penalty which is no deterrent whatsoever. They can pay any fine out of the loose cash which they have in their pocket". In only 3 per cent. of the convictions for offences against the Road Traffic Acts of this country which carry a suspension of licence is a suspension given.
The noble and learned Lord who sits on the Woolsack will get into the queue and say, "I cannot tell the magistrates how to do the job". What are we to do? We cannot go on. We have killed on the roads of this country 8,000 people this year. It will be 10,000 next year. What are we going to do? It is no good saying, "It is not the responsibility of this Department or that one". It is the responsibility of Parliament. Parliament and your Lordships have sat with great attention and have passed laws, and the noble and learned Lord has appointed magistrates who have never looked at a Road Traffic Act in their lives.
Through the invitation of the noble Lord who happens to be the Chairman of the Magistrates' Association, I have addressed meetings of magistrates up and down the country. I can assure your Lordships that my language then has
590
been even stronger than that which I am using this afternoon. What has been the invariable response? I have challenged them on the Amendment about drunken driving to which your Lordships gave so much attention, and asked how many had read it, and I have never yet had one man or woman get off their seat to say that they have. Then, afterwards, they come up to me and say, "Yes, we agree with you. We have got to be more strict. But it isn't my fault. My trouble is that I cannot convince my colleagues on the Bench". How long can we go on like this? What are we going to do?
Yet when we come to the tragedy of the last three or four weeks, the only solution that some of our experts have to stop the carnage on the roads caused through fog is to put on another speed limit. The police cannot enforce the existing limits when the sun is in the heavens and the sky is blue. How they expect to enforce a 20 miles an hour limit when the visibility on one of these motorways is 5 yards, or a 70 miles an hour limit over the whole of the country, is past my comprehension. The 50 miles an hour limit last summer was the biggest farce I know.
If your Lordships want a good example of road hooliganism, drive a motor car from the end of Cromwell Road, over the Hammersmith Flyover to the end of the elevated road where the 50 miles an hour limit applies. There are three speed limits there: there are limits of 30, 40 and 50 miles an hour. If you are law-abiding and you drive your motor car at 30 miles an hour or 40 miles an hour you are blasted off the highway by the raucous sounds of the hooligans who are wanting, or demanding, to pass at 60. You pull over to let them pass, and you are then blasted on the other side by another set of hooligans doing an equal speed who want to pass you on the wrong side. If it were not tragic I agree that it would be funny. You see this every day. But there is one thing which you do not see, and that is a police patrol officer. I have not seen one in five weekends.
The other day a man was prosecuted for driving a motor car at approximately 60 miles an hour over the Hammersmith Flyover. Something went wrong, and he

591
went over on the other side and killed two women. The learned judge fined him £1,500 and, I think, suspended his licence for five years. I commend the learned judge. But the driver did not get that penalty for driving dangerously: he got that penalty because, through a trick of fate, he killed two people. My Lords, sixty miles an hour over the Hammersmith Flyover is the normal speed. I put this to the noble and learned Lord: does he not think that it would be a good idea to have some disciplinary action before people are killed, instead of afterwards? Is that too much to ask? But you never get a prosecution to-day unless there has been an accident.
LORD SILKIN: No.
LORD LUCAS OF CHILWORTH: Very few. Very well; the noble Lord says, "No".
LORD SILKIN: I do say, "No".
LORD LUCAS OF CHILWORTH: The noble Lord is entitled to his opinion. All the evidence I can collect is to the effect that the majority of prosecutions follow an accident; and yet the driver of every one of those vehicles in the pile-ups we have had on those highways had a prima facie case against him for dangerous driving because he was not in control of his vehicle in the circumstances in which he found himself. So I say to the noble and learned Lord quite sincerely: it is no good having these extra speed limits. The noble Lady quite rightly said just now that she deprecates passing Statutes which cannot be enforced. The noble Lord, Lord Stonham, in the interesting speech that he made yesterday, said that he had great hopes as regards future recruitment to the police—an increase of 3,000 this year. We want more and more, with better equipment, more motor cars, more motorcycles, more radar. Why do we have to wait for a tragedy before we find out that all these main roads have not got electric cables along them? Has anybody ever thought about this kind of thing? Our road planners should.
So I leave my case on that there, but I want to mention one other matter—the congestion in London. I shall be within the recollection of a number of
592
your Lordships if I take your minds hack to the Road Traffic Act 1956—that ill-fated piece of legislation which heralded the introduction of the parking meter. I fought a bitter fight from the Front Opposition Bench, and I said: "You will woe betide the day when you let out the Queen's highway for garaging motor vehicles". But oh, no! they would not listen to me. One of the prime factors in the cause of the traffic jams in London is the fact that some of the streets that have to carry a lot of traffic are bespattered on both sides of the road with parking meters—put there not with any degree of thought about traffic management but to raise money to go into the treasury of the local authority.
We were promised that all that money would go towards building off-street parking. If any of your Lordships were to walk down Jermyn Street, which is the parallel road to Piccadilly, you would find for a quarter of the length of that road parking meters on both sides of the road, and loading bays on either side in which loading and unloading is allowed all day, with a supposed twenty-minute limit. I asked one of the wardens: "What happens when he has been there for an hour?" He said: "Of course, I have no authority. I keep on giving him tickets". I asked: "What do you do?" He said: "I have to ring up the police". There are 63,000 tickets waiting somewhere, in some office in London, because the police cannot process them—63,000 prosecutions for parking offences. It was so reported in the Press, and I can only assume that that is approximately accurate. At mid-day, you cannot get down Jermyn Street. That is just an example, and it could be multiplied all over the West End of London. This is one result of having about twenty or thirty highway authorities instead of one. I thought that when we had the Greater London Council we were going to do away with all this proliferation of amateur highway engineers: but, no, we have just as many.
My Lords, how long are we going on like this? You will never cure it. There is only one cure for this traffic congestion, and that is to build off-street car-parks in various areas—I do not mind how far away you put them—and then to ban every kind of parking except for unloading or loading, which should be

593
done in the early morning or late at night. You cannot burke this issue. You can fiddle around, you can put all sorts of speed limits on to stop this highway slaughter, you can talk about your traffic jams, but until you take the waiting vehicle off the road and shut your ears to the nonsense that is talked about banning a motorist from having a motor car unless he has got a garage—what a lot of "poppycock"!—you will never cure it. The Minister said in another place yesterday that he wants the buses to run freely. I quite agree with him. But how can you have buses running freely with double-banked parking on the kerb, and again not a policeman in sight?
I expect it will be thought I have been pretty harsh towards and critical of the police. Whom else am I going to criticise? I could criticise the Government. I suggest to the noble and learned Lord that at this time, in this age of civilisation, you cannot get away with the outmoded precept that the Government cannot tell the police what to do. That is what Goodhart said quite strongly in his Minority Report about the police. My Lords, I have spoken frankly. I hope I shall be forgiven for my harshness, but I see these things go on every day of my life and I see that the Ministry of Transport, as soon as there is a great accident, have an inquiry, the result of which is lost in the mists of time. I have never seen one of the reports yet. I hope the noble and learned Lord with—may I repeat?—his fresh mind on this subject, being the head of the British Judiciary and responsible to the people for their lives and their safety on the roads of this country, will take the initiative in order to bring some of these things to an end.

POWER CUTS AND INDUSTRY
4.20 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I hope that it will meet your convenience if I intervene at this stage to reply to a Question, of which Private Notice was given—namely:
"To ask Her Majesty's Government if they are aware of the effect which gas and electricity cuts have now had upon industrial firms and what action is being taken to remedy the situation."
594
My Lords, a number of firms in the area of the West Midlands Gas Board were asked yesterday to stop using gas, as a necessary measure in the interests of public safety. The Board are restoring normal supplies to-day, and all industry in the West Midlands should have full supplies for the night shift. The Electricity Boards were obliged in the late afternoons of Monday and Tuesday to disconnect some consumers in certain areas for short periods. Both the electricity and gas industries are making every possible effort to bring in the additional capacity which is currently being installed or overhauled and will be better able to deal with demands arising from a severe cold spell later in the winter.
LORD DRUMALBYN: My Lords, we are grateful to the noble Lord for giving that reply to the House. I think this emphasises what was said yesterday; that it looks as if it may be a long time before we have this matter right. It is a little cold comfort, if I may say so, to be told that the Boards will be better able to deal with the demands arising from a severe cold spell later in the winter. What we want to know is: How soon are they going to be able to meet a cold spell?
May I ask a second question arising also out of the question that I put to the noble Lord yesterday? It appears that these crises, so to speak, are especially liable to occur in the late afternoon, and when that happens it appears that quite often staffs are laid off, it being not worthwhile for them to stay to see whether the supply will be restored. It seems very important, therefore, that information should be given, just before the interruption in supply takes place, as to how long it is likely to last. If we are to have the risk of interruptions or reductions of supply for some time to come, would the noble Lord concentrate on this point?
LORD REA: My Lords, might I follow the noble Lord in thanking the Minister, and also put to him, very crudely what the public have in mind? Both the electricity and the gas industries seem to be fifty years out of date. Crises of this sort are foreseen, and surely provision should be made so that action is not taken after the horse has left the stable.
LORD STONHAM: My Lords, I would agree with the noble Lord, Lord Drumalbyn, that explanations are very cold comfort to people who want to get warmth or light in their homes, or to people who have their jobs in industry disrupted and are sent home. I would make this point, first of all, in view of what the noble Lord, Lord Rea, said about the industries being fifty years out of date. If any Government are responsible for the cuts we are having to-day, there is no doubt whatever that it is the Party opposite because—and this is the important point—again and again (and in the recollection of noble Lords, I, myself, have put this down again and again) they have turned a deaf ear to demands that we have persistently made for increased power plant construction.
The annual increase in demand for gas is about 8½ per cent. and for electricity about 8 per cent. That is a very substantial increase. There are two factors involved in the present crisis. The first is that, for the reasons I have given, there simply is not yet enough power, particularly in the electricity industry, to meet all the demands that may be made. It takes five years from conception to fulfilment to produce a big plant. The only remedy is to produce more generating plant; and this we are doing as speedily as we can. Secondly, not all the potential existing capacity was available to meet the demand during the present cold spell. Part was being overhauled, and some had broken down. My right honourable friend is examining the situation with the industries with a view to ensuring that the period during which plant is withdrawn for overhaul can be shortened, so that all overhauled plant may be available before the onset of wintery weather.
VISCOUNT DILHORNE: My Lords, I am sorry that the noble Lord has sought to make Party capital out of these unfortunate circumstances. Perhaps he will be good enough to tell us for our own information just when the Government will begin to accept some degree of responsibility for what happens during their tenure of office. It would he interesting to know whether it will have to be the winter after next, or at some date in the future, before the Government will accept any responsibility. I would
596
ask the noble Lord to bear in mind that the Government take great pride in having been in office for one year. I have heard a good deal about squeezes and that sort of thing since they came into office. We will not go into the causes of those, because we are not debating that subject to-day. But I hope he will not again bring out this old myth behind which they have sought to conceal themselves for so long.
LORD STONHAM: My Lords, it would be interesting to know what the noble and learned Viscount is doing but making Party capital out of this matter. But he must know that to construct major plants of this kind takes at least five years, and that what we are planning and doing now in plant construction will decide the output of power five years hence. Therefore, it was fair to bring in this point about the responsibility.
The second question the noble and learned Viscount asked was: When will the Government accept responsibility? We accept responsibility now, immediately, and there is no question of burking that issue. I have made the point about the repair of plant at this time of the year which seems somewhat extraordinary. There is the additional point that, so far as the West Midlands Area was concerned, there was, unfortunately, a breakdown (which could have occurred at any time of the year) in their largest producing plant which produced the conditions of yesterday and the day before.
LORD ST. HELENS: My Lords, since the Government have now accepted responsibility and, at the same time, have admitted that neither the gas nor the electricity industries are adequate to produce the power required at the moment, may I ask what steps the Government are taking to curtail the sales of gas and electrical heating equipment on the open market by the nationalised industries?
LORD STONHAM: My Lords, so far as the question of responsibility is concerned, we accept that it is the Government's responsibility to ensure that future capacity is equal to demand, which, as I have said, is doubling itself at the rate of every ten or twelve years. This means an enormous increase of power plant construction. That is provided for in the National Plan and will go forward. But, as I indicated yesterday, quite

597
honestly, it may be two or three years yet, because of the increase in demand, before increasing capacity catches up with increasing demand so that we can avoid the present kind of situation. With regard to the noble Lord's question about banning the use (I imagine he meant for a considerable period) of heating appliances—
SEVERAL NOBLE LORDS: Banning the sales.
LORD STONHAM: Well, of course, if you cannot buy them, you cannot use them. It is when it is cold that we think of buying another heating appliance. I think that would be causing considerable and unnecessary hardship to the general public, because—I must emphasise this, and know I am "sticking my neck out" in doing so—we are confident that with all the present plant in commission, and the other plant that will be coming forward during the winter, we shall be, generally speaking, capable of meeting expected demands, except for extremely exceptional circumstances, and then only for limited periods.
LORD DRUMALBYN: My Lords, it was the noble Lord who raised this question of responsibility for this matter. What he has brought out clearly is that this is largely, and probably wholly, due to the fact that in the one case there was a breakdown (and that was unlucky) and in the other case to the fact that equipment was being repaired, equipment which could have been ready. Will the noble Lord make it clear that had that equipment been ready there would not have been these cuts, so that the overall responsibility lies with the Government, but that in any case it lies firmly on the nationalised industries concerned for having failed to have the plant that is in existence, and which they possess, ready for a period of crisis?
LORD STONHAM: My Lords, certainly responsibility lies on the nationalised industries, and responsibility lies on the Government of the day as being responsible for the nationalised industries. But it must be within the recollection of noble Lords that at times over the last five years the nationalised industries were not permitted to implement their plans for increased plant construction simply because the Party
598
opposite curtailed them. This is a fact of history and one from which we are now suffering, however much we may dislike it. But the noble Lord, Lord Drumalbyn, always put his questions in a very fair manner and I will answer them in the same way.
For example, one of the difficulties in the Midlands is because a new works at Tipton, which should have been in operation by now, and was planned to be, is not making gas because some vital parts of equipment arrived months late. There is a responsibility on the nationalised industry, and on the Government, and on the contractor who failed. But that is the kind of thing that happens. Also in that area we are seriously short of men. That, if you like, is a national disease. At this moment, some equipment which could be used to produce gas in the area has not been used because we have not the men. This is the kind of circumstance that affects the situation. We are dealing with them as quickly as we can and we are stepping up the programme of construction and maintaining it in a planned way. That is the only way we can be sure of not having a recurrence of these difficulties.
LORD ILFORD: My Lords, will the noble Lord use any influence which he may possess with these bodies to induce them to refrain from sales and advertising so long as they are unable to meet the demand made on them?
LORD STONHAM: Well, my Lords, the nationalised industries consult in these matters about competitive sales and advertising, but the Electricity Board and the Gas Boards are in business to sell electricity and gas; and the way to do that, of course, is to encourage people to have appliances for heating and cooking. What we want is not a standstill, or a decrease in amenities, but an increase; and together with that increase, an increase in power supplies so that we do not have these interruptions. That, I repeat, is precisely what this Government are planning to do, have planned to do, and are doing. Their only regret is that the plans were not made and implemented five years ago, for if that had been done we should not have had this trouble.
LORD GRIMSTON OF WESTBURY: My Lords, did I understand the noble

599
Lord to say that after the present repairs have been completed, and the construction which was planned to be ready and which is late, or not ready for other reasons, has been caught up with, they expect to be able this winter to meet all demands they are called on to meet'? I thought the noble Lord said that. If that is the case, it does not seem that any part of the difficulty can be attributed to, or that Party politics can put the blame upon, the last Government which made the plans that will enable the industry to meet all demands this winter.
LORD STONHAM: My Lords, if the noble Lord, Lord Grimston of Westbury, will look to-morrow at precisely what I said, he will find I said that when all the plant at present out of use because it is under repair is brought into operation, and additional plant now being commissioned comes into use, except in extremely exceptional circumstances—I used those words, and the circumstances of yesterday were extremely exceptional for November—we shall be able to meet all demands; and those demands, generally speaking, will certainly at times be not less than they were yesterday.
LORD MERRIVALE: My Lords, may I ask one question with regard to electricity? If I understand the problem aright, with regard to switching arrangements it is possible, when the load in one area is too great, to obtain some power from another area. I wonder whether it would be possible, when the load becomes too great in the South-East area, to obtain a greater amount of electricity from the Continent through the Channel cable.
LORD STONHAM: That is the kind of consideration we are going into, but one of the main troubles in the Midlands yesterday was with gas. When there are such a large number of consumers it is not possible to do with gas what can be done with electricity—that is, to cut off supplies: it would be too dangerous to the domestic consumers. That is why they asked certain major consumers to suspend their use of gas.
LORD MERRIVALE: There were electricity cuts to quite a large extent.
LORD DRUMALBYN: I am bound to press the noble Lord on this matter
600
again. Is he aware that the day before yesterday, when cuts in electricity were made, the temperature in London was not below freezing point? This was at London Airport. Is the noble Lord seriously telling the House that the Boards have not foreseen circumstances in which the temperature would be at freezing point and not below? Is he seriously telling the House that they should not be ready by this time, with all the equipment they have, to meet this demand? Will he give the House an assurance that in the future they will programme their maintenance so as to be ready by this time to meet those demands?
LORD STONHAM: My Lords, I am seriously telling the House what the C.E.G.B. and the Gas Boards have seriously told the country for several years; namely that the construction programme would not permit them to meet their extreme demands for some years to come.
VISCOUNT DILHORNE: No.
LORD STONHAM: Yes, there was a statement made by the noble Lord, Lord Erroll of Hale, when he was Minister of Power, and that is still the situation.
With regard to the temperature the day before yesterday, my understanding of the matter is that it is a great many years since in this part of November we had such a cold day. Frankly, the position is, for the reasons I have stated, that in the areas concerned neither the Gas Boards nor the Electricity Board were ready for the demand that the temperature occasioned.
VISCOUNT DILHORNE: My Lords, in view of the replies the noble Lord, Lord Stonham, has given, I think that we shall almost certainly want to debate this whole subject. I should like to put one question. I want to get it quite clear. I understood the noble Lord to say that the situation we have just experienced was due, according to him, to three factors. One, he says, is insufficient capacity, a matter which cannot be dealt with very rapidly; secondly, a breakdown in the Midlands with regard to gas, and thirdly, if I understood the noble Lord rightly, the failure to repair and maintain equipment already in existence before November so that it was ready for the winter pressure.

601
I would ask the noble Lord to say, quite shortly, whether that is a correct summary of what he said. If it is, I would ask him to agree that this failure to repair equipment for use in the winter before the middle of November seems to be a most astonishing state of affairs, one for which the Government, and not their predecessors, are clearly responsible. Will the noble Lord take steps to ensure that that cannot happen again and that the equipment will be repaired and maintained before winter starts?
LORD STONHAM: I have already given the assurance asked for by the noble and learned Viscount. I will accept his summary as a correct and fair summary if he will accept the amendment that the happenings of yesterday and the day before were not a national failure, in the sense that only some areas in the country were affected; that is to say, the West Midlands area, for gas, and parts of the South-East, for electricity. I will just finish by saying, if the noble and learned Viscount wants the facts, that the cuts by the Electricity Board were 5 per cent. on Tuesday and 3 per cent. on Monday for a period of one hour in the late afternoon. Otherwise the noble and learned Viscount gave a fair summary.
VISCOUNT DILHORNE: My Lords, the noble Lord has asked me if I accept certain matters. Of course, I accept his statement of fact as to the extent of the cuts. But it is also not to be ignored that these cuts—which the noble Lord dealt with in percentages—seriously affected employment and the enjoyment of life and comfort of many millions of people. I am sure that I can assume that the noble Lord does not intend to deal with this question lightly and does not wish to seek to minimise the serious effects on people that have already occurred.
LORD STONHAM: My Lords, my first words were that my statement was cold comfort to the people concerned, and I accept the seriousness of the situation. The noble and learned Viscount suggested a debate. That is not a matter for me, but I would much rather deal with this in the proper manner and not simply by question and answer in this way.
THE MINISTER WITHOUT PORTFOLIO: (LORD CHAMPION): My Lords,
602
we have been told by an important member of the Front Bench Opposite that we shall have to debate this matter. We still have a number of speakers on the list for to-day. I am certain that the House would wish to complete the debate on the gracious Speech, and to return to this matter as and when arrangements through the usual channels will permit us to do so. I think that that is fair.
LORD ILFORD: My Lords, I desire only to ask one question of the noble Lord, Lord Stonham, which I am sure he will be able to answer shortly. I understand from his first statement that certain consumers are to be disconnected during the week-end. May I ask whether they will be domestic or industrial consumers?
LORD STONHAM: My Lords, the 5 per cent. cut for one hour was a disconnection last Monday and yesterday, not next week.
ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
4.42 p.m.
Debate resumed.
LORD SEGAL: My Lords, I find it comforting to observe that a great degree of warmth can be generated in this House by cold spells, but if the debate may be steered into calmer waters I should like, if I may be allowed, to explain my participation in the debate at this stage as due not to an intrusion but to an omission, and I would thank the noble Viscount, Lord Brentford, for so kindly giving way.
Perhaps one of the most welcome passages in the gracious Speech, and I hope one of the least controversial is the statement that
"Her Majesty's Government are studying with the medical profession ways of improving the family doctor service, and will introduce the necessary legislation."
The recent lengthy discussions between the general practitioner representatives and the Minister of Health have culminated in the Second Report, which was issued on October 15. This Report to my mind is an historic document, for it changes radically the whole basis on which general practice has hitherto been run and represents the greatest step

603
forward since the National Health Service was launched in July, 1948. It is a striking tribute to the energy and dedication of the present Minister of Health, and perhaps is also a commentary, if not a reflection, on the achievements of previous Ministers of Health and of previous Governments.
At present, it is only a blue-print. An enormous amount of time and energy will be required to implement its recommendations, but, given a further degree of patience and good will, the next two or three years may see a real advance in the whole concept of the National Health Service, far greater than anything previously accomplished in the last seventeen years. Nevertheless, this striking Report reveals one or two shortcomings. In pointing these out, I would emphasise that this has to be done in the interests of the sick patients and not of the general practitioners. By far the most serious shortcomings are to be found in paragraphs 8 and 10 of the Report, which refer specifically to a 5½, day week, releasing the general practitioner from his work as from 1 p.m. on a Saturday until 8 a.m. on a Monday. These hours, in my view, are woefully inadequate. Here the Minister has missed a wonderful opportunity for an imaginative approach to one of the main problems which to-day beset general practice. This opportunity has so far been lost, but not irretrievably so, and I hope that there is yet time for this omission to be remedied.
I well recall the time, now some ten years ago, when doctors in the Regional Medical Service were suddenly awarded a 5-day working week. It was as if a heavy burden had been lifted over-night. After a complete 2-day break at the week-end, doctors returned refreshed and reinvigorated, and far better able to to meet the strains of the coming week. More work was accomplished, I believe, in the week of five working days than had been accomplished previously on the 5½-day week. In all the years it has operated in the medical branch of the Civil Service, the five-day week has proved an unqualified success, and now no one would ever dream of going back to the old days.
But why should this five-day week remain the prerogative of a chosen few
604
in the Government Medical Service and be denied to the vast majority of doctors in general practice? These doctors in the Government Service are also especially fortunate in having no worries at all about the provision of a locum during their week-end of absence. Surely, if anyone in the community has fully earned his right to a five-day working week, it is the hard-pressed overburdened general practitioner.
In his case, this 1½-day release at the week-ends is little more than a snare and a delusion. Under the new plan, the general practitioner is to finish his work at 1 p.m. on a Saturday. After he has had his lunch it will be 2 p.m. and by 3.30 or 4 p.m. during some of the winter months the period of daylight is already over. Mentally he has had no release, and a whole day is virtually lost. If, instead, regardless of the present demands of the medical negotiators, the Minister had agreed to release the doctor for his week-end as from 8 a.m. on a Saturday, allowing him till 9 for his breakfast and then his complete freedom from 9 a.m. to 1 p.m., for a mere four hours on a Saturday morning, a full extra day would have been gained. It is not yet too late for this concession to be granted.
Such a step, I believe, would do more to stop the drift from the National Health Service and attract an increasing number of promising, well-equipped students into the medical profession than any other reform the Minister could ever contemplate. The results, with their emphasis on freedom rather than remuneration—freedom to relax, freedom to study, freedom from the cares and complaints of their patients, which are not always the essence of good medicine—could be enormous and far-reaching. Not only would a doctor be enabled to take up his week-end golf, if he so wished—and surely doctors are entitled to a game of golf just as much as lawyers or business executives, as a means of full mental and physical relaxation, instead of having to ward off the encroachments of a gnawing ulcer—he would also be free to fulfil another highly desirable recommendation made in the Second Report, to do a week-end course of postgraduate study at a hospital or clinic.

605
But what of the patients? What provision is to be made for the sick person, who rightly asks, "What will happen to me during those two days when my doctor is away attending a post-graduate course of study, or even indulging in a game of golf?" To the patient, there is the obvious reply, "No more than will already happen to you during the one and a half days when, according to the recommendations of the Second Report, your doctor may be off work." All these considerations must be provided for. No doctor should ever contemplate a week-end of release from work without having first assured himself that full medical services are provided by a competent colleague during the whole of his period of absence. This is, as I have said, only an additional matter of four working hours—four hours that will ease many years of a doctor's life, and bring untold benefits to the whole community. Once this five-day week for doctors has become firmly established in our way of life, everyone will wonder why it was overlooked in the 1948 Act, and why for all these years so many doctors have had to endure the arduous life of stress that their present work entails.
I have deliberately omitted any reference to remuneration, for this is a matter properly left to the Review Body. But another legitimate criticism might be made of paragraph 20 in the Second Report. What on earth is the point of emphasising a special payment for doctors who attend—I repeat attend—a prescribed number of sessions of approved graduate training? Every undergraduate knows the futility of merely attending lectures. Surely, if payments are to be made for study-leave, then the emphasis ought to be on study rather than on leave. And if special payments are to be made merely for attendance, then a bonus payment ought to be made for proficiency. There is nothing derogatory in members of the Diplomatic Service having to take special examinations for proficiency in a foreign language and receiving an increase in salary if they pass. So, too, it might seem logical if the final session of a postgraduate study course entailed an optional examination, with a special bonus payment, as well as a certificate of proficiency, awarded to a doctor who attains a certain required standard. Both diplomas of proficiency and bonus
606
awards of salary would constitute a stimulus and a challenge to a doctor's professional attainments, not least to the doctor who was well past middle age.
The initial and understandable reluctance of a doctor, especially of a single-handed doctor, to participate in these postgraduate tests would in many cases give way to a genuine enthusiasm, especially if his medical and social contacts were broadened by membership of the College of General Practitioners. It is, I submit, high time that some form of official recognition should be given to this college. Membership of the college for every doctor on the National Health List, while it can hardly be made compulsory, should at least be encouraged in every possible way. Special inducements might well be considered to enable a doctor to participate in its work. Membership of the College of General Practitioners not only would benefit a doctor professionally, but could be of enormous benefit to him socially. It could do more than anything else to eliminate that grim survival of a bygone age, the single-handed doctor, working as a lone wolf.
In this connection, I would commend to the Minister the excellent syllabus of the East Anglian Faculty of this College. This covers an area served by over 2,000 general practitioners, and lists over a period of barely ten months no fewer than 109 medical and social functions, an average of eleven meetings a month. It is partly the result of the energy and enthusiasm of a general practitioner living near Ely, who has enlisted the collaboration of many other practitioners over the whole area and the active support of certain pharmaceutical firms.
It is interesting in this connection to note the highly ethical advertising of some of these firms. There is a very healthy element in their active participation in these postgraduate study courses, and, within certain limits, they might well be further encouraged. Perhaps this aspect of pharmaceutical advertising might be brought to the attention of the Committee on Drugs, now deliberating under the able chairmanship of my noble friend Lord Sainsbury. Instead of sending out indiscriminately samples of drugs to doctors who have taken the minimal trouble to fill in a prepaid postcard, or taking up a busy doctor's time by sending

607
to his surgery their representatives, who, having failed to graduate in medicine, have become graduates in salesmanship, some of the more reputable drug manufacturers would be far better occupied in distributing their samples, if distribute they must, to those doctors who have taken the trouble to attend postgraduate courses. Such doctors have shown their keenness to apply advances in therapy, approved by hospital consultant staffs, to their own practices, and samples sent to them would, in all probability, be passed on to their patients, instead of lying heaped up, gathering dust, on surgery shelves. Perhaps this sacking of touts and the consequent saving of unused samples might even bring down the cost of some proprietary drugs.
That the Second Report is a document of vision and imagination has been amply proved by the overwhelming support it has received from a majority of the medical profession, a majority of nearly seven to one. The doubts and suspicions towards the Government's intentions which have existed in many medical quarters until recently may soon begin to show signs of a thaw. The Minister is now presented with a great opportunity to inject a new spirit of enthusiasm into a rising generation of dedicated general practitioners, who take their Hippocratic Oath seriously, and who are imbued only with a desire to assuage sickness and suffering and to serve their fellow men.
4.58 p.m.
VISCOUNT BRENTFORD: My Lords, if the noble Lord, Lord Segal, will forgive me for not following him in the subject which he has introduced into this debate, I should like to return to the subject which was initiated by the noble Lord, Lord Lucas of Chilworth, the question of roads, and, in particular, safety on the roads. It may possibly not have escaped the attention of your Lordships that I have recently been indulging in a little correspondence with Her Majesty's Government upon this subject, and that at the conclusion of it the Minister of Transport accused me of dramatising the situation. My Lords, I am very happy indeed to accept that allegation. If I did succeed in dramatising the situation, I feel that I have done something quite useful: because, really, when we get to the point
608
of suffering some 8,000 deaths a year on the roads, and the number of injuries from road accidents which will this year rise to nearly 400,000—and we have not yet really touched the public conscience on the subject at all—I feel it is high time that somebody did dramatise the situation in order to bring the seriousness of it home to the people of this country.
After all, it is far worse than the casualties which are occurring in Vietnam at the present time, and yet we hear a good deal upon that subject from quite a lot of people in this country, spread over a wide circle of the population. Not only is there no real public reaction to these exceedingly significant figures, but there is no appreciable reaction from Her Majesty's Government. In fact, Her Majesty's Government state that it is because of the paramount importance of maintaining the economic objective of protecting sterling that they have recently seen fit to postpone for a period of six months starts in road improvements and new roads, in trunk roads and motorways, to a total value of £55 million. This matter was referred to by the noble Lord, Lord Lucas of Chilworth, and I would agree substantially with all that he said.
There are three comments that I would make about Her Majesty's Government's decision. The first is that it is not a universal cut-back of capital investment in which the Government are indulging. They have made exceptions with regard to the building of houses, hospitals and schools, and with regard to capital investments in the distressed areas. Therefore it cannot be said that this cut in road development was not open to a similar exception, had they wished to make it. Certainly my comment would be that no previous Government in any credit squeeze which has yet taken place have cut back the road programme. Therefore, it seems singularly harsh that, upon this occasion, with the rising toll of road accidents which we are having, they should have seen fit to cut back the road programme at the present time.
Her Majesty's Minister of Transport stated on August 3 this year, in the course of a debate in another place, that the savings which he would make for the benefit of the national economy, if he had no more starts in that financial year in regard to road building, would

609
be infinitesimal, and not more than £2 million. That was the stopping of road building and road improvements starts between August and April. This is stopping, £55 million worth of road starts for six months. Therefore, on an approximate calculation, the total effect of this action by Her Majesty's Government for the benefit of the national economy cannot really amount to the saving of more than £1 million. For that saving, I maintain that he has adopted an action which is exceedingly reprehensible, and contrary to the public interest.
The Minister has further claimed that his figure of £55 million cut-back should be seen in relation to the total programme of road building which is anticipated as £12,000 million by the year 1970. But I submit that that is a totally erroneous comparison, and somewhat misleading, because the £55 million cut-hack is out of the programme for this year, and not out of the programme up to 1970. The programme for road improvements and new roads in regard to motorways and trunk roads for this year has been given by the Minister himself at £162 million. Therefore the cut-back, the postponement, amounts to roughly speaking one-third of that total programme.
I have been talking about a cut-back for six months, but I wonder whether that is really so, because a postponement of this sort must inevitably be exceedingly expensive. Many of your Lordships probably have experience in the civil engineering contracting business, and I would ask what is a civil engineering contractor to do who has accumulated his plant—which at the present time is very expensive and very elaborate plant for this type of road building—who has got together and built up his team of engineers, who has brought them all towards the site and is ready to start work, when suddenly he is told that he must postpone his operations for six months? He cannot just put that team into cold storage. He cannot leave all that plant lying idle and depreciating for six months. He has to try to use it to earn some money. Therefore, he has to take it away and use it in such capacities as he can find suitable for its use; and the probability that he will be able, in exactly six months' time, to reassemble that plant and team at the site where he is going to start operations is very remote indeed.
610
Therefore, I submit to your Lordships that the question of postponing starts for six months is much more likely to involve a suspension of nine months, or anything up to one year, for the Government which we have to-day, which claims to be exceedingly sympathetic towards the principles of planning, must realise that the planning of these road programmes is a long-term theme which involves a great deal of work and accuracy and a great deal of accurate timing. For them suddenly to go and throw a spanner of these dimensions into a planned operation of that sort gives the lie to any claim which they may have to be sympathetic towards the planning arrangements of the industrialists of this country.
It would be interesting to know exactly what these postponements have amounted to. I have not been able to obtain, as yet, complete figures, but I have been able to obtain particulars of thirteen of the postponements throughout the country, which amount only to about £3½ million. They include stretches of roads on which, over the last three years, accidents have occurred involving 26 fatalities, 99 serious injuries, and 301 slight injuries. They are, as your Lordships will see, all ordinary cases of bad accident spots on the road. They have been planned for improvement by double widths of roads, by heightening the roads, and generally straightening them out, and removing the bad parts of the engineering of the original roads which had led to these accidents.
Those were the accidents which occurred over a period of three years in those thirteen cases. If my mathematics are correct, the postponement of the improvement of those roads for a period of six months only will result in a continuation of that rate of accidents which will lead to 4 more fatal accidents, 16 more serious accidents, and 50 more slight accidents. If those are, as I believe they are, average, and quite a reasonable average example of the type of postponement that has taken place (and they represent, roughly speaking, one-fifteenth of the total value of the postponements which have taken place) that leads to a total number of additional fatalities which will occur on the roads simply as a result of these postponements for six months, of 60 people, an additional 240 serious injuiries, and an additional 750 slight injuries.

611
I venture to say that this decision on the part of Her Majesty's Government was an inhuman decision, because from what I have said to your Lordships it will be seen that the Government have set the sum of £1 million financial advantage to the country against that total of some 60 deaths, some 240 serious injuries and 750 slight injuries which are calculated to result from their decision in regard to these postponements.
My Lords, the Minister also stated, on the 3rd of this month, that this year's road toll would be greater than last year's terrible tell. I would agree with him, but I claim that his decision to postpone the start on these road improvements will contribute quite substantially to this increase. He says that better roads make a contribution to road safety, but so do many other things. With that I entirely agree, but it is only by progressively increasing the expenditure on roads that it has been possible so far to contain the accident figures as the number of vehicles in use on our roads has mounted. It is a remarkable thing that the increase in the number of vehicles using the roads has been more rapid than the increase in the number of accidents. That fact is due to a wide variety of reasons, and one of the most substantial of which has been the improvement made in road construction.
There are, as both the Minister and I agree, many other aspects of road safety. For instance, we hear a great deal about drink and the effect of drink on road accidents, but I would remind your Lordships that in the Road Research Laboratory's voluntary test just before last Christmas, in which they invited motorists to breathe into a breathalyser, in cooperation with the police and on the understanding that their names would not be asked for and that no particulars of identification would be taken, the outcome of the experiment was to show that upwards of 80 per cent. of the drivers of the cars stopped had no recognisable quantity of alcohol in their breath. Therefore I think it is true to say that, while there is nothing more dangerous, more reprehensible or more worthy of punishment than the action of the motorist who drives when under the influence of drink, that is not, in fact, a common cause of the accidents upon our roads.
612
Speed is another subject that is frequently referred to as a cause of accidents, but I would submit to your Lordships that speed of itself is not a cause of accidents; in fact one can see that on the motorways. Apart from the recent periods of fog, when the records of the motorways have been ruined by the lunatic fringe of drivers, the motorways themselves have been the safest roads on which to drive in this country. What is dangerous is speed at the wrong time and at the wrong place, and it is that which we ought to concentrate upon trying to stop. Inadequately serviced cars are another source of accidents, not only to the occupants of the car itself but to the occupants of following cars, when the car in front has inadequately operating trafficators or brake lights, so that the message which the driver seeks to pass to the car behind fails and the driver of the following car does not know what the other car is going to do.
Another source of accidents is inability, through lack of attention and concentration of people who drive and who walk along the roads, to do so safely. All these, and many other matters, all contribute towards road accidents. The only answer to the problem, I would submit to your Lordships, is the open, recognisable supervision by uniformed police in recognisable police cars travelling upon the roads. We are watching with the utmost interest the experiment being carried out in the West country at the present time over 558 miles of "A" roads and trunk roads.
This experiment has been going on since August of this year, in which the police, numbering 210 officers, operating 70 vehicles from ten different forces, are patrolling those roads. The evidence which we have so far received indicates that the influence which they have exercised upon the ordinary motorist has been very beneficial indeed. The presence of these officers has caused the ordinary motorist to reflect and to remember the principles of good driving. They all know about these principles, but tend to abandon them in the excitement of the moment, or in exasperation at delay, or simply in the boredom of a long journey; and the sight of the police in their patrol cars tends to bring back the attention of the motorist to a recognition of how he ought to drive.

613
In addition to that, we are already aware that the scheme has produced a considerable number of additional fringe benefits—for example, in regard to the elimination of traffic chaos, the diversion of traffic so as to avoid congestion. Even the apprehension of criminals, we understand, has been enhanced as a result of this particular activity. The principle of the whole matter seems to be that if we can have better roads and greater police supervision on the use of those roads we shall have gone a long way towards making a really substantial reduction in the number of road accidents, in deaths which result from them, in the injuries which result from them, and in the tragedy and the sadness which they cause to innumerable families up and down our country.
5.19 p.m.
LORD LLOYD OF HAMPSTEAD: My Lords, I hope the two last speakers will forgive me if I turn to a rather different topic from the two most important topics which engaged their particular attention. As one who is closely associated with an institution which owed its foundation to the inspiration of the greatest of all law reformers, Jeremy Bentham, I should like to begin by welcoming the prospect of a new look at the whole problem of law reform in this country, by means of the newly established Law Commission. Two years ago, when this notion was first put forward in the book, Law Reform—Now, edited by Mr. Gerald Gardiner, Q.C., as he then was, many members of the legal profession thought that this was no more than a gleam in the eye of an enthusiastic law reformer.
Now that it has become a reality I think it can fairly be said that the new Law Commission is receiving the overwhelming approval and support of the legal profession, and this can be sufficiently indicated by the concluding paragraph in the latest number of the Law Guardian, which says:
"The Law Commission will need our support. No candidate for Parliament should be elected at the next Election unless he or she has given a public pledge constantly to urge his or her political Party to implement the Commission's recommendations."
A hundred years ago the poet Tennyson described our much-vaunted legal system as
614
"…The lawless science of our law, That codeless myriad of precedent, That wilderness of single instances".
Such a description would be even more appropriate to-day, and one views with considerable Benthamite satisfaction the proposals of the Law Commission to codify the law of contract, the law of landlord and tenant, and family law.
I hope it will not be thought captious on my part, in view of the extensive and admirably balanced task that the Law Commission has set itself in its first programme, if I venture to wonder whether in one or two respects at least it has not set its sights a little too low. It refers rightly to the widespread dissatisfaction which is felt at the present time in regard to litigation for personal injuries, especially in connection with motor accident cases, which, of course, form the bulk, or at any rate a substantial part, of such litigation. It appears from its programme that, for the present, it is proposing to confine itself to considering criticisms and proposals regarding the jurisdiction and procedure of the courts in such matters and the assessment of damages. These somewhat limited terms of reference therefore preclude the Commission at this stage from investigating the much larger and more vital problem, whether the whole system of individual litigation in respect of motor accidents should not be replaced by, or at any rate coupled with, a comprehensive scheme of social insurance.
Only a few months ago the present Lord Chief Justice, in an address delivered, appropriately enough, if I may say so, to the Bentham Club at University College, referred to the sort of proposed reforms which the Law Commission is now intending to scrutinise, and stated that they really only touch the fringe of the problem. The noble and learned Lord, Lord Parker of Waddington, referred to schemes which have already been introduced in parts of the Commonwealth, such as Saskatchewan, and the serious consideration which has been given to this matter in other Commonwealth countries, such as Australia and New Zealand. "Surely", the noble Lord said, "the time has come when we should recognise that the present methods, even if capable of improvement, are no longer adequate and that some other method is called for".

615
And he posed this question, "Is compensation of victims to continue to be administered under the present outmoded methods by which recovery depends on the proof of fault, or is it to be recoverable regardless of fault under a comprehensive insurance scheme?".
In view of those remarks coming from so influential a quarter, it does seem perhaps a little disappointing that the opportunity has not been taken by the Commission to grasp this nettle, rather than confine itself to what Lord Parker of Waddington has so justifiably referred to as the "fringe of the problem". I would add also that nearer home a comprehensive scheme of this kind is at this very moment being drawn up in France by a commission appointed by and under the chairmanship of the Minister of Justice, and a similar approach is to be found operating in a number of the more progressive Continental countries, especially in Scandinavia.
The other topic in the Law Commission's programme to which I would venture to make reference has a considerable bearing on the matters about which the noble Baroness, Lady Burton of Coventry, spoke so eloquently earlier in the afternoon. What is proposed is that the Commission should investigate the desirability of prohibiting or restricting clauses limiting liability for negligence. But, surely, I would submit, there is a much wider context in which this whole problem should be studied. What I have in mind is the very widespread practice in so many spheres of commercial activity of imposing what are called at the present day "standard form contracts". And it is, of course, these standard form contracts which normally contain the sort of so-called guarantee clause which was engaging the attention of the noble Baroness. Under this a consumer, theoretically, freely consents to the terms of a contractual arrangement. But effectively he has no choice whatsoever. For him it is simply "Take it or leave it". And this problem, I venture to think, has aroused a good deal of concern.
Quite recently—and I think this is a matter of considerable interest so far as the technique of dealing with the problem is concerned—a very constructive approach has been introduced by the
616
Israeli Law of Standard Contracts, 1964, which provides a very interesting procedure for investigating the restrictive terms in standard contracts. Under this Act, either the clauses in the standard contract are to be approved in advance by a special tribunal or, if they are not approved, they can subsequently be considered and adjudged void if they are held to be unreasonable. It does seem rather a pity, I venture to think, that the Commission should confine itself to the narrow platform of exemption clauses relating merely to negligence, when it has the opportunity of taking a comprehensive look at the whole problem of standard form contracts and might at the same time cover much of the sort of ground about which the noble Baroness spoke earlier on.
In the midst of this new pattern of law reform, one can only express the hope that the impetus will not be lost by the failure to provide adequate Parliamentary time to secure passage into law of recommendations which may emanate from the Commission. In this respect, I would express gratification at the reference in the gracious Speech to the fact that provision was being made in the present Session to allow Parliamentary time for such matters, which may lack some of the spectacular features of other parts of the Government programme but are none the less of immense social significance in the life of the community.
May I also express a very warm welcome to the plan for a British-style Ombudsman envisaged in the recent White Paper and now given the prospect of legislative birth by the proposal referred to in the gracious Speech? That great constitutional lawyer, Professor Dicey, in a spirit of complacency not altogether uncharacteristic, I am afraid, of English lawyers, used to congratulate himself and his fellow countrymen on the absence of "administrative law" in our legal system. We have long come to realise that if we do lack such a branch of law, this, far from being a source of pride, is a matter of considerable misfortune, since it means in effect that the citizen has no adequate means of ventilating his grievances against the Executive or the Administration. This gap in our law is now to be partially filled at any rate by the new Parliamentary Commissioner for Administration. Such an institution has

617
worked exceedingly well in the Scandinavian countries, from which it originated, and in New Zealand, to which it has recently been transplanted.
Of course, there are special problems in planting an alien growth of this kind into the context of our traditional constitutional procedures, and doubtless the institution will require considerable adaptation to fit it into these and also to adapt it to a much larger population than an Ombudsman has hitherto had to cope with elsewhere. But, given good will and appointment to the job of a person of adequate stature and character, there seems no reason why an Ombudsman should not he as successful here as elsewhere. He should afford the ordinary citizen a considerable assurance that there is someone in authority who is able and willing to give his mind to the grievances of the citizen, without the need to incur great expense or become involved in complex litigation or to become lost in a maze of bureaucratic stonewalling or evasion, which unhappily does sometimes, if infrequently, occur.
All the same, I confess to feeling some doubt about the wide exclusions referred to in paragraph 8 of the White Paper. For instance the words "powers to preserve the safety of the State", or "matters which affect relations with other countries" are capable of an extensive interpretation. Also the Commissioner is to be concerned only with "faults in administration". I am not sure what this means. For my part, I much prefer the New Zealand Commissioner's power to consider what is—and here I quote:
"unreasonable, unjust, oppressive or improperly discriminatory"
or even plain wrong. That is how the New Zealand Act has it. These are not matters of details but matters of principle, and will need very careful consideration when the Bill comes before your Lordships' House.
Lastly, I am sure that noble Lords in every part of this House will be glad that the Government have now decided to reopen the whole problem of the procedure relating to the deportation of Commonwealth immigrants and of aliens. It is an immensely important principle, to which this country is traditionally wedded, that people's lives and liberties should not be at the mercy of mere
618
administrative decree; but that there should be appropriate public judicial proceedings to protect the individual against being arbitrarily dealt with by officialdom. It has long been a blot on our law that the alien in this country has no such protection but can be arbitrarily placed upon the next boat or plane out of the country, and despatched to a destination entirely contrary to his wishes. This lamentable defect in our law was sufficiently highlighted by the recent unfortunate case of Dr. Soblen, and it would be sad indeed to find the Executive being armed with similar, if not greater, powers to deport Commonwealth immigrants without their having any right of appeal.
On the whole, I would hope that the whole problem might be left to the ordinary courts rather than be referred to our new Ombudsman, so long as the courts are allowed to consider the merits of each case, and are not confined simply to considering any technical flaws in the deportation order.
There are still many other speakers who wish to speak in this debate to-day, and it would be most improper if I were to take up any more of your Lordships' time in dealing with these matters, all of which will have to be examined in considerable detail later on in the Session. I therefore conclude simply by expressing my warm support for a programme of social reform which, as set out in the gracious Speech, seems to be, speaking generally, both well balanced and well conceived.
5.34 p.m.
THE MARQUESS OF ABERDEEN AND TEMAIR: My Lords, I propose to confine my remarks and comments to one single paragraph in Her Majesty's gracious Speech—namely:
"Legislation will be introduced to remove statutory limitations impeding the proper use of the manufacturing resources of the nationalised industries."
Yesterday, the noble Lord, Lord Champion, gave an extremely lucid explanation as to why steel was not mentioned in the gracious Speech; but he ended by saying:
"From where I was standing during the reading of the Speech, I watched members of Her Majesty's Opposition straining forward, listening intently for a mention of steel nationalisation."—[OFFICIAL REPORT, Vol. 270 (No. 5), col. 470, 16/11/65.]

619
Well, I can certainly say that I was one of those leaning forward with my ears cocked. I am only sorry that the noble Lord had to stand, instead of having the comfort of sitting down as did those he described. I listened carefully to that perfect enunciation, and at last there emerged the word "nationalisation". No, it was not steel; but it was a measure (which I suppose means Bill) which was mentioned. Of course, we do not yet know what the Bill will contain. We do not know when it will be introduced; nor, if it is introduced in another place, how long it will take there; or even if it will start here. So all we can do is to consider the main principles which are raised by that statement. It has not attracted a great deal of attention in this House, but it has attracted a good deal in industry.
Yesterday there was a debate on the subject in another place, and I should like to quote what Sir Martin Redmayne said. He referred to this proposition and said:
"The Government cannot be surprised, therefore, if we regard these propositions with some suspicion."—[OFFICIAL REPORT, Commons, Vol. 720 (No. 6), col. 957, 16/11/65.]
In the Prime Minister's words in the debate on November 9 it was put like this:
"… the manufacturing establishments of our publicly-owned industries will be freed from the vexatious, not to say ideological, restrictions on their ability to make a full contribution to our national production drive, including exports."—[OFFICIAL REPORT, Commons, Vol. 720 (No. 1), col. 37, 9/11/65.]
After more than sixty years' experience of industry, I hold that the nationalised industries should stick to their own last and should not start manufacturing. The statement speaks of their manufacturing resources already in existence. In certain cases they do exist, notably in the case of the railways. In the case of coal also there are certain manufacturing resources, albeit small. I have mentioned the nationalised industries, but I also hold that that is a wrong expression. They are not industries. They are services; and those services can be carried out in a national organisation. I myself would certainly never want to change any one of them.
To-day we have spoken a good deal about electricity. I might mention, in passing, that the electricity authorities have managed to keep the Palace of West-
620
minster most comfortable. But they are much better concerned in organising the arrangement and carrying out of their technical requirements. Here again, I would say that, in spite of what has happened, I have the greatest admiration for the way that that has been done. Let us take comparison with the United States of America. There, the electricity supply industry is not nationalised. Look what happened when there was a fault! It spread so rapidly that it blacked out a great section of the whole country, including part of Canada. It is true that here the service got into great difficulties, but they were able to borrow electricity from Scotland. That saved the situation in the North, and prevented the difficulty from spreading everywhere. One must still say that one realises that to have sufficient equipment to provide for emergencies at any time of the year entails an enormous amount of unused plant during the time when there is no overloading. On the matter of railways, here again they do not manufacture anything but sell their service, as do the electricity industry, the coal industry, and so on; but do let them keep to their last.
I do not think we are half way through the list of those who wish to speak, so I will be very much briefer than I had intended to be. I have said that what we have to consider is general principles. Those are already being considered very carefully by industry. I have said how in another place yesterday this particular measure was discussed at considerable length. This afternoon the usual meeting of the Grand Council of the Confederation of British Industry takes place; they will discuss the matter this afternoon and come to further decisions as to policy. They have already been in touch with Government Departments as to any important features.
I would mention my own experience of one service and that is the coal industry, which is a supplying industry that has to transport its output. A firm of which I was chairman for many years supplied a speciality to the coal industry. We put in some new plant which was going to increase the production, with proved methods, at very high speed and lower cost; and equipment of that sort took some time to put in. By the time it was completed and ready for operation, the Coal Board had started to make that

621
same speciality itself. Therefore, we had no outlet for that special equipment at all and it had to be altered for some entirely different use. I use that as an example, and it may be that the same sort of thing has happened to others. I would also refer to the matter of supply of machinery and equipment to the electricity industry, and the fact that some of the equipment has been late in delivery. That is bound to happen, and it is possible that if one were to go into it one would find that it was necessary in order to give preference to an export order.
I will end by giving a summary of what we might do. What might be convincing would be the removal of protection from all State manufacturing, both present and proposed. What will not be convincing will be a claim that one part of the production needs protection and another part does not, and that the protected part would not subsidise the unprotected part. If a nationalised industry is to compete with private manufacturers, it should do so on a strictly commercial basis. The comparison must be a fair and accurate one, however difficult this may be to achieve. When deciding whether a nationalised industry should be allowed to manufacture for sale, the direct and indirect effects of the national capacity to export should be carefully considered. My Lords, I hope that, having cut out a good deal of what I wanted to say, I have been able to make some sort of case. In conclusion, I will just say this. When the Bill referred to reaches this House for discussion, I shall certainly hope that, with the addition to my already advanced years, I am still able to speak and to take part. And if a steel Bill ever comes here—I may be dead by then—I shall speak on that, too.
5.45 p.m.
LORD FERRIER: My Lords, I welcome the references to Scotland in Her Majesty's gracious Speech, about which some other noble Lords will speak, and to safety on the roads. My excuse for referring to this latter again is that it is a year, almost to the day, since your Lordships debated a Motion of mine urging co-ordination of research into road accidents. You will be saved a good deal of my speech by the fact that I will not refer to matters which have already been dealt with, but I think that
622
one could safely say that we all look forward to seeing the Bill which we are promised in regard to safety on the roads. I gather from proceedings in another place that action is expected in relation to drink and driving, and also the condition of vehicles. Perhaps it will contain more, and perhaps it will be one of the Bills which will originate in this House. If it does, we shall have plenty of opportunity to debate it. I think everybody will agree that your Lordships, for many years past, have given this matter a great deal of careful thought.
Like the noble Viscount, Lord Brent-ford, I am one of those who consider that, when one bears in mind the attention paid to the matter of drink and driving, on the overall problem much more weight should be given to other and more easily prevented causes of accidents. On the question of accidents, and especially serious accidents, vehicle failure is one important factor. In saying this, I yield to no one in my distaste for drunken driving, drunken cycling, or drunken walking. However, as was said by the noble Viscount, Lord Hanworth, in the debate last year, "emotion should not cloud our judgment". I believe that the incidence of serious accidents could be cut if Press and public would take more notice of other causes.
There have been much more recent serious happenings, to which the noble Lord, Lord Lucas of Chilworth, has made reference to-day, because of fog on the motorways, and this has done something to focus attention on the relationship between road conditions and safety. Despite what Lord Brentford said, however true it may be in one sense, I wish people would stop saying that speed of itself is not a factor. In my view it is. If it is not, then why is it that there is an overall speed limit of 70 m.p.h. maximum throughout the United States? I feel that speed limits of that nature are easier to enforce than the "spot" ones, ranging from 50, 40 and 30 m.p.h., which present such problems to the police, when they do manage to catch somebody, in proving the matter in a court of law.
It is not my intention to do more than express the hope that the scientific analysis of the causes of serious accidents is now reaching a stage when more absolutely specific advice as to the chief

623
causes of major accidents can come from the Ministry. Can we not go further than drink and driving and the condition of vehicles? What about eye-tests? Surely certificates should be essential for everybody applying for a licence, and they should apply for certain fixed periods. I have a specific suggestion to make here, and that is that, as the doctors have plenty to do without worrying about that sort of thing, a certificate from a qualified optician should be adequate to cover the need.
My next point is about driving tests. One part of every driving test should be a test in the dark. One notices so markedly, as the winter approaches and days get shorter, how extremely "chancy" some of the driving can be when the lights come on in the twilight. Another point concerns safety belts. Are safety belt anchorages to be made obligatory in new cars? That is something which I believe to be overdue. Then I do not see how it is possible to include in a Bill anything about the absolute necessity, as I see it, of staggered double white lines on three-lane highways. Another point that has come to my notice is that articulated vehicles are continually a cause of accidents because of "jack-knifing", arising from the lack of a device to prevent the rear wheels from locking. Such-and-such-and-such might be included in the Bill, but a complete catalogue of that length is, I imagine, out of the question. But we shall see.
There is certainly much more to be done that cannot be done by legislation. I think that the Minister has done well to speak out about the lunatic excessive speed in poor visibility. Probably like everyone else in your Lordships' Chamber, I could tell some stories about motoring in the fog in the last few days, but I will refrain. Incidentally, I am doubtful about the use of illuminated signs on motorways. I feel that a headlight illuminating the fog in front of you is the best illuminated sign you can get, and it is little use saying at the inquest, "I am so sorry, but nobody had turned on the sign." That is what I fear with an excessive number of warnings, leading to people relying on them, like the man who drove out into a road and had a collision. When asked why he came out, he said, "There was no 'Halt' sign."
624
Talking of "jack-knifing" of articulated vehicles, are our lorry drivers maintaining their reputation for skill and courtesy, which at one time they were so much respected for? I believe that the standard is deteriorating, and that more and more of them are driving more selfishly. I think that the motorways are responsible for this. They are certainly driving too fast on ordinary roads. We have had three crashes in our village in exactly the same spot, with exactly the same cause—a "jack-knifed" articulated vehicle. Nobody was hurt, but each of those vehicles must have been doing something like 40 m.p.h. in a 30 m.p.h. area. This bears out the point made by the noble Lord, Lord Lucas of Chilworth, that these limits are useless unless they are enforced.
I do not go all the way in the circumstances, with those who criticise the cut in road expenditure. What I mean is that I do not imagine that, in the general squeeze, the Minister of Transport had any choice. But I do say that the financial cuts need not have been so swingeing. That is another matter, but I am confident that there would not have been the necessity for a cut of this nature, with all the results which the noble Viscount, Lord Brentford, pointed out, had the last Government not been replaced. What the noble Viscount, Lord Brentford, said about cutting down on schemes designed to reduce the accident factor is, to my mind, very disturbing. One would have hoped that it had been possible to cut back no scheme which was specially designed to reduce the accident factor.
The popular cry is for more and better roads. I do not know how many of your Lordships heard Mary Stocks, in her broadcast at 7.50 a.m. on Saturday, so vividly liken this to the worship of Moloch. This cry for more and better roads seems to me to be wrong. "More and better" savours to some of "greed and speed". Should we not clamour for safer and safer roads? What could be better than that?
There is so much that could be done with minimal expenditure. Take, for instance, the positioning of 30 m.p.h. limit signs outside villages. Many of these could be moved right out from the positions in which they have nestled for the last many years. But the sanction of

625
the Minister of Transport, or of the Secretary of State for Scotland, is necessary before a local authority can move a 30 m.p.h. sign, and the minimum time which that takes is four months. Only to-day I mentioned this point to somebody who said, "That is why the one in our village has taken nine months to move". I mention this matter because I have a specific suggestion to make: that some of this red tape could be cut away in order to speed up the ability of local authorities, the men on the spot, to act in carrying out their responsibilities—which they all appreciate, but in which they must be somewhat frustrated sometimes—of trying to make the roads safer, and safer for the people under their care. Indeed, would it not be possible for this question of the locating of road signs at least to be in the hands of those at county level?
I have a bee in my bonnet about my next point, and I feel that it should appear in the Bill. It is that propaganda about the danger from leaving vehicles stationary at bends and at blind spots could be stepped up. If it is not possible to enhance the penalties for this practice (and I do not see how it can be, without more arid more powers for the police), at least propaganda should be stepped up, at Ministry level, to emphasise the dangers of moving vehicles colliding with the rear of stationary vehicles. This type of accident is an absolute killer, and it is an accident which stems so much from lack of thought for others. If a person leaves a vehicle in a dangerous position—and I include in some measure those responsible for road-works signs and road-works vehicles—he is guilty of not thinking of others.
I am sorry that there are no Bishops on the Benches, because I feel that the Churches could do more than they are now in building up a feeling of responsibility among the people in regard to this ghastly accident loss. Could they not do more both from the pulpit and, perhaps, from the palace? I love this quotation:
"There is nothing more infectious than bad manners, unless it be good manners."
What about a conscious effort by everybody to try to leave early for an engagement? That is a simple way to good manners, because there are too many rude and dangerous things done by people in
626
a hurry—a hurry often arising from their own fault. I believe that Christians should set an example of unselfishness, gentleness and humility on the road, and I believe that the Churches could do more to further this end.
As I was saying, the prospect of legislation to promote road safety is inevitable. As His Royal Highness Prince Philip said, I think, yesterday:
"All road users will have to accept increasing restrictions, because of the totally inexcusable behaviour of the minority."
I suppose that we must just face that, and face it bravely. But do not let us assume that, because legislation may contain certain causative factors, the individual can relax in his own personal contribution day and night.
During the debate reference has been made by the noble Lord, Lord Lucas of Chilworth, to the police, and by the noble Viscount, Lord Brentford, to the very interesting experiment being carried out with regard to police being seen and being on the job. It is most gratifying to hear that recruiting is going up, because I am certain that the sight of more police on the roads is a very important factor in containing bad driving.
My Lords, there is one factor in regard to road safety which is worth considering, and it is concerned with road design. I refer to the need for bypass roads around cities and towns. I mention this in connection with accidents specifically, because it seems to me to be a most interesting point for research. The extent to which a bypass road can prevent road accidents within a densely-populated area cannot, I imagine, be calculated, but I believe that it could be estimated: and such a factor, in terms of the value to the community of such a saving, should he one which has a bearing upon a decision as to the viability or otherwise of a bypass road. With these few remarks I welcome the gracious Speech and support the Motion.
6.2 p.m.
LORD HILTON OF UPTON: My Lords, on the final day of this debate on the gracious Speech, during which we have listened to many really first-class speeches from all sides of the House on such a variety of subjects, it is surprising that there is anything at all fresh to say arising from the gracious Speech, but I

627
think there are just a few points which certainly need elaborating, even if they are not entirely fresh. We have had complaints from the Benches opposite because some things have been omitted from the Speech. For instance, the noble Marquess who recently resumed his seat was complaining that steel nationalisation was not referred to in the Speech. I have had experience in another place for a number of years, and I realise that, in the eyes of the Opposition, any Government has a very difficult job in being right, no matter what is contained in the gracious Speech. But, although complaints have been made by the Opposition that steel nationalisation is not mentioned in the Speech, I can well imagine, as can many of my noble friends on this side of the House, the squeals that would have gone up from the other side had steel nationalisation been included.
In my opinion, this is one of the finest programmes of legislation presented to Parliament for many years, and I will tell your Lordships why. During the last Election campaign, one of the slogans of the Labour Party—one of which I was very proud—was:
"Labour believes in people."
There is no need for me to catalogue them now, but many of the proposals contained in the gracious Speech will be of very great benefit to the people of this country: not, perhaps, to the mass of people, but to certain sections of the people who, very often in legislation of this sort, get overlooked.
Now I have one—I was going to say complaint, but that would be rather an exaggeration. I regret one omission from the gracious Speech, and that is that there is no reference in it to the proposals of Her Majesty's Government to clean up some of the programmes on television. For some time now many people in this country have been concerned because so much bad language is now being used in television programmes, and I am sure that last Saturday night, very shortly after that most impressive ceremony in the Albert Hall, the programme B.B.C. 3 must have sunk to an all-time low level, with a certain individual using that most offensive four-letter word; and it is not surprising that this has resulted in so many complaints. The thing that struck
628
me about it, my Lords, was that, if an individual used language of that sort in the street, he could be prosecuted for using obscene language, and the possibility is that he would be fined for it. Yet an individual on a television programme can offend millions of people in their own homes and get away with it. A lot of people have condemned this, and I hope that, in the not too distant future, this Government will take steps to see to it that television programmes are cleaned up.
My Lords, I am pleased with most of the proposals in the gracious Speech. In particular, I welcome the small reference to companies' disclosing their contributions to political funds. I fail to see why companies should be upset about this. I am a leader of a trade union. We support the Labour Party, and each year we publish the amount that we contribute to the Labour Party's funds. There is nothing wrong with this, and I do not say there is anything wrong with companies' contributing to other political Parties' funds. I really cannot see any objection to their publishing just what they do in this connection.
There are so many things that one could speak on arising from the gracious Speech, but, in particular, I welcome the proposal
"to provide supplementary national insurance benefits, related to earnings, in the early stages of sickness, unemployment and widowhood."
In most cases, the people concerned are in a very difficult situation. A man has been working for a long time when suddenly he is stricken with sickness, or he loses his job, and goes on either sickness or unemployment benefit—about half the amount of money that he has been receiving while at work. What is more, in the case of sickness, especially, it very often costs more to live at that time, because sometimes the doctor suggests extra nourishment or, in a cold spell, more fuel to keep the patient warm, and such things. I welcome the Government's proposal to take action to give greater benefits in cases of this sort. In another way, the same applies to a widow in the very early days of widowhood. Her husband has been working for a good long time when suddenly he dies, and the pension that she gets, compared with his wages, is all too small. So I am glad that the Government are taking

629
this action to alleviate the position of these people who, after all, are mainly on the bottom rung of the incomes ladder.
The proposal to extend the supplementation of workmen's compensation is also a humane step to help another small but important section of the community; but, as acting president of the N.U.A.W., I welcome in particular in this section of the gracious Speech the proposal of the Government
"to empower agricultural wages boards to fix minimum rates of sick pay for agricultural workers".
This is something for which farmworkers have pressed for years; it is something that the majority of workers in other industries have enjoyed; and I hope we shall not have long to wait for the relevant Bill. I wish it were possible for us to know to-day just when we can expect this Bill, because surely this is something quite uncontroversial, something for which the farmworkers have asked, and to which they have been entitled, for years. I only hope that when the Bill is introduced the Minister responsible will make it absolutely watertight, so that no farmer can get out of his responsibility to pay this sick benefit to his worker by sacking him if he becomes sick.
My Lords, the last speaker referred to transport and, in particular, to road safety. Both of these are very important subjects, but in particular he referred to the need for more effective coordination of inland transport and for greater road safety. I hope that my right honourable friend, the Minister of Transport, Mr. Fraser, for a time at least, will stop any more rail closures; because unless he does this it is going to be difficult to co-ordinate rail transport, since in many areas it will be almost non-existent.
In my own area recently we had an inquiry about closing the branch line which serves the King's Lynn, Swaffham and Dereham areas of Norfolk. I am glad to hear that it has been decided to have another look at this situation before a final decision is taken. We in that area are anxious to expand industrially, but we are unlikely to do so if our railways are further curtailed. I am glad that the Minister is to have another look at the position. I under-
630
stand his difficulties, because it is something he inherited, following the Beeching Report; but I hope he is going to look carefully before deciding to close any more branch lines. After all, there is something besides making a profit in transport: there is such a thing as service to the people in the locality. If, for example, the branch line to which I referred is closed, it will mean that people in many parts of rural Norfolk will have less public transport than they have ever had during the present century. If this is not a retrograde step I should like to know what is.
My Lords, the other matter that was fairly thoroughly covered by the noble Lord, Lord Ferrier, was road safety. I thought he was rather inclined to say that too much emphasis is placed on drunken drivers. I do not think we can place too much emphasis on the drunken drivers, who we know from the evidence are the cause of so many accidents. I hope that I misunderstood the noble Lord.
LORD FERRIER: My Lords, the noble Lord did misunderstand me. It is very difficult to find words for what I meant to say that are not open to the interpretation which the noble Lord has put on them. I do not believe for one moment that too much emphasis is given to the problem of drink and driving. I would say, give it more emphasis still; but give more emphasis, also, to those factors which are, when it comes to analysis, as the noble Viscount, Lord Brentford, pointed out, the cause of more fatal and serious accidents than drink and driving. But I am glad that the noble Lord raised the point because I certainly did not mean to suggest—and would never suggest—that too much emphasis was given to the matter of drink and driving. In fact, I recollect that last Christmas-time I was a strong supporter of the Government.
LORD HILTON OF UPTON: My Lords, I am grateful to the noble Lord for clearing my mind on this point, because we are now getting near Christmas; we are getting to the season when we expect to see the results of the campaign against drinking and driving. I think the more publicity we can give

631
to road safety between now and Christmas, the better the results are likely to be; with a reduction in the number of accidents caused by drivers drinking too much.
LORD FERRIER: My Lords, I am most grateful to the noble Lord for clearing up this point.
LORD HILTON OF UPTON: But, my Lords, in this connection there is one thing that has worried me for a long time—and I hope the noble and learned Lord who sits on the Woolsack will note what I am going to say. I have been worried at times at the results of magistrates' court hearings where the police have arrested and summoned people for being drunk in charge of a car or for drunken driving. It seems to me that too often, and particularly when they come before some local magistrates, the case is dismissed. This has worried me and I wonder, sometimes (this is a personal view) whether, with some magistrates, it is not a case of their looking at the defendant and saying: "There but for the grace of God stand I." It seems to me that in these cases it would be much better if it could be arranged that the court should be comprised of total abstainers—
SEVERAL NOBLE LORDS: Oh, oh!
LORD HILTON OF UPTON: This is my opinion, and it is a serious one. There should be a court comprised of total abstainers to try such cases. Maybe, on most benches, this might be difficult; but one could get members from adjoining benches to form such a court. I would seriously ask the noble and learned Lord to consider this matter, because it has worried me for a long time. If this were done, I think we should get many different verdicts than at present.
LORD SOMERS: My Lords, if I may interrupt the noble Lord, I think the only result of that would be that they would invariably find the defendant guilty.
THE EARL OF LONGFORD: They usually are.
LORD HILTON OF UPTON: My Lords, thank you.
I should just like, in conclusion, to say a brief word about the London traffic problem. We who drive in London all
632
the time know that this is becoming more and more of a problem. Watching the traffic at certain times of the day, it is quite obvious that the majority of cars coming into London from 8.30 to 10 o'clock in the morning have just one occupant. Going in the other direction, between 4.30 and 6.30 p.m., the majority of cars still have one occupant. These, in my opinion, are the main cause of the traffic problem in London; and I think some Minister of Transport will have to grapple with this problem. I hope that it will be the present one.
It is going to annoy a lot of people, but my suggestion in this connection would be that cars with just one occupant should be barred from central London between those hours. I am quite sure that this would allow people to travel freely in this great city, and I believe that if it were tried it could effect a great saving in many ways. People could pick up one or two passengers, bring them to London, and take them home again. I believe that this would about halve the amount of traffic, and would go a long way to solving the problem.
LORD SOMERS: My Lords, before the noble Lord, Lord Hilton of Upton, sits down, may I comment on his last few words? This question of banning cars from central London, would I admit, on the face of things appears to be a very good thing to do. But has the noble Lord ever considered what would happen to public transport if that were done? Has he travelled by public transport, as it is at the moment, during the rush hours? I have often done so, and it is already absolutely crowded to capacity. It is not possible to run more trains on the Underground, and I doubt whether more buses could be put on the road. The buses are already full. If you are going to double the number of people at present travelling by public transport, how will you cope with them?
The other point about cars with only one person in them has been raised very often, but let us put ourselves in the position of someone who is coming into London from, say, a village fifteen miles out—
THE EARL OF LONGFORD: My Lords, I hesitate to interrupt the noble Lord, Lord Somers, because he is the best listener in the House, but is he making

633
a speech or asking a question? I am not sure what state he is in, so to speak.
LORD SOMERS: My Lords, I am sorry. It is not a speech. It is merely a comment on what the noble Lord, Lord Hilton of Upton, was saying. I am saying that it is almost impossible to find someone who would be travelling to precisely the same spot at precisely the same time as oneself.
LORD HILTON OF UPTON: My Lords, may I make a brief reply? I have thought about this matter, and I have travelled by public transport, as well as in my own car. I am sure that if the number of cars on the roads were greatly reduced it would give the bus drivers far better opportunity to stick to their timetables. More buses could be used in the rush hours, and I believe that this would help to solve this problem.
6.22 p.m.
LORD BALERNO: My Lords, I agree with the noble Lord, Lord Hilton of Upton, on at least two points: first, on the point he made regarding the regrettable mistake of the B.B.C. last Saturday night. The official apology from the B.B.C., if you call it an apology, was that the word was unscripted. Rather worse than the use of that word on the programme were the words which led up to it. I cannot believe that the words of the gentleman who created the situation which enabled the other person to say what he did were unscripted. Therefore, for the B.B.C. to put out as an excuse that the programme was unscripted seems to me very shallow indeed. This is the more so, as written into the Charter of the I.T.A. is a phrase to the effect that the I.T.A. must maintain conditions of decency. Those words were deliberately not written into the Charter of the B.B.C. because it never occurred to anyone that the B.B.C. would fall into the hands of people of the nature and the type who hold the B.B.C. at the present time.
The other point of agreement with the noble Lord, Lord Hilton of Upton, relates to the omissions from the gracious Speech. The omissions to which I would particularly draw the attention of your Lordships concern provisions for Scotland. There are a few lines at the end of the gracious Speech stating that:
"Provision for meeting the special needs of Scotland will be made in the various measures proposed by My Government."
634
That is not very helpful to those of us who are interested in the development of our country.
There is so much that the Government might have included, quite briefly, as an, indication of what we might expect. There have been—perhaps they are continuing—some national surveys, and it would have been interesting to know whether any action was contemplated on them. It would be most interesting to know whether Turnhouse Airport is likely to get the second runway which is absolutely necessary. One can read the whole argument for it in the Scotsman of yesterday. The red herrings which have been drawn across the path of those who have raised in this House the question of this second runway have all been dealt with faithfully. It has, been pointed out that the future types of aircraft likely to use Turnhouse Airport will be even more upset by crosswinds than the Vanguards are at present. There are other matters to which reference might have been made, such as the provision of electricity, and the coordination of electricity supplies in Scotland.
Another subject which might have been included is one which I should have thought would interest the noble Lord, Lord Hughes, namely, industrial developments in the North East of Scotland, which, I presume, would include Dundee. There is a little question about rents, too, which could have gone fittingly into the gracious Speech. The scant attention given to the needs of Scotland indicates some indifference on the part of the Government. There are many pressing problems, but I would not, for a single moment, put the blame for this on the shoulders of the Secretary of State for Scotland. The right honourable gentleman must be commended for his doughty stand in the matter of the Christmas card which has been produced for the benefit of Members in another place. The caption on the card, indicating as it does that the King of Scotland, as such, is doing homage to King Edward, is bad history. Indeed, it would follow logically from this that in the fourteenth century Scotland made a unilateral declaration of independence. Perhaps it was because there were so many Scots in the States of North America that a unilateral declaration was made there. It might also apply to more recent cases.

635
I welcome most warmly the intimation in the gracious Speech of a Bill to facilitate the revision of the constitution of the Scottish universities. This has come just at the right time, and we must be grateful to the Government for bringing it forward so promptly. I should like, also, to commend the Government for their ingenuity in including the future reconstitution of the older universities at a date which each university may fix for itself. The proposed amendment of the constitution and the powers of the university courts is also to be warmly welcomed. I should here say that I have an interest, being a member of the Court of the University of Edinburgh. The proposal that two readers or lecturers should be added to the university court, is a good one, and in cognisance with the proper traditions of university education and life. One is glad also to see that the powers of the courts will be largely exercised by resolution instead of by ordinance in council.
Also to be welcomed are the proposals for the new University of Dundee and the consequent provisions for St. Andrews. It is worth noting that the medical school will go to the new Dundee University. The noble Lord, Lord Hughes, having, in his capacity as Lord Provost of Dundee, served on the Court of the University for many years, must be particularly glad. We know that there have been difficulties in the past in the relations of St. Andrews University and the Dundee Colleges, and one would certainly wish them well for the future. With the noble Lord, Lord Hughes, keeping his eye on developments, I think that we can be assured of that.
6.31 p.m.
LORD BLYTON: My Lords, I hope that the noble Lord will forgive me if I do not follow him, because I want to deal specifically with the National Plan in relation to the energy policy for the future, to manpower and redeployment, and to the structure of the new plan for the coal industry. The National Plan is a guiding light for the development of our economy up to 1970. By and large, I regard it as a first-class document. At least, it is an attempt to set before the nation a plan for the future. It is a Plan that can be adjusted to meet the changing circumstances of the future.
636
It is on the part of the Plan on fuel policy that I have my greatest misgivings. It is estimated that by 1970 the mining industry will be cut back to 170 or 180 million tons, with a consequent loss of manpower which will bring the number down to 350,000 or 400,000 men. In the next two years 150 pits are to close, and the Government, quite rightly, are proposing to bring new industries to the affected areas. The Plan indicates that in our energy policy there is to be more reliance on oil and natural gas, which will have to be imported and will be a charge upon our foreign exchange and add to our balance-of-payments difficulties. I am, I may state, a very disappointed man. I recognise that the figure is only an estimate and does not prevent the industry from producing 200 million tons, but for thirteen years we fought in Opposition—and I was No. 2 in the other place on these matters—so that the base load, in a rising future energy policy, should be 200 million tons.
In my long association with the mining industry, there has never been any shortage of coal problems. In the main, they have been of two kinds—either those which arose internally, like the problem of technical backwardness during the inter-war years, or those which arose from the impact of external forces. This is a constantly recurring problem in this industry and it is the problem we face now. The real troubles in the last forty years have arisen from the violent fluctuations in the demand for coal. These fluctuations have bedevilled the industry for as long as I can remember. At one time there is a sudden upsurge in demand, then at another there is a sudden slump. During these forty years we lurched from crisis to crisis. At one time, there is so much coal that there is a crisis of overproduction and there is a glut that cannot be sold. At another time there is not enough coal and there is a crisis of underproduction. At one time, there are too many miners, and at another time there is a shortage of them. A manpower crisis results in an intensive recruiting campaign to get the men back to the pits.
The coal industry has suffered these violent fluctuations more than any other industry in this country. By its nature and structure, the coal industry is fitted less than any other to stand the shocks, strains and stresses of these sudden

637
changes in demands. A pit is not a factory. It is not operated on the same lines as a factory is. The supply of coal cannot be turned off and on like a tap can. These violent fluctuations have caused immense difficulties to the industry.
A few years ago there was a shortage of coal. There was a clamour for production and still more production. And we had to get it, irrespective of price, quality and cost. The industry was strained to meet what appeared to be an inexhaustible demand for coal. The Coal Board had to work uneconomic pits, neglect development, concentrate on immediate production, and had to cut its exports, to meet the demands of the home market. There was an acute shortage of miners, a desperate shortage of men. I took part in the Board's campaign in the early 'fifties to try to get men back to the industry. The great inducement we offered to the men then was that the industry promised prospects of security of employment. And the prospects seemed very bright. The Conservative Party told us that the future prosperity and expansion was so great that the industry had to be geared to produce 240 million tons in 1965. Throughout the industry, there was an atmosphere of optimism, buoyancy and confidence.
Then the situation changed rapidly. Once more we faced a slump in demand. Once more there were too many miners and there was too much coal. It was a difficult situation for the Coal Board, when we had geared the industry to meet a rise in demand, and drastic measures had to be taken. Collieries were closed. But at least I will say that the Board applied their measures in a more rational way than the old coalowners, and did all they could to offset the social consequencies. However, all that had happened left a deep scar on the consciousness of the mining community, and the suggested cutting back of the industry in the National Plan has further deepened it. There is no doubt that the miners' faith in the future of the industry has been shaken. This situation has revived all the old doubts, suspicions, fears and apprehensions that have been with us for forty years. Collieries are closed down, and villages become deprived of the only industry they have, which is a serious matter for them. Despite every-
638
thing that can be done by the Miners' Union, the Government and the Coal Board to get employment for the men displaced, it means that the men are uprooted and sometimes have to go 100 miles away to get work, with the loss of a lifetime's association they had in the colliery village in which they have lived.
To-day the migration of young men from the pits is really appalling. Mining in the main is a hereditary occupation; the father takes his son to the pit as a matter of course. But that tradition is slowly, but surely, being broken. And, in my opinion, it will have big consequences for the future of the coalfields. The exodus from this industry is on a scale which has no precedent or parallel in any other industry. The migration that is going on is bound to have a disastrous effect on the morale of the men who are left. It is contagious; it will run through the industry like a disease. Even to-day there are 15,000 vacancies in our pits, and we cannot get men to fill them.
I am all for mechanisation, because machinery can do a lot. It can replace men; but it cannot replace morale. Machinery can raise output, but it cannot raise morale. I would urge the Government, even at this late hour, not to underestimate the importance of this on the future of this indusry. Men are going out of this industry to-day more rapidly than they can be replaced by machines, and they are leaving for all sorts of reasons, but I believe the main reason is that they have no confidence in the industry, seeing that so many men have to go, with a cut-back of over 25 million tons in actual production in the next five years. The only way to give them confidence is to give the industry some degree of stability and some prospect for the future. To cut the industry back, to give way to oil in place of coal, cannot create the confidence that is necessary to keep our men there. Unless we are careful, the contraction that is going on, and will go on, will not only become a decline, but most likely will become a disaster, even in the pits in Durham, where on television every night they are urging the young men to come into the pits, even in the circumstances I have tried to describe.
I regard this cutting back of our industry as a matter of great importance. Our greatest difficulty to-day is on our

639
balance of payments, and in increasing our exports to meet the cost of our imports. Under this Plan, we shall have to find a huge amount of foreign exchange to meet the added importation of fuel, when this industry is cut back to 170 or 180 million tons. It is estimated that it will add £18 million a year to the import bill. To-day our imports are something like £500 million a year, but as we cut the use of coal we increase the country's balance-of-payments difficulties. This is most certainly not in the national interests. As I see it, the present trends in production, consumption and manpower, if not arrested, will even destroy the stated aim of the National Plan for coal.
I have not been alone over the last four years in possessing a strong suspicion that the coal industry was being allowed to drift until such time as we should not have the men or the capacity to fulfil even the new target embodied in the National Plan. We have always known that there were powerful forces pressing for a drastic cut-back in coal production. I believe—and I say this quite sincerely to my own Government, for whom I have fought for nearly fifty years—that the economists who advised the Government on this matter were wrong, as they often are. This needs to be said, because the longer the present drift is allowed to continue, the more difficult it will be to arrest.
In 1964 10,000 more men left than in 1963. This year it is running at a rate of 1,000 men per week, or 52,000 a year. In the main, these are men who are under 50 years of age, and this must affect the quality of the labour force remaining in our mines. There is a serious imbalance of manpower at many mines, and productivity increases are seriously impeded in the most efficient pits in the coalfield. It has made others uneconomic, and increased the losses on those already in difficulties. The stark truth is that there is a lack of confidence in the future of the mines, and recruitment is almost confined to communities with a tradition of mining employment. Three hundred thousand men, excluding this year's figure, have gone from this industry since 1958.
It is the cumulative effect of all this that has shaken the confidence in job
640
security in the industry. Nothing has been done to restore this, and this cutback made in the National Plan will most certainly aggravate it. What has been happening is that in recent times judgment of the viability of this industry has been based on the short-term market considerations which prevail, completely ignoring the long-term needs against available resources. The repeated advocacy of a large section of the community, that coalmining is a dying industry, and that it must, give way to other forms of energy, is responsible in a large measure for the existing manpower problem that we are facing, and the continuance of this attitude is responsible for impeding the advance of productivity and holding back the viability of the industry.
I do not want to urge men to work in the bowels of the earth to get coal for a moment longer than is really socially necessary. I had 32 years down the pit, and I am not one to advocate that anyone should spend his life as I did. But, having said that, I say that we must have stability, and a sizeable industry at that, because the smaller the industry gets, the more dependent the nation becomes on imported fuels, with all the costs which I illustrated to your Lordships. The smaller it is, the less viable and competitive it becomes, because of the fixed charges; and the present situation is compelling a smaller industry by the anarchic market forces which we cannot control.
According to the N.E.D.C. Report, based on a 4 per cent. increase each year in the national output, in the next fifteen years no less than 165 million tons of coal, or its equivalent, more than we are using now will be needed. Even if this National Plan had given us 200 million tons, the consumption of other fuels will have to double in the next fifteen years. This Plan means that, with an increased energy market in the years ahead, not only is coal to get none of it, but it is to be cut back 25 million tons, which makes me really despondent. As I say, these other fuels will have to be imported and the nation will have to bear the cost. I know it is argued that the industrialists must go for the cheapest fuel that can be obtained at any given moment. Conversion to oil, which is cheaper in a company's own accounts, may not be cheaper in the terms of the nation's book-keeping. I am certain that in the national interest

641
a healthy British coal industry is the best protection our industrialists and other fuel users can have against rises in world energy prices, which are sure to occur while oil and other fuels have a real grip on the internal British market.
In the interests of the nation, and because of the progress that has been made in productivity in our British mines, I would say to the Government that time ought to be allowed for the growth of energy to catch up with the present surplus of fuels; that time ought to be given to the Coal Board to get on with its policy of concentrating on efficient mines, and time to push on with its mechanisation and its new technical developments. To give it that time it needs the help that I am pleased to say the Government have given in the new Bill, called the Coal Industry Bill, that has been presented to-day.
Before I deal with that I should like to say this. Even with the 200 million ton target, I recognise that there would have to be closures. When the coal has gone the pit must close. But there is a terrible fear of this happening in the pits in the efficient areas in this country like the Midlands. A man who is in an economic pit is always afraid, because the economic pit of to-day can be the uneconomic pit of next week. Even if he is in employment, he is always afraid of what will happen to him, not to-day but next week in circumstances of that character. Therefore, I hope that the Government will bring industries to the area before the pits are closed. There will be large problems of retraining the partially disabled men who have been injured, and we also have to think of the men over 55 years of age whom it is not possible to retrain in new skills.
I want to congratulate the Government and say that I am gratified with the White Paper on the finances of the coal industry. We fought for this in Opposition for over thirteen years. The burden of capital expenditure to meet the Conservative Government's target of 240 million tons in 1965 has resulted in this industry carrying huge debts which ought never to have been carried. Another burden was that successive Governments—and I can include our own—refused to allow inland prices to rise because of the political expediencies of the time. This
642
can clearly be seen in the Select Committee's Report on the Coal Industry. It will show your Lordships exactly what happened. During this time the Board incurred losses instead of making surpluses and building up their reserves. I am pleased that our Government are now to relieve the industry of much of the burden which the industry should not have carried from past under-pricing. Also, they should not have carried the burden of the import of coal at £2 10s. a ton loss because we had to sell at inland prices. Therefore, the Bill makes provision for this, and £415 million of the Board's debt will be cancelled. The Minister proposes to write off any deficit up to the maximum of £25 million in 1965–66, because again there is delay in making price increases.
I know some people will say that the industry is being helped at the expense of the taxpayer. But they should remember that in the years that are gone they got their coal more cheaply because the Government of the day refused to allow price increases which were commercially needed at the time. They also ought to remember that many industrialists got imported coal which was subsidised by the Coal Board to the extent of £2 10s. per ton. I want to remind your Lordships that we are not the only industry which has had help in this respect. There are many other indigenous industries in this country who have been assisted generously by the Conservative Government. These facts ought to be stated. Of the £1,200 million spent on capital development by the Coal Board, £650 million came from the Coal Board's own resources, and between January, 1947, and March, 1964, £460 million was paid to the Treasury in interest payments. The Board has spent £50 million on house building, which I regard as a state responsibility.
Since 1947, agriculture has received nearly £3,500 million in the form of non-returnable grants, subsidies, and guarantees. British Overseas Airways Corporation had £80 million deficit written off, with the provision of a reserve, amounting to a total write off of £110 million. British Railways had £475 million deficit written off, and a further £705 million put into suspense, and I do not think it is ever likely to be redeemed. Atomic Energy had £90 million wiped off for

643
development and research and cotton £25 million to modernise and reorganise its industry. Under this Bill the coal industry are following the trend of the Conservative Party in the last five years before we came to power. Therefore, in the light of these facts, I think our Government are justified in recognising that this industry must be relieved of some of the financial obligations which it ought never to have carried. While I disagree with the contraction of the coal industry to 170 million tons, I am delighted that this financial burden is to be eased, and that funds are to be set up for the redeployment of men, if they are prepared to go, in the circumstances I have tried to outline.
The economists who advise the Government have written down the coal industry, and my regret is that the Government have accepted that basis. We spend each year over £2,000 million for the defence of this realm. We do it because in this uncertain world we must have a defence to protect our island in case of war. The weapons we have are regarded as an insurance against an aggressor, and I think it is right that this argument should be carried into the economic field. We should ensure that within the economy our own indigenous fuel is used to the extent of 200 million tons a year, so that we are not too dependent on imported fuels. Because in the event of trouble arising in the world—something which nobody wants, but it could come in the future—the hazards of bringing imported fuel by ship could bring catastrophe to the economy. When the pits have been closed and capacity has gone, it cannot be regained in a night, because once a pit is closed it takes a long time to reopen it; and sometimes it is impossible.
From a strategic point of view, and in the national interest, I think that the Government have made a mistake in accepting a cut-back of coal. If they had approached the problem on the basis of 200 million tons produced; if they had regarded that as a target and said that they would see that that amount was used, it would have saved on the balance of payments and would have lifted up the morale of our people in the industry. Lord Robens has said that he will continue to base his future on an industry of 200 million tons. I wish him the best
644
of luck, but his task will be hard because he will have to fight against this plan. However, whatever the target of the plan is, I believe that two main factors will determine the size of the coal industry: first, the rate at which the energy appetite of the British economy increases (and that is a point which is outside the control of the Coal Board), and, secondly, the coal industry's own ability, in an expanding energy market, to compete in terms of price, convenience and service.
My Lords, of this I am confident: that in the not-too-distant future, regardless of what the economists say, we shall again see exhortations and efforts being made to get men to the pits. The morale of the men in the pits to-day is the same as it was in the 1930s, when it was the ambition of every miner to keep his son out of the pits. The contemplated closures over the next two or three years, what has gone on in the last few years in closures, and the cutting back of the industry have again created the ideology that mining has no future. I close by asking the Government to look at this matter again, before it is too late, because I fundamentally believe that the economists who recommended the programme proposed are wrong.
LORD HASTINGS: My Lords, before the noble Lord sits down I wonder whether, out of the wealth of his knowledge, he could help us on one question. I have listened to his speech with very great interest, and I feel sure that all noble Lords feel that it was both impressive and moving. As the noble Lord realises, my home is not far from his, and I take a great interest in these matters. He said that 300,000 men had left the industry since 1958. I wonder whether he has any figures which would indicate what has happened to these men. I ask this because of its relevance to the future, and not merely to the past. I believe that a good many have left of their own volition; others have left in the process of natural retirement, and I wonder what numbers make up the balance, and how many of these have found fresh employment.
LORD BLYTON: My Lords, there is a wastage each year, due to retirement, to disease and to injuries; and that wastage is constant. That was what was happening prior to 1950, and more particularly from 1950 onwards. But during these

645
last four years the men earning big wages, working at the coal face, are leaving to go into the motor car factories in the Midlands, and they are leaving the coal industry simply because they regard it as not having any future.
7.6 p.m.
VISCOUNT STONEHAVEN: My Lords, I am going to make only a few of what I am afraid will be trivial comments on matters which have already been raised, but the points themselves have not been raised. I do not intend to speak for more than a few minutes.
The noble Viscount, Lord Brentford, raised the question of the six months postponement of the road programme. I should like to mention two things which he did not include in his remarks, bearing in mind what happened last summer, when, for some reason or other, there was not a bag of cement to be obtained in Scotland. Most modern roads and the big road programmes require a great deal of cement and steel. If we cut back suddenly for six months, and then throw that requirement for cement and steel on to already fully stretched housing and other programmes, which require the same commodities, the situation must be carefully watched, or there will be chaos which will build up all the way along. I mention that as another hazard, in addition to those mentioned by the noble Viscount.
I would also add my plea to those of the many noble Lords, and in particular the noble Lord, Lord Lucas of Chilworth, who have spoken about accidents on the roads. The railways have overcome some of their difficulties of running in fog by having very powerful electric signals. I see no reason why we should not have a very powerful red electric light on the back of a car—not an ordinary tail light but a special fog light, which at least would give the chap following a chance to see something, because there would be a glow visible for a long distance. I think that that suggestion might be worth pursuing.
We have had a fairly long discussion on power cuts, and so on. There are instances where industries use large quantities of processed steam. The paper makers and the sugar beet pulp processors are two that I know about. They use back-pressure turbines and integrate
646
their surplus supply at time of maximum demand with the grid, and buy from the grid at other times. I know of one case in which that has been done with success—in fact, I think there are two cases. There are many paper makers and beet sugar factories which are having to renew their plant, and I think that that possibility should be inquired into, as being cheaper than installing a standby plant. If we could get industry, through its own efforts, to adopt a system of that kind, it would ease the general burden.
I found the speech made by the noble Lord, Lord Hilton of Upton, most interesting, and I entirely agree with him about political contributions. The fact that firms will now have to publish their political contributions will enable us to shame them into giving us a great deal more, and at least the thing will be on the table, which it always should be, and we shall be able to go around and stir them up. I think it will have the reverse effect to what noble Lords opposite think, and I welcome it very much.
I want to say a word to the noble Lord, Lord Hilton of Upton, about sick pay. It has been a practice in Scotland for a very long time now, when agricultural farm servants (as we call them) are sick, to pay them their full wages in the normal way, and they hand over their sick benefit to their employer. As a result of this practice, the farmer or the laird, or whoever it happens to be, is considerably the loser. But it is very rarely indeed that a good man is stood off because he is sick. It may happen in England, but it very seldom happens in Scotland. I was going to ask the noble Lord how our practice fits in with what he knows about sick pay. However, he is not here at the moment, so perhaps he will write to me.
I must say, with regard to the suggestion that was made about lifts, that I cannot see that that would make the situation worse. If the public service is overcrowded, and if a motorists pulls up at a bus queue and lifts two or three, he is doing nothing but good. At least he is using his car to full capacity, and I do not think it would have any deleterious effects. There are difficulties about insurance, and the legal position which will have to be watched—the noble and learned Lord on the Woolsack knows all about that.

647
I want to mention the Bill for the Constitution of the Scottish Universities. Lord Balerno knew all about that and spoke about it. I have a proprietary interest, because we had at one time two universities in Aberdeen; there was King's College and Marischal College, which was founded and endowed by my forbear. I think it was in 1593. I wonder whether to-day that endowment would pay the janitor's wages—I doubt it. However, I want to give that proposal a blessing, coming from that part of the world.
The last thing I want to say is prompted by the most interesting speech of the noble Lord, Lord Blyton, who has had a lifelong interest in the coal mines. I sympathise with him very strongly. The point he did not mention is that the cutback in the coal industry will have a considerable effect on employment in the forestry industry, from the point of view of manufacturing of pit wood. It is very often assumed that a pulp mill can be established in Scotland and everything is lovely. But many of us are nowhere near a pulp mill, and in the past the forestry thinnings and such-like have gone to the pits. This cut-back in the coal industry will affect employment in the country, as well as in the mines, and it is regrettable that it has to be. The noble Lord gave some interesting figures of the various grants that everybody received—I wondered why one bothered to earn anything. But, of course, all that money is just a little of the total taken out of the taxpayers' pockets. It does not come from the beneficent Government; it comes from the taxpayers. Various Governments deploy this cash for those purposes. I wish to associate myself with what has been said about traffic and so on, and to wish the programme in the gracious Speech all success.
7.16 p.m.
VISCOUNT ST. DAVIDS: My Lords, the last Transport Act was passed in 1962, and under that Act a number of temporary provisions were made, including, for waterways, what amounted to a subsidy for five years. Since it takes some time to produce a new policy, and since 1962 is now some way away, it is in this Session that we shall have to decide what new policy we are going to carry out to keep our waterways viable.
648
When the 1962 Act was going through this House I approved of it on Second Reading because I thought it would do a lot of good, but I fought bitterly against a number of its clauses.
So far as the general principle goes, I discover that I was right, but I must say that so far as the clauses go, I find that to some extent I was wrong. In case anybody thinks I am being converted to what the then Government proposed I will say this: that the reason those clauses did less harm than was expected was a reason which will very much interest the noble and learned Lord on the Woolsack. The fact of the matter is that those clauses were not securely based on strong foundations, but were simply placed upon the top of the morass of waterways legislation which already existed, and they have simply sunk into that morass and become part of it. So far as that goes, therefore, we should be rather glad that the situation was as bad as it was. We must consider, however, that the effect might not have been so good if the clauses had been good ones.
On the general question, however, of what the Transport Act did to the waterways, the effect is wholly good. The abolition of the Transport Commission set the waterways adrift as masters in their own house for the first time, and it allowed them to do a great deal of work in improving the waterways which I am sure would not have been done had the Transport Commission continued. And I am sure that even more good would have been done and will be done as soon as there is a policy for the future of the waterways. That is what is holding them back at the moment, and the most useful thing that could be done for them at the present time is simply to state a fixed policy for their future.
The other good thing that the 1962 Act did for the waterways was to allow them for the first time to come to a proper financial assessment of where the different waterways stood. Your Lordships will not be surprised to hear that the waterways have fallen into exactly the same position as Dr. Beeching found the railways had fallen into. The cargo carried on the waterways is now restricted to a comparatively small mileage. Of the 2,000 miles of nationalised waterways, some 1,600 miles of which are navigable,

649
only about 400 miles are carrying any considerable weight of cargo. The fact is that over 97 per cent. of the cargo is being carried on 20 per cent. of the mileage, and the other 80 per cent. of the mileage is carrying the small balance.
The waterways are falling into a position where there is a natural break. The heavy cargo waterways are the waterways where big locks can be built because they are on big flowing rivers or major water supplies. The other waterways, frankly, cannot be enlarged at all, and although they can carry a limited amount of cargo their future purpose is clearly, first of all, water supply and, secondly, the various forms of pleasure and amenity. Waterways in fact divide into cargo waterways and amenity waterways. There is considerable reason why we should recognise that split now, and remove the amenity waterways from the organisation which runs the cargo waterways. To begin with, the two forms of organisation are now completely different. The cargo waterways need strong commercial organisation. They should be run as a commercial organisation, as their finances show that if they were operated apart from the amenity waterways they would be financially viable now—in fact, making a small profit—and they would be free from the enormous administrative burden of the four-fifths of their mileage which is not, and in my opinion for many years certainly cannot be, commercially viable at all.
If these were the railways, of course, it would mean that the remaining four-fifths would have to be closed down, because you really can do nothing but run trains on a railway. But these amenity waterways have their own great values. I am not going into the whole business at this late hour, but every Government pronouncement on park lands and every form of amenity and sport in this country, shows that these waterways have an enormous value, and if they were paid for any part of the amenity that they in fact create they would be perfectly financially viable on their own. But they stand on the same kind of basis as a national park, and not on the same kind of basis as a nationalised industry. For that reason, the two should be taken apart, and it would be greatly to the benefit both of
650
the cargo waterways and of the non-cargo, amenity, waterways.
There are enormous volunteer resources, and manpower resources of all kinds, available for the amenity waterways, which cannot properly be used by a nationalised industry. The Parliamentary Inland Waterways Group, the National Trust and the Inland Waterways Association, acting together, have put a proposal before the Minister of Transport. I do not ask that any pronouncement should be made on this to-day. I know in fact that there are reasons why a pronouncement must yet wait possibly some months. That is the position of our existing waterways. It has little to do with transport. Even our present cargo waterways, if they carried all the cargo that they could, would make little difference to the overall transport position in this country. What we here really should be doing is to follow Europe, Russia or the United States in building waterways of a modern size. That does not mean to enlarge our existing waterways. To call it enlarging our existing waterways is rather like talking about enlarging an "O" gauge model railway into a full scale railway. It is not an enlargement; it is a completely new build. We need a system of major waterways capable of carrying the Continental standard 1,300 tonner to all our main industrial centres. This is being done all over Europe. They are producing a system which, in a few years, is going to be able to load a boat anywhere in Europe and, if necessary, take it as far east as Asiatic Russia.
I am not going into all the arguments for that to-night, but there is one point that I should like to put into your Lordships' minds. We know the state of affairs in Northern Ireland. We know that Northern Ireland industry is permanently handicapped by the fact that everything that is imported there has to be shipped and transhipped, and transhipment, in particular, needs manpower. Of course, men are the most expensive things in the world, and, in my opinion, always should be. Because everything that goes into Northern Ireland has to be shipped and transhipped, as does everything that goes out of Northern Ireland, there is a permanent brake upon the viability of their

651
industry and its capacity to face the industry of the rest of Europe.
Some day this country is going into Europe. That is almost a certainty, given the time and the conditions. What is going to happen to us when we do? We are going to be the Northern Ireland of Europe, for the simple reason that all our raw materials coming into this country can proceed by water from the great factories of Europe, down their canals, down their rivers, across the North Sea itself, which for a 1,300 tonner is simply another inland waterway. But when they reach our ports they have to be transhipped as they come in; and the finished goods on their way out have to be transhipped at our ports on their way to Europe and the rest of the world. That is a permanent disadvantage twice over for every single thing which we have got to handle.
It has been estimated that a proper system of waterways which could be constructed in this country would cost about as much as would the same mileage of major motorway. A proper system has been estimated to cost something in the nature of £700 million. That is a vast sum. But would we not pay £700 million to get rid of that double tax upon our industry on everything coming in and everything going out? Would we not pay that sum for what amounts to a permanent clearance of the log-jam which so badly affects our ports? After all, what is a major inland waterway but an elongated port?
That is the point which I wish to put to your Lordships for the future. It is a long way off in the future, but it is time we started to consider it, if we are to take our proper place with the other European countries. The system must be brought in some day, unless we can think of some method of transhipment which involves no men. Although I must say that, like many noble Lords who spoke a few days ago in this House, I, too, am a reader of science fiction, I have not yet seen any idea of any such method. It costs more to tranship a ton of goods than to send it a thousand miles. Until we can by some method get rid of that transhipment, we are at a permanent disadvantage. We are an island; we are surrounded by sea. Everything that comes to this island or goes from it with
652
a very few exceptions, must do so by water. If one is to avoid transhipment, the only thing to do is to put it on water and keep it on water. I leave your Lordships with that simple thought.
7.30 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I should like to support the noble Viscount, Lord St. Davids, who is such a great expert on waterways. A great deal of what he has said merits very serious consideration. I myself should like to speak for a short time on productivity, for, as was said by the noble Lord, Lord Lucas of Chilworth, it is the most important subject of all. I have some practical knowledge of productivity in relation to light industry and agriculture. I welcome the Government's remarks in the gracious Speech that they intend to encourage greater competitive efficiency by the reorganisation of British industry and the better use of manpower. I presume that that attitude will apply also to the nationalised industries. However, I should have thought that that would be difficult to implement in the nationalised industries, because each of the nationalised industries must be a monopoly in the sphere in which it operates, if it is not to be heavily subsidised. But I am sure that there could be great improvements in the better use of manpower.
On the subject of the nationalised industries, I support everything which was said by my noble friend Lord Aberdeen and Temair, commenting on the passage in the gracious Speech that
"Legislation will be introduced to remove statutory limitations impeding the proper use of manufacturing resources of the nationalised industries."
Does that mean that the nationalised industries are going to compete with private industry by using taxpayers' money to under-cut? I sincerely hope not. It is obvious that a nationalised industry could under-cut private industry since it could be heavily subsidised to any amount. I hope that the noble and learned Lord the Lord Chancellor will be able to give us some encouragement that nationalised industries will not compete unfairly with private industry.
To revert to the subject of productivity, we all realise that it is a matter that is closely bound up with restrictive practices on both sides of industry. I do not

653
want to talk about this matter now, because I have talked about the unions on many occasions in this House. We now have a Royal Commission sitting on the matter, and for the moment I am prepared on this subject to let sleeping dogs lie. I should like to point out—I am sure that the Royal Commission has taken due note of the fact—that 95 per cent. of the strikes to-day are unofficial, which is a quite shocking state of affairs. We have in this House some very charming union members and former union leaders. Really the unions ought to be able to put their own shop in order. If not, I am sure that eventually the unions will have to become a department of the State, and if that happens, as is the case in Russia, the rank and file will lose all their liberty, their individual bargaining power. I sincerely hope, therefore, that their leaders will be able to put their affairs in order without the Government's having to take over the unions.
Basically, we all know that if the United Kingdom is ever to improve its economic position, we shall have to do more productive work for less pay. But the matter is not as simple as that. We also know that in the manufacturing industries it takes three Britons to produce the same amount of goods as one American. In the matter of steel, the Germans, the Swedes, even the Italians, are ahead of this country. In fact, quite a few nations are ahead of us. One bright spot is agriculture, where we practically lead the world in productivity. We are about parallel with Denmark and just about, although not quite, equal to the United States in productivity.
One is always hearing that what is needed is more efficient machinery, better technology, better management. All these things can help, but on the whole British industry is quite well tooled up and its machinery is efficient. These matters can make some difference, but they cannot bridge the main part of the gap. Speaking for myself, and from my experience in my small factory, certainly the credit squeeze has not helped us. It is all very well to say that we should buy ever-newer machines, but one must have the capital to do it. If one has to buy on overdraft, that is a great burden to bear. I suppose it might be impracticable, but I have often thought that it would be a great help if the banks could
654
have a lower rate of overdraft interest for firms wanting to buy machinery in order to complete export orders.
We all know that there is great underemployment in this country; that is to say, there are too many people engaged on unproductive work and too many people doing the same job. We hear much about the great scarcity of labour in this country, but in actual fact there is not a scarcity: it is just that the labour is not properly employed. Management is to a certain extent to blame, as, of course—though I do not want to harp on it—are my old whipping horse, the unions.
There is one important point I want to make about the unions. The unions are for ever campaigning for shorter hours. One can sympathise with that, because the ultimate aim of industry ought to be that the employee should have ever shorter hours so that, whether he be a manual or a clerical worker, he may have a much fuller life. I do not think that anybody would argue with that. But the point I argue with is that when the unions campaign for shorter hours they are not really campaigning for shorter hours; what they are, in fact, campaigning for is to get more overtime; and, of course, that is not really very honest.
The great drawback to productivity in industry is that we have what I can only call this curse of overtime, because by campaigning for shorter hours when they really do not want shorter hours but only to have overtime, the unions are, of course, extracting more out of industry at a higher rate of pay, and by so doing they are destroying the productivity of industry. If that happens, we may have our goods priced out of export markets and the purchasing power of the shopper's pound will go down. The cost of goods in the shops will be higher and we shall then get on to the old merry-go-round of inflation.
I personally—and this is probably a very heretical thing to say—should like to see all overtime abolished, and if shorter hours are negotiated then shorter hours should be worked. I am sure that it would be possible to give a great impetus to productivity. Of course, I am talking of the hourly paid worker and not of salaried people, which is quite a different matter. It is obviously in the

655
interests of the country that we have efficient plant, and it is in the interests of the country to have those machines working every hour of every day. The object of industry is to produce wealth, a fact which they know in America but we do not know here, because the object of our industry is rather to produce jobs. But if you produce wealth, the jobs will follow by themselves.
The average hourly-paid worker is certainly prepared to work 45 hours a week, and he is probably prepared to work three to four hours on a Saturday. Some workers are quite prepared to work 56 hours a week, with overtime. I should like to see the abolition of overtime. The average worker is obviously only interested in the amount of net cash that he takes home. He does not want to pay any tax. I suppose that the tax collectors like the present position, but I should like to see all hourly-paid workers earning less than, say, £1,500 a year have their tax rate calculated on a decreasing scale. I should like to see all hours worked in excess of, say, 48 or 49 bearing no tax at all.
From my own experience, I believe that it is the tax which really stops people working. They do not want to work if they pay a lot in tax. Of course, if they have overtime they will work, but that is at a far higher rate, and it therefore spoils their productivity. If we could only arrange that they do not pay tax if they are earning up to a certain amount, then I am certain that the productivity in industry would have quite an upward surge. Presumably the Inland Revenue would not like this, but, after all, the Inland Revenue is a completely internal part of our economy, and our great aim is to increase our productivity in order to sell more exports. So I put that forward as a suggestion for increasing productivity.
I may be out of order, but I received a letter from the Chief Whip saying that we were going to discuss education today. However, all the time that I have been in the Chamber I have not heard anyone discussing education, so perhaps I am wrong. But if I am in order, I should just like to say something about what is said at the end of the gracious Speech:
656
"A Public Schools Commission will be set up to advise on the best way of integrating the public schools with the State system."
We have this old subject coming up again, but is it really wise? What is the real object of destroying the public school system? It certainly has not failed the country, so why destroy it? I am afraid we have always been a very snobby country, but is this proposal due to inverted snobbery? People say that the system is very class-bound, but I really cannot agree with that, as anyone can go to a public school. I quite agree that, apart from those with scholarships, the parents have to pay; but is it a good thing for the country that everything which parents should provide is to be provided free? I personally would say that it is very bad for the national character.
The other important point is that parents ought to have freedom of choice for their children. If they are prepared to save the State from paying for their children, then I should have thought the State ought to be grateful. The extraordinary part is that so many Socialists send their boys to public schools. Why is this, if they do not agree with public schools? Some people think there is some extraordinary mystique about public schools; that you can turn a sow's ear into a silk purse if you send a boy to a public school. But that cannot happen. All that will happen is that you will make him into a more adept sow's ear.
I think the point about public schools is rather overplayed. But, my Lords, we do not want to destroy them. They help to form people's characters. It is all right to integrate them into the comprehensive schools system if they can keep their character. The point is: can they? Of course, if public schools are abolished all that will happen is that public schools will spring up in Ireland and in the Channel Islands—anywhere out of the country—and parents will send their boys to public schools in these other places. So you will never prevent British people from giving their children an independent education.
Before I sit down, which I am going to do in five seconds, I would say that the other thing I am frightened of (but of course other countries have it) is this: if the whole country is under State education, are you not in danger of losing

657
freedom of independent thought? It could happen that if ever we were to have a certain political Party in power in this country—it might be Fascist or Communist—and if they had complete control of education through the State, it could be very dangerous. Therefore I hope that the suggested integration of public schools into the comprehensive schools system will be played very mildly.
I see that the noble Lord, Lord Hilton of Upton, is not here, but, on the question of sick pay for farmworkers, my noble friend Lord Stonehaven said that in Scotland every employer, if his farm-worker is sick, pays him his wages and takes the sick benefit. My experience in England has been the same. Among my friends, I have never heard of anyone who, if one of his farmworkers is ill—and he may be ill for months—does not pay him his full wages. It may be that there are people, although I have never come across them, who do not do this. But I felt that I should just make that point.
7.53 p.m.
THE EARL OF KINNOULL: My Lords, coming at the end of this very long and interesting debate, which has included the subject of public schools, I should like to raise the hearts of all those of your Lordships who remain here by saying that I shall in fact be very brief. I wish to confine my few remarks this evening to the problems of transport, and, in particular, of rail transport. I noted with interest that in yesterday's debate in another place the right honourable Gentleman the Minister of Transport laid great emphasis on the present record investment that his Ministry have embarked on in their road programme. I only wish he could claim the same record and vigour in regard to rail transport; for is it not true that, with increasing road congestion, the railways are one of the last few friends of the private motorist? Fight for them and the motorist will remain comparatively free from restrictions; allow them to disappear and the motorist will suffer the consequences.
I should like to turn first to the comparative costs as between rail and road transport. I believe I am right in saying that at the present time there are no
658
true comparative costs available from the Ministry of Transport as between road and rail. Rail costs, of course, have been examined with great thoroughness by the two Beeching Reports, but a different formula is at present used, I believe, for measuring road costs, based on what is known as "benefit-cost ratio". I recently read a report of an American road test in which it was claimed that the damage to the surface of a road caused by one 30-ton lorry was equal to that of some 40,000 private cars. Fantastic as this may seem, it does prove the immense wear on roads that heavy freight lorries cause.
But where the comparative costs between these two forms of transport must surely show in favour of railways is in the planning and expansion of cities. For an example, in Liverpool, with the surrounding development of Merseyside, the planning authorities are, I believe, taking the view that to cater for future commuter traffic by road is quite impracticable, and that the only alternative is to provide frequent and efficient city rail services. I should like to ask the noble and learned Lord on the Woolsack whether, in view of this policy, the Government will allow the present 75 per cent. grant available to local councils for road improvements to extend to improvements of their city rail services.
To turn to the question of freight transport, in fairness to the Government I believe that they should be congratulated on the recent agreement with the N.U.R. and on the beginning of the liner trains. I am sure that everyone welcomes this step; and it is encouraging to see that the N.U.R. are giving what might be colloquially termed "the green light" to this service. But there are two points that I should like to draw to your Lordships' attention on rail freight, the first of which is the role of the freight trains for export orders. It is amazing, although I believe true, that at the present time only 10 per cent. of the export orders going through the London docks are handled by rail. Surely the balance as between rail and road transport should, in this vital area, be adjusted. If that is not done, one boggles to think what would happen if the Channel Tunnel were to come about, with all the lorries that would be involved.

659
The second point I should like to draw attention to really stems from the first. If the Government recognise the importance of the future role of rail freight, surely it is time to amend the 1962 Transport Act and to prevent any further freight services from being withdrawn without the Minister's consent. I do not wish to weary your Lordships with this argument, save only to remind the House that when members of the Government were in opposition this point was continually being raised by them.
Turning to passenger services, I regret to say that the Government's record has, I suggest, sunk to an all-time low. I think it would be appropriate to remind the House that at the Election the Government gave the following undertaking:
"A Labour Government will draw up a national plan for transport covering the national network of road, rail and canal communications, properly co-ordinated with air, coastal shipping and port services. The new regional authorities will he asked to draw up transport plans for their own areas. While these are being prepared, major rail closures will be halted".
It is an interesting fact that in just one year of office over 105 passenger services have been closed, 70 of which have been with the direct consent of the present Minister; and still no national plan for transport has yet been published. I may add that in the thirteen years of the previous Government's office there were only 149 closures.
When I offered to introduce a Private Member's Bill in the last Session to enable the Government to carry out their Election undertaking, they refused to accept the offer, on the ground that retaining the tracks was sufficient for the time being. But it was not disclosed at that time that the Railways Board may have the power to reopen lines without consulting the Minister. Perhaps the noble and learned Lord on the Woolsack, when he comes to reply, will tell us whether this is the case, and, if it is the case, why it was not made plain during the various stages of that Bill.
I should like to finish by saying that the supporters of railways are often described as "cranks", preservationists or sentimentalists, but I am sure that in five years' time the tide will have turned and the present vast road programme will have been overtaken by the increasing
660
traffic; and when this time comes I am sure that traffic will revert to the railways.
8.0 p.m.
LORD DRUMALBYN: My Lords, we are now coming to the end of the debate on the gracious Speech. The noble and learned Lord the Lord Chancellor has been sitting in his place almost motionless for five and a half hours and I do not wish to keep him or the House for very long. Indeed, my great fear is that when he tries to rise he will not be able to do so; he will have been rooted to the spot. However, we have had an interesting debate; many noble Lords have spoken on the subjects on which they are particularly well-informed and particularly interested. To my way of thinking, it was the noble Lord, Lord Lucas of Chilworth, who touched on what should be the mainspring of Government action and of the gracious Speech. He said that we must pay our way and that to pay our way by our own efforts was paramount.
In my view, the programme for the year has to be judged in the context of the national objectives: to pay our way in the world, and to be competitive at home and overseas at a time when we are faced with an adverse balance of payments and a shortage of man-power which will, of course, need redeployment. I am bound to say that while the gracious Speech makes reference to this matter and says
"My Government will…encourage British industry to achieve greater competitive efficiency by reorganisation, the more general use of advanced technology, and better use of manpower",
and while I have no doubt that the Government will attempt to do so, it does not seem to me that the rest of the gracious Speech gives sufficient support to that intention.
For one thing, competition surely means choice and it means diversity. I believe that a nation will only pay its way if the individuals who compose it pay their way and if individuals who can stand on their own feet do so. Competition implies that every encouragement should be given to people to do better than the average, both for themselves and for their children. The State has to see that all get a fair deal but, of course, in the nature of things it cannot be the same deal. Ensuring fair play between one section of the community and another and

661
between one individual and another should be a constant aim; both because it is right in itself and because, unless an individual or a section of the community feel that they are getting a fair deal, they will not give of their best.
If as a nation we are to be competitive, costs must be kept down and investment must be encouraged. (We shall be debating the National Plan next week, and I do not propose to say much more on that score at the moment; I hope to be able to speak on that subject then.) Not only must investment be encouraged but the fruits of success should be reinforced to produce more success. I would say that penal taxation on savings is not the best way to make Britain competitive. We must watch the tendency to burden industry with more and more costs. This can be a serious handicap in competition.
The next sentence after the one I quoted from the gracious Speech says:
"Steps will he taken to improve the arrangements for providing incentives for industrial investment…".
I find that sentence a little obscure. It is "the arrangements" for providing the incentives, apparently, that are to be improved. I hope that the noble and learned Lord the Lord Chancellor will deal with this point, because even a casual reading of Part II of the National Plan shows that all industry is awaiting with great anxiety the announcement on the incentives for industrial investment. I hope that the noble and learned Lord will be able to tell us that an announcement on this subject is going to be made in the very near future. I hope also that he will be able to tell us that this sentence means that the Government are now ready to repair the damage done by the last Budget and to restore the allowances to their value before the last Budget. Perhaps, also, he will tell us whether the incentives are to be differential by industries or only by regions.
Another point that I should like to make is that to increase bureaucracy is not going to make people more competitive. Here in this one programme we are dealing with a Land Commission, issuing of building permits, and wage and price increases foreshadowed in the early warning system. This will mean a considerable addition to staffs, and all this is going to lead to more and more con-
662
trol of the nation's life. Then we shall need more bureaucrats to control the bureaucrats.
The noble Baroness, Lady Burton of Coventry, spoke about the proposal for a Parliamentary Commissioner for Administration, and she expressed the hope that it would not be controversial. The proposal might, in theory, help to get fair play for individuals or organisations when they have been denied it by the Government. The tendency for the Party opposite to seek inspiration from Scandinavia in place of Eastern Europe is a welcome change, but the proposed status of the Parliamentary Commissioner for Administration is at least as far removed from that of the Swedish, or even the Danish, Ombudsman as our Constitution is from theirs. It seems from the White Paper as if either his functions or their effects on the ordinary means of recourse to Parliament and the courts have not been fully thought out. I am left wondering, I must confess, whether the object is not, at least, as much to ease the burden on Ministers and to lighten the Parliamentary load in another place as to help the individual. But I do not wish to pre-judge the consideration of this matter; and when it comes along we will look at it without any pre-judgment on either side. I am bound to say that at first sight this rather looks like a case of big fleas having "little fleas upon their backs to bite 'em."
My Lords, there is one subject of great importance which I do not think has been referred to at all except by the noble Lord, Lord Hilton of Upton, in his very penetrating speech. The measure to introduce supplementary National Insurance benefits related to earnings for unemployment, for sickness and for widow hood are very welcome in principle, although, of course, we shall have to look at them carefully in detail. As is generally known, my Party had been preparing such a measure, and we, too, included it in our Election Manifesto. It will be interesting to compare the proposed measure with what we had in mind.
But I must point out how very different this measure is from the sweeping promises in the Labour Party Manifesto. A new wage-related scheme was promised not only for the sick and unemployed but also to cover retirement. Now we are told

663
that instead a review is being carried out of all aspects of social benefits. This is exactly what we undertook to do in our Election Manifesto. We heard from the noble Lord, Lord Byers—I am sorry not to see him in his place—about Conservatives stealing the clothes of others, but here the Labour Party has discarded its own clothes and stolen ours. Naturally, we welcome this tardy recognition of our superior wisdom in this matter and the impracticability of the promises made from the other side of the House.
Another promise was to introduce an incomes guarantee scheme. When, in the last Session, my noble friend Lord Colville of Culross brought in a Bill the broad effect of which was to pay half-pensions to all over 80 who were not receiving the National Insurance pension, it was defeated on an Amendment which gave, as one of the reasons for its rejection, that the Government would be introducing a better scheme in the form of an incomes guarantee. Since the Government are not going to do so in this Session, what are they proposing to do for these old folk who have been left out of our national security arrangements? Perhaps I may remind the Party opposite of what they promised:
"Those whose incomes fall below the new minimum will receive, as of right and without recourse to National Assistance, an income supplement."
I think we are entitled to ask the Party opposite whether these old people over 80 are to receive an incomes supplement.
I turn to the proposals to strengthen the law on misleading trade descriptions, on which the noble Baroness, Lady Burton of Coventry, spoke so well. We all know the great interest which she has taken in this matter over a long period of years. I have particular reason to know of it. It was an admirable speech, if I may say so, which we heard from the noble Lady. She referred to this question and asked the noble and learned Lord the Lord Chancellor two questions: first, whether he would comment on the proposals to deal with oral misdescriptions, and, secondly, to say whether guarantees should not be registered. I look forward very much to the reply of the noble and learned Lord the Lord Chancellor. I doubt whether registration would be practicable over the whole
664
field, but perhaps registration of guarantees which purport to exclude the Common Law safeguard could be registered. In my view we should deal with refusals to sell unless the manufacturer's guarantee is signed by the buyer where such guarantee does exclude the Common Law right or statutory safeguards. We should have introduced a Bill along very much the same lines, and I have no doubt that we shall give the matter sympathetic consideration.
The gracious Speech says that it is for the protection of consumers, and we very much welcome such protection. But surely it is not only for that, but for the protection and encouragement it will give to honest traders. I hope the noble and learned Lord, the Lord Chancellor, will agree that the Merchandise Marks Act was enacted for the protection and encouragement of honest trading and honest traders as well as for the protection of consumers. This, too, my Lords, can help to make Britain more competitive.
My noble friend Lord Hastings had a word to say about the intention of the Government to lessen—the word is "lessen"—the injustices of the rating system. The noble Baroness, Lady Burton of Coventry, said that she was about to become unpleasant—I think that was the word she used. I have never known the noble Baroness to be unpleasant in this House, and she certainly did not succeed in being unpleasant to-night, but I am afraid that some may regard what I am about to say now as being a little unpleasant.
The intention of the Government, we are told, is to lessen the injustices of the rating system. If the proposals of the Government really have that effect, they will be welcomed. But I ask the Government to remember that part of the injustice stems from the fact that some local authority tenants who could well afford to do without it receive a subsidy from other householders who may be less well off. Where two men are working side by side and earning the same amount of pay, and one subsidises the rent of the other by the rates that he pays, there is bound to be a strong sense of injustice.
This situation affects Scotland more than the rest of the Kingdom. In some Scottish burghs local authority rents are still indefensibly low and the consequent

665
burden on the rates is unfairly high. To me it seems wrong that a local authority should lavishly subsidise the rents of all its tenants simply because some may need assistance. It seems to me a foolish policy and one that runs counter to what the Government are seeking to do—that is, to encourage mobility of labour and bring industry to certain areas. I do not believe that injustice of this kind pays. I fully recognise the difficulty for established majorities about increasing rents, and I wonder whether the Secretary of State might take upon himself the rather invidious duty of seeing that these rents are increased. In many cases someone a little removed from a problem can see the justice and injustice involved more clearly than those immediately concerned with it. I believe that this is a nettle which must be grasped, and I hope that it will be grasped.
My noble friend Lord Ferrier welcomed the references in the gracious Speech to Scotland, but I am bound to say that if they had been included in a gracious Speech from this side of the House, we should have heard a good deal about it from the present Secretary of State for Scotland. Someone put it to me in this way, rather colloquially, "Ditto ditto for Scotland, with knobs on".
LORD CHAMPION: So long as you get the "knobs".
LORD DRUMALBYN: Yes, we hope that we get the "knobs".
I should have liked to speak on other matters, but, as I have said, the hour is late and I do not wish to detain the House. The whole question of encouraging competitiveness involves the business of ensuring the best possible education for all our citizens and I note what is said in the gracious Speech:
"My Ministers will continue to develop higher education."
Here again, one is bound to point out that what the Government say does not accord completely with their actions, as they have postponed the starts of constructions in this sphere.
I end, my Lords, as I began, by saying that the whole of our efforts must primarily be directed to ensuring that we become much more competitive. A great deal may have to be sacrificed,
666
both by individuals and by communities, to achieve that object. We may have to postpone benefits we should like to receive. What we have to do is to get the priorities right. What we want is a Government that will take a line, tell the people what h is clearly, and work steadfastly towards it, undistracted by Left-wings or odd assortments of temporary allies. We are not likely to get such leadership from the present Government.
8.21 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, we have had on the gracious Speech from the Throne a series of interesting afternoons, first on finance, industry and economics, then on foreign affairs, and yesterday on land and matters for which the Home Office are responsible. May I say how grateful I am to all noble Lords who were good enough to let me know the subjects on which they were to speak and the questions to which they required answers. If all noble Lords other than my noble friend Lord Champion and a noble Lord on the Opposition Bench would like to go, I hope that the others will realise that three is a quorum and that I shall not take it as in any way discourteous. I have to cover a good deal of ground in a short space of time. Normally I have considerable difficulty in reading my own handwriting and, after all that has been said to-day, still more so now.
The subject which has been discussed to-day more than any other is transport, so I shall start with that. I entirely agree with a great deal of what the noble Lord, Lord Lucas of Chilworth, said, but first of all he said something with which I cannot agree. He said that our business was to pay our way in the world and that roads would help, and that we had acted wrongly in postponing the roads programme. The reason I respectfully differ from that is that first we had to save the pound and then to pay our way in the world. In the summer the Opposition rightly said that Government expenditure ought to be reduced in relation to the condition of the pound. We took the same view, and some road programmes were suspended for six months. The noble Lord must remember that at the same time the Opposition were voting against any increase in taxation. We

667
realise that everybody interested in some particular thing naturally did not want that cut. But the measures which were taken were essential. Some day I suppose the story of the pound and how it was saved can be told.
The noble Lord must bear in mind—and I know that the noble Viscount, Lord Brentford, will too—that those proposals did not apply to development areas, and at that time the road building industry was overheated. There was about £300 million worth in the pipeline, and there is still. I do not know of any cases in which, having taken on more contracts than they could carry out, anybody was unemployed as a result. The fact is that this Government's programme, which involves spending £1,200 million on roads by 1970, is the biggest road programme that this country has ever had.
When it comes to safety on the roads, I agree with a great deal of what the noble Lord said. He said that there are not enough police, which is true. He said that we have laws which we cannot enforce, which is right. He said that magistrates are not imposing as severe punishments as they ought to impose, and one might add, as the noble Lord, Lord Hilton of Upton, did, juries do not convict. What are we going to do? To have total abstainers is one idea, but I think there are rather better ideas than that. My noble friend Lord Stonham has told us that recruiting for the police is going better.
So far as drunken driving and safety generally is concerned, what we are going to do is to stop, by a Bill which will be introduced, the many wholly unsafe commercial vehicles now on the road. This means a proper inspection system, which is the only way to do it. Secondly, we are going to make it a criminal offence to have more than a certain quantity of alcohol in the blood. This is the only way to stop drunken driving. It does not matter much who are the magistrates or juries, because either there is that amount in the blood or there is not. This is the only way to induce a real change of driving habits. I believe it will be supported by almost everyone in the country and by most men, including drivers.
668
I thought the noble Viscount, Lord Brentford, was a little hard on the Governent in relation to the deferment of road work for six months. I joined the Automobile Association when I was 18. I have not found it a very democratic body. It is not always easy to get its accounts in detail. But I understand the natural concern of a motorists' organisation to blame somebody for road casualties other than the motorist and to conduct a campaign on the footing that it is not the motorist's fault but the Government's and there ought to be better roads.
I do not believe for one moment that the number of accidents to which the noble Viscount referred are due simply to roads. I do not dispute that better roads can make a contribution to road safety, but in the end it depends on the driver. I have taken part in hundreds of road accident cases where the judge has to find out what was the cause. While I know there have been cases in which one might find that a better road would have made an accident less likely, the invariable cause of an accident is the driver, sometimes not because he intends to drive dangerously, but because he is careless. The trouble is that, as drivers, we do not take the degree of care which the modern motor car requires.
I know of more than one case where an ordinarily careful driver goes across a main road, looks to right and left, thinks there is nothing coming at all and proceeds quite slowly across. There is an accident and his case is that this lunatic of a motor cyclist came along like a rocket, not paying any attention to where he was going: he must have been going at 60 m.p.h., and was not in sight when the motorist started to cross. Then it becomes clear from the evidence that the motor cyclist was coming all the time. The real answer is that people, instead of looking to the right, only glance to the right. I am convinced that this is the main cause of accidents: that none of us take that degree of care which we ought to do.
The noble Earl, Lord Kinnoull, asked three questions which I hope I can answer. He wanted to know whether it was right that the Railways Board have power to reopen railway lines without reference to the Minister or to

669
Parliament. I think he really knows the answer, because he has already written to my right honourable friend the Minister of Transport asking the question, and my noble friend Lord Lindgren replied saying that there is nothing to stop the Railways Board from reopening a line that has been closed, and they do not require the permission of the Minister to do so.
The noble Earl asked how soon the Government would publish their national plan for transport. A great deal of research work is being done in this field, and it depends when the results come through. But I can say that my right honourable friend will be making a full statement before the end of the year. The noble Earl then asked me whether the Government were prepared to extend the 75 per cent. grant available to local authorities for road improvements to city rail services—and I think he had Liverpool, in particular, in mind. The Government recognise that the development of a properly balanced transport system may require investment in rail or other transport facilities which from a commercial point of view would be unprofitable. However, the first thing is to establish what facilities are needed, both road and rail, in particular areas. That is what the transportation studies under way in the conurbations are designed to do. It is a good thing that local authority transport operators should explore all the ways in which public transport might be developed, so as to serve the growing needs of urban areas. But we must have the facts before we can decide on the proper balance of investment as between road and rail.
The noble Viscount, Lord St. Davids, spoke to us again about waterways. He is always so interesting on this subject, and has so interested me, that I should be very glad if, when a legal Government again exists in Rhodesia, he would be kind enough to come and talk to me about it. I know that my right honourable friend the Minister of Transport is interested in this subject; and it is his business, not mine. I am not at all educated in the subject of the inland waterways; the noble Viscount obviously is. It seems to me a most interesting subject, and if, at some time when it is convenient to him, the noble Viscount would agree to come and educate me further, I should be grateful.
670
The noble Lord, Lord Ferrier, also dealt with transport. I personally agree with him that accidents are due to a mixture of causes, including speed. His suggestion that there should be some tests taken in the dark seems to me a good one, and I will see that it is conveyed to my right honourable friend. The Road Research Laboratory has grown considerably, and there is a great deal of research work now going on. I cannot answer off-hand the noble Lord's question as to whether manufacturers are to be made to fit eye-bolts for safety belts, but I will find out and let him know. I agree with the noble Lord that, to some extent—though I do not think the noble Viscount, Lord Brentford, would agree with this—it is a good thing to have a motorway; but it does tend to result, I am afraid, in some drivers going at 70 m.p.h. whereas otherwise they would not.
As to the police being seen, this matter is, I think, under study at the moment. I believe that some chief constables take the view that if there are police cars about, and they are seen to be about, this is a good thing. Others take the view that if we let the county people know that there are police about in plain clothes, this may have an even better effect, because whereas people can see the police car coming up behind them, if plain clothes police are used they never know whether the car behind them is a police car or not.
My noble friend Lord Hilton of Upton asked me when agricultural sickness benefits will be left to agricultural trade boards—I am not sure whether that is the correct expression.
LORD HILTON OF UPTON: Wages boards.
THE LORD CHANCELLOR: Wages hoards. I am afraid that I cannot tell him, but my guess is that it would probably not be this year. Of course, we are in the middle of November now. There are some Bills which must be got through by the end of the year—the Expiring Laws Continuance Bill, and so on. But it will be as soon as possible.
As the noble Lord, Lord Lucas of Chilworth, had done, so my noble friend referred to London traffic. The noble Lord, Lord Lucas of Chilworth, has gone. It used to be the case that at this

671
time of year Mr. Marples would explain what his plan was for Christmas traffic in London. But whereas yesterday morning we were here until 2 o'clock, your Lordships will remember a previous occasion when many of your Lordships were kept up most of the night because of the London Government Bill, which, your Lordships will remember, broke up the whole of the specialised and admirable children's service, of which, under the London County Council, London had had the benefit until then. One of the things that Bill did was to remove London traffic from the Minister and give it to the Greater London Council. If anybody is going to make a plan for Christmas traffic in London, it is the Greater London Council. As it was the noble Lords opposite who put the Act through, it is no good now blaming the Government—although, of course, they retain an interest in it—in relation to what is happening in London.
My noble friend Lord Hilton of Upton also asked about railway closures in Norfolk, I think on the King's Lynn-Dereham line. The answer there is that my right honourable friend is at the moment awaiting a report about that from the transport users' consultative committee.
As to Scotland, I think the noble Marquess, Lord Aberdeen and Temair, was dealing, among other things, with nationalised industries; and so did the noble Viscount, Lord Masserene and Ferrard. This is a very old political dispute, on which I am sure your Lordships will not want me to embark at this hour of the night. The Government certainly believe it is right that if a railway workshop has room for an outside order, maybe for export, and if they can do it more efficiently and cheaply than private enterprise, there is no reason why they should not do it.
I think it was the noble Viscount, Lord Massereene and Ferrard, who talked about the taxpayers' money. But, of course, bodies like the electricity and gas undertakings are paying their way and making profits: it is their own money, and not the taxpayers' money. We appreciate that, on the other hand, the view is taken in other quarters that it is wrong to allow the State to make a profit if it is a case in which some private industrialist might
672
make a profit. We do not take that view, because we do not think it is wrong for the people to make a profit, instead of private industry, if they can do it more efficiently.
The noble Lord, Lord Balerno, and the noble Viscount, Lord Stonehaven, discussed Scotland. I was surprised that the noble Lord, Lord Balerno, thought that Scotland had not done well last Session. I thought that, what with Highlands and Islands and so forth, Scotland had done extremely well. I remember that when I looked at the Acts that were passed (I think this is right), I noticed that out of the first 40 Acts last Session nine were to do with Scotland. My impression was that my right honourable friend the Secretary of State for Scotland had got away with a lot more to the disadvantage of England, in so far as time was not left.
LORD BALERNO: My Lords, I am afraid that the noble and learned Lord has misunderstood me. I made no reference to the enactments passed last Session: I was referring entirely to what is in the present gracious Speech.
THE LORD CHANCELLOR: Unfortunately, as the noble Lord knows, I was elsewhere at the time, and I had a note which did not convey quite the right expression. So far as this Session is concerned, I was told to-night by my noble friend Lord Hughes to say that "If you wait you will be surprised." Indeed, I should have thought that noble Lords from Scotland should bear in mind that they have in their Secretary of State one who is very capable, if I may say so, of standing up for all the interests of Scotland.
LORD BALERNO: I made particular praise of the work of the Secretary of State for Scotland on one particular point.
THE LORD CHANCELLOR: At this hour of the night I do not want to start anything, but the complaint that might be made is that the gracious Speech contains no reference to Wales.
One or two noble Lords spoke about law reform. My noble friend Lord Silkin said yesterday, as I think the noble Lord, Lord Hastings, did this evening, that he hoped we should have more Bills starting in this House. I think that those of us who have any say in these matters would

673
support that suggestion. It is, of course, natural that a Government should want to get Bills through in a place where it knows it has support to start with. Then if some other body wants to alter it, that is different. There is no reason that I can see why a Conservative Government should not start anything they like in the Lords. But the distinguishing feature of this House is not that a large proportion of the Members are hereditary but that no matter what Government the people elect, one political Party always has an enormous built-in majority. I am bound to say, frankly, that so long as that is so, I think it is no good complaining too much that the people having elected another Party, that Government should prefer to start most of their legislation and get it in the form in which they want it before it comes to your Lordships' House.
LORD FERRIER: My Lords, I suggested that perhaps the Traffic Bill might be originated in this House. I feel strongly that this is a matter which is not political, and one that would be approached in the most pragmatic manner in your Lordships' House.
LORD HASTINGS: My Lords, before the noble and learned Lord gets up, I should like to add that I am afraid the Government seem to have a very poor opinion of the intelligence, generally speaking, of your Lordships' House. Certainly non-controversial Bills could be brought into this Chamber, and we are par excellence an excellent Revising Chamber, as the House of Commons has every reason to know. I hope that this ultra-political view, which is largely unjustified, will not prevail. The majority here is no longer by any means so enormous, although I dare say that we could always produce a majority, if it was absolutely essential. In most cases we wish to see that the Government get their legislation through, but in an improved form. I do not think we have done anything to justify the opinion which the noble and learned Lord has expressed, apparently on behalf of his colleagues in another place.
THE LORD CHANCELLOR: If it is a non-controversial Bill, as some are, there is no reason why it should not be started here. But it is natural, it seems to me, that the Government, instead of
674
having the Bill knocked about here, and then having to start all over again in another place, should want to get it into the right form in another place and then bring it here. As to the size of the majority in this House, I suppose that it is something like 800, or getting on that way. But although your Lordships' House now has over 1,000 Members, it is one of the curious features that less than half could get in if they wanted to come and vote. However, this is not a discussion to-night on your Lordships' House, and I must press on.
I will leave the question of consolidation and codification which was raised by my noble friend Lord Silkin, because I can discuss that with him. I am grateful for what the noble Lord, Lord Lloyd of Hampstead has said about the Law Commission. He suggested that actions for damages for personal injuries should be replaced by a comprehensive scheme of social insurance. There is, of course, a good deal of discussion about this at the present time. He said that he was disappointed that this was not included in the Law Commission's first programme, but as he may remember, and as the Prorogation speech showed, the Government are conducting a full-scale review of the whole of their National Insurance system. It would be impossible, I suggest, to arrange that all plaintiffs should be, so to say, insured in running-down cases for road accidents, and then to treat factory accidents differently. The whole matter will have to be considered, in the first place, in the context of the general review of our National Insurance system.
Then the noble Lord referred to standard forms of contract. I should have thought that there was no reason why the Departmental Committee which is being set up to consider exclusion clauses, and so forth, should not also look both at that and at the question of guarantees which was also raised by the noble Baroness, Lady Burton of Coventry. The noble Lord also referred to Parliamentary time. All I can say on this is that, as has already been explained in another place, we are going to have a Second Reading Committee, to which Bills like Law Reform Bills can go, and which, like the Scottish Grand Committee, will save a Second Reading in another place, that being the place where the time element arises, rather than here. One

675
can only hope for the best, so far as Parliamentary time is concerned.
Like the noble Lord, I welcome the idea of a Committee to hear immigration appeals. It is something which a number of us have been concerned about for a considerable time. Then I come to the Ombudsman, and the points raised, mainly by the noble Baroness, Lady Burton of Coventry. As to the name, I must say that "Parliamentary Commissioner for Administration" sounds pretty awful to me. I would not mind the title the "Ombudsman". But others say, "No, we must talk English, and we cannot start using foreign expressions". I say that "Ombudsman" is now an international word. What I think will probably happen is that, as in New Zealand, where the official title is the Parliamentary Commissioner, everybody will call him the Ombudsman. I should think it would probably work out like that here.
Then the noble Baroness regretted that the scope of the scheme does not extend to local authorities, and my noble friend Lord Lloyd of Hampstead regretted that it does not extend to something else—though I am sorry to say I have forgotten what. The reason is that it will be scheduled by the Government Departments. He will be able to look at the schedule, and this will enable anything to be added to the schedule or removed from it. The reason why nationalised industries and local authorities are not included is that the idea of an Ombudsman has never been tried in a country with such a large population as ours. After all, Sweden, Denmark and New Zealand are comparatively small countries.
A good deal depends on the Ombudsman himself. Therefore, there is, I think, a substantial danger of starting the scheme in too big a way. If we start on a restricted front, and confine it to complaints through Members of Parliament, it is always possible, if we want to alter that later—if we want to add local authorities, or the police—to do so. I am not sure off-hand, but I think it was the Danish scheme which started in this way, and then, after about three years, included the local authorities. It was either the Danish or the New Zealand one. It may be that we shall act in that
676
way. I agree that it is very important who the Ombudsman is.
Your Lordships' House may be a little interested if you find, as I think you will, that complaints are limited to complaints coming through Members of another place. This, I dare say, is one of the provisions which we shall discuss here. Her Majesty's Government look upon the Ombudsman as being in effect an extension of the powers of Members of Parliament to sift the complaints of their constituents who elected them; not in any way as interfering with the powers of Members of Parliament but rather supplementing them. So much for the Ombudsman.
So far as merchandise marks are concerned, there would, I think, be some difficulty in all guarantees being supervised by the Board of Trade because they would have to look at each, and possibly examine the goods scientifically to see whether or not what was being guaranteed was right; although I can see no reason why the Departmental Committee to be set up by the Law Commission should not look at this question.
So far as misdescriptions are concerned, we are going to include oral misdescriptions. The whole of the Bill will create considerable change in this country. I am not an expert in the law of Germany, but as I understand it, one could not advertise "Guinness is good for you" in Germany because one is not allowed to advertise anything that one cannot prove to be true, but the idea that advertisers should have to tell the truth is something absolutely unknown in this country. If we are going to have that, why, merely because a description is oral, on television, should you be allowed to tell any number of lies so long as you do not put them into print?
BARONESS BURTON OF COVENTRY: My Lords, would the noble and learned Lord the Lord Chancellor allow me to ask him a question? I quite take his point regarding television, which I had not thought about, but what I am concerned with is what happens over a counter, after which a customer says the saleswoman has said something and the saleswoman swears she has not. Does the noble and learned Lord expect to be able to cover that?
THE LORD CHANCELLOR: I do not see why not. This is happening all the time in oral contract cases. The judge, or the jury if there is one, hears both sides, and it is decided who is telling the truth. Naturally, we shall very much welcome the views and assistance of the noble Baroness when the Bill dealing with this matter comes before your Lordships' House.
Then, if I may press on, I know of the feeling which my noble friend Lord Blyton has about the coal industry. The National Coal Board was very much let down by being urged by previous Administrations to mine more and more coal and to spend more and more money on capital developments which, as it turned out, were not required. Therefore, I agree it is only fair that the State should write off those capital assets; and it is even more right, now that uneconomic pits have to be closed, that we should see to it that the miners who are displaced are either employed in other, economic pits or assisted to find other work and, if it means moving, find a new home.
Then the noble Viscount, Lord Massereene and Ferrard, gave us the advantage of his views about greater competitiveness and productivity. I agree, and I think most of your Lordships will, with most of what he said. It is quite true that most people who work longer hours and want overtime will want to reduce the standard hours because then more of their work is done in overtime periods and so they get more money for doing it. I do not know whether there would be any real objection to abolishing overtime, providing, of course, that they take the same amount home for working less hours. If we take the steel industry, we find that the German worker works shorter hours and has higher pay, but it has not priced German goods out of the market because employers do not employ more men than they need. One of the great difficulties in British industry is the amount of surplus labour which inefficient employers not only tolerate but seem to encourage.
I had better not start on the subject of public schools tonight, but the noble
678
Viscount said that anyone could go to a public school. Well, you do need a bit of money. He said Socialists send their sons there. Well, yes, I know some who do; they have given up smoking and holidays to send the boys to a public school. When I ask them why, they say, "It is not really that the education is any better than it would be at a good grammar school, but it will give them two enormous advantages throughout life: one is to go to a school where they speak right, and the other is to be at a school where there will be a large section of those who will be the employer class in their generation." I say, "Oh, you mean snob value" and they say, "That's right, that's exactly what we mean; because if only we can afford it, it will be worth it for them throughout life." We are still the most class-ridden country in Western Europe, run by a special class, the vast majority of whom have been at these special schools. But, as I say, I had better not start on that tonight.
The noble Baroness, Lady Emmet of Amberley, raised a question yesterday as to whether it was right that juvenile court magistrates should really come from the whole of the Bench or whether they should not be selected. I have great sympathy with what she said. I have power now to amalgamate petty sessional divisions, and we are doing it at a reasonable rate. I should like very much to consider what she said. There would have to be some process of selection, and whether that should be done by the chairman or an advisory committee I do not know. The noble Baroness said, and it is right, that in country districts in particular there are few courts and they get relatively few children before them, and if any justice who is under 65 years of age can sit I can quite see that that may not be the best possible arrangement. I have just received a report from my Advisory Committee on the Training of Justices and I hope soon to make a public statement. Of course, if there is compulsory training of justices, then probably the older ones would be those inclined to attend at juvenile courts.
The noble Lord, Lord Hastings, also dealt with the suggestion that more Bills should be started in the Lords, and he

679
invited me to give your Lordships at the end of the debate a progress report on housing.
LORD HASTINGS: My Lords, it was on the housing corporations.
THE LORD CHANCELLOR: I understood it to be the whole of housing. I am afraid I cannot do that at this hour. It is, I think, a point which was not covered, perhaps, by the noble Lord, Lord Cohen of Brighton, yesterday. I do not think the noble Lord, Lord Hastings, was here, but we had a magnificent speech (if that is not an improper thing for me to say) by the noble Lord, Lord Cohen of Brighton, which I thought fully covered the whole subject. But on that particular point I will, if I may, make enquiries and then write to the noble Lord, Lord Hastings.
LORD HASTINGS: My Lords, before the noble and learned Lord leaves the subject of housing, in order to save time may I also mention the question about local authorities being organised into consortia? I did ask a question on that.
THE LORD CHANCELLOR: The noble Lord did, and I shall be very happy to look into that.
Then the noble Lord, Lord Segal, asked me two questions. The first was with regard to doctors having two days off instead of one and a half. The answer is that the proposed new contract which has recently been approved for reference to the Review Body by an overwhelming majority of family doctors is based on an acceptance of collective responsibility of the profession as a whole for the general medical care of the population as a whole. But within this framework it will remain open to family doctors, as it is at present, to take two whole days off at the week-end provided that there is another doctor willing to provide any necessary care for their patients while they are not available. Most doctors do in fact hold at least one surgery on Saturday.
The noble Lord also asked about granting doctors a bonus payment for proficiency in post-graduate study courses in
680
addition to payment for attendances. It is not easy to see how proficiency in the type of course normally arranged would be measured, and probably of more importance is the recognition of special experience and service to general practice, and the noble Lord will see that provision for this is made in the contract. In case there is any other point I have not covered, I will certaintly re-read what your Lordships have said and write to any noble Lords with reference to any point I have not covered.
The noble Lord, Lord Drumalbyn spoke on investment incentives. It is not my intention to-night to trespass on the Budget which my right honourable friend the Chancellor of the Exchequer will be producing in due course and of which I think investment allowances may well form part.
As to the Ombudsman, the noble Lord said that he was not like the Swedish or Danish one. The Swedish one is entirely different from the Danish one. The Danish one is like the New Zealand one, and I think our Ombudsman will be very much like the New Zealand one. Then he spoke about wage-related unemployment and sickness benefit and asked why this did not apply to retirement, and something else he wanted to know about which had been in the Election programme. A point I am sure he will bear in mind is that the programme was a five-year programme. I know surprise has often been expressed that the whole of that five-year programme was not carried out in the first year, economic difficulties and all. But it was a five-year programme, and if noble Lords will look again at the Election programme they will see that if in this Session the Government carry through Parliament all the measures which are foreshadowed in the gracious Speech from the Throne, practically the whole of the five-year programme will have been carried out in two years. There will be comparatively little left which has not been carried out either last Session or this Session.
I am very grateful to all noble Lords who have taken part in this very interesting discussion, and of course many of the matters which we have discussed we shall be dealing with in much more detail when the Bills referred to in the

681
gracious Speech come to us, either first or subsequently from another place.
On Question, Motion agreed to, nemine dissentiente: the said Address to be
682
presented to Her Majesty by the Lords with White Staves.
House adjourned at three minutes past nine o'clock.