Sitting of 11 August 1966

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  PIER AND HARBOUR PROVISIONAL ORDERS (BLACKPOOL PIER AND GREAT YARMOUTH NEW BRITANNIA PIER) BILL
  Lords Amendments considered and agreed to.
ORAL ANSWERS TO QUESTIONS
  GIBRALTAR

    Future
    Mr. Wallasked the Secretary of State for the Colonies if he will now make a statement about Her Majesty's Government's future policy with regard to Gibraltar.
    The Under-Secretary of State for the Colonies (Mr. John Stonehouse): I have nothing to add to the replies given by my right hon. Friend the Prime Minister on Tuesday and by the Foreign Secretary on Monday.
    Mr. Wall: Would the Minister say when the present constitutional committee sitting in Gibraltar will report, and will he give the assurance, for which we have been asking, that there will be no change in the sovereignty of Gibraltar without the express wish of the people of Gibraltar?
    Mr. Stonehouse: It would be most unwise to make any statement about the constitutional position in Gibraltar except to say that we are not at present proposing to make any progress in this in any way; particularly at this stage it would be unwise as talks are being conducted with the Spanish. On the second point, I can only repeat what the Prime Minister has told the House—that we have no doubt about our sovereignty. We hope that these talks will be resumed soon.
    Sir F. Bennett: If the Minister is able today to give us the reassurance that we are absolutely sure about the position in respect of sovereignty, why will not he or one of his right hon. Friends state that we have no intention whatever of relinquishing it?
    Mr. Stonehouse: Because, as the Prime Minister has explained to the House on numerous occasions, the constitutional position is that the United Kingdom must negotiate. In view of that position it would be quite unwise for us to give the sort of assurance that is being requested. I think that the House will have been delighted to see reported this morning a statement by the Chief Minister in Gibraltar that he has every confidence in the way in which the talks are being conducted. I think that this will put at rest some of the fears that are now being aroused.

    Spanish Workers
    Mr. Tilneyasked the Secretary of State for the Colonies what are his long-term plans to replace, by Gibraltarians or by mechanical aids, Spanish personnel now working in Gibraltar.
    Mr. Stonehouse: A Committee under the chairmanship of the Financial Secretary is at present engaged on the study of increasing productivity, and other aspects of the matter are being examined.
    Mr. Tilney: Although we all want friendly relations with Spain, since Gibraltar is at present under duress, should not plans be made whereby sterling at present earned by Spaniards could be saved? Cannot we plan for Gibraltar as Spain plans for her colonies in Morocco?
    Mr. Stonehouse: There are considerable plans now being prepared for the development of the economy and I would prefer, before making any statement, to have had these plans fully examined before an announcement.

  BECHUANALAND

    Radio Station, Francistown
    Mr. Juddasked the Secretary of State for the Colonies whether Her Majesty's Government pay rent for the radio station at Francistown to the

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    Bechuanaland Government; and whether it will do so after independence.
    Mr. Stonehouse: Not at present, but negotiations are in progress which will cover the position after independence as well as before.
    Mr. Judd: While thanking my hon. Friend for that encouraging reply, may I ask whether he does not agree that this is a point on which we must react generously in view of our failure to meet other requests in respect of development in Bechuanaland?
    Mr. Stonehouse: As these are commercial negotiations, it would be unwise for me to be drawn on that point. When an announcement can be made about the result of these negotiations, I am sure that it will be made in Bechuanaland.
    Mr. Evelyn King: Will the Minister accept that this radio equipment, always inaudible, is now completely jammed and, therefore, is not worth any rent payable from anybody to anybody? Would he look at this, which is a serious waste of public funds?
    Mr. Stonehouse: That is a question for my right hon. Friend the Secretary of State for Commonwealth Affairs.

    Rhodesian Oil Supplies
    Mr. Fisherasked the Secretary of State for the Colonies to what extent oil, other than aviation fuel, for Rhodesia is being allowed to pass through Bechuanaland from South Africa.
    Mr. Stonehouse: I have nothing to add to my Reply on 4th August in answer to a Question by my hon. Friend the Member for Portsmouth, West (Mr. Judd).
    Mr. Fisher: Is the hon. Gentleman aware that the extent of this traffic is reported to be considerable, and in any case why should any be allowed through a British Colony over which we still have control? Does not this completely conflict with the Government's policy of oil sanctions against Rhodesia, and what steps are the hon. Gentleman's Department taking to prevent this in future?
    Mr. Stonehouse: The reports which the hon. Gentleman has had are quite inaccurate. Reports which I have received
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    indicate that the supplies are really quite insignificant.
    Mr. Paget: Now that the Rhodesians have been able to take off petrol rationing, is there any particular object in trying to see that someone else gets the business?
    Mr. Stonehouse: That is a wider question altogether and should be addressed to my right hon. Friend.
    Sir F. Bennett: As the Minister has now said that the amounts are insignificant and he presumably has some knowledge on which to base that assertion, why cannot he give us the figures?
    Mr. Stonehouse: I do not think that it would be in the interests of Bechuanaland or ourselves to discuss the exact amounts that we may know about, but I am quite sure that we should not be concerned about the quantity of oil going through.
    Mr. Fisher: On a point of order. If this matter is still relevant when we resume, I should like to give notice——
    Mr. Speaker: The hon. Gentleman must give notice in the conventional way.

  BRITISH HONDURAS

    Mediator (Proposals)
    Mr. Fisherasked the Secretary of State for the Colonies if he will publish the Mediator's proposals for the future of British Honduras in Belize as soon as they are available and before any final arrangement is made with Guatemala.
    Mr. Stonehouse: When the Mediator decides that his proposals should be made public, this will be done here and in Belize before any final arrangement is made.
    Mr. Fisher: Will the hon. Member agree that the probably quite inaccurate and certainly reprehensible leak to Caribbean newspapers has caused alarm in Belize and that the sooner the actual proposals of the Mediator are published and debated there the better for all concerned? Can he give any idea when that will be possible?
    Mr. Stonehouse: I cannot give a date, but I am sure that as soon as the

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    Mediator is willing that this should be announced, it will be announced. If I catch your eye, Mr. Speaker, I hope that I shall be dealing with this question in an Adjournment debate tomorrow.
    Mr. Rowland: Is my hon. Friend aware that the accuracy of the leak has not yet been publicly challenged? Will he give an assurance that the people as well as the Government of Honduras will be consulted about the final proposals?
    Mr. Storehouse: Yes. I am glad to give that assurance. We shall consult the wishes of British Honduras before any final arrangement is made.

  HONG KONG

    Drugs
    Mr. Rankinasked the Secretary of State for the Colonies what was the total number of persons sent to prison in Hong Kong during 1965; and, of these, how many were drug users.
    Mr. Stonehouse: A total of 12,786, of whom 10,668 were found to be drug users.
    Mr. Rankinasked the Secretary of State for the Colonies how many pounds of raw opium, prepared opium, morphine and heroin, respectively, were confiscated in Hong Kong during 1965.
    Mr. Stonehouse: The figures in pounds are: 6,470, 83·5, 322 and 86·5, respectively.
    Mr. Rankin: While thanking my hon. Friend for those figures, may I ask him if he is aware that the wholesale price of heroin in Hong Kong is £460 per lb. weight? Is he aware that when the drug is transported from Hong Kong and sold in the United States it fetches £36,500 per lb. weight? Is it not obvious that there must be powerful influences in Hong Kong engaged in this lucrative industry, which is also undermining the well-being of the people of Hong Kong?
    Mr. Stonehouse: I am aware that there is a very large illicit trade in narcotics in Hong Kong, but I am also satisfied that the Preventive Branch is doing its best to stamp out this trade.

  ECONOMIC AFFAIRS

    Economic Planning Councils (Appointment of Women)
    Mrs. Joyce Butlerasked the First Secretary of State and Secretary of State for Economic Affairs what reply he made to the delegation from the British Federation of University Women asking for the appointment of more women to regional councils.
    The Minister of State for Economic Affairs (Mr. Austen Albu): The reply was that women who are qualified to contribute to regional planning are equally eligible with men for appointment to regional economic planning councils; but there is no intention to appoint women simply because they are women.
    Mrs. Butler: In view of the very strong feelings that these appointments have aroused among women's organisations and the fact that there are very many well-qualified women in the regions who could be serving, can my hon. Friend say what arrangements there may be in future for adding women to these councils?
    Mr. Albu: We have asked the bodies whom we consult before making these appointments to consider appointing women, and we have given the names of these bodies to the women's organisations so that they shall know which bodies we consult.
    Mr. Iain Macleod: Although the Minister of State knows that we have reservations about the policy, and even the need for his Department, would he be good enough to give our personal good wishes both to the new First Secretary and to the old one?
    The Secretary of State for Foreign Affairs (Mr. George Brown): Not the old one.
    Mr. Albu: I will pass on the right hon. Gentleman's good wishes.

    Dividends
    Mr. Archerasked the First Secretary of State and Secretary of State for Economic Affairs whether he is aware that, on the day following the

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    Government's appeal for a six months' standstill on increase in income, the boards of two companies recommended increases in their dividends; and whether he will seek powers to discourage further increases in dividends.
    Mr. Albu: It was made clear on 20th July that the Government's call for a standstill on prices and incomes was expected to apply to dividends for the twelve-month period. This has been further stressed in paragraph 31 of the White Paper (Cmnd. 3073). If my hon. Friend will send me particulars of the cases he has in mind, I will have them examined.
    Mr. Archer: While thanking my hon. Friend for that reply, may I ask him if he is in a position to assure the House that increases in dividends will be discouraged as vigorously as increases in other forms of income?
    Mr. Albu: Most certainly. My hon. Friend will probably have noticed that there have been one or two cases where dividend increases already announced have been withdrawn by the companies concerned who have decided not to make them during this twelve-month period.
    Mr. Corfield: Will the right hon. Gentleman apply those same criteria to the prices and products of the nationalised industries, increases in some of which have been announced since 20th July?
    Mr. Albu: The procedure applies to the prices of nationalised industries just as much as to other prices.

    Immigration
    Sir D. Rentonasked the First Secretary of State and Secretary of State for Economic Affairs whether the Government have compared the economic advantages and disadvantages of immigration on the present scale; and whether he will make a statement.
    Mr. Albu: Her Majesty's Government are supporting a general study of the economic implications of immigration, but until this work is completed and more information is available, my right hon. Friend cannot make a statement.
    Sir D. Renton: Would the hon. Gentleman look at the recent article in the July issue of the Lloyd's Bank Review,
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    in which it is suggested that immigrants may be disadvantageous to the balance of payments rather than otherwise?
    Mr. Albu: I have done so but, as the right hon. and learned Gentleman will know, the authors of the article made very considerable qualifications to their conclusions. In any case, economic considerations are not the only ones that we have to bear in mind when we are considering immigration policy.
    Mr. Freeson: Also on the question of economic considerations, will my hon. Friend bear in mind that there are thousands of jobs which are not being filled as a result of the present ceiling quota upon Commonwealth immigrants?
    Mr. Albu: This only shows how complicated the subject really is.
    Mr. Hogg: While most of us will be interested to know of this pending study, can the hon. Gentleman tell us when it is likely to be completed and whether, when completed, it is likely to be published?
    Mr. Albu: I think that it will be published. It is not pending; it is taking place now and is being carried out at the National Institute for Economic and Social Research.

    Price Increases
    Mr. Dickensasked the First Secretary of State and Secretary of State for Economic Affairs what arrangements he has made in his Department to ensure that complaints by the public about unauthorised price increases made since 20th July are properly dealt with and acted upon.
    Mr. Albra: Complaints about particular price increases are dealt with by the Government Department that sponsors the industry concerned. All appropriate steps will be taken to follow up complaints received.
    Mr. Dickens: Can my hon. Friend consider the advisability of making the Government's information services available so that people can know what the facilities are for reporting unauthorised price increases?
    Mr. Albu: We will certainly consider that, but the procedure is that described

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    by my right hon. Friend in the answer he gave on 25th May.
    Mr. Fletcher-Cooke: Can the hon. Gentleman tell me the Department to which complaints should be sent against the increase of charges which the Post Office proposes to make on 3rd October in flagrant breach of paragraph 32 of the White Paper on the standstill of prices?
    Mr. Albu: The hon. and learned Gentleman knows that these increases were part of the measures announced by the Prime Minister on 20th July. Of course, if the hon. and learned Gentleman has any complaint to make, he will no doubt write to the Postmaster-General.

    Bonus Payments
    Mr. Dickensasked the First Secretary of State and Secretary of State for Economic Affairs whether bonus payments made to employees at the employer's discretion are to be subject to the incomes standstill.
    Mr. Albu: Yes, Sir.
    Mr. Dickens: While I am grateful to my hon. Friend for that reply, may I ask him to bear in mind the fact that there is a need for the strictest control by the central government over bonus payments made, not on an individual's performance toward a firm, but upon the profitability of that firm?
    Mr. Albu: My hon. Friend is quite right. We have to watch this question of bonus payments very closely indeed. I am glad that he has distinguished between bonus payments which are part of an incentive bonus system, where in operation, and other types of bonus payments.
    Mr. Iain Macleod: Can the Minister of State tell us how he proposes to carry out the terms of the answer which he has given to the House? Is he going to have a vast increase in the army of people who are supposed to give information? How is he going to ensure that such bonus payments which go on are within the standstill?
    Mr. Albu: As the right hon. Gentleman knows, the standstill is on a voluntary basis, and so far we have very good evidence that industry is co-operating
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    with the Government in carrying it out. As my right hon. Friend said yesterday, we hope that this will continue.

    Northern Ireland
    Mr. McMasterasked the First Secretary of State and Secretary of State for Economic Affairs what steps he is taking within his responsibilities in the United Kingdom to ensure that the economic and financial restrictions at present in force and to be applied do not cause a rise in unemployment in Northern Ireland; and if he will make a statement.
    Mr. Albu: Intensified efforts are being made to steer new jobs to Northern Ireland in common with the development areas in Great Britain. The tougher control of industrial development certificates in congested areas, the extension of the system of office development permits, and the building licensing restriction should all be helpful.
    Mr. McMaster: Is this the best the Minister of State can say? Is he aware that unemployment in Northern Ireland is 6 per cent., many times above the national average, and that the hardship caused by a credit squeeze such as the present one is bound to affect a marginal area like Northern Ireland more severely than any other part of the country? Will the hon. Gentleman take clear and effective steps to prevent a sharp rise in unemployment in Northern Ireland this winter?
    Mr. Albu: The hon. Gentleman knows very well that the level of unemployment in Northern Ireland is lower than it has been for many years. He is also aware of the very energetic steps that my right hon. Friend has taken over the last year to get new industry into Northern Ireland. He may also be aware that the Northern Ireland banks are exempt from the requirement to make special deposits; this will also be helpful to Northern Ireland industry.
    Mr. McNamara: Is my hon. Friend aware that the responsibility for a large part of the unemployment in Northern Ireland is that of the Unionist Stormont Parliament and that we are prevented in this House from in fact—[Interruption.]
    Mr. Speaker: If the responsibility does lie there, the hon. Gentleman cannot ask a supplementary question about it.
    Mr. McMaster: On a point of order. In view of the complacency of the Minister of State's reply, I beg to give notice that I shall raise this matter on the Adjournment.
    Mr. Speaker: Notices must be given in the conventional language.
    Mr. Fittasked the First Secretary of State and Secretary of State for Economic Affairs whether he is aware of the prospect of redundancy among 4,000 workers in Short Brothers and Harland before the end of 1967; and what steps he will take, including diversification to provide new jobs, to mitigate the effects of this redundancy.
    Mr. McMasterasked the First Secretary of State and Secretary of State for Economic Affairs if, in co-operation with the Northern Ireland Government, he will take immediate steps to create sufficient new jobs in Northern Ireland to employ the men whom the Government expect as a result of their plans for Short Brothers and Harland to be declared redundant between now and the end of 1966; and if he will make a statement.
    Mr. Albu: As my right hon. Friend told the hon. Member for Belfast, East (Mr. McMaster) on 7th July, a great deal of work is already being done on these problems, both by us and by the Northern Ireland Government, and further announcements can be expected shortly.
    Mr. Fitt: Would the Minister of State take it seriously that all political parties in Northern Ireland, including myself and hon. Members opposite, are deeply concerned about the position in Short Brothers and Harland? This factory is of supreme importance within the context of industrial relations in Northern Ireland and many people are deeply concerned. Would the Minister of State give an undertaking to expedite any negotiations which may be taking place so that we may have a successful conclusion?
    Mr. Albu: I assure my hon. Friend that negotiations are going on very actively indeed. My hon. Friend may
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    be pleased to know that Rolls Royce are already advertising for men to be employed on the manufacture of aero engine components. This is in addition to the negotiations which are going on, with a large number of companies. We hope that these negotiations will be very soon brought to a successful conclusion.
    Mr. McMaster: Is the Minister of State aware that the trade union leaders responsible at Short Brothers and Harland have informed many Members of the House that no visible progress has been made with the diversification of the works of Short Brothers and Harland, in spite of the appointment of consultants and the receipt of their report a long time ago? Will the hon. Gentleman take urgent steps to deal with this problem, as he promised during the General Election and before?
    Mr. Albu: My right hon. Friend has recently seen some of the trade unionists in Northern Ireland, and he does not believe that this can possibly be the case. In any case, the hon. Gentleman, who is a lawyer, will understand that, while negotiations are proceeding, one does not bruit them all over the world.
    Mr. Whitaker: Will my hon. Friend make it a condition of the receipt of any aid from this Government that the companies involved do not practise discrimination on the ground of religion or any other mater?
    Mr. Albu: That is a question for my right hon. Friend the Home Secretary.
    Mr. Currie: Can the Minister of State give any indication of the date when an announcement is likely to be made as to the outcome of the negotiations?
    Mr. Albu: Obviously one cannot do that. When one is conducting negotiations, one cannot say in advance—in fact one would prejudice the success of the negotiations if one did so—when they may come to an end.

    Expenses
    Mr. Lubbockasked the First Secretary of State and Secretary of State for Economic Affairs if he will make a statement on the policy of Her Majesty's Government with regard to expenses during the period of the wages and prices standstill.
    Mr. Alba: Paragraph 18(1) of the White Paper (Cmnd. 3073) makes it clear that it is not intended that the standstill should be regarded as applying to increases in payments made in specific compensation for expenditure incurred, e.g. travel and subsistence allowances.
    Mr. Lubbock: Is the Minister of State aware that certain local authorities propose to increase the expenses paid to councillors and that this will be particularly resented by ratepayer's who are about the one section of the population not being insulated in any way from the economic measures?
    Mr. Albu: I think that the hon. Gentleman is under a misapprehension. This is not in any sense a pay increase. It is an increase in the maximum level of the financial loss allowance and is payable only to those who suffer actual loss.

    Wages and Dividends
    Mr. Dribergasked the First Secretary of State and Secretary of State for Economic Affairs what steps he proposes to take to redress the unequal and inequitable impact of the incomes standstill on shareholders and on wage-earners since the former will be able to collect accumulated arrears of dividends after the standstill is over, while the latter will never receive the extra wages that they might have been paid during this period.
    Mr. Albu: The Government have called for all company distributions, including dividends, not to be increased during the next twelve-month period. They will not hesitate to use their fiscal and other powers to ensure that distributions after the standstill are not increased so as to make good any increases foregone as a result of the standstill.
    Mr. Driberg: That answer is very encouraging so far as it goes, but can my hon. Friend say whether the Government will have the power to do that after the standstill is over?
    Mr. Albu: Yes. There is no doubt that the Government will have ample powers, certainly ample fiscal powers to deal with this matter. The Government are relying on industry to collaborate in this present situation by observing the standstill in the spirit as well as the letter.
    Dame Irene Ward: Could the Minister of State arrange, in the midst of these very important matters, that people holding undated War Loan do not have to suffer further depreviation?
    Mr. Albu: I dot not quite see what that has to do with the Question I have been answering.

    Agriculture (Economic Development Council)
    Mr. Godberasked the First Secretary of State and Secretary of State for Economic Affairs when the Economic Development Council for Agriculture will be set up; and what is the reason for the delay.
    Mr. Albu: Our consultations are not yet complete, but my right hon. Friend hopes to be able to make a statement fairly soon.
    Mr. Godber: This is very disappointing indeed. Is it true that this is the only one of the little N.E.D.C.s which has not yet been set up? If this is so, is not this yet a further indication of this Government's lack of interest in agricultural matters generally?
    Mr. Albu: Certainly not. The Government and my right hon. Friend have been pursuing this matter very energetically, but I regret that for the moment we are not able to make a statement about the formation of the Economic Development Council.
    Mr. Emrys Hughes: Will the Economic Development Council for Agriculture make a searching inquiry into recent increases in farmers' rents, which are a heavy burden on the agricultural industry? Will my hon. Friend do his best to expedite this inquiry, in the interests of farmers and of consumers?
    Mr. Albu: I am sure that the Economic Development Council will make all the inquiries and studies it feels are necessary to improve the efficiency and profitability of agriculture.
    Mr. Godber: The Minister of State did not answer the first part of my supplementary question. Is it true that this is the only one of the little N.E.D.C.s which has not yet been set up? If this is so, is not this an indication of the Government's complete lack of interest in agricultural matters generally?
    Mr. Albu: It is not so. There are several economic development councils which we are considering setting up.

  BOARD OF TRADE

    Electricity (Connection Charges)
    Mr. Alisonasked the President of the Board of Trade whether he will refer the initial connection charges imposed by Electricity boards to the Monopolies Commission.
    The President of the Board of Trade (Mr. Douglas Jay): No. The monopolies legislation excludes from consideration monopoly conditions which have express statutory authority.
    Mr. Alison: Then what does the President of the Board of Trade propose to do about the substantial extra charge imposed upon house buyers as the result of the monopoly position enjoyed by the C.E.G.B.?
    Mr. Jay: If the hon. Gentleman is interested in that, he should table a Question to my right hon. Friend the Minister of Power.

    Western Europe (Import Credit Quotas)
    Mrs. Renée Shortasked the President of the Board of Trade which countries in Western Europe have operated an import credit quota since 1964; and what effect this has had on British exports to those countries, in percentages.
    Mr. Jay: None, Sir.
    Mrs. Short: Does not my right hon. Friend think that it is time he had a look at this? Is it not a fact that Italy and some other countries have organised control of import credit and that we could do this in a selective way and thus have a considerable impact on the import of luxury goods which are not essential at this time?
    Mr. Jay: We have indeed had a look at it, but one of the difficulties is that it requires legislation. I am not sure that my hon. Friend would want to go on legislating throughout August and September.
    Sir C. Osborne: Why cannot the Government look at the possibility of legislation, as today's trade figures are really disappointing and as we are still
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    importing vast quantities of some luxury goods which we could well do without? Will the President of the Board of Trade look at this again?
    Mr. Jay: This is certainly one method, amongst others, of restraining imports, but there are considerable difficulties.

    Sales Promotion
    Mr. Gwilym Robertsasked the President of the Board of Trade if he will contribute to reducing prices by seeking to prohibit the television and newspaper advertising of commodities such as soap, washing powder, petrol, tea, bread, butter and margarine which people will buy whether they are advertised or not.
    Mr. Jay: I hope that manufacturers and distributors of these and other goods will seek to reduce prices to the consumer by avoiding disproportionate expenditure on sales promotion. But I do not think that a prohibition of particular promotion methods would be justified.
    Mr. Roberts: Is my right hon. Friend aware that the most important condition to make a prices and incomes policy work is to create the right atmosphere and that an important contribution to this atmosphere would be an attack on excessive advertising of this type, for which the public are paying?
    Mr. Jay: I certainly agree that firms, in addition to the manufacturers of detergents, might well examine the possibility of reducing advertising expenditure and thereby charging lower prices to consumers.
    Mr. Lubbock: Is the President of the Board of Trade aware that the housewife will be extremely disappointed by the reaction of the detergent manufacturers to the Report of the Monopolies Commission and that if they do not pay attention to the findings of the Monopolies Commission, there will be a widespread demand for Government action?
    Mr. Jay: I certainly intend to ensure that the consumers' interests here are looked after.

    Shipbuilding Industry Board
    Dame Irene Wardasked the President of the Board of Trade when the Shipbuilding Industry Board will be set up; and if he will name the personnel.
    Mr. Jay: I would refer the hon. Member to my statement on 9th August.
    Dame Irene Ward: The right hon. Gentleman will be aware that that statement was not quite complete as he announced only the name of the Chairman. Could we have the names of the other members? As this matter is very urgent can the right hon. Gentleman now give me an assurance—he has the power—that he will arrange for a debate on the Geddes Report very soon after the House resumes?
    Mr. Jay: We hope that it will be possible shortly to name the other members of the Shipbuilding Industry Board, but it is usual to consult the Chairman after his appointment about the other members. As to a debate, I am sure that the hon. Lady will be putting this point to my right hon. Friend the new Leader of the House.
    Mr. Ogden: Can my right hon. Friend say how many members of the Board will be full-time and how many part-time?
    Mr. Jay: It is intended that there should be at least two other full-time members.

    Passenger Vessels (Safety)
    Mr. Websterasked the President of the Board of Trade what steps are being taken to enforce Section 17 of the Merchant Shipping Act, 1964, as relating to safety arrangements for passenger vessels carrying more than twelve people.
    Mr. Jay: The Board's officers, assisted by the police and other authorities, are active in enforcing this requirement. I am sending the hon. Member a copy of a Press notice issued by the Board of Trade on 9th August.
    Mr. Webster: Is the right hon. Gentleman aware that following the "Darlwin" disaster there is great concern about this matter? Can he state, for instance, the size of his staff that is employed on enforcement and the numbers of police officers who are specifically attached for these duties?
    Mr. Jay: I cannot give the exact numbers without notice. I have, however, already asked my staff to tighten up the regulations in these matters, as the hon.
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    Member will probably have seen. He will see from the Press statement which I have sent him that I have also invited the Press and the public to exercise their right to ask to see the certificates displayed in these vessels, and I hope that they will do so.
    Mr. McNamara: Is my right hon. Friend aware that there is much concern about the qualifications of people who are skippers of these craft? Would he care to make a statement as to the qualifications which are demanded of them? If none are demanded, will my right hon. Friend introduce regulations to ensure that a sufficiently high standard of seamanship is demanded of skippers?
    Mr. Jay: Certainly, that is a point that my officers are entitled to look into when granting certificates. But we had better await the report of the two special investigations which are now taking place before carrying the matter further.
    Mr. Corfield: Am I right in assuming that the right hon. Gentleman already has power to ensure that these certificates are displayed? If not, does he propose to take that power?
    Mr. Jay: Yes, it is the legal duty of those who receive these certificates to display them in the vessels which they use. The public have a right to ask to see them before making any use of the vessel, and I hope that they will.
    Mr. Websterasked the President of the Board of Trade what steps are taken to record certificates to cover the safety of passenger vessels carrying more than twelve people.
    Mr. Jay: Copies of all passenger certificates are retained by the Board.
    Mr. Webster: Is the President of the Board of Trade aware that a registry, either locally or centrally kept, would be of very great help to make sure that this scrutiny of the 1964 Act is enforced? Will he do something about this?
    Mr. Jay: Copies of these certificates are already available to the police, to local authorities and to other people concerned, but I will certainly examine the hon. Member's suggestion.
    Mr. Farr: Would it not be desirable for the certificate in question to be displayed in a prominent place—say, at

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    the top of the companionway or a bulkhead—so that it is visible to all passengers coming aboard?
    Mr. Jay: It is the duty of the master of the ship to display it in a prominent place where it can be seen by passengers.
    Mr. Geoffrey Wilsonasked the President of the Board of Trade what steps are taken to ensure that passengers in vessels proceeding to sea have their attention drawn to the fact that the provisions of Section 17 of the Merchant Shipping Act, 1964, have been complied with when necessary.
    Mr. Jay: Owners are required by statute to exhibit passenger certificates on board ship in a conspicuous place.
    Mr. Wilson: In view of the Answers that the Minister has given to previous Questions, will he consider having a standard form of badge which is easily recognisable, such as a motorist uses for a licence on his car?
    Mr. Jay: I will examine that point, but I think the instructions we have made go a long way to meet the need.
    Mr. Bessell: Is the right hon. Gentleman aware that the announcement made this afternoon will be widely welcomed by people everywhere, but may I ask him this, that provided the certificates are displayed and provided that the boats are seaworthy and properly skippered, passengers need have no fear in using pleasure vessels?
    Mr. Jay: I think that, so far as the law laid down by this House is concerned, that is certainly true, but I cannot give an absolute guarantee of what may happen.

    Japanese Wireless Transmitters
    Mr. Rhodesasked the President of the Board of Trade whether he will prohibit the importation of miniature frequency modulation wireless transmitters from Japan.
    Mr. Jay: No, Sir.
    Mr. Rhodes: Is my right hon. Friend aware that this type of equipment—and there is evidence to support this—can be used both for industrial espionage and for personal blackmail? In view of the fact that his right hon. Friend the
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    Postmaster-General yesterday, in a Written Answer to me, said that he would not grant a licence to users of this equipment and that users could be prosecuted if they used it, would it not be desirable to prevent it from coming into our markets?
    Mr. Jay: I will certainly examine that point, but as the matter stands there is, I think, nothing illegal at present about importing such articles.

    Semi-Development Areas
    Mr. Blakerasked the President of the Board of Trade if he will take steps to create a category of semi-development areas, enjoying advantages less than those of development areas but greater than those of the rest of the country.
    Mr. Jay: I would refer the hon. Member to the reply given to a Question by my hon. Friend the Member for Yarmouth (Dr. Gray) on 4th August and to my speech in the House on 2nd August.
    Mr. Blaker: Would not the right hon. Gentleman agree that some parts of the country outside development areas need help more than others? Does he not agree that for those areas it is not enough to say that there will be an easy policy of granting industrial development certificates but that it is also a question of the rate of investment grant? Would not the President consider establishing a category of areas which were entitled to grant at, say, 30 per cent.?
    Mr. Jay: I think that we can solve this problem adequately by a reasonably flexible use of the industrial development certificates. We use these certificates in a much more discriminating way than seems to be generally realised. Now that we have greatly widened the development areas, I think that that is the proper way to meet the problem.
    Mr. Anderson: Does my right hon. Friend agree also that particularly because of the willingness of people to travel further to work, boundaries of development areas are bound to be artificial and that if one falls on the wrong side of the boundary one can suffer, as in my county of Monmouth? This adds substance to the complaint by the hon. Member for Blackpool, South (Mr. Blaker).
    Mr. Jay: Yes, but as long as we pursue a policy which discriminates geographically, we are bound to have boundaries.

    Boeing 747 Aircraft (Noise)
    Mr. Worsleyasked the President of the Board of Trade what estimate he has made of the noise of a Boeing 747 in comparison with types of aircraft in common use today.
    Mr. Jay: I would refer the hon. Member to the replies on this subject given to the hon. Member for Twickenham (Mr. Gresham Cooke) by my hon. Friend the Parliamentary Secretary to the Ministry of Aviation on 27th April.
    Mr. Worsley: Can the right hon. Gentleman be specific as to whether there is any likelihood of an increase in noise as a result of these new aircraft? Is he aware that the level of noise in Central London has been steadily increasing and is now a major nuisance?
    Mr. Jay: I entirely agree that this is a very serious problem. As far as these particular new aircraft are concerned, we have made it perfectly clear to the operators—that is, B.O.A.C—that there will have to be no greater noise than that which is tolerated at present with existing aircraft.

    British Travel Association (Market Research)
    Mr. Allasonasked the President of the Board of Trade what information he has as to the total amount spent by the British Travel Association on market research; towhich market research organisations the work was contracted; and what were the amounts of such expenditure in the years 1963–64, 1964–65 and 1965–66.
    Mr. Jay: The total amount spent on market research over the Association's 16-year life is not readily ascertainable; nor would it be in accordance with practice to name the outside organisations to which parts of the research work were contracted. The total expenditures on research in 1963–64 and the two succeeding years were, respectively, £28,250, £53,000 and £47,650.
    Mr. Allason: As there is a considerable Government grant to this body, should not the Minister be interested in
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    the way that it is spent? Is he satisfied that there is a tendering system in the award of contracts?
    Mr. Jay: I agree that research by these bodies is extremely important. We are discussing it with them now. I think it is perfectly possible that there can be improvements.

    Concentrated Protein
    Mr. Tilneyasked the President of the Board of Trade whether he will draw to the attention of the trade commissioners in developing countries which lack protein the British invention, details of which have been sent to him, whereby highly concentrated protein for human consumption can be extracted and stored from purely vegetable matter.
    Mr. Jay: I believe that information on this British invention was disseminated through British Embassies and High Commissions overseas some years ago. Those concerned with the sale of the British process should contact my Department for further assistance.
    Mr. Tilney: Is the President aware of the advances from America to use this invention under licence so that British products and know-how may well be squeezed out?
    Mr. Jay: I was not aware of that, but if those concerned would like to contact my Department I shall be very glad to do what I can to help.

    Blyth Shipyard
    Dame Irene Wardasked the President of the Board of Trade whether he will take steps to maintain the Blyth Shipyard similar to those taken to protect the productive capacity of Fairfields in Scotland.
    Mr. Jay: The position of these two shipyards is very different and I do not consider that Government intervention would be justified in this case.
    Dame Irene Ward: In view of the fact that the Blyth Shipyard closure has caused great consternation to those on Tyneside, is it not possible to do on the Tyne what it is possible to do on the Clyde? Does it matter that the two yards are vastly different if both are producing a

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    great deal of employment? I cannot believe that the right hon. Gentleman is going to allow unemployment in shipbuilding to develop on the Tyne, having regard to our past.
    Mr. Jay: Of course, when we acted to save the Fairfield Yard we were violently opposed by the hon. Lady's Front Bench opposite.
    Dame Irene Ward: I do not care about that either.
    Mr. Jay: I rather thought that would be the response. However, there really is a major difference, in that the Fairfield Yard was a major yard with a large modern plant and with a large number of orders, and the circumstances in this case, although I very much regret the closure, really are different.

  EDUCATION AND SCIENCE

    Bournemouth College of Technology
    Sir J. Edenasked the Secretary of State for Education and Science whether, in view of the fact that the Bournemouth College of Technology meets all the criteria set out in Command Paper No. 3006, he will now include Bournemouth in the list of colleges designated as polytechnics.
    The Minister of State for Education and Science (Mr. Goronwy Roberts): No polytechnics have yet been designated. My right hon. Friend's preliminary proposals, set out in the Appendix to Cmnd. 3006, are being considered by the Regional Advisory Councils for Further Education whose views he will be considering carefully before he invites any local education authority to formulate a scheme for the establishment of a polytechnic.
    Sir J. Eden: Would the hon. Gentleman give special consideration to the opportunities offered for further education by the Bournemouth College of Technology and Art, particularly bearing in mind, in view of the fact that it has recently received planning consent, that it is likely to be the only college in the area capable of developing along the lines set out in the Command Paper?
    Mr. Roberts: Bournemouth College of Technology has indeed an excellent record and provides excellent tuition and
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    practice at many levels. Bournemouth Education Authority has informed us that it is putting forward, through the regional advisory council, a strong case for the designation of this college, and we shall most certainly very carefully consider what the authority puts forward.

    Swimming
    Mr. Hector Hughesasked the Secretary of State for Education and Science what provisions he has or plans for encouragement of the science and art of swimming, in view of the Girl Guides' relay swim across the English Channel.
    Mr. Goronwy Roberts: As the answer to my hon. and learned Friend on 29th April, 1965, indicated, there is in the schools great interest in the teaching of swimming, and there has been a considerable increase in the number of school swimming pools. In addition, members of the Sports Council and officers of the Department have met representatives of the Amateur Swimming Association and the Welsh Amateur Swimming Association to discuss informally the long-term development of their sport. The Amateur Swimming Association has for many years received a grant. In 1965 a grant was made for the first time to the English Schools Swimming Association.
    Mr. Hughes: Bearing in mind the facts stated in my Question, will the Minister organise an international festival to vindicate and honour Britain's splendid achievements in the art of swimming and in field sports?
    Mr. Roberts: It is certainly a most interesting suggestion. I am prepared to look at it.

    Pre-School Play Groups
    Mr. Winnickasked the Secretary of State for Education and Science if he will introduce legislation to include preschool play groups among his Department's functions.
    Mr. Goronwy Roberts: My right hon. Friend cannot consider whether any change in the existing law is desirable until he has received the reports of the Central Advisory Councils for Education.
    Mr. Winnick: Does my hon. Friend not agree that, in the absence of nursery

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    schools and nursery classes, pre-school groups should be encouraged and that his Department has a special responsibility along these lines?
    Mr. Roberts: We have already sent to local education authorities Circular 8/60, a copy of which, if the hon. Member wishes, I will send to him, and we have already sent out two addenda which bring this matter a bit more forward.

  MINISTER FOR TOURISM
  Mr. Goodhartasked the Prime Minister whether he will appoint a Minister for Tourism.
  The Prime Minister (Mr. Harold Wilson): No, Sir.
  Mr. Goodhart: Does the Prime Minister appreciate that the United Nations is thinking of designating 1967 as international tourist year? Does he believe that there is no prospect of restoring the savage cut in travel allowance during this international tourist year? How long does he expect to have to continue his West of Margate policy?
  The Prime Minister: Yes, certainly, the United Nations are acting, as the hon. Member has said, but, of course, we do not need a Minister for Tourism because this is one of the responsibilities of the President of the Board of Trade and the Minister of State and the British Travel and Holidays Association. So far as the tourist allowance is concerned, the amount allowed is considerably above the average which has been taken in recent years.
  Mr. Heath: Is it not true that the Minister of State at the Board of Trade is Minister for Tourism, unless the Prime Minister has changed the previous arrangements which held for some time? Would he not agree that the present sort of measures, such as the Selective Employment Tax, which puts another £20 million burden on the British hotel industry, make it much less attractive to tourists and that, of course, the provision the Prime Minister made for a loan of £5 million in no way offsets that?
  The Prime Minister: It has always been the position, right from the days when the Secretary of State for Overseas Trade was dealing with these matters, that he is the Minister who has responsibility for
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  tourist matters, but, so far as the Selective Employment Tax is concerned, the right hon. Gentleman will be aware that the House had adequate time to debate and it is now the decision of the House.
  Mr. Heath: The fact that the House has debated it does not alter the fact that the hotel industry, providing for tourists and attracting overseas tourists to this country, is being badly damaged by the additional burden of £20 million.
  The Prime Minister: The right hon. Gentleman will be well aware from his own experience at the Board of Trade that not all the hotels add to this £20 million. In fact, only a relatively small proportion cater for overseas tourists, and they will be helped by the announcement I made on 20th July.

  RHODESIA
  Mr. David Steelasked the Prime Minister if he will give an assurance that he will not grant independence to Rhodesia so long as the government of that country remains under the control of a white minority; and whether he will permit the illegal régime to negotiate the future constitutional basis upon which there will be a return to constitutional government.
  The Prime Minister: As I have repeatedly made clear, independence will not be granted to Rhodesia except on a basis which is acceptable to the people of Rhodesia as a whole; and negotiations for a settlement must take place with a constitutional government in Rhodesia.
  Mr. Steel: Does the Prime Minister recognise that the five principles, drafted, as they were, before U.D.I., and as an attempt to avert U.D.I., are vague and imprecise, and can he say whether he still stands by the letter he wrote to Dr. Mutasa on 2nd October, 1964, stating that the Labour Party is totally opposed to granting independence to Rhodesia so long as the Government of that country remained under the control of a white minority?
  The Prime Minister: Yes, I have answered many questions on the letter to Dr. Mutasa, and I have since met Dr. Mutasa in Rhodesia and discussed this question with him. The position of

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  Her Majesty's Government is exactly as stated—and repeatedly stated—in the White Paper on the Rhodesian negotiations, and although the five principles may be in general terms, the whole purpose of our discussions before U.D.I. and of the present talks is to see that they are very categorically defined and agreed.
  Mr. Winnick: Would not the Prime Minister agree that South Africa is playing a very sinister rôle in helping the illegal régime in Rhodesia to defeat the policy of sanctions, and can the Prime Minister tell us what action he proposes to take by way of talks to prevent the South African régime in this sinister rôle they play?
  The Prime Minister: This does not arise out of the Question, so far as I can see. We have debated the position of South Africa, and while it is certainly true that South Africa has not accepted the principle of boycott, it is not making emergency arrangements, to help Rhodesia and is allowing only normal trade to continue.
  Mr. Evelyn King: Whatever alternative to the Rhodesian policy may exist, in so far as the policy of sanctions is directed to influencing European opinion in Africa, is it not clear that it has now totally failed? It is not influencing them. But is costing the British balance of payments something of the order of £100 million a year. How long are we to continue a policy which is both failing and expensive?
  Mr. Speaker: Order. I remind the hon. Gentleman that long supplementary questions leave less time for others.
  The Prime Minister: The enthusiasm of the hon. Member for Dorset, South (Mr. Evelyn King) for dealing with the Rhodesian problem has never been very well marked, and I have no doubt that he would like to feel that the sanctions policy has failed. It has not up to this time led the European electorate to cause any constitutional changes, but it is having a very deep effect on the economy and on the illegal régime.
  With regard to the second part of the hon. Gentleman's supplementary question, he may like to take a little time in the Recess to work out what would be the effect on our balance of payments—which has been affected, of course, by
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  the higher copper prices—if we were to try to sell out to the illegal régime, an action which would be unacceptable to the rest of Africa.
  Mr. David Steelasked the Prime Minister whether there will be a period of direct British rule in Rhodesia following the ending of the present illegal régime.
  The Prime Minister: I would refer the hon. Member to the statement I made to the House on 25th January last, and to the Answer I gave on 8th August to a supplementary question by my hon. Friend the Member for Fife, West (Mr. William Hamilton).
  Mr. Steel: Can the right hon. Gentleman elaborate on that section of the Lagos communiqué which referred to the Prime Ministers' accepting Her Majesty's Government's statements that a period of direct rule would be needed? How long does he envisage that this period would last, and to what purpose would it be put?
  The Prime Minister: I stated this fully in my statement to the House on 25th January last after the conference. I said that it would never be intended to have direct rule from Westminster and that what we had in mind was rule by the Governor. I said that it might be minutes or hours, days or weeks, depending on how long it would take to negotiate an adequate settlement with a constitutional Government.
  Mr. John Lee: Is my right hon. Friend aware that a period of direct rule would be valuable as a form of education and preparation of the people of Rhodesia, bearing in mind that the present racialist gangsters have denied the people a proper period of preparation?
  The Prime Minister: I do not think that I could best help towards a solution and a settlement by going further than I did on Monday when I stated that talks were being resumed. I expressed concern then about certain developments, Mr. Smith's speech and the treatment of the university, and it would not help towards a settlement if I were to go further.
  Mr. Maudling: Does not the Prime Minister agree that the constant use of the phrase "direct rule" makes the

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  chances of an agreeable solution very much more remote?
  The Prime Minister: In referring to what I said on 25th January, I pointed out that it was not intended to have direct rule from Whitehall. I am sure that the right hon. Gentleman would not suggest that we could negotiate any settlement with the illegal régime and that there need not be a return to constitutional government under the Governor.

  AWARDS TO INDUSTRY
  Mrs. Renée Shortasked the Prime Minister if he will make it a condition when awards to industry are presented to firms that all sections of workers who have contributed to the gaining of the award shall be represented at the presentation ceremony.
  The Prime Minister: No, Sir; but I know that most award winning firms are much concerned to do this.
  Mrs. Short: In view of the cutting which I sent to my right hon. Friend indicating that in a certain firm board room junketings took place when an award was given without representation of the workers, will he consider directions to firms so that all levels of workers shall be absolutely committed to the need to increase productivity and raise exports?
  The Prime Minister: I do not think that, where honours are involved, particularly, as in this case, a new and I believe much coveted award, it would be appropriate for the Government or anyone else to issue directions as to how such an award should be received. But I know that it is the practice of a very large number of firms which receive the award to take every opportunity of bringing in those who did the job on the factory floor to join in whatever celebrations are held.

  PAYMASTER-GENERAL (DUTIES)
  Mr. Martenasked the Prime Minister if he will re-define the duties of the Paymaster-General.
  The Prime Minister: I have nothing to add to previous Answers on this Question.
  Mr. Marten: As the implications of the previous Answers were that the Prime Minister should be kept well informed about security matters, can he tell us whether the temporary secretary, Miss Wells, employed at No. 10 Downing Street, was positively vetted beforehand? If so——
  Mr. Speaker: Order. Security Questions are not allowed on the Order Paper, and I do not think that they should be allowed in supplementary questions.
  The Prime Minister: On a point of order, Mr. Speaker. In view of the slur made by the hon. Member for Banbury (Mr. Marten), may I be allowed to reply?
  Mr. Speaker: Since the question has been asked, yes.
  The Prime Minister: The hon. Member for Banbury (Mr. Marten), who spends most of his time snooping on this kind of question, gave a statement to the Press. I wish now to give the facts. This lady was sent for a few days as a replacement for a sick secretary and acted part-time as secretary to my wife. She was employed on exactly the same terms as have always been the case at Downing Street, although we have in fact greatly tightened up the security provisions in the recruitment even of temporary staff as compared with the position under our predecessors.
  It was when she was asked to type a stock letter on Vietnam and began to query the text that one of my secretaries threw doubt on her position when she was replaced and returned to the place from which she had come. There has been the fullest vetting of anyone who has anything to do with security work. This lady had no access to any security work, and I repeat that the rules are tighter than in the time of the Government of which the hon. Member was a member.
  Sir D. Renton: Does that mean that there is or is not positive security vetting of all those employed at No. 10 Downing Street If not, why not?
  The Prime Minister: It is not usual to give details of the methods of vetting, but I can say that everything done before in respect of every member of the Downing Street staff is still done. [HON. MEMBERS: "Answer."] Everything done

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  under my predecessor is still done. In his time, the rule was that temporaries engaged on official work were brought in without vetting at all. We stopped that and have been vetting all people who come to work at Downing Street, even those who come to deal with purely political or constituency work. I can certainly tell the right hon. and learned Member for Huntingdonshire (Sir D. Renton) that the conditions are much tighter.
  Mr. Marten: On a point of order, Mr. Speaker. With respect, does not the Prime Minister's reply entitle me to raise this question?
  Mr. Speaker: Order. The hon. Gentleman should not question my ruling.

  PRIME MINISTER (DISCUSSIONS)
  Mr. Bruce-Gardyneasked the Prime Minister what plans he has, following his discussions with President Johnson about the state of the British economy, to hold similar discussions with the Heads of Government of the Common Market countries.
  The Prime Minister: None, Sir. There are regular opportunities for Ministerial and official exchanges with the Governments of the Six about our respective economic problems.
  Mr. Bruce-Gardyne: Would not the right hon. Gentleman agree, in view of the position of the dollar, that at present the United States is not in a position to retain the safety net under the pound single-handed? Would he further agree that it is important that the Governments of Western Europe should be brought in on these consultations and that it cannot very well be left to the delicate handling of the Foreign Secretary?
  The Prime Minister: The hon. Gentleman suggests that the dollar holds a safety net under the pound. That is an inaccurate way of putting it. The pound and the dollar have both been under recent attack and must work together as far as possible. There is no question of the dollar putting a safety net under the pound and the hon. Gentleman's questions are not particularly helpful.
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  As for consultations with European countries, and not only the Common Market countries, the hon. Gentleman will be aware that, at the recent conference at The Hague, Finance Ministers of the Group of Ten and central bankers had full discussion of all our mutual problems and strongly expressed support of the Government's action and confidence that it will be successful.
  Mr. Farr: During the Prime Minister's discussions with President Johnson, was the question of Gibraltar raised at all?
  The Prime Minister: No, Sir—not at all.
  Mr. Gwilym Roberts: Is my right hon. Friend aware that, unlike the Opposition, we on this side of the House believe in the sovereignty of the British Government and are not over-anxious to tie ourselves to the shoe laces of Germany, France or anyone else?
  The Prime Minister: I am aware that that is the position of my hon. Friend, as it is the position of the Government. It is a more robust attitude than that of right hon. and hon. Members opposite, who think that they will solve our problems by points of order or debates on the adjournment on issues on which they showed such little robustness—I am thinking particularly of Spain—when they were in Government.

  COLONIAL OFFICE AND COMMONWEALTH RELATIONS OFFICE (AMALGAMATION)
  Mr. Onslowasked the Prime Minister what economies in Ministerial salaries will result from the amalgamation of the Colonial Office and the Commonwealth Relations Office.
  The Prime Minister: As I informed my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) on 8th August, I have as yet nothing to add to the Answer I gave on 10th May to my hon. Friend the Member for Fife, West (Mr. William Hamilton).
  Mr. Onslow: Is the Prime Minister not aware that some saving should have been made as soon as the Colonial Secretary became an item of Government surplus stock? How long is it likely to take the

  1883
  Prime Minister to realise that his whole Front Bench is grossly overblown and overpaid even for the sort of black farce which he has been putting on since he came into power?
  The Prime Minister: The hon. Gentleman has had his bit of fun, and for that kind of invective he has been more effective than his own Front Bench. As for his question, I would have thought that he would take a deep interest in Commonwealth problems and would feel that there are still so many problems in connection with the movement to independence of Colonial territories, and at the same time some heavy questions within the self-governing Commonwealth that it is necessary to have two Ministers. There will be a saving when, following this amalgamation, the Minister responsible for the Colonial Office will in due course—although this will require legislation—become a Minister of State instead of a Secretary of State. Then there will be a financial saving.

ASSIZES AND QUARTER SESSIONS (ROYAL COMMISSION)
The Prime Minister (Mr. Harold Wilson): With permission, Mr. Speaker, and in accordance with precedent, I would like to make a statement about the setting up of a Royal Commission.
As the House knows, my noble Friend the Lord Chancellor has for some time been considering the arrangements for the trial of civil actions outside London. But, as these arrangements necessarily affect criminal business too, the Government have now come to the conclusion that a far-reaching inquiry into the whole of the present system of assizes and quarter sessions is desirable.
Her Majesty the Queen has been pleased to approve the recommendation that a Royal Commission should be appointed with the following terms of reference:
To inquire into the present arrangements for the administration of justice at assizes and at quarter sessions outside Greater London, and to report what reforms should be made for the more convenient economic and efficient disposal of the civil and criminal business at present dealt with by those courts.
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I hope to announce the names of the chairman and other members of the Royal Commission after the Recess.
Mr. Heath: May I thank the Prime Minister for telling the House about the setting up of yet another Royal Commission?
The Prime Minister: I hope that the right hon. Gentleman will feel that this is in accordance with precedent and that it is my duty to inform the House. As for the sting in the tail of his supplementary question, I hope that he will realise that for a long time there has been a widespread demand in the legal profession, and even more widely, for a thorough inquiry into the question of assize courts, some of the rules of which have not changed since the 14th century. Since the right hon. Gentleman failed to modernise in this respect, I hope that he will not begrudge our doing so.
Mr. English: Will the terms of reference of the Commission be wide enough for it to be able to consider restrictive practices in the legal profession?
The Prime Minister: It is for the Royal Commission to construe its own terms of reference. I think that I can say with confidence that they are not drafted in a form to invite such a construction. I would not construe them in that way.
Mr. Doughty: Is the right hon. Gentleman aware that during the period of the last Government the Streatfeild Committee was set up and made recommendations, and that changes were made as a result. As for the composition of this Commission, will the Prime Minister see that it is staffed by people with experience of the work of assize and quarter sessions courts, and not by those with only outside experience?
The Prime Minister: In addition to the Streatfeild Committee, which reported in 1961, inquiries were made in 1867, 1908, 1913 and by the Peel Commission of 1936. It is now time that something was done. The Streatfeild Committee was not concerned with the fundamental alteration of the assize system—under which 61 assize towns have to be visited by judges at least twice a year. Some are very small and away from the main centres of population. It is about time this was dealt

1885
with and it would be more satisfactory for those authorities if it were done by an independent Royal Commission.
Mr. John Lee: I thank my right hon. Friend for this announcement, which will be widely welcomed. I realise that the Royal Commission must govern its own procedure, but does my right hon. Friend have any idea how long it will be before we get a report, in view of the urgent nature of the reforms which are to be recommended?
The Prime Minister: I cannot forecast how long it will take. The Royal Commission has a clearly defined task. One has to listen to local opinion on this matter, especially as some areas or towns will lose their assizes. Most people with experience of this will agree that it is profoundly unsatisfactory, very uneconomic and costly to the taxpayer and the ratepayer to run the system on the present basis.
Mr. Carlisle: Now that the Prime Minister has agreed that he was wrong in his previous answer when he said that no such inquiries had been made during the lifetime of the previous Government when, in fact, the Streatfeild Committee was set up to inquire into the urgent dispatch of criminal cases, will he assure the House that one recommendation of the Streatfeild Committee, namely, that there should be no further Crown courts, will not bind the Royal Commission in any way?
The Prime Minister: The hon. Member now admits that the Streatfeild Committee did not deal to anything like the extent that the Royal Commission will deal with this problem, since it had very limited terms of reference. Now he does not feel that the Streatfeild Report, on the very important question of the extension of the Crown courts, was satisfactory. It will not bind the Royal Commission or any action taken by it. What he has said makes it more important to have this Royal Commission.
Mr. Archer: Can the Prime Minister assure the House that the Royal Commission will not consist entirely of members of the legal profession, but that some provision will be made for representing the consumer?
The Prime Minister: The Commission will certainly inquire into civil as well as criminal cases. There must be an adequate representation of the public interest in this matter, as well as the professionals engaged on this work. This will not just be an inquiry by the lawyers into the legal profession. I should think that it was not impossible for the chairman to be a non-lawyer.
Sir Knox Cunningham: Does the Prime Minister expect or hope that the Royal Commission will report in the lifetime of this Parliament?
The Prime Minister: Yes, but I should inform the hon. and learned Gentleman that it will not be inquiring into Northern Ireland.
Mr. Molloy: Will the Prime Minister acknowledge that despite the frivolous attitude of the Leader of the Opposition—which, I hope, will be noted in the country—in addition to the economic aspect and the expenses aspect which have been mentioned, there is also the question of achieving justice? Will he see that the terms of reference which are to be considered will include this very important aspect and also make it clear that this is to be a genuine effort to put things straight, after the "phoney" efforts that we had from right hon. Members opposite when in power?
The Prime Minister: I can assure my hon. Friend that I do not consider the Leader of the Opposition to be frivolous, although it is nice to see him smile once in a while.
As for the terms of reference, in my original statement I have already set out the terms which will make possible the very thorough inquiry on which my hon. Friend is so determined.
Mr. Ronald Bell: Will the Prime Minister refer the whole of Government policy to one of these bodies, which take minutes and waste years?
The Prime Minister: The Government could, of course, have taken their own decisions in this matter of assize courts—there is a body of information on the subject—but I should have thought that the whole House, even in a holiday mood, would feel that, since so many local interests are involved, and since we have to ensure that justice is available

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quickly and, as far as possible, economically and efficiently in different parts of the country, it is better to have the matter impartially surveyed rather than done by the Government.

BRITISH NATIONAL EXPORT COUNCIL
The President of the Board of Trade (Mr. Douglas Jay): The British National Export Council was established for an initial period of three years in 1964, as a partnership between industry and Government for the purposes of stimulating the growth of our exports, and of bringing together under one central organisation the bodies concerned with the promotion of British exports to various parts of the world.
The Council was sponsored by the Federation of British Industries and the National Association of British Manufacturers—now merged in the Confederation of British Industry—the City of London, the Association of British Chambers of Commerce and the Trades Union Congress. Its activities have been financed by funds raised from industry, business and commerce, matched by a contribution from the Government.
It has been represented to Her Majesty's Government that there would for practical reasons be advantage in deciding now whether the Council should continue in being after the expiry of the three-year period. The sponsoring organisations have all expressed a strong wish that it should continue, and this wish the Government fully share. The Government attach the highest importance to the work which the Council has so successfully begun and believe that there will be ample scope for promotion effort of this kind for many years to come.
I have, therefore, informed Lord McFadzean, under whose energetic leadership the Council has made so much progress, that the Government strongly endorse the need for the Council to continue its work after the end of the three-year period, and intend to continue financial support for its activities on the present basis of matching the contribution of industry, business and commerce.
I have also asked Lord McFadzean to convey to all members of the Council
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and of its committees the Government's high appreciation of the time and energy which they voluntarily give to this vital work in support of our export trade.
Mr. Barber: After the deep divisions between the Government and the Opposition over the past few months, I am very pleased to be able to say that I entirely agree with and support all that the President of the Board of Trade has said. Is he aware that the British National Export Council, started by my right hon. Friend the Leader of the Opposition and continued by the right hon. Gentleman, has the good wishes of the whole House and that we send our gratitude to those men of industry and commerce on the Council and the area committees who have so unstintingly given service and advice in the national interest?
Mr. Jay: I am grateful for what the right hon. Gentleman has said, which, I think, is generally accepted.
Mr. Bessell: Is the right hon. Gentleman aware that I and my right hon. and hon. Friends would like to associate ourselves with what the right hon. Member for Altrincham and Sale (Mr. Barber) has said? Would it be possible for the Government to increase the financial contribution made to the Council, in view of the considerable importance of its work?
Mr. Jay: We believe that the present principle of matching the finance privately raised with that provided by the Government is right and that there should continue to be contributions from both sources.
Dame Irene Ward: Does not the right hon. Gentleman think that in conveying all these congratulations to Lord McFadzean he might tell him that even the Council would be improved if there were some suitable women at top level on it?
Mr. Jay: I am sure that Lord McFadzean will give due attention to what the hon. Lady said.
Mr. Ogden: Can my right hon. Friend assure the House that, if the Council asked for more financial aid, such a request would be sympathetically considered? Would he bear in mind that we should balance the export drive with a "Buy British" drive?
Mr. Jay: I agree with my hon. Friend. We will, of course, consider sympathetically any suggestions which we receive from the Council.
Mr. Heath: Is the right hon. Gentleman aware that this decision, which I am sure is right, is particularly gratifying from him, in view of the continuous carping criticism with which the appointment of this body was greeted by the present Prime Minister, by himself and by some of his right hon. Friends, when it was first set up?
Mr. Jay: I am also interested to recall that it was the right hon. Gentleman who set up the Council, in view of what he said earlier about the setting up of a Royal Commission.
Mr. Shinwell: Is the rather peculiar attitude and behaviour of the Leader of the Opposition this afternoon due to what happened when he arrived at the Dorchester Hotel last night?
Mr. Speaker: Order. I do not think that that arises on this statement.

ADJOURNMENT (SUMMER) AND SITTINGS OF THE HOUSE
The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): I beg to move,
That this House, at its rising To-morrow, do adjourn until Tuesday 18th October, and that To-morrow the following paragraphs shall have effect—

(1) paragraphs (1), (2), (3), (5) and (6) of Standing Order No. 1 (Sittings of the House), as applied by paragraph (2) of Standing Order No. 3 (Friday Sittings) shall not have effect; and Proceedings on Government business may be entered upon and proceeded with at any hour, though opposed;

(2) Mr. Speaker shall not adjourn the House until he shall have reported the Royal Assent to the Acts which have been agreed upon by both Houses;

(3) when the Proceedings on any substantive Motion for the Adjournment of the House shall have continued for a period of five and a half hours (without reckoning the time occupied by any intervening Proceedings), then—

(a) if Mr. Speaker shall already have reported the Royal Assent to the Acts as aforesaid, he shall forthwith adjourn the House without putting any Question; and

(b) if Mr. Speaker shall not so have reported the Royal Assent to the Acts as aforesaid he shall forthwith suspend the sitting until a Message is received from the Lords, or until a Message is delivered desiring the attendance of this House in the House of Peers for the purpose of hearing a Commission read for signifying the Royal Assent to the Acts as aforesaid; and, as soon as he shall have reported the Royal Assent to the Acts as aforesaid, he shall forthwith adjourn the House without putting any Question:

Provided that sub-paragraph (b) of this paragraph shall also apply if such a Motion for the Adjournment of the House shall have been withdrawn.
On this occasion, I should have preferred to move this Motion formally and to answer points raised in the debate at the end, but it is such a complicated Motion that I think that it would be convenient if I gave a very brief explanation of what it means.
It means, first, that we propose to adjourn the House until 18th October; second, that we propose to enable any Lords Amendments to the Prices and Incomes Bill to be dealt with whenever they are received; third, that we propose to ensure that the Royal Assent to the Prices and Incomes Bill is given before the House rises; finally, and most important, it is designed to ensure that there shall

1891
be no inroad into the normal five and a half hours for discussion which private Members expect to have on such an occasion.
These are the essential four parts of the Motion.
3.48 p.m.
Mr. Edward Heath Mr. Edward Heath (Bexley) rose——
Mrs. E. M. Braddock: On a point of order. Would my right hon. Friend accept from me for the record the thanks of the House generally to the staff of the Catering Department, who have done such a marvellous job here in very difficult circumstances? I feel that it would be appropriate to have that placed on record. Will he accept that from the House and have it placed on record, so that the staff may know that their work is appreciated?
Mr. Speaker: This is not exactly a point of order, but I think that it commands the wholehearted support of the whole House.
Hon. Members: Hear, hear.
Mr. Heath: I am sure that the House will agree with what the hon. Lady has said. Credit is due to her, as Chairman of the Committee concerned, for the part which she has played, and I have no doubt that the right hon. Gentleman will ensure that her remarks are passed on.
I should like to welcome the new Leader of the House to his new position. It has enabled him to shoot from No. 14 to No. 4, in the hierarchy of which he is a part, but he would be the first to agree, I am sure, that that is an insignificant factor compared with the great honour which has now come to him of leading the House. I would congratulate him on the eloquent way in which he read the piece of paper provided for him by the Chief Whip. We are all interested, though not necessarily reassured, to see that the Paymaster-General is solidly by his side as his adviser on Parliamentary procedure.
I hope that we shall have a reply to the debate from the right hon. Gentleman, with the leave of the House, which I am sure he will receive in due course. I noticed with great interest yesterday, on the business statement, that the then Leader of the House gave an undertaking
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that every single point which was raised in this debate would be answered at the end of it. I must say that I heard this with some astonishment. It has never happened with this Government before—and I see now that it was an undertaking given by a man who knew full well that he himself would never have to honour it.
The House is being asked to agree to this Motion. Seldom has it been asked to fix the date of its rising in such a state of uncertainty, seldom with so many matters outstanding and seldom with so many problems unsolved. I must ask the Leader of the House for answers to some questions, and no doubt right hon. and hon. Gentlemen on both sides of the House will wish to ask similar questions and also will seek assurances on other matters before they feel that the House should accept the Motion.
Looking at it from the other point of view, although the Leader of the House did not go into these matters it is obvious why the Government want the Motion to be passed. The plain fact is that here we are in the middle of August already, kept sitting here by the mismanagement of business by the last Leader of the House and by the general incompetence of the Government in handling their business. It seems an absurd position for a Government which was returned only four and a half months ago, with a majority of 100, not to be able to manage their affairs in a way which is customary in the House. Never before have a Government so panted for the haven of a holiday as do the present Government. Never before have a Government been so desperate to get away from their obligations to Parliament. But then, of course, never before have a Government been so discredited in so short a time as have the present Administration.
Never before have an Administration, within four and a half months of a General Election, seen all their policies fail—and, what is more, right hon. Gentlemen come to the Government Dispatch Box and openly admit that they have failed. On the incomes policy, the right hon. Gentleman the former First Secretary, in the course of many eloquent speeches on the Prices and Incomes Bill, has constantly reiterated that his policy has failed. He wants us all to know it. The housing policy has failed. No one knows that better than the Leader of the

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House. He has got out from under it. [HON. MEMBERS: "Order."] The National Plan has now to be rewritten. In Rhodesia, the Government's policy has failed. Every prophecy which the Prime Minister made about the timing of the Rhodesian policy has been proved to be absolutely wrong. The Government's policy on Europe has failed. [HON. MEMBERS: "Order."] I will tell the procedural advisers that these are all reasons why the Government want the Motion passed. As the Leader of the House is incapable of putting them himself, I am putting them for him.
All this has happened within four and a half months of the General Election. Never before, in such a short time, have a Government broken all their promises. That is one reason why they want to get away. They said that there would be no stop-go. That was their major promise. What have we got? A complete stop. There is no "go" in sight anywhere. The Prime Minister has been anxious to tell us that. The Government promised no unemployment, and now the Prime Minister says that, after all the redeployment there will be a permanent level of unemployment of 1½ per cent. to 2 per cent., up to 470,000. That is the policy to which the Government have committed themselves.
What of the 400,000 houses? That promise has been broken. It ought to be 420,000 houses in order to reach the target of half a million.
The Paymaster-General (Mr. George Wigg): On a point of order. [HON. MEMBERS: "Sit down."]—On a point of order. [HON. MEMBERS: "Sit down."]—I shall stay here all day if hon. Members keep up that noise.
Hon. Members: Sit down.
Mr. William Hamilton: Get back to the kindergarten.
Mr. Wigg: Mr. Speaker, may I be given protection from the back-yard opposite and——
Mr. Speaker: Order. There is a way of fighting Parliamentary battles, and noise is not a part of it.
Mr. Wigg: On a point of order. The rules of procedure on the Motion for the Adjournment for the Recess are governed by the debate on 14th May,
1894
1964, in which I took part. Your predecessor, Mr. Speaker, then ruled quite definitely that it was not in order to raise matters of detail. It is my submission that the right hon. Gentleman the Leader of the Opposition has been doing that since he began his speech. May we take it that the House will be governed by the rules of procedure of 14th May, 1964—which I must confess at the time I thought had been devised specially for my benefit? I should like to think that they have wider application and that they apply also to the Leader of the Opposition.
Mr. Speaker: May I assure the right hon. Gentleman that debates on the Motion for the Adjournment are governed by more than the rules as applied in the single debate of 14th May, 1964, which I have read, together with all similar debates. It is in the hands of Mr. Speaker to decide whether or not a speech is in order. It is in order for an hon. or right hon. Gentleman to argue the reasons why he thinks that the House should adjourn or should not adjourn, should adjourn for the time for which it is proposed that it should adjourn, or should adjourn for a shorter time.
The right hon. Member for Dudley (Mr. Wigg) is right in saying that anyone who speaks in the debate must not go into detail. The judgment about whether an hon. or right hon. Gentleman is going into detail is a matter for Mr. Speaker. If I find the right hon. Gentleman the Leader of the Opposition or other hon. Members straying beyond the bounds of order, I shall deal with the matter.
Mr. Wigg: May I express my gratitude to you, Mr. Speaker—and I am sure that the House, too, is grateful—for restating the position for the benefit of the Leader of the Opposition.
Mr. Heath: Thank you, Mr. Speaker, for your Ruling.
I think that a situation has now arisen in which the Chief Whip must send for the Prime Minister. Last night, at one minute past ten o'clock, we read an announcement that the Prime Minister had made the right hon. Member for Coventry, East (Mr. Crossman) Leader of the House. When we read it, many of us thought that it was a hoax—because some of us were living in that atmosphere. Now, within 10 minutes

1895
of the debate starting, we find that it was a hoax and that the Paymaster-General is the new Leader of the House. The only person who can settle this is the Prime Minister and he is now beating it hell for leather for the Scillies. But no doubt we can settle it later.
The final reason why the Government want this Motion is that never before have any Government put up such a ghastly performance as the present Administration have put up in the last four and a half months. We had the Budget misjudgment—again, openly admitted by the Chancellor of the Exchequer standing at that Box. He stood there and said, "I agree that I was completely wrong". He goes on producing more freeze and more squeeze, culminating in what we realise, looking back, is the worst economic crisis since 1931.
Overseas, we have had the abortive Moscow visit. I will not go into detail for the Paymaster-General. We had that lost week-end when our life blood was draining away. We have had the squalid abandonment of the United States policy in Vietnam and that near-disastrous French visit which has killed any mutterings there were—half-hearted though they were—about our moving towards the European Economic Community.
Mr. E. Shinwell: Who wrote the right hon. Gentleman's speech?
Mr. Heath: No doubt the right hon. Gentleman will be able to make his speech.
Mr. Shinwell: I have no speech writer.
Mr. Heath: The right hon. Gentleman will see that this speech is in my own handwriting.
Mr. Shinwell Mr. Shinwell rose——
Mr. Speaker: Order. None of this helps the debate.
Mr. Shinwell: I am sorry. I could not help it, Mr. Speaker.
Mr. Speaker: I accept the right hon. Gentleman's apology. It seems that I must prevent the House from being too happy.
Mr. Heath: I pay a sincere tribute to the right hon. Gentleman the Member for Easington (Mr. Shinwell).
Mr. Shinwell: Oh, what is this?
Mr. Heath: No member of the party opposite has done more, or more consistently, to try to come to the aid of his Leader and his party than the right hon. Gentleman, and never was aid more greatly needed than now.
Another reason why the Government want the Motion is that never has a party been so divided within itself over the great issues of the day, over Vietnam, over Europe and, above all, over the incomes policy. On every major Division on the Prices and Incomes Bill there were about 30 absentions, 30 hon. Members opposite who wanted to kill the Bill and who could have done so if, as the hon. Member for Ebbw Vale (Mr. Michael Foot) so often urged on other hon. Members, they had had the "guts" to vote against it when they had the opportunity.
It was in view of all these reasons for trying to get rid of the House by this Motion that the Prime Minister last night produced his sudden, panic changes in the Administration. We had a shuffle last January. We had a shuffle last April. We have a shuffle in August. Yesterday, the right hon. Gentleman promised the Press another shuffle in October. When this Parliament met first, he promised us an annual shuffle. Now, we are having quarterly shuffles. Outside, this has been described as musical chairs. That is an insult to the game. When the Prime Minister plays it, there is always a chair for everyone.
In view of the situation in which he wants us to part, I must ask the Leader of the House for certain assurances. First, the general one, on which he has, no doubt, been briefed: will the Government be prepared, under Standing Order No. 117, to approach Mr. Speaker on a matter of public interest or when the public interest requires it, particularly, of course, on any major events while the House is in Adjournment, and will he listen to representations from Her Majesty's Opposition in cases on which they believe that the House ought to be recalled? I hope that he will be able to give that first assurance.
Second, I want the Leader of the House to give an assurance about our economic affairs. Despite all the Government's measures, the situation remains critical. The £ today is once again below

1897
2·79. The trade figures are bad. What is the Government's intention now regarding Part IV of the Prices and Incomes Bill, should it be passed by Parliament before we rise? The First Secretary of State made clear last night that he wanted to pursue an inflationary policy still and to control it through Part IV of the Bill by authoritative means. When I heard that speech I was astonished that the First Secretary could stand at the Box, with the Chancellor next to him, publicly pursuing an entirely opposite policy. Of course, I realise now that it was made by a man who knew that at the most he had only another half hour in the job and he would never have to carry through all the things he was relating in that last speech.
If there is to be an inflationary policy such as we heard described last night, when will the Government implement Part IV of the Bill? Will the Leader of the House give an undertaking that, if an affirmative Order is laid by the Government to introduce Part IV, the House will be recalled at once and that he will not leave it till towards the end of the 28 days allowed for an affirmative Order before recalling the House? It is of great importance that we have an opportunity to discuss the economic situation in which the Government find it necessary to implement Part IV and that it be not left till the last moment.
The third assurance I want is about housing. If I may say it to the right hon. Gentleman as confidentially as one can on the Floor of the House, the last Minister of Housing and Local Government was a man who broke every promise he ever made to the electorate and entirely failed to carry out his obligations to the House of Commons. What is more, the last Leader of the House had absolutely no control over the Minister of Housing and could not, therefore, keep him to his obligations. On 19th July, the last Minister of Housing promised to make a statement to the House before the Recess about the mortgage option scheme.
The right hon. Gentleman has still not done so. On 9th August he said that it did not matter—he had made a statement to the builders whom he had met on 2nd August—thus showing that he cares nothing whatever for the House of Commons and treats it with contempt.
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Will the present Leader of the House try to remedy that situation and speak seriously to the new Minister of Housing about it, and, before he does that, carry out this afternoon the obligation, which he gave personally, to make a statement to the House about the mortgage option scheme?
The fourth undertaking we want is on Rhodesia. The Prime Minister gave undertakings last Monday that he would recall the House in the case of a settlement or a breakdown of negotiations or a change of Government policy. He was particularly pressed about the use of force or any question of abdicating British responsibilities to the United Nations, where, of course, the Government have use of the veto. Will the Leader of the House kindly confirm those undertakings about recall of the House on the Rhodesia question?
The fifth undertaking I ask for is about Gibraltar. I ask the Leader of the House, as my right hon. and hon. Friends and I have asked the previous Foreign Secretary and the Prime Minister, for a clear assurance that there will be no diminution in sovereignty over Gibraltar, no agreement to diminish sovereignty over Gibraltar, without the agreement of the people of Gibraltar. The House cannot understand why the Government refuse to give such an assurance. The hon. Gentleman refused to give it this afternoon. Commentators on this question, the Press and its leader writers, cannot understand why the Government refuse to give the assurance.
In the White Paper on Gibraltar, published last year, it was stated:
"The policy of Her Majesty's Government is clear. Great Britain has at no time renounced her title to Gibraltar or failed to defend her position there and will not do so now."
Why cannot the Leader of the House, or, for that matter, the Prime Minister and the Foreign Secretary, say quite clearly that they stand by that undertaking and they will not make any agreement to reduce British sovereignty over Gibraltar without the agreement of the people of Gibraltar?
The right hon. Gentleman may say that the Government are in negotiations. This we fully understand. Having been at the Foreign Office myself for three years, I realise, as some others did not when I

1899
was negotiating, what the difficulties are. But the Spanish Government have set out their position quite plainly. They lay claim to sovereignty over Gibraltar. Why cannot the British Government now state their position clearly, that they will not see sovereignty over Gibraltar diminished without the consent of the people of Gibraltar? It may be said that this is a concern of the United Nations as well, but the United Nations is concerned with the wishes of the people of the territory involved, so I see absolutely no difficulty in the way of the Leader of the House giving the undertaking.
It is important that the undertaking be given because, unless it is given, misinterpretations will be put upon the position of the Government, and these can be very damaging, damaging in Gibraltar and damaging in the negotiations themselves.
The right hon. Gentleman may say that the last Foreign Secretary gave the House an assurance that the representatives of the people of Gibraltar were satisfied with the negotiations. A remark like that, coming from the last Foreign Secretary, immediately sends shivers down one's spine. He said that the representatives of the Federation of South Arabia were satisfied with negotiations which the Government had conducted, but that statement was immediately repudiated by the representatives of the Federation of South Arabia. So I must ask the Leader of the House now—the country expects it and the people of Gibraltar expect it—for a perfectly clear assurance in the words I have used, which, in fact, are laid down in the Government's own White Paper.
I have asked for those five assurances, which, I hope, the right hon. Gentleman will be able to give the House so that he may get his Motion through, but, of course, it must be recognised that even these undertakings will come from a discredited Government whom last night's changes certainly cannot save. What the Prime Minister has done is to compound failure with failure.
The First Secretary's incomes policy has failed, and so he is moved on to be Foreign Secretary. [An HON. MEMBER: "The right hon. Gentleman has said all this."] I shall say something else, too, We all know that this was the prize
1900
that the Prime Minister had to offer to prevent his Government being broken up on 20th July.
The last Foreign Secretary failed. There was not one constructive initiative throughout the time that he was at the Foreign Office. He was a creature of No. 10 and the butt of his party. Now he has been shifted, much to the pleasure of hon. Gentlemen opposite below the Gangway. It is the third office that the right hon. Gentleman has held in 21 months. They are all coming up now for the third time in the Labour Party. The only difference this time is that the Foreign Secretary goes from being the Prime Minister's cipher to being the Chancellor of the Exchequer's rubber stamp.
The last Leader of the House failed—failed to deal with the business of the House. Now he is moved to deal with Rhodesia, where, no doubt, his well known rigidity will impair any possibility of movement whatsoever. The Commonwealth Secretary failed—failed to prevent U.D.I., and failed to secure any settlement afterwards. He has been moved to the Ministry of Overseas Development, where there is less and less to do and less and less to spend——
Mr. Hector Hughes: On a point of order, Mr. Speaker. Is the right hon. Gentleman not infringing the rules of the House, first, by tedious repetition, and, secondly, according to your Ruling earlier today, by going into detail?
Mr. Speaker: One of the last things the Speaker ever wants to have to rule on is tedious repetition. If the right hon. Gentleman goes into too much detail the Chair will call him to order.
Mr. Wigg: Further to that point of order, Mr. Speaker. As this afternoon the right hon. Gentleman has written a new chapter in Erskine May—[HON. MEMBERS: "Oh."]—or, at least, you have given a slightly different interpretation from that of your illustrious predecessor on 18th May, 1964, can the House take it that the new doctrine laid down by the right hon. Gentleman applies to my hon. Friends, who may wish to raise some subjects and treat them in a way which, on previous occasions, they have been debarred from doing?
Captain Walter Elliot: Further to that point of order, Mr. Speaker. May I point out that many right hon. and hon. Gentlemen on both sides of the House think that my right hon. Friend is not going into enough detail? Could he not go into more detail?
Mr. Wigg: Further to the point of order, Mr. Speaker. I share the point of view of the hon. and gallant Member for Carshalton (Captain W. Elliot); I do not think that the right hon. Gentleman has gone into enough detail. Therefore, I hope that some of my hon. Friends will endeavour to go into the detail that I tried to go into on 18th May, 1964, and that they will inquire into the detail about which the Opposition Front Bench always remains very quiet—the detail about Suez. As long as that is possible——
Mr. Speaker: Order. The right hon. Gentleman knows that that is not a point of order. The Chair will continue to rule what is in order along the lines of the debate to which the right hon. Gentleman referred and all other similar precedents, and if hon. and right hon. Gentlemen go into unnecessary detail, they will, despite the encouragement of the right hon. Gentleman to them to do so, be ruled out of order.
Mr. Heath: I was just warning the House that if, as a result of accepting the assurances that we may be given by the right hon. Gentleman, we give the Government this Motion today, we shall still have our doubts about the assurances because of the discredited nature of so many of the Ministers, and, in particular, because they have failed. [Interruption.] Obviously, the Paymaster-General just cannot take it.
I must round it up by coming to the Leader of the House himself. Anybody less likely to get the confidence of all sections of the House, whose interests he is there to look after, it is difficult to imagine. He is just about the most political animal on the Government side of the House, barring the Paymaster-General. In fact, when we ask for these assurances, and want to put our faith in them, what is the position? There are some people who thought that after the General Election, and perhaps some who thought that after the first shuffle, the Administration would devote themselves seriously to the business of
1902
government. [An HON. MEMBER: "Surely the right hon. Gentleman did not."] No; to be perfectly fair, I did not. But they must all now, especially after last night, be disillusioned.
What is the fact? It is that the Government are in future to be run by a triumvirate consisting of the Prime Minister, the Leader of the House and the Paymaster-General, who are just about the slickest three political tricksters in the whole business.
The last assurance that I have asked for concerns the Chancellor of the Exchequer. It is interesting to note that he was the one man who publicly announced that he wanted to move, but he is the one man who has been told firmly to stay put. I gave him very good advice about it at the time. I stated from the Dispatch Box that it was being said that the Chancellor of the Exchequer was telling his friends that he wanted to move. But I warned him that if he was doing that he ought also to tell his enemies, like the Prime Minister. But he did not, and now he is left in the hot seat, responsible for deflation, stagnation, declining investment and everything else, for which he will be blamed, and then, finally, he will be shifted.
I say to the Leader of the House that this is a tired, discredited Government. We cannot rise until we have been given the assurances for which I have asked. Better still, the Government should rise and get out.
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: Order. There is so much noise that it is impossible for me to indicate who has caught my eye. Mr. Mendelson.
4.17 p.m.
Mr. J. J. Mendelson: Seeing that this is a serious occasion, and that we are about to debate a Motion in which we are asked to adjourn the House for a very considerable period, I should like to bring to the notice of my right hon. Friend the new Leader of the House a number of important and urgent points on which the House needs assurances before passing the Motion.
Before doing that, I should like to congratulate my right hon. Friend upon his new appointment and express my confidence that, with his knowledge of

1903
Parliament, and looking at the writings for which he has been responsible on this subject, and his understanding of political democracy, he will be a good Leader of the House and will continue to give ideas to many people, as he has done in the past in many different ways, on Parliamentary reform.
I could not help feeling, when we were listening to the speech of the Leader of the Opposition, that this was one of those occasions when he had a speech that absolutely had to be made. He might have prepared it for a very different occasion. I also felt that there was one section of it that he probably wanted to deliver as an after-dinner speech last night, but he was unable to do so because he turned up with a false invitation.
It is not very far to move from a false invitation to a false prospectus. During his speech the right hon. Gentleman referred to me and some of my hon. Friends and asked why we had not taken action that might have given him and his political friends an opportunity to form the Government. This is what I have in mind when I talk about a fraudulent prospectus, because if one thing has been revealed throughout the discussions in the past few weeks it is that the Opposition have a policy which they dare not properly reveal to create the kind of level of mass unemployment and pursue the policies pursued on similar occasions by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), and that there is no danger at all of anyone wanting to replace our Government by a Government with that kind of policy.
That is the feeling up and down the country. As recent Gallup polls have shown, whatever arguments there might be about the policy of Her Majesty's Government and the need for being quite clear about what happens during the adjournment of the House and in the autumn, the thing that stands out is that the political popularity of the right hon. Member for Bexley (Mr. Heath) has made no progress at all. In fact, according to some surveys it has gone down, but I wanted to be more generous than the right hon. Gentleman was in his speech.
The main burden of the argument which I wish to put to the House, and to which I would like my right hon. Friend to reply, concerns the period
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ahead of us during which the House will not be in session and the threatening international situation which we all face.
As I do not want to take up too much of the time of the House, I will put one urgent point to my right hon. Friend. It concerns the situation in South-East Asia where, just as we are about to adjourn, we are facing a new change of policy and a potentially dangerous international crisis in Vietnam. It arises, first of all, from an announcement by Marshal Ky, the Prime Minister of South Vietnam, that he thinks that the proper policy to be pursued is a very wide escalation of the war, an invasion of North Vietnam by South Vietnam and her allies—which is the way in which Marshal Ky formulates it, meaning primarily the United States—and the destruction of the Government of North Vietnam. That is the way in which Marshal Ky proposes to proceed in the next few weeks.
That is grave enough in itself, but, as has been pointed out in leading articles in The Guardian and the New York Times, we must not lightly dismiss statements made by the Prime Minister of South Vietnam. He is not perhaps very powerful in himself, and it is well known that his military effort depends entirely on the military forces of the United States. But, as both The Guardian and the New York Times point out, he has an uncanny way of predicting what is to be United States policy a few months later.
It was fully six months before the United States extended the war into North Vietnam by air attacks on that country that Marshal Ky demanded precisely that policy. At the time when the Premier of South Vietnam advocated bombing operations against North Vietnam, his view was dismissed as unimportant. But I submit that the present advocacy of an extension and escalation of the war by Marshal Ky may well become the accepted policy within the next six weeks. That is the burden of the argument which I wish to put to the Government.
We have even more reason to be deeply concerned, because that statement by Marshal Ky was taken great note of in America. I pray in aid an important expression of American opinion by a number of Congressmen in order to point to the urgency of the

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situation and to urge the Government not to ignore the dangers which are building up in South-East Asia, because, through the play of alliances, we could be involved immediately if the war were to extend.
The policy now proposed by Marshal Ky is one which would bring American forces into direct confrontation with the forces of other major powers. If they were then to become involved with the United States, the United Kingdom, as one of the principal allies of the United States, would automatically become involved through the play of alliances. At that moment, it would be far too late to argue the case which I want to argue today. If it were to happen during the Recess, this House would have no opportunity of making its voice heard in what could be the last three or four days before catastrophe overtook us all.
Therefore, I want to call in aid an important statement of American opinion about how dangerous the situation is. On 29th July, after Marshal Ky had made his statement, mainly directed to the United States, a group of 48 members of the House of Representatives published a statement which has only been partly mentioned in our Press, but which deserves very careful scrutiny by Her Majesty's Government.
These 48 Congressmen—46 Democrats and two Republicans—had this to say in what was headed "Statement on Vietnam":
"Recent statements by Premier Ky suggesting an invasion of North Vietnam and eventual war with China indicate he and other South Vietnamese Generals have ambitions that extend far beyond and contradict the limited aims stated by President Johnson in seeking self-determination for the Vietnamese people. The danger that the war will spread is increasing daily. Extension of the conflict may embroil the major powers of the world in a destructive and brutal confrontation that would shatter all hopes of world peace."
That is the view of those 48 Congressmen, and it forms the main basis of the argument which I am putting to the Government. It is true that the Congressmen go on to say:
"Premier Ky's statements dramatise the necessity for the American Government to redirect its energies more forcefully in the pursuit of a peaceful political settlement of the war. The spiral of escalation now being advocated by General Ky must be opposed and new initiatives attempted for a negotiated settlement."
1906
If, by misfortune, while the House is not sitting, some of the policies now advocated by Marshal Ky were officially to become accepted by the Government of the United States, and were then to become part of a joint policy, what policy would Her Majesty's Government adopt and what steps are they preparing to recall the House and to allow Parliament to express its opinion on the situation? We have even more reason to be concerned in the light of a statement made recently by Mr. Dean Rusk, the Secretary of State in the United States Administration.
When I said a minute ago that I would like to know the Government's policy if the United States were to adopt Marshal Ky's statement, I was not merely talking academically and in theory, because a few days after Marshal Ky had advocated his policy publicly and a few days after the 48 Congressmen had published their statement, Mr. Rusk held a Press conference. I only wish to put one point to the Government about it, because, obviously, it is much more important to base my urgent call for a Government reply upon the reality of the position than upon my own point of view.
Mr. Rusk refused to dissociate the United States Government from Marshal Ky's statement. That represents an entirely new and highly dangerous development in United States policy. If the Government were to be faced during the Recess by a development of American policy beyond that implied in the statement made by Mr. Rusk at his Press conference, when he said in a general way that some military action into North Vietnam cannot be excluded, the effect of which was to give active support to the policy advocated by Marshal Ky, would they then make it quite clear that in no circumstances would the United Kingdom be associated with such a policy? It is essential that we have such an assurance before we consider passing the Motion. If such a policy were to develop it would be far too late for hon. Members to express their views, even if hurriedly recalled, because events would move on very fast indeed.
Beyond an assurance that Her Majesty's Government will dissociate themselves from any policy of further escalating the

1907
war into North Vietnam, I want the further assurance that they will act on the policy proposed by these 48 Congressmen and to say to the United States Government, here and now, "Instead of following the dangerous advice of Marshal Ky, we must, because of the dangers inherent in this situation, reinforce our efforts to bring about a peaceful solution".
In fact, the proper reply for Her Majesty's Government to this refusal by Mr. Dean Rusk to dissociate the United States Administration from the policy advocated by Marshal Ky would be to give a serious warning to the United States that Britain is no longer prepared to accept responsibility for those dangerous policies. This must be said now, because it will not be possible to say it if such a policy were pursued and our major ally were to become involved in an international war. In such an event, the play of alliances would be too late to help.
We have an opportunity now to make our position clear and to support these 48 Congressmen in their efforts to call a halt to this war. I invite my right hon. Friend, in his first speech as Leader of the House, to speak out and give the assurances for which I have asked.
4.32 p.m.
Mr. John Boyd-Carpenter: It would subject one to the risk of prosecution by the R.S.P.C.A. to deny hon. and right hon. Gentlemen opposite their Adjournment Motion. The cruelty of keeping sitting a body of people who have seen, during the last four and a half months, the complete crumbling of their political ideas, the complete frustration of their policies and the complete repudiation of their election promises, would be an act of intolerable cruelty.
Hon. Gentlemen opposite must realise—if they did not realise it before, they must surely realise it after the speech of the hon. Member for Penistone (Mr. Mendelson)—that hardly anyone can allow Parliament to go into recess with any confidence as to the way in which the Government will handle our affairs in the absence of any check from the House of Commons. That is why it is essential to obtain from Ministers as clear an indication as possible of their attitude, position and conduct on vital matters.
1908
I agree with the hon. Member for Penistone—though certainly not with his views—that the subject which he raised is of the greatest importance. My hon. Friends and I will be raising other equally important matters. The real anxiety of all hon. Members on leaving our country to the unchecked rule of a Government who have made a shambles of our economy in four and a half months is very real indeed.
There can be no conceivable reassurance in the changes we have had in the last 24 hours. Even those who believe that the calm serenity of the new Foreign Secretary will enable him to deal with the international situation cannot be reassured by that extraordinary exhibition we saw a few moments ago of the way in which the newly appointed Leader of the House was treated by his colleague the Paymaster-General, who attempted to lay down the conduct of the debate. I have no doubt that the Paymaster-General filled more space in the columns of HANSARD this afternoon than he has during the last couple of years. The new Leader sat punctiliously here while we watched what one might describe as the Prime Minister's personal representative—others might use a stronger expression—trying to keep an eye, as is the custom in Communist countries, on the conduct by other leading Ministers of their responsibilities.
I seek assurances on two points and, without them, I agree with my right hon. Friend the Leader of the Opposition that we cannot responsibly allow this House to go into recess. The first relates to the matter which the new Leader of the House was himself handling up to 24 hours ago, the question of mortgages. What is to happen during the Recess to the flow of mortgages which are necessary if owner-occupiers are to get houses built? Considering the mess which the right hon. Gentleman left behind in his former office, no one can feel particularly assured on this issue. Indeed, the only reassuring aspect of the situation is the substitution of a Balliol man in charge of this matter for one from New College.
When is the right hon. Gentleman's mortgage option scheme to be announced and to when will it be retrospective? The Leader of the House will appreciate the point of that; that unless people know that whatever benefits this scheme

1909
may contain—and we do not know what they are—will be retrospective to people taking motgages now, they will tend to hold back and so aggravate the falling off of building in the private sector. To what date will they be retrospective and what applications for mortgages will be covered?
Can the right hon. Gentleman assure us, in the light of the pressures being put on building societies in respect of mortgage rates, that throughout the Recess there will be an unchecked flow of funds into building societies and available to them to lend without rationing or check? In his previous capacity, a few hours ago, the right hon. Gentleman told us; that building societies would be put under pressure not to carry out their announced intention to take their recommended lending rate to 7⅛ per cent. Why it is apparently infamous for a building society to charge 7⅛ per cent. when the Labour-controlled Greater London Council can charge 7¼ per cent. is a matter about which the House has not been informed.
The question that arises on this Motion—and the Leader of the House understands this better than anyone—is how are the building societies, during the months of the Recess, to be able to get funds at interest rates which the Government have, in general, raised to unprecedented levels if they are denied, by Government pressure, the right to adjust the rate at which they lend to a point at which they can afford to borrow at existing rates? In other words, how are their funds to be maintained during the Recess?
I follow up the question asked by my right hon. Friend the Leader of the Opposition about the negotiations over Gibraltar and which, Mr. Deputy Speaker, you may recall Mr. Speaker yesterday indicated, on my right hon. Friend's application for a Motion under Standing Order No. 9, that it would be possible to discuss, within reason, on this Motion. I want to know whether the Leader of the House persists in the refusal, which his hon. Friend the Parliamentary Secretary persisted in this afternoon, to give the undertaking for which we have asked; the undertaking that the sovereignty of Gibraltar will not be diminished, reduced or handed over
1910
to Spain without the consent of the people of Gibraltar. If that assurance cannot be given, why not? What is there in these negotiations to prevent that from happening?
I am not one of those—and there are some—who speak in this House with any hostility towards Spain or the Spanish people. I have a great affection for the Spanish people. I have many Spanish friends and I am far from being anti-Spanish, but I think that Anglo-Spanish relations are being endangered by the suspicion and ambiguity which the sinister silence of right hon. Gentlemen on the Front Bench opposite is producing, the sinister refusal to give a plain assurance on the lines set out in their own White Paper of quite a short time ago.
I feel very strongly about the position of the people of Gibraltar, partly for personal reasons. I had a forebear who was there to defend the Rock in the famous four-year siege many years ago and I know the Rock and its people well. They are not Spaniards. They are like ourselves, a people of mixed origins. The very name of their Chief Minister, Sir Joshua Hassan, is the clearest indication that their origin is far more widely based than Spain. They very plainly do not want Spanish sovereignty.
I should incur your displeasure, Mr. Deputy Speaker, if I went into the intricacies of the Treaty of Utrecht, but I remind anyone who looks with undue favour on the Spanish claim, that we have owned the Rock longer than the Spanish did. If historical claims mean anything, which I doubt, probably a better claim is that of His Majesty the King of Morocco!
We must have a plain assurance. The former Foreign Secretary, now the First Secretary of State and Secretary of State for Economic Affairs, gave a purported reason for not giving the assurance, which is more than the Prime Minister did. He said that this could not be done because our case was that sovereignty of Gibraltar was ours. Of course, that is so. No one quarrels with that, but what is to prevent anyone who has the power, as we have, saying that he will not exercise it without the consent of others concerned? That is precisely what right hon. and hon. Gentlemen opposite

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are perpetually saying about Rhodesia, where we have the sovereignty. Why cannot the same be said about Gibraltar?
The Prime Minister tried to introduce a red herring into this matter with his talk yesterday about the frigates. I thought that it was a Freudian sense of guilt that made him bring up an action of his which cost the hard-pressed shipyards of this country many millions of pounds of continuing orders, which did not deny the Spanish Navy a single ship, but which only secured that it did not get them from Britain. I cannot acquit the Government and the Prime Minister of a great deal of responsibility for what I regard as the folly of the Spanish Government in bringing up this claim at this moment and pressing it in this way.
Although the Prime Minister dug up the question of the frigates, he did not mention the other matter which exacerbated this problem, the naval exercises. The then Foreign Secretary, who was not then a Member of the House, cancelled, within a fortnight of coming into office, naval exercises which had been arranged many months ahead, and in readiness for which Spanish naval officers had been taking courses in English and signalling. That was regarded as an insulting thing to do, and in the absence of explanations it was insulting.
That does not justify the Spanish attitude or claim, but it does indicate the ham-handedness of a Government which, first, aggravates the feelings of a proud and sensitive nation and then, when those feelings produce foolish, ill-considered action causing hardship on the Gibraltar border, of which I saw something last September, appears to show weakness in the handling of negotiations by not saying plainly from the outset that the sovereignty of Gibraltar is not in issue, save in so far as the people of Gibraltar consent.
If we are to go into recess and these negotiations are to go on in an atmosphere of suspicion, not only will Anglo-Spanish relations be poisoned—some hon. Members might not regret that, but I should regret it enormously, and not only will it cause alarm to thinking people in Gibraltar, but it will serve no national purpose whatsoever. Those
1912
negotiations, conducted against that background and in that atmosphere, will be doomed to failure.
It is no good the Prime Minister dragging in the sale of frigates, because there is one thing which all hon. Members think is a far more important issue. That is not the sale of frigates, but the sale of a free people, which this House, including the Prime Minister's own hon. Friends, will not tolerate for a moment.
Therefore, what harm can be done, if, with all the troubles gathering around the Government, with all the economic difficulties which they have encountered and aggravated, and with all the other problems at home and abroad with which they are so ineffectively trying to cope, they clear up at least one of the difficulties? Why cannot they say plainly and clearly that the people of Gibraltar, who have fought at our side for 250 years, who have a loyalty to the British Crown and British connection unrivalled in the world, can go into the period of the Summer Recess with a certain pledge and a clear understanding that they will not be sold down the river by Her Majesty's Government?
4.46 p.m.
Mr. Arthur Blenkinsop: I find it somewhat amazing that the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) should raise the issue of the problems of our relations with Spain at this moment, particularly in view of the very discreditable record of past Conservative Administrations in this regard, stretching back over very many years. When one remembers, if one is politically old enough, the whole attitude of the Conservative Party in the past that helped to establish a dictatorship in Spain, it seems to me amazing that right hon. and hon. Gentlemen opposite should still be attempting to support a régime of that nature, and be attacking what I regard as the honourable effort of Her Majesty's Government on taking office to make clear this Government's difference of view on this matter.
Mr. Boyd-Carpenter: If the hon. Gentleman regards the Spanish régime in this light, why is he so hesitant in making clear that he and his colleagues are not prepared to hand free people over to it? If he is concerned to go into past history, is he seeking to justify the efforts of a

1913
great many of his hon. Friends to impose Communist tyranny on the Spanish people too?
Mr. Blenkinsop: I was merely drawing attention to a political history of which many hon. Members are well aware. I should have thought that no one on either side of the House would wish to support the highly discreditable actions of previous Conservative Governments in this respect.
I support the appeal of my hon. Friend the Member for Penistone (Mr. Mendelson) for some assurance on our policy in relation to Vietnam while the House is in recess, and particularly in relation to the American Government's attitude and such influence as we possess upon them. In common with my hon. Friend, I very recently had the opportunity to discuss this subject with Congressmen and Senators, and some members of the United States Administration. It is a subject which divides the United States very deeply.
It would be a mistake to imagine that there is widespread, or anything like unanimous, support in the United States for the policy of escalation in Vietnam, which is now being followed by the United States.
There are certain matters for which the Government have a more immediate responsibility to which I want to call attention and ask for certain assurances. I found in the United States that there were fairly repeated references to the responsibilities which the United States felt it had under the S.E.A.T.O. Treaty and which it claimed Britain also possessed. My understanding—and I have had this assurance in the past—is that Her Majesty's Government have never accepted that the S.E.A.T.O. Treaty imposed any kind of military commitment. Nor have they accepted the action in Vietnam as constituting aggression in the terms of the S.E.A.T.O. Treaty. It is of the utmost importance that that attitude should be clearly reasserted by Her Majesty's Government.
My hon. Friend the Member for Penistone properly referred to the very deep anxiety which there must be, not only in this country but throughout the world, about the present trend of
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American policy and the way in which it may lead to a much wider conflagration in which we would inevitably be involved. One issue which is raised in the United States is whether there is any commitment under the S.E.A.T.O. Treaty. I hope very much that my right hon. Friend, whom I congratulate on his new appointment, will give an assurance that we in this country do not accept a military commitment here. Many of us suspect that the attempt in the United States to found a commitment on the S.E.A.T.O. Treaty is a means of trying to justify action which many of us believe is wholly unjustified. This is a commitment which the United States itself has created and is not binding on anyone else and cannot be found in any reading of the S.E.A.T.O. Treaty.
As my hon. Friend the Member for Penistone said, it is of supreme importance that, before we rise for the Recess, we should have further clear assurances in this matter from my right hon. Friend. In this specific case, a direct responsibility is borne by Her Majesty's Government, unlike certain other matters, and I am eager that they should press the United States Administration for a de-escalation rather than an escalation.
I welcome the statement of my right hon. Friend the Prime Minister in the United States, which, alas, because of other events, received very little publicity, that he was anxious to prevent further military escalation of the war. I am glad that this statement was made. There are many in the United States who welcomed the modest dissociation of Her Majesty's Government from American policy. That attitude must be maintained, and it must be made clear that we are wholly opposed to the policy on which the American Government appear to be set and which is causing deep anxiety in the United States and in this country. It is making almost impossible any moves for a settlement in Europe or elsewhere. This issue must be brought home to the United States. Her Majesty's Government must do whatever they can to make this point utterly clear.
As we are going into recess, I appeal to my right hon. Friend to give the limited assurance for which I have asked.
4.55 p.m.
Sir Frederic Bennett: I have promised to be very brief. I will therefore limit my remarks to the question of Gibraltar, which is where I hope to be going very shortly, as I have informed the responsible Minister.
As congratulations seem to be in order today, I should like to express my thanks to my right hon. Friend the Leader of the Opposition for the most effective speech which many of us can remember for a very long time. I enjoyed every moment of it. Probably the opposite was the case on the benches opposite. He certainly proved definitely that the Paymaster-General can still talk as well as conspire and plot.
I hope that hon. Members opposite will speak on the question of Gibraltar, because all-party Motions on this subject have been tabled during the last few weeks. Concern should be expressed on this topic by hon. Members on both sides. There should be no attempt on the Government benches to make party politics out of the question of the frigates, and so on.
I read in a leader in one of the newspapers today or yesterday that one could always trust the Prime Minister to be waspish when he was on a weak wicket. It was because he was on a weak wicket over Gibraltar that he tried to bring in these controversial items about which any hon. Member on this side would be ready to speak. But what we should be concentrating on is the people of Gibraltar. There is no doubt that there is genuine apprehension and fear among the ordinary people of Gibraltar. Those of us who have contacts with Gibraltar know that it is probably almost the second or third subject on which we get letters at present from the people of Gibraltar worrying about their political future. Therefore, it is not good enough for us to get the answer which I expect that the Chief Minister of Gibraltar has said that he is satisfied with the way in which Her Majesty's Government are carrying on the negotiations. That should not bring all-round relief to any hon. Member, because there are many people in Gibraltar who do not share their Chief Minister's faith in the British Government. That is well known to all of us on both sides of the House.
1916
Since we have claimed that we have no doubt about where the sovereignty of Gibraltar lies, what possible reason is there for our not saying that we do not intend to part with that sovereignty? Why is it that right hon. and hon. Members opposite are so coy about making a simple statement to the effect that we have no intention of parting with one inch of the sovereignty of Gibraltar, which we have asserted is ours, without the consent of the people of Gibraltar? If the Leader of the House would make such a statement he would allay every doubt in the House. What is worrying is that, day after day, there have been Questions and Motions for the Adjournment of the House to get that simple statement, and the mere fact that it is not forthcoming cannot but raise doubts throughout the House and the country and on the Rock. The Leader of the House now alone has it in his power to clear up this matter, even at this late stage.
I said that the Chief Minister of Gibraltar might well have said that he is satisfied with his negotiations with Her Majesty's Government. There are other distinguished gentlemen abroad who have put faith in the present British Government and Prime Minister. There was a time when the Chief Ministers of Aden and South Arabia would have said precisely the same thing that the Chief Minister of Gibraltar has apparently said today. There was doubtless a time when our partners in E.F.T.A. would have believed assurances which we gave about our trading relations with them, but they were let down. We can find examples over and over again during the last 20 months when those overseas who trusted us and the word of the Government have found themselves betrayed. Hence, unless we get the definite statement for which we have asked, those who go to Gibraltar during the Recess, including myself, have a duty to make it clear that the people there should be very careful in trusting their fate any longer to the hands of Her Majesty's Ministers.
5.0 p.m.
Mr. Michael Foot: As one who has participated in some previous debates on the Adjournment Motion, I followed with great interest the interchange between my right hon.

1917
Friend the Paymaster-General and Mr. Speaker. Many of us were very gratified to discover that the correct interpretation of the rules of order means that much wider debate is possible than we, in our timid manner, had thought in the past. We therefore propose, not only on this occasion but in the future, to make the fullest possible use of the accurate account of the rules of the House which Mr. Speaker has been good enough to give to us.
I move from that vote of thanks to another happy note. I congratulate my right hon. Friend who was Minister of Housing and Local Government on his appointment as Leader of the House. I know him much better than the Leader of the Opposition. He has been an extremely good Minister of Housing and I believe that he will be a very good Leader of the House. The Leader of the Opposition was quite unfair in one thing he said about my right hon. Friend. He said that he was one of the three slickest tricksters in the business, and he named the two other tricksters. At that moment, I saw the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) positively wincing. I think that he has since left the House in a sulk.
The right hon. Gentleman the Member for Enfield, West is not even rated in the first three. Most of us on this side—and, I dare say, most hon. Members opposite—would have nominated him absolutely No. 1. It was very hard that the Leader of the Opposition, when in such a rare gay mood, should have dealt with his associate in such a savage and grudging fashion, particularly as his right hon. Friend has for as long as four or five months sustained his Leader without once suggesting that he would stab him in the back. It was very harsh of the right hon. Gentleman not to have tried to spread his bonhomie further round the House, and include his right hon. Friend among those to be congratulated.
I am also glad that my right hon. Friend has been appointed Leader of the House because there are topics in which some of us have been interested for some time and on which he will, perhaps, give us assurance. I hope that we shall have an assurance that during the Recess, and in preparation for the return of the House in the autumn, he will
1918
examine the various proposals that have been made for the reform of the House of Commons. Strong pressure has come from this side for many major changes in the conduct of our business. We want to do away with all the nonsense of Black Rod, and so on, and clear up a lot of flummery. I am sure that my right hon. Friend will be eager to do that.
On other reforms of the House there is great controversy within the parties as well as between the parties. Speaking for myself, I still strongly oppose the whole idea of establishing specialist Committees, but we should decide the matter once and for all. We should not have a position in which debate goes on interminably. The debate on the subject, being so interminable, has prevented other urgent reforms.
I hope that during the Recess my right hon. Friend will take the opportunity of preparing a Government Motion for altering the rules governing Standing Order No. 9. We have had discussions and representations, and a whole series of examples in the past two months has illustrated that it becomes more and more difficult for subjects to be raised under the Standing Order. That is No. 1 reform. We want more flexibility on the Floor of the House of Commons itself, so that urgent matters can be debated without delay when, say, 40 or 50 hon. Members in the House demand it. I hope that my right hon. Friend, in proceeding with his plans for the reform of the House of Commons, will present, very early after our return, a positive programme for achieving that result.
Another matter in which I and some of my hon. Friends, and the right hon. Gentleman the Leader of the Liberal Party, have shown interest recently—and, indeed, over many years—is the Suez incident. I do not want to embarrass hon. Members opposite, but this is rather an important topic. Recent revelations suggest that the Government of 1956 had prior knowledge. There are still some right hon. Members who were prominent in that Government—and I speak not only of the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), but also of the Leader of the Opposition himself. He probably knew as much about Suez as anyone, and might have said a word about it this afternoon, in between the banter. But he did not. We have now

1919
been told that prior to the Suez expedition there was a secret flight of Ministers, and of those acting for Ministers, and that they signed a treaty with the Israeli and French Governments to launch the expedition against Suez in 1956.
If that is true, lies were told the House of Commons on a scale hardly known in this century—and that is saying a great deal. The matter should be cleared up. I have tried many times to get the subject dealt with by the same honourable method established by the Liberal Government in the First World War, when Mr. Asquith set up an inquiry into the Gallipoli expedition—how it happened, and its origin. My purpose, if I have an opportunity, is, by means of a Bill or a Motion, to raise the matter in Suez week, in November next—to discuss it precisely on the precedent laid down by the Asquith Government in the First World War—when I hope that we will get to the truth of the matter.
Hon. and right hon. Members opposite can ponder these things during the Summer Recess. The Leader of the Opposition will have plenty of time to prepare his speech on the subject, which we hope we can look forward to, whether he is hoaxed or not. Incidentally, I was among those who got the bogus invitation, but the only two simpletons to accept it were the Leader of the Opposition and his hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), who both scampered along to the South Vietnam reception. The right hon. Gentleman must be hard up for dinners if he responds like that. Do not any of his hon. Friends ever take him out for a meal?
The right hon. Gentleman should give his mind to the subject of Suez, and I hope that my right hon. Friend will repeat the assurance given to us by the previous Leader of the House that we shall have an opportunity to debate it when we return. I would prefer my right hon. Friend to go further, and to agree that my Motion or Bill should be given time—for I am always willing to accommodate the Government, when I can do so reasonably, and I would be glad if they were to introduce their own Bill, in which case I assure them that I will withdraw mine in their favour——
Mr. Wigg: Would my hon. Friend accept the congratulations of the House
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on being able to ventilate this subject this afternoon, and would he also pay a tribute to the Leader of the Opposition who, by his speech this afternoon, has made it possible?
Mr. Foot: If the Paymaster-General had been here earlier he would know that I had already given the right hon. Gentleman a vote of thanks, and I do not propose to give him another—at least, not until he has earned it.
Gibraltar has been mentioned. Leaving aside one Tory treaty, let us turn to another. With Suez, there was this secret treaty, and the Treaty of Utrecht was a secret treaty. If ever a treaty was signed behind the back of the House by a Tory Minister it was the Treaty of Utrecht. Indeed, the Tory Minister responsible for negotiating it—and no doubt setting the pattern for the party opposite when dealing with Suez—was attainted for high treason, and was not able to live in this country until allowed to do so by a generous Whig Government 10 years later. Hon. and right hon. Members opposite should be careful of recalling the Treaty of Utrecht and its consequences, particularly as it is the curious form in which Gibraltar is mentioned in that Treaty that gives rise to some of the difficulties.
I respond to what the hon. Member for Torquay (Sir F. Bennett) said on the matter. We on this side of the House are also very much concerned about what should happen about Gibraltar. I am not concerned because the Government have any intention to sell the people of Gibraltar. I do not think that that will happen. Nothing I have heard makes me think that that is the case. I do not think it a good idea for hon. Members to suggest that something will take place on the basis of a very flimsy foundation. I do not think anything of the sort will occur. It would be quite wrong that it should.
But there are different ways in which the problem of Gibraltar could be solved. In my opinion, it would be proper for the present position to be maintained, or, if the people of Gibraltar wanted integration with this country—which would be a compliment to this country—we should be ready to consider it, just as we were ready to consider it for Malta. That would be a tolerable solution. It would also be tolerable if they said that they

1921
wanted to have independence, although there is difficulty about that because of the form of the Treaty of Utrecht.
What would be absolutely intolerable would be that the sovereignty of Gibraltar should be altered to the disadvantage of the people of Gibraltar. Of course, we would not tolerate that. I am sure that the Government well understand that if they were to alter the sovereignty of Gibraltar in that sense, it would, of course, cause the greatest difficulties, not only on the other side of the House, but on this. I do not believe that the Government have ever embarked on such a proposal about Gibraltar. At the end of this debate we should make clear to the people of Gibraltar that the Government have no such intentions and that, even though we may discuss the three possible solutions I have suggested, the Spanish solution, or any approach to it, is ruled out.
I am very glad to hear that the Opposition are now against the sale of a free people. I think those were the words used by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). I am glad to hear that he is against the sale of free people in Gibraltar. I hope that he is against the sale of free people in Rhodesia. I wish that he and his party had been opposed to the sale of free people in Spain. If that had been the case we would not have had the Second World War and many of the difficulties which we have today.
On the economic questions which we have been discussing——
Sir F. Bennett: Before the hon. Member leaves the question of Gibraltar, may I interrupt him as he mentioned my speech? He said that it would be wrong to suggest that there was any truth in reports, or that credence should be placed in the idea of the people of Gibraltar being sold. The simplest way would be for Her Majesty's Government to repudiate that, just as they have not hesitated to do in the case of Rhodesia.
Mr. Foot: I have listened to what Her Majesty's Government have said and I do not interpret it in the way in which the hon. Member for Torquay does. I have stated quite clearly what I believe would be an honourable solution of the Gibraltar problem and what I believe would be
1922
a dishonourable solution. Nothing I have heard from the Government comes into the category of a dishonourable solution, but it comes into the category of the three possible and honourable solutions.
Hon. Members opposite have a right to state their views, but I think that it will be plain, when my right hon. Friend the Leader of the House speaks, that it is much better, in the interests of the people of Gibraltar, that it should not be suggested that there is a fierce difference about this matter as there is not a fierce difference. To suggest that there were would do some injury to the people of Gibraltar, and I am sure that the hon. Member for Torquay does not wish to do that.
I am very glad to hear that the Conservative Party is now in favour of preventing the sale of free people whether it happens in Spain, Rhodesia or Gibraltar, but there is also another place in which we are interested—Vietnam. The people of Vietnam have the right to choose their own future, also. This is one of the reasons why many of us on this side of the House have been so persistently concerned with this subject. We have not had any concern from hon. Members opposite. The Leader of the Opposition, who covered so many subjects, seemed to get the whole world out of proportion and chose to omit this. He left to my hon. Friend the Member for Penistone (Mr. Mendelson) much the most important problem of all and one which is not easy to solve. I hope that the Leader of the House will give the assurances for which my hon. Friend has asked on this subject.
I merely add that in my opinion the most serious event, or the most serious indication of events, which has occurred during the past five or six weeks was the statements made by U Thant, when he returned from his visit to Moscow. These were the most important warnings to the world. U Thant is, I think, regarded by everyone concerned about the peace of the world, certainly by everyone on this side of the House, as one of the greatest statesmen of the century. It would be an appalling loss to the United Nations if U Thant ceased to be the Secretary-General. One of the assurances which we might send from this House would be to let him know how strong and powerful is the support in this country and in this

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House for him to stay in his post as Secretary-General.
I think that the most impressive speech I have heard within the walls of this Palace was the speech which U Thant delivered to the combined meeting of Members of the House of Lords and the House of Commons. In 20 minutes he stated the whole world position. He stated it with absolute responsibility. He also made many criticisms of policies pursued by many Governments, including our own, but, though those criticisms were made in a manner designed to win their point and were expressed with great courtesy, they were still very strong.
U Thant, the leading pacificator throughout the world, came from Moscow a few weeks ago saying that he regarded the Vietnam situation as graver than he had ever known before. What did he mean? Of course, what he meant was that in his opinion—he was not stating it in these words, but we could deduce it—the escalation of the war by the United States, the bombing of Haiphong and Hanoi and other forms of escalation which had taken place, the more intensive bombing, had led to a situation in which the Soviet Government were faced with the most difficult choice that any Government have had to face since the Cuba crisis in considering how to react to that situation.
I hope very much that the Soviet Government will react to the situation with the maximum restraint, but I think that that Government have shown much more restraint in reacting to the Vietnam situation over the last few years than have the United States Government. That is why we on this side of the House are so critical of our own Government, because we believe that instead of criticisms being directed so strongly to the Soviet Government they should be directed more objectively to the United States Government, who have rejected urgings of restraint not only from us but from growing numbers of the public in the United States and other countries all over the world.
If there is a deterioration in the Vietnam situation even more serious than we can see at the moment, and even though it may not involve the direct points made by my hon. Friend the Member for Penistone, it would surely demand the return
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of the House. I hope that the Government will not hesitate to recall the House at any period if there is any serious worsening of the situation in Vietnam. It is the responsibility of the Government to allow the House to come back and to speak because there might very well be a need for this House to be recalled. We might debate the danger of what could possibly be the gravest international situation since the Cuba crisis, 1962. This issue overshadows all others. Therefore, my main purpose in speaking is to support the pleas made by my hon. Friend the Member for Penistone on this question.
For the rest, I will not give my views about the Government changes. I have seen so many Government changes on the Conservative side of the House. When I have read the names on those occasions and have seen the names down to the Ministries it has reminded me of what Junius said—that their names read like a satire upon all Governments. I should not like to apply that the other way round. I am in much too gentle a mood for that.
However, I hope that during this period the Government will ponder on many of the things which many of us have been saying not merely on international affairs, but also on our domestic problems. Many of us are most deeply concerned that our Government appear to be embarked on economic measures which are opposed to the whole philosophy which many of us have adopted over the years. I hope that they are not doing so. Some of us have tried to restrain them from courses which we thought were wrong and to divert them into different courses.
The Leader of the Opposition taunted me and said, "If you wanted to defeat the Prices and Incomes Bill, you could have done so". We could have done so only by going into the Lobby with hon. Members opposite and thus apparently supporting their doctrinaire laissez faire ideas. That was one of the reasons for not doing so. There are many other equally good reasons for not doing so. We are in no position to be taunted by hon. Members opposite in this respect, because had they wanted to fight the Prices and Incomes Bill, they could have fought it much harder than they did.

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If ever there were a fake fight and a fake opposition, this was it. We could see that. They were complimented by the Former First Secretary, now Foreign Secretary, who had made rings around them. We have been confronted with the most feeble official opposition that we have had in generations—and that is a further incitement for us to supply the deficiency ourselves.
What we shall strive to do, and what we intend to do, is to get the Government to change many of the policies which we think are wrong and to divert their course into channels which we think are right, but at the same lime not to inflict upon the long-suffering people of this country a return of such a collection as we see thinly represented on the opposite benches. We do not want to do that, and there are multitudes of people in the country who understand our position perfectly well and who appreciate it. Some of them have written to me and have said, "We agree with many of your criticism, but do not let that crowd get back". That is a point of view which we need not argue in the House, because we can see it for ourselves.
I wish the Government well, but I hope that they ponder carefully the representations which my hon. Friends have made by our speeches, our Motions and our votes.
Mr. Quintin Hogg: And by abstentions.
Mr. Foot: And by our abstentions, as the right hon. and learned Member for St. Marylebone (Mr. Hogg) says.
Mr. Hogg: Which were totally ineffective.
Mr. Foot: The right hon. and learned Gentleman is ill informed about his history. If I went into all the historical analogies on the subject which could disprove his case, I should weary the House even more than I have wearied it.
I wish the Government well as long as they adopt the policies which I have advocated. I hope that they have a happy summer and come back much better men than they are. I could have proposed other changes in the Administration which might not have commanded full support throughout the House, but I am
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not worried about the changes which have taken place; they do not seem to me to make all that difference. Above all, I hope that the Government will recognise the serious case which has been put from this side of the House, and which we are still waiting to hear from the other side of the House, about the paramount issue of Vietnam, and on these other matters which we have sought to press from this side of the House.
5.25 p.m.
Mr. Bernard Braine: I am as anxious as any that the House, having laboured long and hard during recent weeks, should rise at a reasonable hour for the Recess and should enjoy that refreshment of mind, body and spirit it provides. Heaven knows, right hon. Gentlemen opposite, battered and bruised, their supporters divided and confused, need that refreshment. I entirely agree with the hon. Member for Ebbw Vale (Mr. Michael Foot) that the Government need a pause for reflection of what has gone so sadly wrong.
But on this occasion I am opposed to the House rising in the absence of a clear and unequivocal assurance from the Government concerning the talks which are shortly to be resumed with the Spanish Government on the subject of Gibraltar, and I share the doubts and anxieties which were expressed in such a cogent fashion by my right hon. Friend the Member for Kingston-upon-Thomes (Mr. Boyd-Carpenter) and my hon. Friend the Member for Torquay (Sir F. Bennett).
The House may recall that on Tuesday I asked the Prime Minister a Question. I invited him to make plain to the House and to the whole world, as the former Foreign Secretary had failed to do the day before, that as long as the Gibraltarians wish it we are in Gibraltar and mean to stay there. Others of my hon. Friends—and I do not doubt, in their hearts, many hon. Members opposite, too—have sought over the weeks a similar assurance. And all that they have been told, all that we were told at Question Time today by the Under-Secretary of State for the Colonies, is what no one, except, possibly, the Spanish Government disputes—namely, that our sovereignty over Gibraltar is not in question. Why should they not accept it? We have as good a title to Gibraltar as anyone.

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However, that is not the issue, and it never has been the issue. The issue is not the legality of our sovereignty. It is whether that sovereignty is to be the subject of compromise or even surrender in defiance of the wishes of the Gibraltarians and of this House. That is the issue. The whole House has long been accustomed to the evasive answers which the Prime Minister gives on these occasions but here, I suggest, was an occasion which demanded something more from him. This country is responsible for the well-being of 24,000 British subjects in Gibraltar who have no voice in this place. We have a moral responsibility for them.
I should have thought that not merely national interest, but our honour—I choose that word deliberately—required the Prime Minister to give a plain answer to a plain question. Instead, he chose, in an obscure way which still puzzles a great many of my hon. Friends, to refer to frigates, a matter which was not mentioned in the Question and which certainly was not in my mind. Indeed, his answer was a perfect example of standing facts on their head. If anyone in the House has been responsible for causing bad blood with Spain it is the Prime Minister himself in respect of his conduct both when in opposition and within a matter of days of entering No. 10 Downing Street.
There was even less excuse, I suggest, for the Prime Minister's failure to give a firm assurance on Tuesday, because it followed the strange reluctance of the former Foreign Secretary to say unequivocally on the previous day that the Government would not agree to any change in the status of Gibraltar without the approval of the Gibraltarians. The darkness of doubt could have been dispelled in an instant had the Prime Minister chosen to answer a straight question in a straight fashion. But he did not cast a single ray of light upon the matter. All that he has succeeded in doing has been to raise suspicions that maybe he is prepared to do a deal behind the back of Parliament during the Recess, when he cannot be called to account.
The Minister of State for Foreign Affairs (Mrs. Eirene White)The Minister of State for Foreign Affairs (Mrs. Eirene White) indicated dissent.
Mr. Braine: It is not the facts that matter so much as what people believe the facts might be. I am not suggesting for one moment that this is in the minds of right hon. Gentlemen opposite. Indeed, I find it extremely difficult to understand, having regard to their past record on the subject of Spain, and the views that they have never hesitated to make known when in opposition, with the difficulties these have made for Anglo-Spanish relations, why they cannot come to this House and stand by what they laid down in their White Paper last year. Let me quote a passage from the White Paper. It says:
"Great Britain has at no time renounced her title to Gibraltar or failed to defend her position there and will not do so now. She has no desire to quarrel with Spain but she will stand by the people of Gibraltar in their present difficulties and take whatever measures may be necessary to defend and sustain them."
Since the publication of the White Paper the situation has changed. The restrictions imposed by the Spanish authorities have increased. They have been increasing the last few weeks. Yet we are shortly to resume talks with the Spanish Government.
There is considerable apprehension on this score in Gibraltar, as my postbag reveals. Possibly because of my known connection with the Commonwealth Parliamentary Association or possibly because I have been identified, in all the years that I have been in this House, with Colonial matters, I have been receiving a very large number of letters from Gibraltarians. A letter I received the other day expressed a sentiment common to many. The writer said:
"We are British subjects and are proud to be so. We like the way we live with Britain and do not wish to see this changed. In fact we would like even closer association with Britain, if this is possible."
That is the kind of sentiment which appears in letter after letter which I and my hon. Friends have been receiving. There is considerable apprehension in Gibraltar at the moment, and there has been for some time, about the outcome of these resumed talks.
I am perfectly well aware that this is not the occasion to argue whether there should be talks with Spain. For all of my political life I have laboured for better relations with Spain. I have a deep admiration—[Interruption]—this is

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not a matter to sneer at—I have a deep admiration for the Spanish character and genius and the Spanish contribution to European civilisation. I was a member, as were many other hon. Gentlemen, of the Anglo-Spanish Parliamentary Group. I resigned from that Group for the simple reason that I did not find it in my heart to belong to an organisation of that kind at a time when the Spanish Government, for their own reasons, were bringing intolerable pressures to bear upon our fellow British subjects in Gibraltar. I am not arguing whether there should be talks. In almost any situation it is better to talk than to throw brickbats. I am not criticising the Government on that score at all. But perhaps I may be permitted to say in passing that I find it repugnant that these particular talks should have been resumed at a time when the Spanish authorities are stepping up their pressures upon the Gibraltarians.
Nor am I proposing to comment on what may or may not be discussed at these talks, if they take place, except to say two things. First, there have been rumours, and I put it no higher than that, of possible concessions to Spain, which if true, would in my judgment be wholly unacceptable to the people of Gibraltar and to this House. Secondly, Parliament has a right to insist that the Government should make it plain that readiness to talk with Spain does not indicate a readiness to settle at any price.
It is by dealing with this point that the right hon. Gentleman, when he replies to the debate, could do a great service to the Government and to this House. It is the Government's failure to express this feeling plainly at a time when Spanish pressures upon Gibraltar have been increasing that obliges me to oppose this Motion. It would be quite wrong in my view for this House to rise without any knowledge of what may be discussed and agreed in the talks. It would be quite wrong for the House to rise without any correction of the unfortunate impression created by the Prime Minister and the former Foreign Secretary that there may be some weakening in our position.
When my right hon. Friend the Leader of the Opposition asked the Minister, on Tuesday, whether he would confirm the final paragraph of last year's White
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Paper, which I have quoted and which, after all, is the basic document on this matter, or whether he would repudiate it, the Prime Minister answered in these words:
"… negotiations are going on and I would rather we said what we have to say to the Spanish Government in this matter. There will be plenty of time to tell the House of Commons, …"—[OFFICIAL REPORT, 9th August, 1966; Vol. 733, c. 1388.]
I am sure that on reflection the Prime Minister would wish that he had not used those words, because there will not be plenty of time. If the House accepts this Motion, then by the time it resumes on 18th October and the Government lay an agreement, if it has secured one, before the House, as convention requires, the pass may have been sold. I am not saying that it will be, but in the absence of any clear and unequivocal statement at this stage it may be. The very evasiveness of the Prime Minister and the former Foreign Secretary on this subject suggests that this is at least in the realm of possibility. If this happens it would be to the indelible shame of the British Government. But there is nothing that this House could do about it.
It is not good enough to say, as the Leader of the House may argue, and as has been argued by Ministers before, that any agreement which results from these resumed talks will be laid before Parliament and that that is in accordance with the normal practice. This is a situation without precedent. Not only would any agreement, if reached, be between a Government who are answerable to a freely elected Parliament and a Government who are not. That is the first feature. The second is that such an agreement would concern not merely the rights and interests of Britain, for which we have a charge here, but those of a territory which, far from demanding independence, desires continued and close association with this country under the British Crown. It is imperative, therefore, before this House rises, that the Government should give a clear assurance that no concessions will be made in regard to sovereignty or status, in which case we can depart without further anxieties on that score. If, on the other hand, it is in the mind of the Government that some concessions are contemplated, of a kind which it would not be unreasonable to grant, if the people of

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Gibraltar were in agreement with them, particularly if it then led to a permanent and honourable solution of this much-vexed problem, then we must have an assurance that the Government will, with the approval of Mr. Speaker, use the normal machinery of Parliament to recall the House before any agreement is signed, rather than to present us with a fait accompli. Nothing less than that will satisfy my hon. Friends and myself.
The Leader of the House brings great skill, expertise and enthusiasm to his new task. One may have disagreed with him politically in the past and have been highly critical of him in his rôle of Minister of Housing and Local Government, but it would indeed be churlish not to wish him success in his new rôle. I hope that from now on he will recognise that he should hold the conscience of the House dear. This is a subject which should not be a matter of party difference. What happens to the 24,000 Gibraltarians is a matter of interest, and it should be a matter of honour, to every Member of the House. I hope that the right hon. Gentleman will recognise that and, when he replies, give us the assurance we seek.
5.41 p.m.
Mr. R. T. Paget: I feel anxiety about the House going away when there are very urgent matters for which we are responsible, but I certainly do not regard Vietnam as among the matters for which we are responsible. I should have thought that my right hon. Friend the Prime Minister may, as a result of recent events, have leaned that perhaps making statements about American conduct and dissociating oneself from them in Vietnam can be expensive, when the £ comes under pressure.
I want to speak about Gibraltar. Of course the wishes of the inhabitants of a territory of which we have been rulers for a long time are an important consideration, but I do not regard them as the only consideration. I do not think that it is responsible to leave inhabitants in an economic position, particularly inhabitants without very much political experience, in which they cannot earn their living, merely because that is their choice.
This also applies in regard to Rhodesia, which is the subject on which
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I want to say most. I am very anxious indeed about our going away while the Government are committed not to settle with Rhodesia without recalling the House, because that in practice means that they will not settle with Rhodesia. That in practice means that this thing will run on. It is running on terribly expensively. The blockade of the Mozambique channel, while keeping an aircraft carrier there with escorts and flying 1,000 miles from its port on a blockade patrol, is, to say the least of it, enormously more expensive than the additional cost to Rhodesia of importing her petrol through Bechuanaland, still a British Colony. After all, the Rhodesians have just removed petrol rationing.
Then there is the R.A.F. in Zambia, who are not allowed to use Tanzania, which cries out for us to make war on Rhodesia. Just as a single example, the cost of keeping a Typhoon flying operationally for one hour is a round trip by a Britannia carrying petrol from Nairobi.
These are very expensive operations, but they are far more expensive indirectly. I refer to the amount of ill will we have gained for ourselves from our third biggest customer—South Africa. There is almost a willing boycott upon our trade there. The Japanese, the Germans and the French are all profiting enormously by the expansion of trade. This is £360 million of our trade.
Worst of all, it is copper. I think that the Prime Minister is under very much of a delusion if he imagines that our copper troubles, instead of being caused very largely by our Rhodesian policy, would be worsened if we settled with Rhodesia. All my copper friends in Zambia assure me that there would be no trouble all in Zambia settling with Smith as long as we stopped propping Zambia up, because the Zambians know very well that they are utterly dependent upon that copper and cannot do without it. Banda, who is a good deal less dependent, knew that perfectly well and said so. He said, "I cannot live without Smith", or whoever rules Rhodesia, "and I have to live with it". The moment we stop propping Zambia up, the copper difficulties will come to an end.
Of course we shall not get back to the price which we had before these troubles. That wise price, imposed by the copper

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people to prevent substitutes coming into this market, will no longer be recoverable. But if we do not do it, copper may well go over £1,000 a ton. Then it will be serious for our balance of payments.
What is the position with regard to Rhodesia now? What is the point of sanctions at this time? Military sanctions are, as the prime Minister has often said, and as he knows, out. They are out because they would be wrong. They are out because I do not think that our troops would stand for it. In any event, they are out because they are utterly beyond our capacity. No Chiefs of Staff would sanction this operation without committing two divisions. We know perfectly well that we have not got the logistics to support a brigade on the Zambesi. Therefore, talks about military intervention are nonsense.
Sanctions are plainly not working in the sense of bringing Mr. Smith's régime down. All my information is that Rhodesians are at this point over the hump and that economically things are getting better rather than worse. I have a number of sources and there is a large measure of agreement on that. The tobacco is coming out. I am not going to say where, but it is coming out, and I will go wide enough to say that it is coming to Europe and that the people who are getting it in Europe are doing very nicely, thank you. It is getting easier. The farmers, who were asked to hold back their deliveries, are now being asked to expedite them. One very large producer told me that he had had two urgent telephone calls asking, "Can you let us have more?"
Some of us listened yesterday to three very charming professors whom Mr. Smith, I think very unwisely, expelled from the Rhodesian University. These professors held a meeting yesterday and, as far as I know, there is no objection to my quoting things which were said there. They gave remarkable confirmation when one of them told us that a Liberal economist who had access to the Government papers and position said to them, "You cannot go on putting your faith in these sanctions. Believe me—and I know—the Government's economic position is very much stronger than anybody thinks it is." From such a hostile source, that was fairly remarkable evidence.
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What is the point of sanctions now? The Rhodesians have been getting out of their difficulty by a quick adaptation of their economy to fit in with the South African economy. That is what sanctions are doing, and it is all that they are doing. We are giving independence to the South African Protectorates. It is an independence which, in practice, means that economically they become Bantustans completely dependent upon the Union economy. If these sanctions go on, all that we are doing is making Rhodesia into an Anglostan dependent upon and knit into the South African economy. I just cannot believe that that is the best way to serve our African friends in Rhodesia. Every day that this goes on, this pressure increases. More and more will we find Rhodesia fitting into the South African picture.
One of my hon. Friends said the other day that principle has no price. That is something he might tell the Chancellor some time. On the other hand, it is extremely easy to have principles at somebody else's expense. One can talk about self-determination and let the people run over the precipice, like the Gadarene swine. One can talk about one's principles and see the people with whom one is entrusted—that is, the Africans—pushed into a much worse position than is available to be negotiated now, knowing that, each day the negotiations are delayed, one's position to negotiate will become worse. I do not feel that this is a responsible way to behave.
I urge upon my right hon. Friend that there is no alternative at this point but to negotiate for the best. We cannot get our terms. We have lost on this one and the more we go on, we are losing at somebody else's expense.
5.53 p.m.
Mr. John Farr: In his speech this afternoon, the hon. Member for Ebbw Vale (Mr. Michael Foot) made a statement with which hon. Members on this side thoroughly agree. He referred to three points or factors which, he thought, were predominant concerning Gibraltar. It is rare that hon. Members on this side can agree with the hon. Member for Ebbw Vale, but I think that I speak for nearly all of us when I say that the three points which he enumerated for Gibraltar were almost exactly the

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three points which we regard as paramount concerning that territory.
What is so regrettable is that as we have seen earlier this week, the hon. Member for Ebbw Vale may say one thing but will not back up his convictions in the Division Lobby. Therefore, whilst we welcome his support, we have to dismiss it as a matter of little value and of little weight to us because he will not have the courage to come back to this House after the Recess, if Gibraltar has been sold down the river, and put his vote to the test in the Division Lobby with us on this issue. He has never done it yet. Therefore, we have to dismiss his support with much regret.
We have had a fairly severe time in the last few weeks with the rush of panic legislation through the House. I should like to take this early opportunity also of congratulating the right hon. Gentleman who finds himself at the Dispatch Box this afternoon on his new appointment as Leader of the House. We are in some difficulty, however, because shortly before he came in this afternoon and took up the illustrious position which he is now occupying, his right hon. Friend the former First Secretary came in and took charge of the Questions that were directed to his former Department. We are in some difficulty to know whether the right hon. Gentleman has, so to speak, accepted office yet or whether he is simply standing in; and, if so, why the former First Secretary came along for Questions to the Department of Economic Affairs.
The new Leader of the House will be asked many questions——
Mr. James Dickens: It was surely obvious that this afternoon my right hon. Friend the Member for Belper (Mr. George Brown), the former First Secretary, did not answer any Questions from the Front Bench. It is quite wrong, therefore, for the hon. Member to create this atmosphere of ambiguity and confusion.
Mr. Farr: I am grateful to the hon. Member for his intervention. I merely say that it seemed rather strange to us on this side that the former First Secretary came in at the commencement of Questions to his Department, did not answer any of them but left as soon as they were concluded, and sat the whole time
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beside the Parliamentary Secretary. If he was not the Minister for Economic Affairs at that time, where was the Minister? Why was not the new Secretary of State for Economic Affairs and First Secretary—the former Foreign Secretary—present?
The right hon. Gentleman who is occupying, so to speak, the hot seat today has been asked many pertinent questions about Gibraltar and Rhodesia, and my right hon. Friend the Leader of the Opposition referred to the chronic financial situation. I wonder whether the new Leader of the House will be able to reply to these quesions with authority. I do not for one moment agree with the right hon. Gentleman's policies, although I am an admirer of his power of persuasion and oratory, but I do not think that he has been in the job long enough to be able to reply adequately to the seaching questions which my right hon. and hon. Friends have put to him.
A few moments ago, the Prime Minister came into the House. I hope that when the new Leader of the House was talking to his right hon. Friend the Prime Minister, he asked him whether he could give the urgent assurance which we need about Gibraltar. If he is not empowered to give the House that assurance, which we have not had yet although we have been asking for it for many weeks, I suggest that the right hon. Gentleman should get authority from the Prime Minister to give us the answer which we require before the House rises for the Summer Recess.
We had a very long Session in one way and another. We have had a difficult Budget followed by a contentious Finance Bill, and that in turn has been followed by a succession of very complicated Bills. As a consequence of the Finance Bill, we have had the Selective Employment Payments Bill. That was followed by the Prices and Incomes Bill, which has been rushed through the House in a very ham-handed manner.
After what is almost an unparalleled succession of fairly late nights, hon. Members are in need of a rest, but the rest that we need matters not one iota compared with the necessity for Members of the House to keep an urgent and continuous vigil on the outcome not only of the question of Gibraltar, but also of the question of Rhodesia, to which my right

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hon. Friend the Leader of the Opposition also referred.
As for Rhodesia, when the Prime Minister spoke about this a few months ago he indicated that he expected the matter to be solved, not in months, but in weeks. Therefore, it will, perhaps, come as a bit of a shock to hon. and right hon. Members to realise that, when the House resumes at the end of October, U.D.I. will be almost one year old; and, as far as we on this side of the House can see, the effects of the policies which the Government have pursued towards Rhodesia have had little or no effect at all on altering the headlong course which that country is now embarked upon.
The hon. and learned Gentleman the Member for Northampton (Mr. Paget) gave us an example a few moments ago when he said that petrol rationing was being or had been abolished for people living in Rhodesia. I can tell him that the guaranteed price which Rhodesian farmers are getting from their Government for the forthcoming tobacco crop is a considerable improvement on the price they got last year—much better.
Mr. Paget: Twenty-eight pennies.
Mr. Farr: I am glad to have the hon. and learned Gentleman's support. While we are going into recess and hon. Members are scattered all over the country, while this burning question of Rhodesia remains completely unanswered, with the answer apparently beyond the grasp of this Government, German, Japanese, French and Italian businessmen are making hay where the sun shines in Rhodesia, in Bulawayo and Salisbury, and are moving into what was largely a trading preserve of this country.
As to Gibraltar, which is the main reason for my taking part in the debate today, there we have a really strong reason why this House should not consider going into recess. What we need is not for the House to be dispersed all over the country but a two-day or three-day debate on Gibraltar, because there are many urgent problems connected with that territory that have been unresolved. What are the Government planning to do during the Recess? So far as we can find out, the talks with the Spanish are to continue. We cannot get from the Prime Minister or the Foreign Secretary any firm assurance as to the future of that Colony.
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At Question Time, and at the time of the statement in the House this week, Ministers were asked to state categorically that the status of Gibraltar would not be affected while the House was in recess, and continuously the theme running through the responses from Ministers has been that they will not give the guarantee which this House is seeking, namely, that the sovereignty of Gibraltar will not be effected while the House is adjourned for the Summer Recess, and without the full co-operation and the full acquiescence of the people of that territory.
Mr. Sydney Silverman: Is not the hon. Member misleading himself about this? It is true that the Government have refused to give the undertaking which they were asked for, but that was not an undertaking in the terms the hon. Member is now reciting. It was an undertaking that they would in no circumstances recommend any agreement changing the basis of the régime in Gibraltar without assuring themselves that the people of Gibraltar approved. It is true that the Government did not give that assurance. I agree with the hon. Gentleman in thinking they should have given it and should give it now, but what he is now saying is something different. He is saying that the Government have refused to give an assurance that they will not alter the basis of sovereignty in Gibraltar without consulting the House. My impression is that the Government gave precisely that assurance.
Mr. Farr: I am grateful for the hon. Gentleman's intervention, but I think my hon. Friend the Member for Essex, South-East (Mr. Braine) dealt with that point a little while ago. It is no use whatever the House coming back when an agreement with Spain has been signed and sealed by the Government. The House is in a very difficult position if it adjourns for the long Recess and comes back and finds that in the meantime the Government have sold another territory down the river. That is what we are afraid of. I have no very great hopes of this because of the very great reluctance of certain hon. Members opposite to vote against their own party, but it might well be that the House would not ratify or approve an agreement which was made; but we on this

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side do not wish to see any agreement entered into without consultation with the people of Gibraltar, without their agreement first, and, secondly, without the seal of approval placed upon it by this House.
I conclude by saying that it appears to me that there has been a change in the attitude and the statements of Ministers over Gibraltar in recent weeks. In May and in the early part of June a fairly strong line was taken by the Foreign Secretary about the sovereignty of Gibraltar. It has been only in recent weeks, and especially this week, that we have found Ministers—the Prime Minister and Foreign Secretary—exceptionally evasive over the issue. We on this side think that the House must remain in continual and perpetual vigil till such time as we can get a clear decision from hon. and right hon. Gentlemen opposite that Gibraltar will not be sold down the river behind our backs during the Recess.
6.7 p.m.
Mr. Stanley Henig: Although it is not the subject I want to talk about I cannot resist making one slight reference in passing to the speech of the hon. Member for Harborough (Mr. Farr). I fully agree that we on this side are concerned about the people of Gibraltar, but they are not the only people in the world. There are also the people of Spain who, if anyone was sold down the river, were sold down the river by this country 30 years ago. Our objection—let us make it clear—on this side of the House would be to handing over the people of Gibraltar to Spain, and our objection would be because we are not impressed by the nature of the Spanish Government.
I hope that when we are talking about selling or not selling people down the river we shall, in addition to being concerned about the Gibraltarians—a small minority compared with the number in Southern Rhodesia—also be concerned with the majority of the people in the latter country.
I should like to turn to the subject I was intending to speak about. I, among others, I think, on this side of the House, am very glad to see my right hon. Friend the new Leader of the House who has just taken over this most important office. I hope I am not treading on any corns
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here, but I hope that he will be very forthcoming on a subject which is very dear to us on this side, namely Parliamentary and institutional reform. It was some years ago that I was at a seminar given at Oxford by my right hon. Friend on the subject of interest groups being involved in decision-making in Governments. I had the temerity—and perhaps the foolhardiness, I suspect, in recollecting this incident—to make a point against him and was firmly rebuked with the final statement, "The difference between us is that I am a democrat and you are not."
At this moment we are not concerned about where I stand on these matters but a good number of us are very concerned about where my right hon. Friend stands. The case for institutional reform is something for which it is difficult to get a ready hearing. People say that what matters is policy and that the institutions through which policy is to be affected do not matter. It is my contention that it is the institutions that matter and I have been depressed by the fact that, in the three or four months since this Session began, we have not had a chance to discuss institutional reform.
I would join with those hon. Members opposite who regret that the House is going into recess were it not that, on reflection, I suspect that the cause of institutional reform might be better advanced by the Government using the next two months perhaps to bring forward some proposals along these lines when the House reassembles.
What proposals might the Government at that time, having used the Recess for mature reflection, decide to bring forward? First, it is now time that we made some progress in the further use of Standing Committees. We were all excited when the Prime Minister pledged that the Mother of Parliaments would use much more than hitherto this kind of standing specialist committee, but we have been a little disappointed since because the negotiations have been going on extremely slowly between the two Front Benches. I am sorry that, instead of holding talks through the usual channels with the Front Bench opposite—which I suspect is not really interested in reform in this matter—the Prime Minister did not consult us on the back benches behind him.

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What we want with this kind of reform is a set-up in which hon. Members with specialist knowledge can use their knowledge. It is absurd that an hon. Member who comes to the House with a certain specialist knowledge which could be of use to the country, Parliament and the Government, should, because of the procedures of the House, be unable to make use of it.
Secondly, it is about time that we took some steps to reform the nature of the links between hon. Members and members of the Civil Service. We all know the constitutional rules on this. On 8th February, the Prime Minister said:
"Civil Servants, however eminent, remain the confidential advisers of Ministers, who alone are answerable to Parliament for policy; and we do not envisage any change in this fundamental feature of our Parliamentary system of democracy."—[OFFICIAL REPORT, 8th February, 1966; Vol. 724, c. 210.]
That was a clear statement, and we know where we stand. But despite this it should be possible to increase the links between hon. Members and members of the Civil Service.
It is not always considered the right thing to quote examples of other Parliaments, but I am sure that members of the United States Congress are not the more ignorant for the fact that, in their standing specialist committees, they have full power to call for persons and papers and those persons can be members of the United States Civil Service. I know that there is a rather different system of government there, but it does not seem to me that it is a good thing that hon. Members of this House should be kept ignorant in this way.
It may be that, in some subjects such as defence, certain rules of secrecy will be necessary but that is something the Government could well look at because, although Parliamentary Questions and speeches by back benchers can be a nuisance, I am sure that, on reflection, my right hon. Friends would prefer those speeches to be well informed because Members had access to civil servants rather than badly informed.
Mr. Deputy Speaker (Sir Eric Fletcher): Order. The hon. Gentleman must relate his argument to the question whether we should adjourn tomorrow until 18th October.
Mr. Henig: I was about to do so, Mr. Deputy Speaker. Another reform which I am sure you will agree is most relevant to the subject relates to the timing of sittings of this House. For some weeks we have had a perpetual——
Mr. Deputy Speaker: Order. The hon. Gentleman must relate his argument to the Question before the House—which is whether we should adjourn tomorrow until 18th October.
Mr. Henig: With respect, that is what I was about to do. I was going to say that we have heard right hon. Members opposite persistently asking the Leader of the House when the House was to adjourn for the Summer Recess and have constantly had the reply—usually greeted with derision opposite—that it would be when the House had fulfilled a certain amount of its business. That has been going on for some time because we have this ancient tradition of a huge Parliamentary Summer Recess.
The old tradition was, I think, to have a three-month Summer Recess which was supposed to be sacrosanct. The trouble is that, when we have a lot of extra business—and really the business of the House is much too important to be done in a small number of months in the year—what tends to happen is that part of the Recess is knocked away at the beginning rather than at the end.
It seems to me that it would be much more sensible for this House to have a Recess which lasted, say, from 15th August to 15th September and, of course, in an emergency we might even lose that. The idea of a three-month Recess is today quite ludicrous and I do not see why the Government should be apologising for the fact that we are having only two months this year.
Another matter which I hope you will agree is relevant, Mr. Deputy Speaker, is that one hopes that when the Government have used this long period of reflection, they will come back with proposals to deal with the system of voting in the House. In recent weeks we have heard complaints of shortage of time to discuss certain subjects—for example, from the Opposition on the question of the Selective Employment Tax. But it seemed to me to be a subject for amusement—or perhaps sorrow—that during the whole time they

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were grumbling, we were frequently trooping through the Division Lobbies, sometimes, perhaps, for 10 minutes in every hour. Yet it was known in advance what the result would be.
I would also hope that, at the end of the long Recess, the Government would come up with some really radical proposals for dealing with the question of the allocation of time in this House. The last time I was lucky enough to catch your eye, Mr. Speaker, was in the debate on the allocation of time for the Selective Employment Payments Act. Such a debate, I gather, is a jamboree which takes place fairly regularly—every couple of years or so—when a Government put forward a timetable Motion, with the Opposition objecting that it is an infringement of liberty. It is time to get beyond this. When they come back the Government should decide to bring forward——
Mr. Speaker: Order. We cannot debate on this Motion what the Government ought to do when they come back.
Mr. Henig: I am sorry to have strayed beyond Order, Mr. Speaker. I was trying to suggest that, unless the Government had a fairly long time in recess—two months instead of one month—they would not really have time to think about this important subject. I am not certain whether this gets round the point or not. If it does not, I apologise from necessity and withdraw from it.
There is another subject particularly relevant in view of the Ministerial changes. The Government will need a lot of time to think about the question of the relationship between this House and the Civil Service.
Mr. Speaker: Order. We cannot discuss, even under the ingenious method that the hon. Member is seeking to adopt, the kind of subject that he wants Parliament to debate when it comes back after the Recess.
Mr. Henig: I am sorry, Mr. Speaker; it seems that I am now effectively hemmed in on all sides in my attempt to debate this issue. Therefore, I simply say that this House has now been sitting for three or four months and it is to have a two months' Recess. Many hon. Members have suggested that this is too long,
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because so many subjects remain to be spoken about. The Government can effectively answer this argument—and this relates to my question on procedure as well as to the points raised by other hon. Members in connection with Gibraltar, and so on—if, at the end of this Recess, they are in a position so to organise the business of the House for next Session and subsequent Sessions that it is in a position to discuss all these matters.
6.21 p.m.
Sir Ian Orr-Ewing: Mr. Speaker, I shall try to keep within your rigorous Ruling on the question whether we should or should not adjourn, and should have a longer or shorter Adjournment. I add my congratulations to the right hon. Gentleman for having moved from the Ministry of Housing and Local Government to his present position as Leader of the House, but he will have to change his attitude a little. My hon. Friends and I have always felt that he was one of the most hyper-political creatures, and that he adopted a hyper-political outlook in respect of almost every policy he advocated in the Ministry of Housing and Local Government.
My instinct is that the right hon. Gentleman had a fairly close relationship with the G.L.C., and as he is now moving to a more honourable position and one of greater responsibility, in that he will be speaking for both sides of the House, in an almost a-political atmosphere, I hope that he will drop his previous attitude.
I suggest that it is a good idea to have a Recess, because it is clear that Ministers are in need of a rest. I am told that a change of job is as good as a rest, and as the Minister has had a change of job he may not need a rest. But the Prime Minister is clearly in need of a rest. As one gets tired two things happen: one's memory lapses, and one tends to revert to old habits and old arguments, which is what we have had in the House recently from the Prime Minister.
I want particularly to draw the attention of the House to a Question concerning Gibraltar which was raised the day before yesterday. I refer to this because we are just about to see the discussions on Gibraltar resumed. It is, therefore, important that the background of these discussions should be clearly understood. The day before yesterday,

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in answer to a supplementary question by my right hon. Friend the Leader of the Opposition, the Prime Minister said:
"I attacked the frigate deal because of the Gibraltar situation …"—[OFFICIAL REPORT, 9th August, 1966; Vol. 733, c. 1387.]
The Prime Minister's memory is at fault. He did not attack the frigate deal because of the Gibraltar situation—
Mr. Speaker: Order. We cannot discuss on this Motion the Prime Minister's remarks about frigates. The hon. Gentleman must link what he has to say to the question whether we should adjourn to the date to which we are proposing to adjourn.
Sir Ian Orr-Ewing: I only wish that you had been in the Chair earlier, Mr. Speaker, because the hon. Member for Ebbw Vale (Mr. Michael Foot) went very wide and discussed the question of Suez, Vietnam and goodness knows what else.
We are now reconvening the discussions on Gibraltar. My right hon. Friend asked for some reassurances on this matter. I was at pains to point out that the foundation of the quarrel which now exists between this country and Spain, and particularly between Spain and Gibraltar, is not as painted by the Prime Minister. I thought it important that the record should be put right, so that these discussions should be more productive and so that, if a change is made, the House can be recalled in the middle of the adjournment.
It is wrong to suggest that this argument started—as the Prime Minister went on to suggest—with the decision by Spain to put pressure on Gibraltar. To suggest that the pressure occurred before the frigate deal was started is not true; the frigate deal had been going on for many years. The Spaniards desired to re-equip their whole fleet, and when I was an Admiralty Minister I was responsible in some way for the negotiations. They had been going on for years before real pressure was put upon Gibraltar, for the first time, in 1964. These deals, which cost us £14 million to cancel, could have led to the entire renewal—
Mr. Speaker: Order. I am not questioning a word of what the hon. Member is saying. He has a right to his opinion. But we are deciding whether or not to
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adjourn to a certain date, and he must link his remarks to that point.
Sir Ian Orr-Ewing: Mr. Speaker, you are much tougher on Members than was your predecessor, Mr. Deputy-Speaker.
We are about to start discussions with Spain, and it is important that the climate of those discussions and their historical background should be clearly understood and known by the Government of the day, who are now responsible for them. The Prime Minister's words about this background are completely inaccurate. The hon. Member for Ebbw Vale used the word "lie" earlier, and was not stopped. There are gross inaccuracies in the history as given to the House by the Prime Minister only the day before yesterday. This is bound to influence the climate of opinion in these very important discussions.
It is not true to say that the cancellation of this deal arose because of the feelings between Gibraltar and Spain, or that the bringing of pressure to bear on Gibraltar occurred before the deal was called off; it was called off in July, 1964, and the pressure on Gibraltar built up in October of the same year. I should like to quote chapter and verse, but in view of your Ruling, Mr. Speaker, I do not wish to transgress. Nevertheless, I hope that this matter will be put right, and that we can get the Prime Minister to accept the historical facts.
6.28 p.m.
Mr. Sydney Silverman: I offer my personal congratulations to my right hon. Friend the new Leader of the House on his appointment. We are old friends and colleagues, and I hope he will not think it a presumption on my part if I offer my congratulations in this situation. For many years, whichever party has been in government and whichever party has been in opposition it has been customary for Motions for the Adjournment to be opposed. They are rarely opposed seriously, and on this occasion I doubt whether any hon. Member will challenge the matter to a Division. The only question that is really in order is whether there is a valid reason against adopting a Motion which we are invited to adopt or for opposing a valid reason suggesting that we do not oppose it.

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Only three questions have been raised which could possibly be within the rules of order on the Motion that we are discussing. The first is Gibraltar, the second Rhodesia, and the third Vietnam. I suggest that in the case of Rhodesia and Gibraltar the House may be satisfied with the assurances that the Government have already given. In both cases they have said that there will be no change in the situation without the authority of Parliament and without the recall of Parliament—or until Parliament reassembles—so that it may give or withhold its approval to any suggested change.
I agree that, in the case of Spain, the Government might reasonably have given the further undertaking for which they were pressed, that in no circumstances would they agree to a change in sovereignty which did not carry the support of the Spanish people. As we have repeatedly said over the last 12 months we will not support any constitution in Rhodesia which does not command the support or approval of the majority of the population, it is not unreasonable to say to the Government that what they said on behalf of the people of that country they could also say on behalf of Spain. No one can seriously argue that their failure to do so is a valid reason for refusing them the Motion. They have said that they will do nothing until Parliament has approved whatever they propose and I think that Parliament should be satisfied with that.
However, this is not the case on questions raised about Vietnam. Catastrophic things could happen over Vietnam before Parliament reassembles, if the Motion is carried. It is reasonable for some of us to say to the Government, as we would be inclined to do, that, unless they can give us reasonable assurances on this point, we would not be in favour of adjourning for so long.
If the proposals of President Ky were adopted, that would be only with the support of the American troops. There has been considerable controversy in this country about whether the Government were right to give the support which they gave 18 months ago to the original escalation of the war. I am not suggesting that it is in order to debate that now, but subsequent events have shown that that 100 per cent. support was not unlimited
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in time or unconditional. Subsequent actions took place which the Government thought justified their dissociating themselves from American action. What we ask them to do now, before we consent to go away for two months, is to undertake that they will dissociate themselves from any further escalation in the direction suggested by the present so-called Government of South Vietnam.
If they do not give us such an assurance, they are asking the House to go away for two months in circumstances which conceivably—I do not say "probably"—could mean that we would, against our will, be involved in a world war on the wrong side, without being consulted—[HON. MEMBERS: "Wrong side?"] Yes, on the wrong side——
Mr. Patrick Wall: Does that mean that the hon. Gentleman would like us to be on the side of the Communist Chinese?
Mr. Silverman: I am saying nothing which any hon. Member need get excited about. I am saying that, if we were to support an action which might lead to a world war, which we did not want and which was against our will and in which it would be at least doubtful whether the Americans were on the right side, if we had to be dragged in—if we were dragged in—on that side, we might, without being consulted be in a world war which we did not want, about which we had not been consulted and on the side of which, on the whole, we least approved. I think that every hon. Member must see the danger to which that could lead.
I am asking for an assurance—I see no reason why the Government should have any difficulty about giving it—that, if there is any reasonable probability, any forlorn or remote chance at all, that the Americans might further escalate the war along the lines against which American Congressmen have recently protested, we should either immediately dissociate this country from any such policy or recall the House so that we may discuss here what the Government and the country ought to do in such a situation. I am not asking for any further undertaking than that, but I do say that I would certainly not support a Motion for the Adjournment for two months in these circumstances without such an assurance.
6.36 p.m.
Sir Harry Legge-Bourke: I would agree with the hon. Member for Nelson and Colne (Mr. Sydney Silverman) in one thing, that the three subjects which he listed at the start of his speech are certainly highly relevant to the question whether or not we should adjourn. However, he was a little arrogant in assuming that those were the only three subjects which could possibly be relevant. I hope that, when I have finished, he will see that one or two other matters are also relevant.
The right hon. Gentleman the Lord President of the Council and I have exchanged pleasantries across the Floor of the House from time to time since 1945. There was an occasion when he referred to me as a "Blimp" and I took that as a compliment, coming from him. In wishing him well, I would add that I hope that he will always remember that ordinary Members on both sides are highly sensitive to those who sometimes give the impression that they have little time for those whom they consider to be less intelligent than themselves. Therefore, I hope that, as Leader of the House, the right hon. Gentleman will be able to make all parties, on both sides of the House, realise that he has the rights of hon. Members very much in mind.
We have had a historical review in your absence from the Chair, Mr. Speaker, and I wish to do no more muck-raking. But there has been some muck-raking today. I suppose that it is inevitable that, when a Government's record has been undistinguished—to put it mildly—a few red herrings should be dragged out from the past to put the eye off the major ball.
However tired we are, and however overstrained are the unfortunate staff who attempt to serve our needs, I still say that there are many reasons why we should remain in session. Although Gibraltar is certainly one of them, and it is very important that one current rumour should be banished before we adjourn, there are other matters. I have little more to add to a discussion of Gibraltar than what has already been said by my hon. Friends and by some hon. Members opposite, but there is one current rumour which must be banished quickly. That is the suggestion that the reason that the Government are being so
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equivocal on this issue is because the United States wishes to change its strategy in the Mediterranean and to come to an understanding with Franco, and that Franco's price for reaching that understanding is Britain trading in the rights of the Gibraltarians.
That rumour is being put about in this place as well as outside. I hope, therefore, that the Government will once and for all scotch that rumour. If it is true, or anything like true, it is certainly something which calls for a major exercise by the Foreign Office while we are away. If it is not true, it is not only doing a great deal of damage to the United Kingdom's relationships with Spain, but must also be causing grave concern to Gibraltarians.
I hope that the Government stand by the last paragraph of the White Paper and will not be bullied by the Americans, by General Franco or by anyone else over the future of Gibraltar, but will do what they believe to be right and which the Gibraltarians are satisfied fully protects the interests of Gibraltarians. That is all I shall say about Gibraltar, and it is probably more than enough for the right hon. Gentleman.
There is one other issue which I would like to raise additional to the subjects mentioned by the hon. Member for Nelson and Colne. If we had not been debating the Summer Adjournment today, we should have been debating the Industrial Reorganisation Corporation Bill. Rather unusually, even before the Bill has been debated, the Government have selected two of the principal officers who are to run that corporation. One is the chairman of a well-known textile company and the other is a distinguished merchant banker. I regard both gentlemen as either extremely gullible, or indulging in a deliberate exercise to bring about creeping Socialism. That is my opinion of their acceptance of the appointments.
It is bad enough to have a chairman and another principal officer of a corporation, which has not yet been put on the Statute Book, appointed by the Government, but if, during the Recess, we are also to witness the appointment of other principal officers of this corporation, which may or may not be brought into being according to whether Parliament passes the Bill, we shall be reaching the point where Parliament is being made

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utterly ludicrous and the rights of hon. Members to decide whether such a corporation should exist are being undermined.
As it appears that one of the main matters which we shall be discussing during the first week of our return will be this Bill, according to the business statement yesterday, I hope that we shall have an assurance from the right hon. Gentleman that no further anticipatory appointments will be made, so that we can go into the merits of whether there should be such a corporation.
Finally, during the last few months we have witnessed an exercise of political tergiversation greater than anything which has happened since the time of Robert Peel, when he was castigated by Disraeli for tergiversation over the Corn Laws. Promises have been broken by the Government almost daily and sometimes we have felt that we have had to sympathise with the appalling difficulties into which the Government have got themselves, largely through their own fault and their own policy.
I hope that during the Recess the Government will tell the country a little more of the truth than they have so far about the position of our national affairs. I do not believe that we have begun to hear the truth and I hope that we shall in future.
The accusation might well be made today, as it was once made in the 1945–50 Parliament by a distinguished United States Treasury official, who said of a certain previous Labour Chancellor of the Exchequer, "Who is this guy? We used to be able to trust Bank of England figures; these, we know, are 'phoney'".
I hope that during the Recess we shall be told what the true figures are and that there will be no more of this deliberate deception of the British people.
Mr. Speaker: Mr. Crossman.
Mr. Neil Marten: On a point of order. A number of backbenchers still wish to speak in this debate, on which there is no time limit. Are we to understand, Mr. Speaker, that the right hon. Gentleman is about to intervene in a helpful way, perhaps about Gibraltar, or does his rising mean that the debate is to come to an end? There
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are many things which I would like to say. I would like to welcome him to his new job and I would like to deal with the question——
Mr. Speaker: Order. I am seized of the point of order without the hon. Gentleman amplifying it further. I have called the right hon. Gentleman who seeks to intervene. What happens after that I know not yet.
Lord Balniel: On a point of order. Is the right hon. Gentleman intervening to wind up the debate, or is this just an intervention which will allow the debate to continue? Is it the Government's intention to move the Closure after he has spoken? I am bound to ask him whether he has noticed that there are many hon. Members on both sides of the House who would like to speak. I had intended to begin my speech from the Opposition Front Bench by congratulating him on his appointment as Leader of the House, but I am bound to say that this is one of the most disastrous openings for a Leader of the House, curtailing of the rights of discussion, which we have seen for a very long time.
6.46 p.m.
Mr. Crossman: I hope that it will be for the convenience of the House if I intervene at this juncture in the debate. I thought that until now we had had a reasonably good-humoured and typical debate of this kind which had gone on in much the usual way and under some of the usual difficulties. I thought that it was relatively good humoured; even my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said that he was in a gentle humour. I want to thank the Leader of the Opposition and all those other Members who have been sympathetic to me in my new responsibilities for the kind things they have said, because I know that after that I cannot expect, and do not want, any quarter from them.
I can tell the Leader of the Opposition that I appreciate the difficulties of this debate. There are matters on which individual hon. Members genuinely feel strongly. I have done it myself. One feels that one cannot let the House go for fear that something disastrous happens. Hon. Members vary about what

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those things may be, but they hold such views sincerely. One also feels that such an occasion is a good chance to make a last protest, so far as one can within the limits of order, and I congratulate hon. Members on the skill with which they have taken their opportunity.
When my right hon. Friend the Paymaster-General intervened with memories of how he had been cribbed and confined in May, 1964, I thought that I was cribbed and confined, too. As a matter of fact, I welcome the somewhat greater licence which we have had today. It brought out one problem of the debate which was illustrated when the hon. Member for Harborough (Mr. Farr) said that I was incompetent to answer the 40 or 50 big questions of policy which had been put to me. That is true. No Minister could conceivably answer all the questions which have been put today, because they were not all concerned with this Motion, but with general issues of policy on which I could not reply.
What I can and must reply to are the serious arguments put to me for not letting the House go without certain assurances and statements. I will start with those and begin with some which were put to me by the Leader of the Opposition.
The right hon. Gentleman's speech was good humoured, apart from one sentence which was repeated by one or two of his hon. Friends and to which I would like to reply. Having congratulated me, he suddenly said that as far as he could see, with me as Leader of the House, there was no chance of both sides getting fair treatment. He gave the remarkable reason that I was born a political animal. This seems to be a very American definition of a politician. It is in America that politicians are thought of in that way. I always thought that in England "political animal" meant one who was a politician, but politicians can be fair. A man may be a party man—and the right hon. Gentleman and I are both party men—and yet on all the issues which matter in Parliament loyalty to party and loyalty to Parliament are not incompatible.
I hope that, on reflection, the right hon. Gentleman will agree that if I am as political an animal as he is we can both claim that because we are political animals we would give minorities their
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fair share; and I have had somewhat greater experience in my political life of being a member of a minority than the right hon. Gentleman has had. For 18 years I was a member of various minorities and I have a penchant for and bias in favour of minorities, certainly until recent experience, and against majorities.
I must admit that during the last 18 months of responsibility my attitude towards majorities has changed a little, but I assure the right hon. Gentleman that office does not altogether destroy that sympathy with minorities and my conviction that our Parliamentary system can only work in the last resort if we recognise fairness and recognise that we agree, above all, about the importance of making our system work.
Mr. Heath: I trust that the right hon. Gentleman realises that he will be put to the test the moment he sits down.
Mr. Crossman: That is quite true, and I fully appreciate it. I know very well that it is a test to which the right hon. Gentleman, when he was Patronage Secretary in the old days, was subjected to rather frequently—yet always with the same result, which I shall not, at this point, anticipate. The right hon. Gentleman and I understand each other and I assure him that I do not mind his making that taunt.
The Leader of the Opposition asked a number of questions which we must consider seriously. He asked, first, for an assurance about Part IV of the Prices and Incomes Bill. I, for my part, wish to emphasise what has already been explained. My right hon. Friend who was until a few hours ago the First Secretary continually emphasised that the Government were fighting for the voluntary principle and that they were anxious to have the reserve power contained in the Bill to make it work. My right hon. Friend said that time and again and, on each occasion, meant what he said.
As a member of the Cabinet, I support the Bill for that reason and I assure the Leader of the Opposition that what the First Secretary has emphasised on so many occasions is the point that I wish to emphasise now. That is why the special limitation of 28 days was written into the Bill, remembering that Part IV cannot come into force without an affirmative Order being brought before the

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House and that it is not just 28 days but 28 calendar days. We mean what we say about the Bill and what the First Secretary has emphasised so frequently on this subject.
I was then asked for an assurance about housing. I have some difficulty in answering this one, remembering who was the previous Minister of Housing and Local Government. I admit to the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and the Leader of the Opposition that, in retrospect, I failed—or, since I am speaking about the previous Minister of Housing and Local Government, perhaps I should say "he failed"—to tell the House about mortgages and that perhaps I should have given that information before making my speech to the builders, even though it got a good Press; indeed, the whole of it was printed. Although it was so widely publicised, I accept, as does the previous Minister of Housing and Local Government, that that is no substitute for making a statement to the House. Perhaps it would be apt if I quoted some of what I said on that occasion, so that it will at least be on the record. I said:
"… we shall be introducing the necessary legislation in the autumn. Some details have still to be settled in further consultation with the building societies and other lending bodies, and we shall publish with the Bill a White Paper which will explain fully how the scheme will work".
Then, concerning retrospection, I said:
"I have heard suggestions that some would-be purchasers have held off from buying houses because of uncertainty about the Government's intentions. I want to make it quite clear that there is no point in deferring purchase on this account. The legislation which will be introduced later this year will provide that owner-occupiers"—
and this answers the right hon. Gentlemans question—
"who already have mortgages will be able to transfer to option mortgages and get the benefit of the Government subsidy, if they consider it to be to their advantage to do so. Anyone wanting to buy a house now can be assured that the Government are going to carry through their scheme for helping owner-occupiers; and that it can help them whether they take out a mortgage now, or after the scheme comes into operation".
That is the answer. The switch means that retrospection is unnecessary in that particular case.
I turn from those subjects of the home side to the questions which have been
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asked about various aspects of foreign policy, particularly Rhodesia.
Mr. Boyd-Carpenter: I trust that the right hon. Gentleman remembers that I asked him another question about mortgages. I asked what assurances he could give about the supply of funds to building societies in view of the problems caused by interest rates during the Recess.
Mr. Crossman: I considered that that was not the kind of matter which would be likely to decide whether or not we should adjourn for the Summer Recess. I do not think, therefore, that giving an assurance or making a statement on this subject would be likely to affect the Motion, since we can debate the matter; in other words, it is not as urgent an issue as some of the others that have been raised and is, therefore, not a matter which would be likely to prevent us from rising for the Recess.
I come to the questions put to me about Rhodesia, Gibraltar and Vietnam, because the majority of hon. Members have felt that around these three issues is centred the main concern about rising for the Recess. On Rhodesia, I do not think that I need say more than repeat the absolute and specific assurances given by my right hon. Friend the Prime Minister on 8th August, when he said:
"Since we are approaching the Recess I should like to make it clear that, although there is at present no indication that a settlement is likely within the next two months, nevertheless, if there were any developments during the Recess making possible a settlement before the time fixed for the assembly of Parliament, we should regard this as sufficiently important to advise you, Mr. Speaker, under Standing Order No. 117, that the House should be recalled …".—[OFFICIAL REPORT, 8th August, 1966; Vol. 733, c. 1018.]
In terms of the Motion before the House, no hon. Member could ask for a more specific assurance than that. My right hon. Friend's assurance was to the effect that if anything like that occurred—although the Government think it unlikely—the Government would specifically recall the House for that particular reason. No Government could be more specific.
Many questions were asked about Rhodesia and a number of speeches were made concerning Gibraltar. They varied from the careful and moderate language used by the Leader of the Opposition to

1957
the more extreme remarks of the hon. Member for Essex, South-East (Mr. Braine). That hon. Gentleman said that it would be wrong for the House to recess without knowing what was being discussed and what might possibly be agreed. If we are to say that no Government should negotiate during a Recess without, in advance, telling the House everything that might be said and done, all negotiations would be impossible during all Recesses. However, I take it that those extremities of the back benches opposite are not the reasons why other hon. Gentlemen opposite say that they are seriously worried on this issue.
Mr. Braine: As the Leader of the House has referred to words that I used, does he recall that I was saying that it had to be presumed that the talks would take place against the background of increasing pressures from Spain? Is he aware that I said that I found it extremely difficult to understand how the Government could enter into these talks in that kind of atmosphere, and that it was in those circumstances that I felt that the right hon. Gentleman should give the House an assurance on these matters?
Mr. Crossman: I listened to the hon. Gentleman's speech carefully. He said—and he made his point clear—that his view was that he had little confidence in the Government and that, rather than have any negotiations at all going on, he would prefer to make such negotiations impossible. That would be the effect of meeting the demands he made. I admit that it may be a reasonable point of view for the hon. Gentleman to take, but it is certainly a point of view that would be unlikely to receive the agreement of the House in general.
I was asked to give the specific assurance that the Gibraltarians would not be sold down the river. This continued assertion that the present Government are determined to sell Gibraltar down the river rings slightly forensic in view of the Prime Minister's explicit statement that there is no repudiation of the White Paper, a document which was absolutely clear. Having said that, I really do not understand what all the froth and bother is about. That statement having been made, I assure the House in good faith,
1958
these negotiations should be given a chance of success.
A number of my hon. Friends have referred to the situation in Vietnam and I agree with them that this is the area of the world—this area and not Gibraltar—where catastrophe and disaster could occur. This is the area about which all of us, whatever our positions, have a right to be alarmed and to express our fears and doubts, for we must all be constantly aware of the danger to the world of war breaking out. I therefore respect any hon. Member who asks, "Will you give the assurance that Her Majesty's Government share our alarm and are prepared to act?"
While I cannot give my hon. Friends an assurance that the Government will do all that they want them to do, if the kind of disaster which they foresee as being possible were actually to arise, Parliament would be recalled. However, I cannot go further than that and say precisely what the Government would do.
As Leader of the House, I assure the House that if the kind of eventuality about which my hon. Friends have spoken were to arise, it would be the duty of the Government to recall Parliament, because, in that event, the rôle of Britain could be decisive. I am sure that hon. Gentlemen opposite agree that in the event of there being such a crisis it would be our job to be here. I give that assurance. It is an absolute assurance.
I come to the subject raised by my hon. Friend the Member for Ebbw Vale which, after Vietnam, might be considered a minor matter. Indeed, history is always less exciting than present eventualities. He asked about Suez—and it was interesting to note that his question was not repeated from the Opposition. I am bound to wonder what would be the result of carrying out an exposure of Suez. I share my hon. Friend's curiosity. Fresh revelations may come day by day, possibly first from M. Pineau and then from General Daya. We never know what will come next. I wonder what the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) feels on this issue. Considering how fresh revelations come to light, I wonder whether it is more fun doing it this way than having the right hon. and learned Gentleman "come clean". I enjoyed it. I am looking forward to the fresh morsels that I shall

1959
read during the Recess. But we have decided to meet my hon. Friend's point of view. We think that it would be good and healthy for Parliament to debate this subject soon after the Recess. We think that it might be arresting to have the Opposition Front Bench alerted and ready, and that it would be helpful to discuss what happened in that long ago, historic, time of November, 1956.
I was much struck by the speech, on a former occasion, of my hon. and learned Friend the Solicitor-General about the precedents for inquiries of this sort. The inquiries into Mesopotamia and Gallipoli were good and sound. Without our being political animals in any sense, but in my present historical and judicious mood, I am sure that I shall receive a historical and judicious response from the Opposition for having a historical and judicious inquiry into what happened so long ago. We shall have the debate, after which we shall consider an inquiry.
I was also told that we should hold up our holidays because of the tardiness of both the Government and the Opposition on Parliamentary reform. There were earnest pleas from my hon. Friends the hon. Member for Lancaster (Mr. Henig) as well as the hon. Member for Ebbw Vale. My conscience twinged me, because I think that we have been rather slow. We have taken our time in reflecting on the subject of the Committees and we should accelerate this. I say freely, speaking for the first time in my new capacity, that I have a strong prejudice in favour of Parliamentary reform, because I do not agree with the idea that Parliament has declined, is declining, and should decline still further. The first two parts of that are correct, and the third is a disaster. Parliament has declined, is declining, and should not decline any further.
I shall be interested to read the Report of the Select Committee on Broadcasting the Proceedings of the House. Television is very important, but it is not the most important issue. How we present ourselves to the public through new media of communication is secondary to the issue of what we actually do here, which is what matters, and I believe that we are right to be deeply concerned and worried about whether we are doing our job properly. We should be allowed to
1960
have a few months' thought on this rather than to have further discussion here in an unadjourned House because it is important to consult widely and carefully, as there are great differences.
There are those of us, like my hon. Friend the Member for Ebbw Vale, who want to restore Parliament in its pristine 18th century figure. He wants the power to seat and unseat Governments in Parliament, whereas we now believe that that power should be in the hands of the electorate. But he is not a pure 18th century man. I agree with him that we should discuss things here on the Floor of the House a great deal more and a good deal less in secret conclave in other places. This is a heathy thing to ask, for anything which we can do to have the big issues discussed in the open is all to the good, because if we are to do our function of educating the public, which is our major job, we must get the great ideas debated here and so debated outside.
Another, older function, is that of being the critic, the check, the control of the Executive. I speak as a member of the Executive here and as a Member of the House. After 18 months, I think that my former Department does need controlling. Anybody who has worked in a big Department knows that the submission of that Department's detailed work to hon. Members in a Committee who would have time to see it in detail and with understanding knows that that has much to commend it. I therefore welcome the chance of such Committees being set up. But we must take care to set them up in the right way. We cannot make them American-style committees. They must be in our tradition. We must take trouble and care on this. We are on the edge of getting it right, but do not let us set up too many Committees.
Not every Committee has a queue outside waiting to attend it. Having come from local government, I say that anybody who thinks that the municipalisation of Parliament is the be-all and end-all had better study the committee system in local government, which has become a reductio ad absurdum. Let us select the right Committees for the right things if they are to be really effective. If we are to do that, we do not want to go on with this part of the Session now. We want a bit of a rest, time to reflect and

1961
think. The time has come—I have a feeling that the Leader of the Opposition is with me on this—when, having had this excellent debate, we should decide to adjourn.
Sir Knox Cunningham: As the Leader of the House has already said that the Prime Minister was not repudiating his White Paper, would he go a little further and say that the Government will not contemplate a transfer of sovereignty of Gibraltar to Spain against the wishes of the people of Gibraltar? If he would say that, it would be a very great help to a number of hon. Members on the question whether we shall adjourn for the Recess.
Mr. Crossman: I said that I found it difficult to feel that this agitation was not somewhat synthetic when the Prime Minister has already stated categorically that the White Paper is not being repudiated and that it includes the sentences which were quoted. I cannot see how anybody can fairly say that we are trying to sell Gibraltar down the line.
The Parliamentary Secretary to the Treasury (Mr. John Silkin)The Parliamentary Secretary to the Treasury (Mr. John Silkin) rose in his place and claimed to move, That the Question be now put.
Question put, That the Question be now put:—
The House divided: Ayes 141, Noes 90.

Division No. 171.]

AYES

[7.06 p.m.

Albu, Austen

Griffiths, David (Rother Valley)

Orme, Stanley

Allen, Scholefield

Hamling, William

Owen, Dr. David (Plymouth, S'tn)

Anderson, Donald

Hannan, William

Owen, Will (Morpeth)

Archer, Peter

Harper, Joseph

Page, Derek (King's Lynn)

Armstrong, Ernest

Harrison, Walter (Wakefield)

Paget, R. T.

Atkins, Ronald (Preston, N.)

Haseldine, Norman

Park, Trevor

Atkinson, Norman (Tottenham)

Hazell, Bert

Pavitt, Laurence

Bacon, Rt. Hn. Alice

Healey, Rt. Hn. Denis

Prentice, Rt. Hn. R. E.

Bagier, Gordon A. T.

Heffer, Eric S.

Price, William (Rugby)

Beaney, Alan

Henig, Stanley

Redhead, Edward

Benn, Rt. Hn. Anthony Wedgwood

Horner, John

Rhodes, Geoffrey

Bennett, James (G'gow, Bridgton)

Houghton, Rt. Hn. Douglas

Richard, Ivor

Blackburn, F.

Howarth, Harry (Wellingborough)

Roberts, Goronwy (Caernarvon)

Blenkinsop, Arthur

Hughes, Hector (Aberdeen, N.)

Roberts, Gwilym (Bedfordshire, S.)

Booth, Albert

Hynd, John

Robertson, John (Paisley)

Boyden, James

Jackson, Colin (B'h'se & Spenb'gh)

Roebuck, Roy

Braddock, Mrs. E. M.

Janner, Sir Barnett

Ross, Rt. Hn. William

Brooks, Edwin

Jay, Rt. Hn. Douglas

Rowlands, E. (Cardiff, N.)

Brown, R. W. (Shoreditch & F'bury)

Jenkins, Hugh (Putney)

Shinwell, Rt. Hn. E.

Coleman, Donald

Jones, Dan (Burnley)

Shore, Peter (Stepney)

Concannon, J. D.

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

Short, Mrs. Renée (W'hampton, N. E.)

Crawshaw, Richard

Judd, Frank

Silkin, Rt. Hn. John (Deptford)

Croseman, Rt. Hn. Richard

Kerr, Russell (Feltham)

Silkin, S. C. (Dulwich)

Darling, Rt. Hn. George

Lawson, George

Silverman, Julius (Aston)

Davidson, Arthur (Accrington)

Lee, John (Reading)

Silverman, Sydney (Nelson)

Davies, Robert (Cambridge)

Lyons, Edward (Bradford, E.)

Slater, Joseph

Dewar, Donald

McBride, Nell

Small, William

Dickens, James

MacDermot, Niall

Snow, Julian

Dobson, Ray

Macdonald, A. H.

Spriggs, Leslle

Dunwoody, Mrs. Gwyneth (Exeter)

McKav, Mrs. Margaret

Steele, Thomas (Dunbartonshire, W.)

Dunwoody, Dr. John (F'th & C'b'e)

McMillan, Tom (Glasgow, C.)

Stonehouse, John

Edwards, Robert (Bilston)

McNamara, J. Kevin

Taverne, Dick

Ellis, John

MacPherson, Malcolm

Tinn, James

Ennals, David

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

Urwin, T. W.

Ensor, David

Marquand, David

Wainwright, Edwin (Dearne Valley)

Evans, Ioan L. (Birm'h'm, Yardley)

Mendelson, J. J.

Walden, Brian (All Saints)

Fitt, Gerard (Belfast, W.)

Mikardo, Ian

Walker Harold (Doncaster)

Fletcher, Raymond (Ilkeston)

Millan, Bruce

Watkins, David (Consett)

Floud, Bernard

Mitchell, R. C. (S'th'pton, Test)

Whitaker, Ben

Foot, Michael (Ebbw Vale)

Molloy, William

Whitlock, William

Forrester, John

Morris, John (Aberavon)

Wigg, Rt. Hn. George

Fowler, Gerry

Moyle, Roland

Williams, W. T. (Warrington)

Fraser, John (Norwood)

Mulley, Rt. Hn. Frederick

Willis, George (Edinburgh, E.)

Freeson, Reginald

Murray, Albert

Wilson, Rt. Hn. Harold (Huyton)

Garrett, W. E.

Newens, Stan

Winnick, David

Gray, Dr. Hugh (Yarmouth)

Norwood, Christopher

Greenwood, Rt. Hn. Anthony

O'Malley, Brian

TELLERS FOR THE AYES:

Gregory, Arnold

Oram, Albert E.

Mr. Fitch and

Mr. Bishop.

NOES

Alison, Michael (Barkston Ash)

Batsford, Brian

Body, Richard

Allason, James (Hemel Hempstead)

Bessell, Peter

Boyd-Carpenter, Rt. Hn. John

Balniel, Lord

Biffen, John

Braine, Bernard

Barber, Rt. Hn. Anthony

Blaker, Peter

Brown, Sir Edward (Bath)

Bruce-Gardyne, J.

Hawkins, Paul

Orr-Ewing, Sir Ian

Bullus, Sir Eric

Heald, Rt. Hn. Sir Lionel

Osborn, John (Hallam)

Clegg, Walter

Heath, Rt. Hn. Edward

Page, Graham (Crosby)

Corfield, F. V.

Heseltine, Michael

Pardoe, John

Costain, A. P.

Holland, Philip

Peel, John

Craddock, Sir Beresford (Spelthorne)

Hornby, Richard

Percival, Ian

Crouch, David

Howell, David (Guildford)

Price, David (Eastleigh)

Cunningham, Sir Knox

Hunt, John

Ronton, Rt. Hn. Sir David

Davidson, James (Aberdeenshire, W.)

Jennings, J. C. (Burton)

Russell, Sir Ronald

Dean, Paul (Somerset, N.)

Johnston, Russell (Inverness)

Scott, Nicholas

Doughty, Charles

King, Evelyn (Dorset, S.)

Sharples, Richard

Eden, Sir John

Kirk, Peter

Steel, David (Roxburgh)

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

Legge-Bourke, Sir Harry

Summers, Sir Spencer

Errington, Sir Eric

Lewis, Kenneth (Rutland)

Tapsell, Peter

Eyre, Reginald

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

Teeling, Sir William

Fortescue, Tim

Longden, Gilbert

Thorpe, Jeremy

Foster, Sir John

Loveys, W. H.

Weatherill, Bernard

Giles, Rear-Adm. Morgan

Lubbock, Eric

Webster, David

Glover, Sir Douglas

Maclean, Sir Fitzroy

Wells, John (Maidstone)

Glyn, Sir Richard

Maxwell, Hyalop, R. J.

Whitelaw, William

Goodhart, Philip

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

Wills, Sir Gerald (Bridgwater)

Goodhew, Victor

Mitchell, David (Basingstoke)

Wilson, Geoffrey (Truro)

Grant, Anthony

More, Jasper

Wolrige-Gordon, Patrick

Grimond, Rt. Hn. J.

Morgan, W. G. (Denbigh)

Worsley, Marcus

Garden, Harold

Neave, Airey

Hall-Davis A. C. F.

Noble, Rt. Hn. Michael

TELLERS FOR THE NOES:

Harris, Reader (Heston)

Nott, John

Mr. Pym and

Mr. Younger.

Question put accordingly and agreed to.
Resolved,
That this House, at its rising Tomorrow, do adjourn until Tuesday, 18th October, and that Tomorrow the following paragraphs shall have effect—

(1) paragraphs (1), (2), (3), (5) and (6) of Standing Order No. 1 (Sittings of the House), as applied by paragraph (2) of Standing Order No. 3 (Friday Sittings) shall not have effect; and Proceedings on Government business may be entered upon and proceeded with at any hour, though opposed;

(2) Mr. Speaker shall not adjourn the House until he shall have reported the Royal Assent to the Acts which have been agreed upon by both Houses;

(3) when the Proceedings on any substantive Motion for the Adjournment of the House shall have continued for a period of five and a half hours (without reckoning the time
1964
occupied by any intervening Proceedings), then—

(a) if Mr. Speaker shall already have reported the Royal Assent to the Acts as aforesaid, he shall forthwith adjourn the House without putting any Question; and

(b) if Mr. Speaker shall not so have reported the Royal Assent to the Acts as aforesaid he shall forthwith suspend the sitting until a Message is received from the Lords, or until a Message is delivered desiring the attendance of this House in the House of Peers for the purpose of hearing a Commission read for signifying the Royal Assent to the Acts as aforesaid; and, as soon as he shall have reported the Royal Assent to the Acts as aforesaid, he shall forthwith adjourn the House without putting any Question:

Provided that sub-paragraph (b) of this paragraph shall also apply if such a Motion for the Adjournment of the House shall have been withdrawn.

ORDERS OF THE DAY
  INDUSTRIAL DEVELOPMENT BILL
  Lords Amendments considered.
  INDUSTRIAL DEVELOPMENT BILL

    Clause 1.—(MACHINERY AND PLANT.)
    Lords Amendment: In page 1, line 17, at end insert:
    "(c) for carrying on the business of a hotel or a restaurant."
    Mr. Speaker: I call attention to the fact that Privilege is involved in this Amendment.
    7.17 p.m.
    The President of the Board of Trade (Mr. Douglas Jay): I beg to move, That this House doth disagree with the Lords in the said Amendment.
    The substantive effect of this Amendment would be to make the investment grants introduced by the Bill payable to any restaurant or hotel for the plant and machinery—that is, equipment—installed in it. We had some extensive discussions on this issue during all the stages of the Bill in this House. The Government's view remains that it would not be appropriate to give assistance to the hotel industry in this way. To pay investment grants indiscriminately in respect of all equipment in all hotels, restaurants, public houses and other such institutions would be to make a much too wide and indiscriminate use of public money.
    It was very largely because the investment allowances, by a series of court decisions, could be used on such a wide scale for all sorts of equipment for which they were not originally intended that it was decided to introduce this more selective and discriminating system of investment grants. For that basic reason—and also because of the cost involved—we would not think it right to return to the former system.
    It can be forcibly argued, and I entirely agree with this argument, that many hotels and other tourist institutions are playing a great part in encouraging tourists to come to this country, and are thereby earning foreign exchange. That is certainly true—indeed, it is for that
    1966
    reason that the present Government have introduced, or continued, a number of schemes by which assistance is given to the hotel industry.
    First, we must remember that by this Bill the initial allowance which is applicable to equipment used by hotels or restaurants is raised to 30 per cent. That is a generous level, and it will be open to all hotels all over the country, whether they are in development areas or outside them.
    Secondly, hotel buildings which provide employment in development areas—and the development areas have been greatly widened so as to include, for instance, practically the whole of Scotland and Wales—will be eligible to receive the 25 per cent. building grant which applies within development areas. Thirdly, hotels are also eligible for B.O.T.A.X. C. assistance—loans, in particular—on the usual terms and conditions throughout all development areas.
    In addition, I have been able to announce since the passage of the Bill through this House that, in view of the overseas earnings which many hotels help to bring to this country, the Government are introducing a further and new scheme for development loans from public money to a total of £5 million. It will be available for any development scheme for a hotel where it can be shown that there are real and good prospects of earnings from overseas tourists. We are basing our policy on a more selective approach, and we shall make this money available where it is clear that overseas earnings are in prospect. In addition to all that, I would remind the House that the Government are, in any case, paying a grant of £2 million a year to the British Travel Association, whose job is to encourage and assist the British tourist industry.
    All these forms of assistance together are a major contribution to this industry and the recognition by the Government of the value of its services, but we must remember that, of the total earnings of the British hotel and catering industry, rather less than 10 per cent. accrues in the form of foreign exchange. That is a very much lower percentage than the nearer to 25 per cent. earned in exports by manufacturing industry. In my view, that real distinction justifies the basic principle of the Bill that the investment grants should be concentrated on plant

    1967
    and equipment used in manufacturing industry, and also justifies the very considerable help and assistance to the industry which the Government propose to give in the way I have described.
    For all those reasons, it seems to us right to confine the investment grant broadly to manufacturing industry in the way provided in the Bill and to give our help selectively to the hotel industry in the other ways I have described. I therefore ask the House to disagree with this Amendment.
    Mr. F. V. Corfield: The President of the Board of Trade will not be surprised that his attitude to this Amendment comes as a great disappointment to my right hon. and hon. Friends. He has based his case on his view it is not appropriate to assist hotels in this way. He has once again drawn attention to the fact that court decisions had resulted in investment allowances being paid for a much wider range of equipment throughout the whole industry—including the manufacturing and extractive industries, and so on—than might have seemed to be in accordance with the original intentions. He said that that was the basis of the policy of changing over to these grants.
    From there on he seemed wholly illogical in saying that, therefore, this was not an appropriate method to apply to hotels, because the discretion that resides in the President of the Board of Trade and the selectivity that can be used, answer the problem of preventing grant being payable in respect of certain types of equipment which, in the past, attracted investment allowance and have, at times, been the subject of a considerable amount of criticism. He argued that he has produced a system ideally suited for selectivity in grants of Government assistance which the hotel industry requires.
    He went on to indicate the other types of assistance that were available to the hotel industry—the increased initial allowance, and the 25 per cent. building allowance in the development areas. One of the big needs of the development areas—and here one thinks immediately of the Highlands, the South-West, and so on—is every bit as much for modernisation of existing hotels as for the building of new ones, but, in most cases, when one
    1968
    modernises an hotel one does not increase employment—indeed, by putting in modern facilities and equipment one may actually be reducing the employment available. That, together with the £5 million maximum loan at a favourable rate, contrasted with something like £20 million extra burden in the form of the S.E.T. and the loss amounting to many times that amount as a result of the withdrawal of the investment allowances, cannot be regarded in any sense as more than a drop in the bucket by way of recompense.
    We come back to the ludicrous nature of the distinction that the Government have drawn for the purposes of this legislation and the S.E.T. between manufacturing industries and others. That was well brought home this afternoon by the Prime Minister who, in reply to a Question, said that all hotels do not contribute to earnings of foreign exchange. That is very true, but all manufacturers do not contribute to exports. Many manufacturers produce articles whose utility is not always immediately obvious.
    It was the Prime Minister himself who referred to "candyfloss" as epitomising the frivolous and the futile, yet those who make candyfloss—I am not quite certain what it is, but I believe it is not a very useful or permanent substance—will under this Bill qualify for a grant for the machinery for making it. Here we have the height of absurdity in drawing such a distinction. The President of the Board of Trade has wholly failed to make out a case for the rejection of this Lords Amendment, and I hope that my right hon. and hon. Friends will vote against his Motion.
    7.30 p.m.
    Mr. A. G. F. Hall-Davis: I think it right at the start to declare an interest in this matter. I am a director of companies owning and operating hotels and restaurants, a fact which by now will be known to the right hon. Gentlemen opposite.
    The other place has given us an opportunity to debate this Amendment with the benefit of up-to-date knowledge of decisions which are being taken by the hotel industry in the light of the Government's declared policy. These are decisions which should be taken into account by this House when deciding whether to accept or to reject this

    1969
    Amendment. I had intended to restrict my speech to what I considered to be the most vital points, but the President of the Board of Trade has again repeated one canard which I cannot allow to go without comment.
    He referred to the fact that only 10 per cent. of the turnover of the hotel and catering industry was drawn from overseas visitors. I point out that in this year so far as the figures available to date indicate, when Commonwealth visitors are included the estimate of increased spending by overseas visitors on fares and in this country will be approximately £35 million and the total benefit to our balance of payments from spending by overseas visitors in 1966 will amount to £350 million.
    Mr. Jay: I gather that that is inclusive of what is spent on fares and not just in hotels and restaurants?
    Mr. Hall-Davis: That is quite true and I think the right hon. Gentleman will agree that the proportion is roughly three-to-two of spending in this country and on fares generally, but fares spent with British carriers benefit our balance of payments. In the light of these figures the Government only make themselves ridiculous when they go on repeating the statement about only 10 per cent. of the hotels and catering trade turnover being concerned with overseas visitors. This was said by their spokesman in another place and it has been reiterated by the President of the Board of Trade this evening. It is absolute figures and the rate of growth which should be looked at in assessing the industry's contribution to balance of payments.
    According to the Government spokesman in another place, investment expenditure by the hotel and catering industry on plant and equipment in 1964 was of the order of £16 million. I calculate that the cost of the new investment grant, if it were applied to this expenditure and allowing for some increase in the level of costs since 1964 and the higher rate in development areas would have been of the order of £4 million a year. When this £4 million is set against the £35 million increase in overseas earnings in a single year and the total spending by overseas visitors, including that spent with British carriers, is it any wonder that the hotel and catering industry feels
    1970
    that it has been harshly and foolishly treated by the Government?
    This is one aspect of the background to our discussion of this Amendment. I turn to another aspect of the background, one which again was referred to by the right hon. Gentleman. That is the Government's promised scheme of assistance to the hotel industry by means of loans. I hope that the House will bear with me while I make a few brief comments on this scheme in the hope that they will be helpful in due course to the Government and to the industry. The Government's proposals to help the industry by means of loans shows every sign of hasty preparation and considerable lack of understanding of the circumstances and needs of the hotel industry.
    Basically, the proposals are on too small a scale to encourage the construction of large hotels. The qualifying figure is set too high to be of assistance to small hotels in addition to which the scheme is full of defects of detail. It is certainly no substitute for the benefits which the Amendments we are discussing would bring to the industry. I shall enlarge the criticism that the proposals are on too small a scale. I have seen estimates by those well qualified to make them that to cater for 4 million overseas visitors in 1970 compared with this year's 3 million an extra 10,000 hotel bedrooms will be required. Assuming that 7,500 are provided in new hotels at an average cost of £7,000 and 2,500 in extensions to existing hotels at a cost of £3,000 the total expenditure required is £60 million.
    It is against this scale of required investment that we must view the right hon. Gentleman's proposals to advance £5 million for a trial period of one year. Hotel planning is a long-term process involving years of preparation. Unless the President of the Board of Trade can assure the industry that any scheme of assistance will be maintained at least for five years it will be of little value. The right hon. Gentleman's scheme has many other unsatisfactory features. To set a minimum level of loan of £10,000 combined with a maximum rate of 50 per cent. of the cost will make it impossible to qualify for a loan in respect of almost every project costing under £25,000. I remind the right hon. Gentleman that in the case of almost every project of this

    1971
    kind the cost of furniture, furnishings and other items and equipment amounts to 25 per cent. of the cost of the structural work. So even where loans are made at the maximum rate they would meet 40 per cent., not 50 per cent. of the total cost.
    There are a great many small hotels in areas visited by tourists which could not contemplate and indeed could not justify expenditure of £25,000 so the scheme will not help them at all. Then there is the question of repayment. If it is the intention of the Government that there should be an annual repayment inclusive of principal and interest then a borrowing at 6 per cent. repayable over 15 years would require an annual repayment of principal and interest of approximately 10·3 per cent. with a net cost in the first year of 7·9 per cent. reaching virtually 10 per cent. in the last year.
    Few hotel undertakings could rely on new projects generating in their early years a sufficient cash flow to provide for such repayments and at the same time to service the other capital invested in the project. In considering the relative advantages of the Government's proposals with those in the Amendment there is the question of security for the loan to be considered. If security is needed and it is to take the form of a first charge on the property I am certain that many reputable companies will be unable to start projects if they have to give the Government a first charge.
    I trust that these are points which the right hon. Gentleman will consider as indicating the weaknesses of his proposals and that he will discuss them with the "Little Neddy" for the industry at an early date.
    So far I have been engaged in the field of argument, opinion and conjecture. I now turn to the concrete evidence we have available of the effect which Government policy is having upon the provision of new hotel accommodation. The wisdom of our decision on this Amendment will be judged by whether the construction, extension and improvement of hotel accommodation continues or is checked. All the evidence is pointing in one direction and the Government surely cannot disregard it.
    The annual statement of the Chairman of Scottish and Newcastle Breweries Ltd.
    1972
    appeared in the Press yesterday. At the end of a long section dealing with the effect of the Government's policy on the hotel and tourist industry—a section which I commend to the President of the Board of Trade—Sir William McEwan Younger stated:
    "In particular, so long as these conditions prevail, we will only in quite exceptional circumstances embark on new construction or costly modernisation of major hotels."
    Another of the country's largest hotel groups—I shall give the right hon. Gentleman the name afterwards if he wishes—had in hand a programme of investment in expansion and improvement of hotel accommodation involving an outlay of £2 million a year. It has now decided to call a halt for the time being to the sanctioning of all new projects under its development programme. This is what is actually happening and has a direct bearing on the Amendment.
    I want finally to quote some words of Sir Geoffrey Crowther, Chairman of Trust Houses, which appeared in the Daily Mail on 29th July:
    "I do not believe that the Government has taken a deliberate dead set against hotels. It simply did not realise what it was doing to an industry which is one of the country's chief earners of foreign currency."
    I share Sir Geoffrey Crowther's views. I am obliged, however, to add the words of the popular song:
    "When will they ever learn,
    When will they ever learn?"
    If the Government intend to reject the Amendment, I hope that they will make it clear—and this is a plea to the right hon. Gentleman—that they do not regard themselves as irrevocably committed to the proposals announced by the right hon. Gentleman the President of the Board of Trade on 26th July. I am sure that something more beneficial can be worked out between the industry and the Government which embraces grants as well as loans and which worthily recognises the whole industry's valuable contribution to our balance of payments.
    Mr. John Hynd: I have been listening with some interest to the dissertation of the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis). As I am not at all informed about the economics of the industry and am rather puzzled, I would like to have some further information from those who

    1973
    are informed about it. The impression which I got as a layman was that there was something curiously wrong with the argument. It might have helped us if the hon. Gentleman had told us what were the fortunes of the hotels in which he was directly interested, so that one could see just how serious the situation was.
    Mr. Hall-Davis: I can tell the hon. Gentleman that one of them was erected in what was then a development area, and I can assure him, because it is public knowledge to my shareholders and locally, that it has given a very minimal return on a capital invested. Whoever has had the benefit, it has not been the hotel company.
    Mr. Hynd: That is precisely what puzzles me about it, because the hon. Gentleman was talking about the tremendous pressure on hotel accommodation, particularly from tourists to this country. I should have thought that if there was this tremendous demand, the hotel industry would be doing well out of it. I am rather concerned about why it is not.
    Normally, when one is asking for Government subsidies for a private concern, it is in order to assist that concern to attract business. In this case, it seems that the business is there, but that the hotel industry is either unable to cater for it, or is only anxious to get public money in order to supplement what it can now make out of the business. We hear much talk from hon. Members opposite about free enterprise and about those who take the risks being entitled to their rewards, and so on, which seems to be rather difficult to fit with their present arguments and constant demands for more and more public subsidies for a purely private enterprise activity.
    It is because of that that I ask for further information. I am not making any assertions, but there are many laymen on this subject in the House, and I am sure that I shall be asked in my constituency why it is necessary for an industry, which itself says that it is pressed with more and more business, to have a public subsidy and why it is not capable of absorbing that business and not able to pay its way.
    Mr. Corfield: Surely the hon. Gentleman realises that this argument applies to every industry in Sheffield, part of which he represents, which gets grants under the Bill. What we are objecting to is the discrimination between Sheffield manufacturers and hoteliers, both of whom make valuable contributions to the economy, although it would be difficult to distinguish the more valuable.
    7.45 p.m.
    Mr. Hynd: I agree, but I gather that one of the reasons for investment grants, and so on, for productive industry is to enable that industry to build up its products to satisfy customers, whereas in this case the customers are there and the facilities are not being made available by the industry.
    The hon. Gentleman mentioned Sheffield. I do not think that there has been much difficulty about the building of new hotels in Sheffield. Two enormous luxury hotels have been built there during the last two or three years and I have not heard that they are doing too badly. Judging by the prices which they charge, they do not seem to be short of visitors and I do not think that they could show a need for a Government subsidy. I am only asking for more information so that I can satisfy my constituents that public money is being justifiably spent, if the Amendment is accepted.
    We were told that certain hotel organisations were holding back from development or cancelling developments, presumably because of the Government's failure to be more forthcoming with public subsidies. Of course, we must try to build up the tourist industry, but if we are to spend a lot of public money on doing so, is there any reason why we should not do as some other countries have done and build and run a series of hotels in tourist areas as public enterprises?
    I am sure that many hon. Members will have had the pleasure of visiting Greece, for instance, during the last two or three years, as I have. I have found that the most reliable and the best hotels which I could find at reasonable prices and with very high standards were the Xenia hotels which are Government-built and owned and which do extremely well. It succeeds there, and I do not see why

    1975
    it should not succeed here. Has any thought been given to that aspect of the matter? In short, I am concerned only with justifying, one way or another, the amount of money proposed to be handed out.
    Mr. Deputy Speaker (Mr. Sydney Irving): I gather that the hon. Gentleman is asking for information about State-run hotels. He cannot do so on this Amendment.
    Mr. Hynd: I had left that issue and I was saying that I should be glad to hear more detailed information to enable me to make a reasoned judgment one way or another on the justification for expending or withholding public money.
    Sir John Eden: My hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) made a powerful case and I suspect that the Government will find it very difficult to resist it. I wonder why the Government should wish to resist it in any event and why they are asking the House to reject the Amendment. I would have thought that they would welcome the opportunity provided by the other place to correct some of the errors of their policy in dealing with the hotel industry. They have been given a welcome opportunity to put right some of the wrongs which they have already done to the industry.
    I gather that one aspect of the Government's argument is that it would be invidious to single out one service for special treatment. But the hotel industry has already been singled out for special treatment, unfortunately, for special adverse treatment. It has had imposed upon it the Selective Employment Tax and it has also had removed its assistance, the investment allowance procedure. The Government have already gone some way to recognise that it is an industry meriting special and singular treatment.
    Watching over the industry with benign assiduity is the right hon. Gentleman the Minister of State at the Board of Trade, who has under his wing the interests of the industry and the furthering of the tourist trade generally. Now the Government have singled out this industry in another way by the introduction of the new proposals for development loans for major capital expenditure on
    1976
    structural work or fixed equipment, when that will play a significant part in attracting overseas visitors. My hon. Friend the Member for Morecambe and Lonsdale has most graphically pointed out how ineffective these proposals are likely to prove.
    I hope that the right hon. Gentleman, when he replies, will give the House some further information as to how this scheme is to be operated, and in what way he thinks that this justifies the refusal of the Government to accept the Amendments which have been proposed by another place. How is it proposed that the hotels, which are to attract overseas visitors shall be earmarked before they are constructed or before the new equipment is installed? I should have thought that it was perfectly clear that unless we have new and modernised hotels throughout the country we are not likely to continue to attract visitors to the extent that we have been doing.
    Secondly, I should have thought that there was some relevance in what might be called the negative side of the coin, namely, the desirability of providing adequately for the rising standard of demand of holiday-makers within the country. These are important points which should be dealt with by the Minister. I cannot understand how he will determine what capital expenditure will attract overseas tourists and why, although I accept the balance of payments point, apart from that, he should disregard the aspect of keeping in the country those who would otherwise go abroad.
    I hope that the right hon. Gentleman and the Board of Trade Ministers, of all Ministers, will not be too inflexible on these matters. They should not lend themselves to the diktat of the former First Secretary, who laid down a rigid law from which he appeared to be totally unprepared to depart. The right hon. Gentleman and the Board of Trade Ministers are dealing with the realities of our industrial and commercial life and they, above all, must be aware of the need for flexibility and of the need to adjust regulations where it is manifestly in the national interest so to do. This is clearly the case with the hotel and catering industry and I hope that the Government are prepared to reconsider their attitude on the Amendment.
    Mr. John H. Osborn: The hon. Gentleman the Member for Sheffield, Attercliffe (Mr. John Hynd) has raised certain points and I would like to say to him from this side of the House that we are not interested in subsidies. The Amendment refers to the payment of grants and refers to Clause 1 of the Bill. The subsidy is something else which has been dealt with by the President of the Board of Trade in another context, outside of this Bill.
    Mention has been made of hotels in Sheffield. There is one new hotel in my constituency and another in the centre of the city. Both are Trust House hotels and as my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) has pointed out, certain hotels are not continuing with their programmes. I believe that the Trust house group is one of those which has curtailed its development.
    I have been actively concerned, in discussions with the Chamber of Commerce and the Chamber of Trade in Sheffield, with the problem of attracting businessmen to the city. Businessmen will go to London, but they are reluctant to make the journey to Sheffield. I feel that they will be less reluctant now that there are two new hotels in the city in addition to those which already exist. This is accommodation which makes it possible for the heads of businesses to invite their customers to the city. When the customers come to the hotel, they do not stay there; they are able to go out and see the products being made. Invariably, the key export order is one that is clinched either after a reasonable evening meal or the next morning, when the customer has had time to sleep on the arguments put forward.
    A country like ours must not only cater for the tourist trade, but for the travelling businessman. These people are travelling around Europe and America and are willing to buy here. If we have good hotels, whether by means of this Clause or other grants, and if these hotels are up to international standard, then export customers will be delighted to come to this country.
    Mr. Jay: With the leave of the House, I would like to reply to a number of questions which have been raised. I would like to say, first of all to the hon.
    1978
    Member for Morecambe and Lonsdale (Mr. Hall-Davis), who has great knowledge of this industry, as have other hon. Members who have spoken, that it is not our intention to administer this development loan scheme in any rigid or inflexible manner. We are already discussing the working of it with the British Travel Association and the British Hotels and Restaurants Association, and the "Little Neddy". We shall take into account what hon. Gentlemen have said and, any points which may be raised in these consultations.
    I still believe, in spite of all that has been said, and in the light of these consultations, that this will be a considerable contribution to the development of the industry. I rather agree with my hon. Friend the Member for Sheffield, Attercliffe (Mr. John Hynd)—Sheffield appears to be very well represented in the House this evening—that when we are using public money and offering loans of this kind, directed to one particular industry, although there is a good case for doing so, we have to set some limits and have considerable safeguards to see that the loan of public money is justified and is properly used.
    After all, we are making available sums of up to £5 million in one year for the benefit of a particular industry. If firms in this industry do not feel that it is any use to them, they are under no obligation to accept it. Money will only be loaned to people who think that they can make some good use of it. If we are to be told that even this amount of assistance will not enable the British hotel industry to develop and modernise, there will be some people, like my hon. Friend the Member for Attercliffe, who will begin to say that perhaps this industry ought to be organised in some other way.
    I hasten to add that I am not proposing this, because I believe that the industry, as at present organised, and with all the help given by the Government, is perfectly capable of increasing its earnings and developing in the way in which we all wish.
    8.0 p.m.
    Mr. Hall-Davis: Two factors are involved. One is the amount of money. The other is the time in which it is available. This is a particularly inappropriate industry to have too narrow a

    1979
    time band in which advantage can be taken of the offer.
    Mr. Jay: I take that point. This is an experimental scheme. We have not limited it to one year. We have said that it will certainly be available up to the end of one year. If the hon. Gentleman wishes to extend it beyond that, that is a tribute to the scheme; it shows that it is of some value to the industry.
    Some fairly large figures have been used in the debate as estimates of the finance which the industry has lost as a result of the change-over from the investment allowance. Figures even as high as £20 million have appeared in the Press. We are dealing this afternoon with much smaller sums. According to my information, with a 40 per cent. Corporation Tax and with the loss of the 30 per cent. investment allowance, the figures work out in this way, on the basis of the actual capital expenditure which was carried out by the industry in 1964. The amount forgone in the loss of investment allowance in a year would be £2½ million and as much as £1½ million of this would be recouped by reason of
    the increase in initial allowances. Therefore, on this test alone only £1 million is at stake.
    That has to be compared with the very large figures which the hon. Gentleman gave of about £350 million as the total earnings from tourists and a quite considerable sum, though less than that, as the total turnover of the hotel and restaurant industry. As compared with the £1 million, we are offering up to £5 million in development loans to the industry.
    Those figures put the matter in rather better perspective. When it is viewed like that and when account is taken of the points I made earlier as to what the Government are doing in four or five different ways to assist hotels, it is reasonable to think that the industry has every chance of developing its earnings with this help, and it would be inappropriate to go still further and add the investment grant.
    Question put, That the House doth disagree with the Lords in the said Amendment:—
    The House divided: Ayes 109, Noes 80.

    Division No. 172.]

    AYES

    [8.2 p.m.

    Allen, Scholefield

    Gray, Dr. Hugh (Yarmouth)

    Molloy, William

    Anderson, Donald

    Gregory, Arnold

    Moyle, Roland

    Archer, Peter

    Griffiths, David (Rother Valley)

    Murray, Albert

    Armstrong, Ernest

    Hamling, William

    Newens, Stan

    Atkins, Ronald (Preston, N.)

    Hannan, William

    O'Malley, Brian

    Atkinson, Norman (Tottenham)

    Harrison, Walter (Wakefield)

    Orme, Stanley

    Bacon, Rt. Hn. Alice

    Haseldine, Norman

    Owen, Dr. David (Plymouth, S'tn)

    Beaney, Alan

    Hazell, Bert

    Owen, Will (Morpeth)

    Bishop, E. S.

    Heffer, Eric S.

    Page, Derek (King's Lynn)

    Blackburn, F.

    Horner, John

    Price, William (Rugby)

    Booth, Albert

    Houghton, Rt. Hn. Douglas

    Redhead, Edward

    Braddock, Mrs. E M,

    Howarth, Harry (Wellingborough)

    Rhodes, Geoffrey

    Brooks, Edwin

    Hughes, Hector (Aberdeen, N.)

    Richard, Ivor

    Brown, R. W. (Shoreditch & F'bury)

    Hynd, John

    Roebuck, Roy

    Coleman, Donald

    Jackson, Colin (B'h'se & Spenb'gh)

    Ross, Rt. Hn. William

    Concannon, J. D.

    Janner, Sir Barnett

    Shore, Peter (Stepney)

    Crawshaw, Richard

    Jay, Rt. Hn. Douglas

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

    Crossman, Rt. Hn. Richard

    Jenkins, Hugh (Putney)

    Silkin, Rt. Hn. John (Deptford)

    Darling, Rt. Hn. George

    Jones, Dan (Burnley)

    Silkln, S. C. (Dulwich)

    Davidson, Arthur (Accrington)

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

    Silverman, Julius (Aston)

    Davies, Robert (Cambridge)

    Judd, Frank

    Slater, Joseph

    Dickens, James

    Kenyon, Clifford

    Small, William

    Dobson, Ray

    Kerr, Russell (Feltham)

    Snow, Julian

    Dunwoody, Mrs. Gwyneth (Exeter)

    Lawson, George

    Spriggs, Leslie

    Dunwoody, Dr. John (F'th & C'b'e)

    Lee, John (Reading)

    Steele, Thomas (Dunbartonshire, W.)

    Edwards, Robert (Bilston)

    Lyons, Edward (Bradford, E.)

    Tinn, James

    Ellis, John

    McBride, Neil

    Urwin, T. W.

    Ensor, David

    MacDermot, Niall

    Wainwright, Edwin (Dearne Valley)

    Faulds, Andrew

    Macdonald, A. H.

    Walker, Harold (Doncaster)

    Fitch, Alan (Wigan)

    McKay, Mrs. Margaret

    Watkins, David (Consett)

    Fletcher, Raymond (Ilkeston)

    McMillan, Tom (Glasgow, C.)

    Whitaker, Ben

    Floud, Bernard

    McNamara, J. Kevin

    Whitlock, William

    Foot, Michael (Ebbw Vale)

    MacPherson, Malcolm

    Willis, George (Edinburgh, E.)

    Forrester, John

    Marquand, David

    Winnick, David

    Fowler, Gerry

    Fraser, John (Norwood)

    Mikardo, Ian

    Freeson, Reginald

    Millan, Bruce

    TELLERS FOR THE AYES:

    Garrett, W. E.

    Mitchell, R. C. (S'th'pton, Test)

    Mr. Harper and

    Mr. Ioan L. Evans

    NOES

    Alison, Michael (Barkston Ash)

    Goodhart, Philip

    Page, Graham (Crosby)

    Allason, James (Hemel Hempstead)

    Goodhew, Victor

    Pardoe, John

    Barber, Rt. Hn. Anthony

    Gurden, Harold

    Peel, John

    Batsford, Brian

    Hall-Davis, A. G. F.

    Percival, Ian

    Bessell, Peter

    Hawkins, Paul

    Price, David (Eastleigh)

    Biffen, John

    Heald, Rt. Hn. Sir Lionel

    Prior, J. M. L.

    Body, Richard

    Heseltine, Michael

    Pym, Francis

    Boyd-Carpenter, Rt. Hn. John

    Holland, Philip

    Renton, Rt. Hn. Sir David

    Bruce-Gardyne, J.

    Hornby, Richard

    Russell, Sir Ronald

    Bullus, Sir Eric

    Howell, David (Guildford)

    Scott, Nicholas

    Clegg, Walter

    Hunt, John

    Sharples, Richard

    Corfield, F. V.

    King, Evelyn (Dorset, S.)

    Steel, David (Roxburgh)

    Costain, A. P.

    Kirk, Peter

    Teeling, Sir William

    Craddock, Sir Beresford (Spelthorne)

    Legge-Bourke, Sir Harry

    Thorpe, Jeremy

    Crouch, David

    Lewis, Kenneth (Rutland)

    Vaughan-Morgan, Rt. Hn. Sir John

    Cunningham, Sir Knox

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

    Weatherill, Bernard

    Davidson, James (Aberdeenshire, W.)

    Longden, Gilbert

    Webster, David

    Dean, Paul (Somerset, N.)

    Loveys, W. H.

    Wells, John (Maidstone)

    Doughty, Charles

    Lubbock, Eric

    Whitelaw, William

    Eden, Sir John

    Maxwell-Hyslop, R. J.

    Wills, Sir Gerald (Bridgwater)

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

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

    Wilson, Geoffrey (Truro)

    Errington, Sir Eric

    Mitchell, David (Basingstoke)

    Wolrige-Gordon, Patrick

    Eyre, Reginald

    More, Jasper

    Woreley, Marcus

    Fortescue, Tim

    Morgan, W. G. (Denbigh)

    Younger, Hn. George

    Foster, Sir John

    Noble, Rt. Hn. Michael

    Giles, Rear-Adm. Morgan

    Nott, John

    TELLERS FOR THE NOES:

    Glover, Sir Douglas

    Orr-Ewing, Sir Ian

    Mr. Blaker and

    Glyn, Sir Richard

    Osborn, John (Hallam)

    Mr. Grant.

    Lords Amendment: In page 2, line 10, at end insert:
    "(f) the extraction of timber and works ancillary thereto."
    Mr. Deputy Speaker: I call the attention of the House to the fact that Privilege is involved in this Amendment.
    The Minister of State, Board of Trade (Mr. George Darling): I beg to move, That this House doth disagree with the Lords in the said Amendment.
    The effect of the Amendment would be to make the extraction of timber and works that are ancillary to the extraction of timber a qualifying industrial process for plant and machinery grants. We ask the House to reject the Amendment for three main reasons: first, it is outside the scope and intentions of the Bill; secondly, the forestry industry does not fall within the category of industries that require the highest priority for Government assistance in the present economic circumstances; and, thirdly, there is already an adequate system of Government financial assistance to forestry.
    I remind the House that the scope of the Bill is, broadly, to provide investment incentives for industry in the sense of manufacture and production and for construction and mining. The Bill is not designed to provide incentives for agriculture, horticulture or forestry.
    As the White Paper on Investment Incentives stated, there are separate
    1982
    arrangements for agriculture as a key sector of economic activity. Provision for investment grants for agriculture and horticulture is made in the Agriculture Bill. The arrangements for agriculture are different in a number of important respects from those contained in the Bill.
    I agree that the Amendment relates to the extraction of timber rather than the cultivation of our forests and that forestry is not covered by the other arrangments to which I have referred, and that what I have described as the mining processes of the Bill cover the extraction of peat and brine—in case hon. Members wish to raise this argument—which are not minerals. I am sure that it will be agreed by hon. Members that the extraction of these minerals is essentially similar to the mining of minerals. On the other hand, the extraction of timber is more akin to the harvesting of a crop although, in this case, a very long-term crop.
    I do not deny that forestry makes an important contribution to import saving. We import approximately 90 per cent. of our requirements in timber and timber products and spend large sums abroad each year on imported timber, timber products and paper. But the application of investment incentives for forestry equipment, which is what we are discussing here, whether for cultivating or for tree felling, would not, in our view, have any immediate effect upon the balance of payments.

    1983
    8.15 p.m.
    To take, first, the planting of trees, many years pass before trees which have been planted can make any contribution to the economy, and the rate at which timber can be extracted depends upon the planting of forests. Moreover, most private foresters and timber merchants operate on a modest scale and do not buy enough plant and machinery to attract sizeable investment grants. For the industry as a whole, the amount at stake is not very large.
    We therefore take the considered view that the needs of forestry should be looked at as a whole, rather than that we should take this one narrow section, and that these needs should not be dragged in at this very late stage to a scheme which is designed for manufacturing industry. As I have said, there is already a system for giving Government assistance to forestry.
    We have considered carefully whether the present system of assistance to forestry is adequate, or whether it needs supplementing by something comparable to the special schemes under the Agriculture Bill which will provide the new investment incentives for agriculture. The Government have concluded that this would not be justified at the present time. However, there is provision for regular review of the assistance to forestry and I assure hon. Members that the Departments responsible will certainly watch the situation carefully as it develops and consider whether any improvements are called for at any time.
    I again stress, however, that in our view the assistance to forestry as asked for in the Amendment is outside the scope of the Bill. It is much better to help forestry in the ways I have suggested. I must, therefore, ask the House to disagree with the Lords' Amendment.
    Mr. Michael Noble: Most hon. Members would have expected the Minister of State to refuse to help in this way, and might have anticipated at least some of his arguments, had they had the misfortune to read the Official Report of the proceedings of the other place. To my mind, however, it is rather tragic that at a moment like this the Minister can come to the House and say that he has decided to give no help to
    1984
    an industry because, in his view, it is not sufficiently important and that the economic state of the country is such that no help should be given.
    This highlights once again the Government's determination to try to scramble through, if, perhaps, only for the length of the Recess, without ever looking at the problems which are bound to face this industry and many other industries where there is a long-term serious problem and to say that they will look at them again in a year's time or yearly and see whether anything needs to be done.
    The tragedy—and it is, in a way, a tragedy, and Government for many years have been involved in it—is that we have neglected forestry to a quite appalling extent. I do not think, as the Minister of State thinks, that the Forestry Commission are the people who should be doing all the planting. I do not regret any curtailment in that sphere if we can get the people who look after the land to use trees as a sensible crop and one that should be grown.
    It is anomalous, to put it no higher, that at a time when the balance of payments is one of the critical problems, the Minister can admit that we are importing 90 per cent. of our timber—our import figure is, I think, about £450 million a year—and that this is not important. Of course it is important. If we are to get the situation right, although the growing of trees is a long-term programme, if the Minister would come up to my part of the world and look around he would see many thousands of acres of trees planted in the 1920's and 1930's which, are now ready for cutting and need to be extracted. That being so it is surely right—and the Minister has admitted there is not much money involved—to say now that this sort of help, which is quite small in quantity, should be given to the people who ought to be thinking out new methods of extracting the timber which is ready to be extracted.
    I have said before in debates here that probably the biggest mistake the Forestry Commission has made in the 40 years of its existence is that it has never looked beyond its immediate nose—rather as the Minister is trying to do with the economic situation today. When I was young the Commission planted thousands of acres of trees but with no idea at all how it was going to get them out of those

    1985
    areas in which it wanted them. Then after the war this problem hit the Commission rather hard and it proceeded to build enormously expensive roads all through its forests in order to get the timber out. Hon. Members who have been to other parts of Europe and seen the way the timber comes out, in Sweden, in the Alps, for instance, will have seen that there are not these great and very expensive forest roads built all over the place. In those countries they have other, better, much more efficient methods of extraction. Then the Commission had no idea till the paper mill came along, where it should sell the material. This was planning gone mad.
    I believe the other place, in putting this Amendment before us, has done a real service in trying to concentrate our minds on more efficient methods of extraction which will make our own industry cheaper and more efficient, and a protection against having to import timber. I believe that we should support the Amendment, and I shall certainly ask my hon. and right hon. Friends to do so.
    Mr. Michael Alison: I want to take issue with the Minister of State on the argument that this is really akin to agriculture. It surely cannot be denied that timber, in this sense in which we are talking about it, is not a crop for consumption in that sense. This is the preparation of an industrial material. It is akin to industrial material. It is a material integral to many aspects of industrial manufacture. It is not only a material for the making of things like window frames and furniture, a material which the furniture manufacturers use, but it is deeply related to the extraction of coal.
    It is so analogous to coal, and so closely related to coal, that I cannot see how the Minister can possibly excuse not putting this particular industry into the same category as those covered by the Clause, in the same category as searching for or the extraction of coal. If the Minister is talking about the extraction of timber as being akin to a long-term—this was the phrase he used—a long-term crop, he should remember that if he were to carry that further he would discover that timber in the very long term becomes coal, and there is no reason, therefore, why he should not be prepared
    1986
    to give it the same treatment as coal, on that extended time scale.
    The point is of some historical significance and interest. I do not know whether the Minister has seen it, but if he has he will recall, in Professor Alan Taylor's "English History, 1914–45", the extremely interesting point which the professor brings out, namely, that the German submarine warfare, in the 1914–18 war, and developed comparatively late, after 1916, had a serious impact, above even the impact on food supplies, upon the supplies of pit props for our coal mining industry, which at that time was unsupported by oil and other mineral resources for the generation of power for British industry.
    Pit props were essential to the mining industry and a large percentage came from Scandinavia, and supplies were almost entirely cut off by the success of the German submarine warfare. It was that which led to the setting up of the Forestry Commission, for the specific purpose of growing pine and other similar trees so that pit props could be supplied from British forests and we would not be subject to this sort of possible strangulation if war came a second time.
    I hope that the Minister appreciates that pit props are an integral part of industrial processes. Plant and machinery required for the preparation of pit props in the forests should qualify in the forests in which the trees are felled, lopped, and turned into pit props on the spot. We want to make quite certain that he will at least agree that the preparation of pit props qualifies under the Bill. It would be much more suitable if he allowed the machinery used for the preparation of this essential industrial material to qualify, whether machinery used in forestry or for getting the material away from forests to factories, and if he were to make quite certain that the extraction of a natural feature, which is integral to the manufacturing process in factories and mines, is included in the provisions of the Bill.
    Mr. James Davidson: Some of the points I wish to make have been dealt with already, and I shall try to keep my remarks brief. First, comparisons have this evening already been made with agriculture, though perhaps not with fishing, but in fact these are three

    1987
    industries which are normally grouped together, agriculture, forestry and fishing. Agriculture is eligible for machinery and plant—and will be eligible under the Agriculture Bill; the fishing industry is already eligible for grants given by the White Fish Authority; but, for some reason which I find very hard to understand, the forestry industry is being excluded.
    The point is being made by the Government that the forestry industry is eligible for certain grants, but they are grants for planting, not for machinery or for extraction. Those grants will not, on the whole, go to people who do the extracting. Extracting is more usually done by independent contractors, and for this reason this industry is regarded as a separate part of what is the same industry.
    It has been said that the amount involved is perhaps not very large. I should like to make the point that to those involved as contractors in the extracting industry the amount may be very large indeed, and to the small contractor it is a very large amount of money.
    I should like to mention the aspect of employment. It has been said that this is outside the scope and function of the Bill, but surely part of the scope and function of the Bill is to try to stimulate employment in the development areas, and this is surely important. Timber extraction and forestry in general form a highly important industry in many development areas, and particularly in the north and north-east of Scotland. It would be an encouragement if help to them with their equipment were allowed under this Bill.
    It would be an encouragement to private forestry. I should like to stress at this point that by private forestry I mean the planting of trees in the right place, not the wrong place, and, in passing I would say that some of us would be delighted to see rural development boards set up in due course, guaranteeing the interests of agriculture and forestry.
    I know very well that in my own part of Scotland there is a very great shortage of land for planting timber, and I believe that this small Amendment would in fact assist in this way. One of the reasons why the Forestry Commission cannot get land is that it will not pay sufficiently high prices for it. If there were these
    1988
    grants available for extracting machinery, that would reduce the costs of extraction, reduce the costs of timber production, and, therefore, would enable the Forestry Commission to offer slightly higher prices for land and thus make it more readily available for planting.
    Mr. A. H. Macdonald: I am trying to following the hon. Member's argument, but he was speaking of people planting timber and saying that they were not the same people who take it out. In this case how can this Amendment assist them?
    Mr. Davidson: It is one continuous operation—is it not?—planting, growing, and extracting timber. Therefore, the final end product and its price is closely related to the original price of the land purchased for planting. It is the same with agriculture and it is a reasonable argument. The point has been made that 90 per cent. of our timber is imported, but I make it slightly more according to figures I have studied. I believe that the value is nearer £700 million than the £400 million mentioned by the right hon. Gentleman.
    Forestry is in every sense closely related to manufacturing industry and is therefore completely within the scope of the Bill. The point about pit props and the connection with coal has already been made and coal is specifically mentioned in the Bill. There is also a reference to furniture and
    "the making of any article;".
    No one can possibly dispute that paper-making is a manufacturing industry. Timber is important to building and the Bill specifically mentions the construction industry. I have looked at the Bill very carefully, for it is an interesting Measure, and I cannot possibly understand why forestry has been excluded.
    8.30 p.m.
    Mr. Marcus Worsley: I do not think that many of us on this side of the House were very optimistic, when we saw this Amendment, that the Government were likely to accept it. But I must say, with respect to the Minister of State, that I do not think that the words he used were those which would most encourage the private forestry industry. Perhaps in this context I should declare an interest, for I am a timber grower.

    1989
    The right hon. Gentleman said that this was not an industry that demanded the highest priority of attention from the Government. I think that he has used most ill-chosen words and I invite him to make it clear that it is part of Government policy to support the forestry industry. I hope that he will. What the Government do not always appreciate is the importance of confidence to an industry. A moment ago we had a debate on the hotel industry. What happened to that industry was a crisis of confidence in the Government's intention to support it. This resulted from an accumulation of different measures.
    There is a risk of something very similar happening in the timber industry. I am sure that the House will realise that the decision to plant a wood is immensely long term. There is no other industry where confidence matters more, for the simple reason that there is no prospect of a quick return from the planting of a tree. There is no other industry to which support over a long period is more important. It is most important for the Government therefore to measure their words in speaking about this industry. I hope that the right hon. Gentleman will show that the Government are behind it.
    Secondly, I believe that the Minister is wrong not only in the way he set it out but in what he said—that it is not an important industry at this moment in the context of the balance of payments. I shall not repeat the figures about imports and exports but will merely underline what has been said in terms of the balance of payments.
    The Amendment is concerned with increased efficiency of the industry. We have a series of grants, the most important of which is a grant for the planting of new forests. In other words, the emphasis on grants under the present system is entirely on the capital installation of new forests. What is needed in the emphasis in future is held towards the efficient extraction of existing forests. Assistance in this direction would be a direct and immediate assistance to the balance of payments.
    The existing grants are building up wealth for the future and that is fine, but the Amendment would assist extraction at the moment and enable timber to be got out more efficiently and therefore
    1990
    more cheaply. It would be of direct help to the balance of payments. Not only has the right hon. Gentleman put this point in a discouraging way but the point itself is wrong.
    In his concluding remarks, the right hon. Gentleman said something about the Government keeping this matter under review. I invite him to say whether that is just a form of words or whether he really means it and that it is indeed the Government's intention to look at the situation of the industry. This is not a party point. I can be as rude as he would like about the record of Conservative Governments in looking at this problem in a clear and coherent way. I ask for an undertaking, if we are not to have this Amendment, that the words of the right hon. Gentleman are not just a mere form but are seriously meant so that the part the industry can play in our balance of payments situation will be looked into in future.
    Mr. Paul Hawkins: I have been interested in forestry all my life and had a part in the most expensive extracting machinery during the war in getting timber out of German woods with a pick and shovel when I was a prisoner because we were allowed to extract only the roots of the trees and the stumps. I assure the right hon. Gentleman that that was a very expensive way and very hard work and that machinery is badly needed in our woodlands for extraction purposes.
    There is a large area of forestry in my constituency, Thetford Chase, probably one of our largest forests. It stretches from my constituency through South Norfolk. These woods were planted 30 or 40 years ago and now a very large programme of extraction is coming along. More and more machinery is needed for the area.
    As my hon. Friends have said, the industry has had little to thank any Government for over the past years. It needs a dose of confidence now if it is to go on with the cycle, so necessary in forestry, of planting and felling, which is such an enormously long-term business.
    If one puts a stop on any particular part of that cycle—which could happen if it were shown that the Government were not sympathetic to forestry—it has a bad effect upon the whole of this big

    1991
    industry, which could save a tremendous amount in imports. We still have large areas of land in this country which could well have been afforested and I believe that we could save an immense amount of money in growing our own timber.
    I, too, was disturbed by the words of the Minister of State in referring to agriculture and forestry as being rather second-rate to industry in the towns. He appeared to put manufacturing industry far above agriculture and forestry. Indeed, if he does not do anything else he should try and dispel that impression and I hope that he will.
    Mr. Darling: With the leave of the House, I should like to reply briefly to the criticisms of my observations and also to the case that has been put forward for accepting the Lords' Amendment.
    I agree entirely with the hon. Member for Norfolk, South-West (Mr. Hawkins) and the right hon. Member for Argyll (Mr. Noble) about the importance of agriculture and forestry. I do not think that I suggested that they were not important to the national economy. They are tremendously important. I was merely saying that after consultations with the other Government Departments concerned we have decided that it is far better to help forestry, in the way suggested in the Amendment, under other legislation than this Bill.
    I do not want to spell out the anomalies which would be created if we kept bringing additional industries, trades or processes into the provisions of the Bill when such industries or trades are excluded under the principles laid down in the Bill.
    Mr. Noble: Very much the same sort of remark was made in the other place. A noble Lord asked whether the Minister there was saying that the Government intended to bring in legislation to deal with this problem in another Bill, and the answer he received was, "No". If this is the Minister's answer, even if something may happen in three or four years' time he should make it clear that what he has in mind is in the future, and not something that will be included in the Agriculture Bill, or something of that sort.
    Mr. Darling: I have read the OFFICIAL REPORT of the debate in the
    1992
    other place. As the right hon. Gentleman said, the question was directed to the contents of the Agriculture Bill, which is at present going through the House. The answer is that it is not intended to satisfy the demand for an extra grant for forestry within the terms of that Bill, but, as I have already said, arrangements exist under present legislation—as the right hon. Gentleman knows far better than I do—for continuous reviews of the needs of forestry, and in the course of these reviews, in the not too far distant future, the Government intend to see whether additional assistance is needed.
    I thought that the hon. Member for Chelsea (Mr. Worsley) was going to speak for the timber growers of Chelsea when he began, but he went on to declare his own interest. I am sorry if I did not make myself clear. What I meant was that the national economy derives economic assistance from the timber industry in the long term. We obtain assistance in the long term from timber planting now, but in the short term we derive very little advantage, whereas assistance given to the extraction industry has an immediate benefit for the economy. The only quarrel between us is on the question of what legislation, and in what form assistance should be given.
    I was surprised when the hon. Member for Aberdeenshire, West (Mr. James Davidson) pursued the argument that we should give Government grants for the purpose of increasing the price to be paid by the Government to private land owners in order to obtain land for afforestation. This seemed to be a proposition that no Government would be likely to accept.
    Mr. James Davidson: I am sorry if I did not make my argument clear. If we reduce the costs of the extraction of timber we increase the profit made by the private growers of that timber and can, therefore, allow a higher price to be offered for the land which is purchased. One reason why the Forestry Commission cannot get land is that it is not offering a high enough price.
    Mr. Darling: It comes to the same thing in the end. If the hon. Member has read the OFFICIAL REPORT of our proceedings in Committee he will know that on more than one occasion it was pointed out that the purpose of investment grants is not to increase dividends paid to shareholders

    1993
    or to increase profits but to encourage people to invest more money in the machinery and equipment which is needed to increase the rate of productivity. We can argue these points on another occasion.
    8.45 p.m.
    I was intrigued by the arguments of the hon. Member for Barkston Ash (Mr. Alison) about pit props. He probably knows that the purpose of the Coal Board's modernisation schemes at the moment is to get rid of things like pit props. I see the argument, but the machinery and the equipment required at the sawmills, because this is a productive, manufacturing process, would, of course, attract investment grants. It ought to be made clear, and the right hon. Member for Argyll skated over this——
    Mr. Alison: The right hon. Gentleman appreciates, I am sure, that some of the preparation of pit props is not done in sawmills but in situ, in the forest. We want to be clear that machinery used in the forest in trimming and lopping, which may be interchangeable with the felling of trees, is, nevertheless, eligible.
    Mr. Darling: I see the point, but this is also a matter which we have discussed and considered carefully. The conclusion to which we came was that, for the activities which took place in the forest, the proper assistance that the Government gave should come under other legislation than this Bill.
    The right hon. Member for Argyll skated over the grants which are given for planting and replanting of trees, the management grants and the dedication schemes, some of which he was responsible for. At least, he had the job of administering them. Of course, the level of grants for planting and replanting is reviewed at least every three years under this legislation. The last review having been made in 1964, all this has to be reviewed next year. This is one of the points which was in our minds when we suggested that, under other legislation, some of the matters raised by hon. Members might receive the favourable consideration for which they are asking, but I can give no undertakings.
    Mr. Corfield: Surely we have now reached a situation in which mobile equipment which is moved into the forest to make gates and hurdles is making an article and is covered in the Bill, whereas if the materials are moved down to a much more efficient sawmill so that the process is carried out much more commercially, the equipment is not in the Bill. Is this not absurd?
    Mr. Darling: Not at all. We are going back to our earlier arguments. It would be a mistake to begin the Committee stage all over again.
    Question put, That the House doth disagree with the Lords in the said Amendment:—
    The House divided: Ayes 111, Noes 75.

    Division No. 173.]

    AYES

    [8.57 p.m.

    Allen, Scholefield

    Dobson, Ray

    Heffer, Eric S.

    Anderson, Donald

    Dunwoody, Mrs. Gwyneth (Exeter)

    Horner, John

    Archer, Peter

    Dunwoody, Dr. John (F'th & C'b'e)

    Houghton, Rt. Hn. Douglas

    Armstrong, Ernest

    Edwards, Robert (Bilston)

    Howarth, Harry (Wellingborough)

    Atkins, Ronald (Preston, N.)

    Ellis, John

    Hynd, John

    Atkinson, Norman (Tottenham)

    Ensor, David

    Jackson, Colin (B'h'se & Spenb'gh)

    Bacon, Rt. Hn. Alice

    Faulds, Andrew

    Janner, Sir Barnett

    Beaney, Alan

    Fitt, Gerald (Belfast, W.)

    Jay, Rt. Hn. Douglas

    Bonn, Rt. Hn. Anthony Wedgwood

    Fletcher, Raymond (Ilkeston)

    Jenkins, Hugh (Putney)

    Bishop, E. S.

    Floud, Bernard

    Jones, Dan (Burnley)

    Blackburn, F.

    Forrester, John

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

    Booth, Albert

    Fowler, Gerry

    Judd, Frank

    Bowden, Rt. Hn. Herbert

    Fraser, John (Norwood)

    Kenyon, Clifford

    Braddock, Mrs. E. M.

    Freeson, Reginald

    Kerr, Russell (Feltham)

    Brooks, Edwin

    Garrett, W. E.

    Lawson, George

    Brown, R. W. (Shoreditch & F'bury)

    Gray, Dr. Hugh (Yarmouth)

    Lee, John (Reading)

    Coleman, Donald

    Gregory, Arnold

    Lyons, Edward (Bradford, E.)

    Concannon, J. D.

    Griffiths, David (Rother Valley)

    McBride, Neil

    Crawshaw, Richard

    Hamling, William

    MacDermot, Niall

    Crossman, Rt. Hn. Richard

    Hannan, William

    Macdonald, A. H.

    Darling, Rt. Hn. George

    Harper, Joseph

    McKay, Mrs. Margaret

    Davidson, Arthur (Accrington)

    Harrison, Walter (Wakefield)

    McMillan, Tom (Glasgow, C.)

    Davies, Robert (Cambridge)

    Haseldine, Norman

    McNamara, J. Kevin

    Dickens, James

    Hazell, Bert

    MacPherson, Malcolm

    Marquand, David

    Richard, Ivor

    Steele, Thomas (Dunbartonshire, W.)

    Mikardo, Ian

    Rodgers, William (Stockton)

    Tinn, James

    Millar, Bruce

    Roebuck, Roy

    Urwin, T. W.

    Mitchell, R. C. (S'th'pton, Test)

    Ross, Rt. Hn. William

    Wainwright, Edwin (Dearne Valley)

    Molloy, William

    Shore, Peter (Stepney)

    Walker, Harold (Doncaster)

    Moyle, Roland

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

    Watkins, David (Consett)

    Murray, Albert

    Silkin, Rt. Hn. John (Deptford)

    Whitaker, Ben

    Newens, Stan

    Silkin, S. C. (Dulwich)

    Whitlock, William

    O'Malley, Brian

    Silverman, Julius (Aston)

    Willis, George (Edinburgh, E.)

    Orme, Stanley

    Silverman, Sydney (Nelson)

    Wilson, Rt. Hn. Harold (Huyton)

    Owen, Dr. David (Plymouth, S'tn)

    Slater, Joseph

    Winnick, David

    Page, Derek (King's Lynn)

    Small, William

    Redhead, Edward

    Snow, Julian

    TELLERS FOR THE AYES:

    Rhodes, Geoffrey

    Spriggs, Leslie

    Mr. Fitch and

    Mr. Ioan L. Evans.

    NOES

    Alison, Michael (Barkston Ash)

    Goodnew, Victor

    Osborn, John (Hallam)

    Alison, James (Hemel Hempstead)

    Gurden, Harold

    Page, Graham (Crosby)

    Barber, Rt. Hn. Anthony

    Hall-Davis, A. G. F.

    Pardoe, J.

    Batsford, Brian

    Hawkins, Paul

    Peel, John

    Bessell, Peter

    Heald, Rt. Hn. Sir Lionel

    Percival, Ian

    Biffen, John

    Heseltine, Michael

    Price, David (Eastleigh)

    Blaker, Peter

    Holland, Philip

    Pym, Francis

    Body, R.

    Hornby, Richard

    Ronton, Rt. Hn. Sir David

    Boyd-Carpenter, Rt. Hn. J.

    Howell, David (Guildford)

    Russell, Sir Ronald

    Bullus, Sir Eric

    Hunt, John

    Scott, Nicholas

    Clegg, Walter

    King, Evelyn (Dorset, S.)

    Sharples, Richard

    Corfield, F. V.

    Kirk, Peter

    Steel, David (Roxburgh)

    Craddock, Sir Beresford (Spelthorne)

    Legge-Bourke, Sir Harry

    Thorpe, Jeremy

    Crouch, D. L.

    Lewis, Kenneth (Rutland)

    Vaughan-Morgan, Rt. Hn. Sir John

    Cunningham, Sir Knox

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

    Weatherill, Bernard

    Davidson, James (Aberdeenshire, W.)

    Longden, Gilbert

    Webster, David

    Dean, Paul (Somerset, N.)

    Loveys, W. H.

    Wells, John (Maidstone)

    Eden, Sir John

    Lubbock, Eric

    Whitelaw, William

    Errington, Sir Eric

    Maxwell-Hyslop, R. J.

    Wills, Sir Gerald (Bridgwater)

    Eyre, Reginald

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

    Wilson, Geoffrey (Truro)

    Fortescue, Tim

    Mitchell, David (Basingstoke)

    Wolrige-Gordon, Patrick

    Foster, Sir John

    More, Jasper

    Worsley, Marcus

    Giles, Rear-Adm. Morgan

    Morgan, W. G. (Denbigh)

    Younger, Hn. George

    Glover, Sir Douglas

    Noble, Rt. Hn. Michael

    Glyn, Sir Richard

    Nott, John

    TELLERS FOR THE NOES:

    Goodhart, Philip

    Orr-Ewing, Sir Ian

    Mr. R. W. Elliott and

    Mr. Grant.

    Committee appointed to draw up Reason to be assigned to the Lords for disagreeing to their Amendments to the Bill: Mr. Barber, Mr. Corfield, Mr. Darling, Mr. Jay and Mr. Dan Jones: Three to be the quorum.—[Mr. Jay.]
    To withdraw immediately.
    Later—
    Reason for disagreeing to the Lords Amendments reported and agreed to; to be communicated to the Lords.

  SCOTTISH GAS BOARD (REVALUATION)
  8.58 p.m.
  The Under-Secretary of State for Scotland (Mr. Bruce Millan): I beg to move,
  That the Valuation (Scottish Gas Board) (Scotland) Order, 1966, a copy of which was laid before this House on 20th July, be approved.
  Perhaps it would be for the convenience of the House if I said something about the necessity for the Order. As Scottish hon. Members, at least, will have noticed, this is the year of revaluation in Scotland. The purpose of the Order is to bring the effect of revaluation to bear on the Scottish Gas Board. If the Order were not approved, the effect of revaluation would be to lower the Board's rate payments relative to other ratepayers, which would obviously be unfair to ratepayers as a whole. The Order is brought forward now because it is required by September, so that it can have effect on the rate payments to be made by the Board in the current year.
  The Scottish Gas Board is not valued for rating purposes in the normal way by the local assessor. Since 1963–64 the Board has had a basic rateable value of approximately £616,000, which was laid down by the Local Government (Financial Provisions) (Scotland) Act, 1963, in place of the valuations which had applied up to that time, and which were based on the revenue principle.
  The Assessor of Public Undertakings is responsible, under the Valuation and Rating (Scotland) Act, 1956, for the annual adjustment of this basic value by reference to changes in the output of gas, and he is also responsible for the apportionment of the rateable value between the rating areas in which gas is manufactured or supplied. Section 12 of the 1963 Act also provides that if it appears to the Secretary of State that by reason of any substantial change of circumstances it is necessary for him to do so he may vary the basic rateable value. He does this after consultation with the Gas Board, the Scottish Valuation Advisory Council and the local authority associations.
  The general revaluation which has just taken place in Scotland constitutes a sufficient change of circumstances to
  1998
  make necessary the Order which increases the basic rateable value from approximately £616,000 to £790,169. This figure is proportional to the average increase in total valuation, as brought out in the statutory estimates of the effect of revaluation, which the assessors have submitted to my right hon. Friend the Secretary of State for Scotland. The effect of the change in the basic valuation of the Scottish Gas Board will be to put it in broadly the same position relative to other ratepayers as it was in 1965–66.
  I hope that with that short explanation the House will be willing to approve the Order.
  9.2 p.m.
  Mr. Michael Noble: Earlier in the Session the temptation to talk for several hours on Scottish gas might have been difficult to resist, but at this time I do not believe that the House desires a very long discussion on this important topic. We agree with the Under-Secretary of State's argument that when everything else in Scotland is being revalued the Scottish Gas Board should suffer the same fate, because in these days revaluation always seems to be upwards.
  I have one or two simple questions for the Under-Secretary of State. I think that the Secretary of State is right to take this action, but there was recently a 13 per cent. increase in the cost of gas in Scotland, and although this is the revaluation year in Scotland it is two years off in England. Will this mean that for industrialists coming to Scotland, who are already paying more for their gas, the cost will be even greater in Scotland, and therefore the attraction of Scotland will be less?
  My second point, which is of some importance, is that, if I heard the Under-Secretary of State correctly, the increase in the valuation of the Gas Board's assets has been the average of the increase of the valuation in Scotland. Is this fair? The increases that have been drawn to my attention in commercial and industrial concerns, which is after all what the Gas Board is, have been enormously above the figure of about 25 to 30 per cent. which has been given here. Is it fair that the Gas Board should be treated in this respect very much more lightly than other commercial concerns, which is what seems

  1999
  to have happened? May we not be in danger of running into the same kind of problem as already exists in Glasgow, where industrial valuations have been greatly increased and industry is finding it difficult to pay the rates that are likely to be demanded. I know that appeals are pending, but I imagine that there will be no appeal from this valuation. Would it not be fairer that the Gas Board's increases should be related to industrial valuation and not an average between domestic and industrial valuation? If that were so, what would be the valuation?
  Mr. Millan: The right hon. Gentleman's first point was whether this increase in valuation would increase the amount of rates which the Gas Board would have to pay and therefore, perhaps, involve an increase in the price of gas. The increase which the Board will have to pay will be only the average increase, not in rateable value, but in rates burden, which will be borne, by and large, by ratepayers in Scotland as a whole. The increase in basic valuation is exactly proportionate to the general increase in valuations over the whole of Scotland and therefore if the rate burden between the two years were the same there would be no increase in the burden on the Gas Board.
  As we know, the rate burden between the two years is not the same. My point is that the increase in rates payable by the Gas Board will be, in terms of real rate burden as distinct from valuation, approximately the average borne by ratepayers in Scotland as a whole. It may not be exactly proportionate, because there is the need to split the basic rateable valuation between the different rateable authorities and therefore what the Board eventually pays is made up of individual rate burdens coming to a cumulative total. However, the general effect will be as I have stated it. By itself this will not affect the burden of the Gas Board in such a way that it would affect the price of gas.
  Secondly, the right hon. Gentleman asked whether the sort of calculation made here is fair and whether the Gas Board should not be treated on the same basis in terms of increase of rateable value as industrial and commercial concerns. One could argue a number of
  2000
  different bases of valuation for the Gas Board. The thing on which virtually everyone agreed before the 1963 Act was that the revenue principle which determined Gas Board valuation was unsatisfactory, and it may even have been during the right hon. Gentleman's term at the Scottish Office that the change to the present system was made.
  It was provided that when the basic valuation was to be altered in the way provided by this Order there should be this process of consultation. As I have said, the Order was subject to consultation with the Gas Board, the Scottish Valuation Advisory Council and the local authority associations. It is up to these bodies to make their representations to the Secretary of State about the way in which changes in the basic valuation should be made.
  I do not think that one can compare the Gas Board with ordinary industrial and commercial concerns. It is because such a comparison would be unfair that we need special arrangements for the valuation of the Board. There is no hypothetical rent. None of the standards normally applied by assessors in determining rateable values can be applied in any real sense to the valuation of the Gas Board. We have the special arrangements and, on the whole, they work well in holding the burden between the Gas Board, the local authorities and the interests of ratepayers generally. The normal process has been gone through in this instance, and I therefore hope that the House will approve this Order.
  Question put and agreed to.
  Resolved
  That the Valuation (Scottish Gas Board) (Scotland) Order, 1966, a copy of which was laid before this House on 20th July, be approved.

  LAND REGISTRATION [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session amending the Land Registration Act 1925 it is expedient to authorise any increase attributable to that Act in the sums payable out of the Consolidated Fund under section 5 of the Land Registration Act 1936 into the Insurance Fund under the said Act of 1925.
  Resolution agreed to.

  BORSTAL, GAYNES HALL
  Motion made and Question proposed, That this House do now adjourn.—[Mr. loan L. Evans.]
  9.10 p.m.
  Sir David Renton: I am fortunate, at this early hour, in being able to refer to the Gaynes Hall open borstal institution in the parish of Great Staughton, in my constituency, which has been an open borstal for about 20 years. As a former Home Office Minister, I am not against the principle of having some open borstals, and this evening my aim is exploratory rather than critical. But if we are to have open borstals I suggest that certain conditions should be observed.
  The first of those conditions is that those lads who are likely to want to escape should not be sent to an open borstal. The second is that there should be adequate arrangements to check the whereabouts of the lads who are at the borstal. The third is that, if the lads do escape, they should not normally be returned to open conditions. They should know that that is so and, therefore, this should be one of the sanctions to prevent their escaping. I hope that no reasonable person familiar with this problem would dispute those conditions.
  During its 20 years of existence, this borstal has been used mainly for those lads considered to be not only suitable for open borstals, but the most promising types for training and reform. As a result, Gaynes Hall probably has more advanced training facilities than any other borstal in the country.
  The success rate used to be fairly high. I do not know what it is now, but I should like to know what it has been in the last year or two. The absconding rate at Gaynes Hall throughout the 20 years of its existence has varied considerably, but in the past 18 months it has been very bad indeed. In 1965, out of a total of 358 lads there during the year—that is, taking those who are there at the beginning of the year and those who came in during the year—no fewer than 101 absconded. The absconding rate, therefore, was 28 per cent. During the first six months of this year, the position was not quite so bad, but bad enough. Out of 276 lads there in that
  2002
  period, 49 absconded during the first six months. That is an absconding rate of 17·6 per cent.
  If we take the total of 150 who absconded during the 18 months I have described, we find that 79 of them were sent back to open conditions at Gaynes Hall. In addition, 11 were still at large. It is, therefore, only the balance of 60 who were apparently returned to conditions of security instead of to open conditions.
  I am grateful to the right hon. Lady the Minister of State for coming here this evening. I am thankful that I have not kept her, as once was feared, into the early hours of the morning, but, as it is, we are given a little more time to consider this very important matter. I should be glad if she could tell me how many absconded in July this year.
  Many of those who have absconded in the past have committed indictable offences, including burglary, house-breaking, stealing cars and taking cars without the consent of their owners. Most of those offences were committed in my constituency and have given rise to much anxiety, and indeed indignation, locally. Local anxieties reached their climax when, on 20th April, a lad absconded and raped a married woman in the morning while her husband was away at work. The lad concerned pleaded guilty to that offence at the assizes held a month or so later and is now in prison. As this was the only case of this kind in 20 years I mention it only because it greatly increased the long-felt anxieties of people living in the neighbourhood and brought their fears to a climax.
  Since then, I have twice seen the Home Secretary about the question of abscondings from this borstal and action has already been taken with a view to improving the situation locally. For example, there is now a police officer stationed there and living in the village of Great Stranghton nearby. I understand that the Home Secretary hopes to arrange for one or two local residents to be on the board of visitors. That will be a good thing and will increase the liaison between the governor and his staff and the local community.
  I have been told that security arrangements for ensuring that the lads are present and have not absconded have been reviewed and improved, but I should be

  2003
  grateful if the Minister of State could enlighten me on the following matters. What is being done to improve the security arrangements? What steps are being taken to ensure that the high standards of selection which prevailed in the past will be carried on in future? Thirdly—and this a relatively new problem in relation to Gaynes Hall—what does the Home Secretary propose to do about the growing problem caused by the proximity of this borstal to Grafham Water, which was opened by His Royal Highness the Duke of Edinburgh last month?
  This is not only the largest artificial reservoir in the country but it is rapidly becoming an important pleasure resort. The gates of Gaynes Hall are only about a quarter of a mile from the shores of Grafham Water. Grafham Water is already attracting over 1,000 cars and over 3,000 people who go there, and I am glad they do go to enjoy themselves, on Saturdays and Sundays in the summer. I realise that Grafham Water came many years after the borstal was established, but now that both are so close together the security risk is obviously increased. I do not wish publicly to go into details about this, for reasons which the House will apperciate, but I would be glad if the Home Office could bear in mind this factor and if the right hon. Lady could give us her views about it.
  I hope that I have said enough to enable the right hon. Lady to give me a reply this evening which will reassure my constituents about the matters which I have raised.
  9.20 p.m.
  The Minister of State, Home Office (Miss Alice Bacon): The right hon. and learned Member for Huntingdonshire (Sir D. Renton) has raised a very important question this evening. As he was a Home Office Minister and once occupied my position, I know that he appreciates the difficulties attendant upon prisons and borstals, keeping large numbers of people together, and open prisons and borstals. I shall deal, first, with the general subject of open borstals so as to set the background against which we must consider Gaynes Hall.
  There are 12 open borstals in the country for about 2,000 boys. The functions
  2004
  of all borstals is to train these boys over a reasonable period to lead a useful, honest life and to change the attitude of mind which led the boy to get into trouble. It is the job of borstal to try to lead the boy to want to live a better life and to fit him to be able to maintain it once he has started. This, I believe, can best be done in conditions as nearly free as the freedom to which he must eventually return. We must help him, if possible, to learn to use this freedom.
  Clearly, certain boys, especially those with backgrounds of violence, serious mental or emotional disturbances, and sexual offences, ought not to go to an open borstal, and boys of that type are never sent there. For them, training is more difficult. It is true that there are fewer escapes from closed borstals than from open establishments, but there are also fewer long-term successes, as I am sure the right hon. and learned Gentleman appreciates. Boys who get the opportunity to go to an open borstal get a better training and a better chance of ultimate success. For this reason, we feel that as many as possible should go to open borstal.
  The second matter which I would like to discuss is the method of selection of boys to go to open borstals. This is done, as the right hon. and learned Gentleman will know, at an allocation centre. There are two of these, one in Manchester and one in London. In both, the boys are received as soon as possible after they have been sentenced. They stay in the allocation centre for at least two weeks while their records, health, educational standards and family background are considered. They are then allocated to the borstal whose training seems most likely to meet their needs.
  The boys sent to Gaynes Hall are, in general, in the 18 to 20 age group, healthy and of good intelligence. They are the sort of boys who have the best chance of succeeding in their borstal training. Gaynes Hall has one of the highest success rates in the country, more than 50 per cent., although the right hon. and learned Gentleman will appreciate that the measurement of success rate is not exact.
  I would now like to say a little about the conditions at Gaynes Hall. It is an open borstal, so that it has no perimeter wall, no bars and no bolts. The boys

  2005
  live in single-storey brick buildings and the establishment is surrounded by its own farmland and lies in the rural area of Huntingdonshire.
  One of the prime needs of any establishment for young people, good or bad sick or well, is space; and open borstals, containing the concentrated energies of anything up to 200 young men, do need plenty of space. They also need work, preferably work which is both constructive and fairly heavy. For these reasons, most are in the country and have land enough for some farming and the like to be learnt. Gaynes Hall has its own gardens supplying its kitchens and selling salad crops locally, its cereal and hay, a pig-breeding unit, and beef cattle.
  The boys learn and perform all the tasks involved and do them well enough to put up creditable performances in the county show and county rally. There are five vocational training courses for groups of 12 to 15 at a time, two learning motor mechanics, one building, one painting and decorating and one precision-instrument making. In addition, there is a smaller group doing baking. The borstal has the services of a tutor organiser, and of a number of teachers from the local education authority who come in in the evenings.
  Boys attend the local church for Communion and special services and have assisted in archaeological digs, run fund-raising stalls for an orphanage, and taken part in other useful work for the community. I have mentioned already that they enter for the county show, and have done well in it. They also have a branch of the Young Farmers' Club and visit other clubs in the district. They also organised the county eliminator for the Royal Show Tractor Driving Competition last year.
  A team was entered for the County Youth Public Speaking Contest and gained second place. Boys play cricket, rugby, soccer and five-a-side matches locally, and teams enter national canoeing events. They are keen members of a weight training and weight lifting club and they won 75 certificates in 1965 from the British Amateur Weight Lifting Association. All these activities are good in themselves but, more important, they let the community see and know the boys and prevent the boys from
  2006
  feeling hopelessly rejected before their adult life is begun.
  The most important element of all is that they give a boy a foothold in the decent law-abiding community when he leaves the borstal. There will always be a risk of abscondings in open borstals, and because of the risk we have made special arrangements to pay compensation for material losses that are not covered by insurance, to people living in the immediate vicinity. This I readily admit, does not in any way compensate them for the alarm, anxiety and vexation. But we do try to take every possible step to protect the outside community. Within the borstal itself there are many ways of keeping the boys under supervision and of estimating their progress before they are judged ready for activities in which they would have the best opportunities for absconding, and of keeping check of their whereabouts.
  There are nine roll calls a day, so that the absence of a boy comes to notice very quickly. We have the very valuable and watchful assistance of the police and, as a result of discussions with the right hon. and learned Gentleman, extra mobile patrols are now maintained. In addition the boys have a full and busy day. Absconding, nevertheless, occurs and a statistical table of these was published as a Written Answer in reply to the right hon. and learned Member on 7th July. As that Answer showed, there were 101 abscondings in 1965 and there have been 62 so far this year.
  Seen as a proportion of approximately 160 boys, I know that it is a disturbingly large number. It must be said that this does not fairly represent the risk. There are 160 boys in Gaynes Hall every day of the year.
  They are not always the same boys. Indeed, as I hope to show in a few minutes, absconding is largely restricted to one group of boys. But the risk is there for every boy for 24 hours a day every day. Seen in this light, although every absconding is a sort of failure, the total is less formidable.
  As to the group most at risk and the group among whom there are most abscondees, 41 out of the 62 abscondings this year occurred within the first four weeks of the boys' arrival at Gaynes Hall and 21 of them within the first week of

  2007
  arrival there. There remain the other later ones, and these may be more serious.
  The right hon. and learned Gentleman mentioned one particular case of an absconding which resulted in a youth being convicted of the rape of a local woman. As the right hon. and learned Gentleman knows, it is 20 years since any similar occurrence arose, although this does not make it any less distressing for the woman concerned and her family. I entirely share the concern which the right hon. and learned Gentleman has expressed at this distressing occurrence and I join him in expressing my sympathy and that of my right hon. Friend the Home Secretary for the victim and her family. I do not think that anyone would wish deliberately to give this case any more unnecessary publicity, which can only cause further harm to those most deeply concerned.
  This was, for the youth concerned, his first period of borstal training, although he had previous convictions as a juvenile. I want to make it perfectly clear that the boy had no previous history of violence of any kind, nor of any sexual offences. He was undergoing borstal training after conviction for simple larceny. This offence was in line with those he had committed previously. I do not think that any fault could be attached to the allocation authorities in this case.
  There are many reasons for a boy to abscond, as many reasons as there are boys. Some are harmless, even pathetic, and may include home difficulties, anxiety about a girl friend, or a quarrel with another boy in the borstal. Others are more serious, in that they represent deliberate attempts to escape and remain unlawfully free, or "on the run".
  The former often cause little trouble. The boy may not get more than a few yards away or may himself return quite soon. At worst he will go home to try to sort out his trouble and usually is soon recovered. In these cases the governor might properly be willing to keep the boy in an open borstal. Whether he does so or not depends on the decision of an assistant director of the Prison Service, who will determine, in the light of the circumstances, whether the boy will remain in an open borstal or be sent to a closed establishment.
  2008
  I can assure the House that absconding is never taken lightly and that a serious absconding will result in a boy's losing his place in an open borstal. It will also result in the boy's being sent for a period to the corrective training centre at Reading before his reallocation to a closed borstal. These facts are well known to the boys and are to some extent a deterrent.
  There are, as the right hon. and learned Gentleman has told the House, changes coming to this area. In particular, a lido and recreation centre are planned for Grafham Water.
  Sir D. Renton: It is already in existence. There is a sailing club and a fishing club. Everything is already going on there, except that swimming is not yet allowed. I think that it will be one day.
  Miss Bacon: I thank the right hon. and learned Gentleman for his intervention. He knows the area, and I do not. There is the recreation centre and the lido at Grafham Water.
  The right hon. and learned Gentleman suggests that in the face of all this, Gaynes Hall should no longer remain an open borstal. I cannot accept this. The borstal cannot be closed as if it were a door. Even if we were to build walls around it, or put bars on the windows or bolts on the doors, the boys would have to go on working outside the walls. The alternatives are for it to remain there as an open borstal or to close down Gaynes Hall as a borstal altogether.
  Many hon. Members are already aware of the gravity of the present borstal situation. We simply do not have enough borstal places for the boys who are coming from the courts. The number of committtals has risen considerably over a long period. The closed borstals are full and the open borstals are coming under pressure. The allocation centres have, from time to time, to retain boys in a sort of queue waiting to go to borstals.
  Steps have been taken to improve the situation as far as possible. The second allocation centre, to which I have referred, was set up this spring to relieve the congestion at the London centre. In addition, we have recently turned a former prison at Stoke Heath into a borstal because of the shortage of borstal accommodation. The borstal population is

  2009
  nearly 5,500, however, and it would be idle to suggest that we could possibly afford to give up a borstal at the present time. Gaynes Hall must, therefore, remain as a borstal, and for the reasons which I have given it must remain as an open borstal.
  The boys at all borstals are encouraged within their limits to keep themselves in touch with the world to which they are to return. In a closed borstal, opportunities are limited and more must be achieved by encouraging the outside world to visit them rather than by sending them to it. The essence of an open borstal, however, is its ability to diminish the barriers, and at Gaynes Hall the boys participate in the life of the community as much as possible.
  I have already mentioned all the activities at Gaynes Hall. I hope that I have shown that no boy need be driven back to lawbreaking by loneliness or boredom. The majority of inmates come from towns and cities and will return to them and must, therefore, come to terms with them. If our training borstals can
  2010
  help boys to do this, they will not altogether have failed.
  Sir D. Renton: Before the right hon. Lady concludes, I wonder whether she would allow me to correct one thing? She accused me of saying that I wanted Gaynes Hall to become a closed borstal. I did not do so. My wish was to find out what the right hon. Lady and the Home Secretary had in mind in view of the new development at Grafham Water. The right hon. Lady has explained the position carefully, but I should not like it to go on record that I had made the suggestion which the right hon. Lady said I had made, but did not make.
  Miss Bacon: I apologise to the right hon. and learned Gentleman. Later in my speech I thought that I had misinterpreted what he said. Perhaps I should have said that some people, but not the right hon. and learned Gentleman, thought that it ought to have been a closed borstal.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes to Ten o'clock.

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

COST OF PRISON FOOD
11.5 a.m.
LORD ROYLE: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The question was as follows:
To ask Her Majesty's Government what was the average weekly expenditure on food per prisoner in H.M. Prisons in the years 1964 and 1965 and in the first six months of 1966.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, figures are available only for financial years. In 1963–64 the average weekly expenditure per prisoner in England and Wales was 14s. 11d. including the estimated value, at growers' prices, of food produced on prison service farms. The corresponding figure for 1964–65 was 17s. Figures for 1965–66 are not yet available.
LORD ROYLE: My Lords, I thank my noble friend for that Answer. I wonder whether he is satisfied that the increase in the amounts is due to more than increases in food prices. Is he satisfied that the quality has improved as well as the prices? It may be small wonder that we hear of all sorts of troubles in prisons because of the quality of the food. May I ask my noble friend whether the Home Office have anything in mind for the future about improving these figures, so that prisoners may be fed much better than they are at the moment?
LORD STONHAM: My Lords, the difference of 2s. 1d. between the two years is partly accounted for by an increase of 9d., from 4d. to 1s. 1d. per prisoner per week in the cash allowance for extra items of food. The remainder of the difference is represented by the increases of the cost of food. As I believe my noble friend will be aware, the food expenditure is
1760
based on ration scales. I am satisfied that the ration scales provide sufficient bulk and calories, but I am certainly not satisfied that there is sufficient variety in the diet. On my many prison visits testing the meals I find that in many cases they are excellent, thanks to the efforts and skill of the cooks and the catering staff, and there has been an improvement. But a little more money would enable us to provide a better diet, and we are most anxious to do so; the present climate, however, is hardly the one in which to ask or press for a little more money.
LORD ROYLE: My Lords, I thank my noble friend.

PRISON SENTENCES
11.8 a.m.
LORD ROYLE: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can now give the figures for 1965 of persons sentenced to imprisonment for:—

(a) Drunkenness,

(b) First Offences,

(c)Non-payment of fines.]

LORD STONHAM: My Lords, during 1965, 802 persons were received into prison in England and Wales under sentence of imprisonment for drunkenness without the option of a fine. A total of 12,030 were received in default of payment of fines: these included 4,144whose fine had been for drunkenness. The statistics of persons received under sentence of imprisonment for first offences in 1965 are not yet available. The 1964 figure was 6,753. I will send the 1965 figure to my noble friend as soon as possible.
LORD ROYLE: My Lords, I am much obliged to my noble friend. Is he aware that the figures he has just given are not a great improvement on the figures which he gave in winding up a debate on the White Paper on the Adult Offender? While I should be one of the last persons to suggest that magisterial discretion should be interfered with, I wonder whether the Home Office would consider sending some form of advice to

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magistrates to show them what a large percentage of these offenders occupy prison cells. Has the time not come now when we should reduce these figures quite considerably, and so relieve the pressure so far as the prison population is concerned?
LORD STONHAM: My Lords, I agree with my noble friend that these figures are not an improvement on those for the previous year. In fact, so far as fining offenders is concerned, they are worse, because the number has increased by some 2,000. I entirely agree with him that for most of these people prison is worse than useless. But with regard to giving advice to magistrates, my noble friend's speech in the debate which he introduced recently was in fact virtually a blueprint for action in these matters; and when the Criminal Justice Bill is introduced in the autumn he will find that in this respect we are doing much more than just giving advice to magistrates.

PLEASURE BOAT SAFETY REGULATIONS
11.12 a.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the two last disasters to pleasure craft, they are satisfied that the existing regulations and licences that apply to such craft are adequate.]
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD RHODES): My Lords, Her Majesty's Government have no reason to think that there is any widespread infringement of the relevant provisions of the Merchant Shipping Acts. These provisions require any ship carrying more than twelve passengers to have a passenger certificate issued by the Board of Trade after a survey by one of the Board's surveyors. The Board of Trade have taken urgent action to bring the provisions of the law to the attention of the police, local authorities, harbour masters and the public itself, and to invite their cooperation. I am
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sure noble Lords will join me in expressing sympathy to those bereaved by the recent disasters.
VISCOUNT MASSEREENE AND FERRARD: My Lords, while thanking the noble Lord for that Answer, might I ask him if he would bring to the attention of the Board of Trade the fact that there should be some legally enforceable check on the competence of crews? Further, might I ask him whether the Government would give precise instructions to local authorities as to their powers in relation to safety regulations governing pleasure craft?
LORD RHODES: My Lords, I thank the noble Viscount for his constructive suggestion. The answer to his first question is, Yes, I will. The answer to his second question is that the local authorities themselves can take powers to license craft carrying fewer than twelve passengers. But I take note of what the noble Viscount has said and will bring his remarks to the attention of the Board of Trade. We will do whatever we can to confirm the position.
VISCOUNT MASSEREENE AND FERRARD: My Lords, while thanking the noble Lord very much for that further reply, might I point out that there appears to be some confusion among local authorities—
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, the noble Viscount must ask a question. He must not point things out.
VISCOUNT MASSEREENE AND FERRARD: My Lords, might I ask the noble Lord whether he is aware that there would appear to be some confusion among local authorities as to their powers of control in relation to these craft, and could the position he made more precise?
LORD RHODES: My Lords, it could be that attention is directed to the sort of power they can take. I take the point.
VISCOUNT ST. DAVIDS: My Lords, will the noble Lord not agree that, although the Steam 5 regulations and similar regulations governing pleasure craft carrying more than twelve passengers are indeed careful and thorough regulations, their enforcement is distinctly

1763
patchy, and that regulating the capacity of their crews is, except in very limited localities, actually non-existent?
LORD RHODES: My Lords, that may be a valid criticism. I would point out to the noble Lord that the shortage of surveyors is acute, and it is an immense task for surveyors to cover a very wide area, especially in holiday times when there is pressure to take advantage of the season.

ABERSTWYTH—CARMARTHEN RAIL SERVICE
11.17 a.m.
LORD MERRIVALE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the Railways Board have considered operating the Aberstwyth—Carmarthen line on the basis of a thrice-daily express diesel service: whether they do not consider that a considerable saving in operating costs could thus be effected compared with past deficits, and therefore whether they would be willing to have the line costed in the same way as the Central Wales route; and finally whether they would not agree that a fast service would attract more custom.]
THE MINISTERWITHOUT PORTFOLIO (LORD CHAMPION): My Lords, the Railways Board were given consent to the withdrawal of passenger services from this line on September 10, 1964. Any question of the restoration of services will be a matter for the Board to consider in the light of their commercial judgment. My right honourable friend the Minister of Transport doubts, however, whether any possible scheme of economy could so reduce the heavy loss sustained by the service as to make a reopening justifiable.
LORD MERRIVALE: My Lords, I would thank the noble Lord for that reply, but in view of the investigations planned in the Government White Paper, Transport Policy, particularly in paragraphs 29 to 32, would the noble Lord not agree that the Carmarthen—Aberystwyth
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line could be specially selected for costing on the basis of operating in the same way as the Central Wales line, as there is in that area such peristent and widespread opposition to the present position?
LORD CHAMPION: My Lords, I think that any decision on this matter must be a matter for the Board. What happened as a result of this closure is that there has been a saving of over £100,000 per annum, and if operating costs were halved and traffic doubled the losses would still be £40,000 perannum. On the point whether there ought to be costing such as the noble Lord suggested, that is a question which my honourable friend will consider in co-operation with the Board.
LORD MERRIVALE: My Lords, I am grateful to the noble Lord for that further reply, but could I ask him whether he would not agree that the social value of this line is without question? Is it not important that justice should appear to be done, and that therefore a decision should be taken in the light of all relevant costing?
LORDCHAMPION: My Lords, we want to see that justice is done. The last Minister of Transport in the Conservative Administration gave sanction for this closure. If I remember rightly, he caused express buses to be run to and from the points mentioned in the noble Lord's Question. Although they are nearly as quick as trains, they are not greatly used.
LORD MERRIVALE: Yes, but is it not correct that in effect the average fares were around 15s.? Does that not denote a demand for an express service rather than a limited stopping service? Therefore does not the noble Lord think that an express rail service would attract greater custom, and cut down journey time from around 2½ hours to 1½ hours?
LORD CHAMPION: My Lords, I really do not think that anything that is done in this connection is going to save this particular bit of line for passenger services. But I must again emphasise the fact that the Minister of Transport has no responsibility for day-to-day management, and this is a matter in regard to which the Board have a duty.

BUSINESS
LORD SHEPHERD: My Lords, the House may like to know, for its convenience, that it is hoped to adjourn at a suitable moment close to 1 o'clock. In view of the large number of noble Lords present today, and the recognised limited accommodation in our Dining Room, I wonder whether noble Lords would stagger their presence in the Dining Room; I am sure that that would make matters a great deal easier for all.
At a suitable moment after 3.30 p.m., my noble and learned friend the Lord Chancellor will be making a Statement on the Royal Commission for Assize and Quarter Sessions; and my noble friend Lord Rhodes will be making a second Statement, on the British National Export Council.

PRICES AND INCOMES BILL
11.22 a.m.
Brought from the Commons yesterday and printed pursuant to Standing Order No. 45; read 1a.
Then, Standing Order No. 41 having been suspended (pursuant to the Resoluof August 1):
THE EARL OF LONGFORD: My Lords, I beg to move that this Bill be now read a second time. On August 3 we had a full debate on all aspects of prices and incomes, and we were able to take into account the various White Papers, and also the main details of the Bill which is now before the House. I think it was generally agreed that we should take the Second Reading today very shortly, leaving discussion of all the main aspects of the Bill to the Committee stage. The number and character of the Amendments indicate that full opportunities will arise.
Perhaps, without causing embarrassment, I may be allowed to express appreciation of noble Lords having tabled their Amendments so promptly. This will enable us, I hope and believe, to have an adequate Committee stage. We in the Government are always anxious, as I think the House is aware, to provide full opportunities for discussion, and we all, on this side of the House and I think elsewhere, are grateful to the noble Lord, Lord Conesford, for the tribute he paid to my noble friend
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Lord Shepherd the other day, which was most gracefully delivered and gratefully received. I have no doubt that my noble friend Lord Shepherd would wish to share that tribute with other sections of that mysterious body known as "the usual channels".
The House will also be very greatly indebted for the skill and devotion of the printers, who have achieved a print of a Bill which only passed the House of Commons at 10 p.m. last night, together with a Marshalled List of Amendments. Without their skill and energy, which we are rather apt perhaps to take for granted, we should not be in a position to consider the Bill today. I should like also to pay tribute to the great ingenuity of our own Public Bill Office, for working out and putting into effect the mechanics of an operation which has permitted us to take the Committee stage, with a long Marshalled List, on the morning after the Commons finished with the Bill.
I shall not spend more than a moment or two on the great questions of policy before us. We are all aware—or, at any rate, all who think, in any part of the country, are aware—that for some time now incomes have outrun production, and we are all aware that if this continues disaster is bound to overtake us. We hope by a great effort on the part of all concerned to bring about a balance. Clearly, we should all prefer a wholly voluntary effort, but if we are to succeed the ability to deal with any selfish minority must be there in the background, and it is provided for in the present Bill. It is my sincere hope, and the hope of the Government, that Part IV of this Bill need never be brought into force, but let us be clear that, if it is necessary, it certainly will be operated.
I would hope that the nation is now becoming aware of the meaning of a prices and incomes policy and of the possible alternatives, if any. If the great debates which have been taking place in both Houses of Parliament have assisted this illumination, then they have been well worth all the effort. Let us be careful in all our words and deeds that we give no comfort to those who for selfish reasons would act against the national interest. I am sure that that will be the general spirit. Let us, on the other hand, give every encouragement to those on

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both sides of industry, in high places and in low, who during the next twelve months are going to increase productivity with every exertion in their power. Moreover, let us also encourage all those—and this, I believe, means the nation as a whole—whose restraint is going to pull us through all these difficulties. Certainly it is upon that self-restraint that our whole economic future depends. My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Longford.)
11.27 a.m.
LORD HARLECH: My Lords, naturally I am happy to join in the tributes which have already been paid by the noble Earl the Leader of the House to my noble friend Lord Conesford, to the noble Lord, Lord Shepherd, to the printers, and to others connected with this Bill. But I am afraid that in the few words which I shall have to say—and I do not intend to make a Second Reading speech—I shall not have many tributes to pay to Her Majesty's Government.
I think I must say something about the Parliamentary institutions of this country, and what we believe is the violence which has been done to them by Her Majesty's Government in the conduct of this particular piece of legislation. Here is a Bill, the Prices and Incomes Bill, which was originally introduced in another place as long ago as last February. A General Election then intervened. It was reintroduced, not with great despatch, in July of this year and it received a Second Reading in another place on July 14. Of course, at that time it contained no Part IV. Then we had the Prime Minister's very serious statement of July 20, in which he said:
"It is not our intention to introduce elaborate statutory controls over incomes and prices."—[OFFICIAL REPORT, Commons. Vol. 731 (No. 58), col. 636; 20/7/66.]
But one week later the Bill was amended by the addition of sweeping, compulsory powers contained in what is now Part IV of the Bill.
It was then claimed that it was essential to pass the Bill through both Houses of Parliament before the Summer Recess: and this despite the fact that Parliament was faced with a Bill which the Prime
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Minister himself claimed at a Press Conference in Washington was unprecedented in peace time, as regards the stringency of controls to be imposed on incomes and prices in this country. I do not think it would be right for me to comment upon how the Government dealt with these matters in another place; in any case it is well known to the world. But I do recognise the difficult position into which this hasty and indeed panicky, action put the members of the Government Front Bench opposite. I do not expect them to admit it, but they must have been as distressed as we were at the scant attention which was paid to the convenience and rights of your Lordships' House.
Noble Lords opposite—the noble Lord, Lord Shepherd, in particular—certainly did their best to right this situation, and a number of chiefly disagreeable alternatives were placed before my noble friend Lord Carrington with regard to the procedure we should adopt in dealing with this Bill. My noble friend agreed to what he thought was the least disagreeable of these procedures, and we had that peculiar debate last week on the "White Bill", which I recognise was to be regarded as the Second Reading of this Bill. Now we are to have all the further stages of the genuine Bill in one day, and only hours after it has received a Third Reading in another place. This has led to another rather curious innovation, in that we have had to table Amendments to a Bill that we had not actually received. In fact, the Bill that we have now received has certain changes from the one which was included in the White Paper which we debated last week. I think it would be of convenience to your Lordships if we could have some indication of where any significant changes have been made in this Bill compared with the White Paper we discussed last week.
In all these circumstances, I think I must give noble Lords some indication of the attitude that I and my noble friends have to today's proceedings. First of all, we feel that the House has been treated with great discourtesy by Her Majesty's Government. Secondly, from the timetable that has been set for us it is blindingly clear that Her Majesty's Government have not the slightest intention of paying any attention to the

1769
views expressed by your Lordships. In spite of this, we have thought it right to table a number of Amendments which will enable us to point out some of the most undesirable features of the Bill, and to suggest ways in which it might have been improved. We do not intend to press these Amendments to a Division, because we are all too well aware that, even if we carried our Amendments, we should within hours receive the Bill back with all our Amendments deleted. I do not think it could help the reputation of this House to prolong the farce in this way.
We have, of course, a constitutional right to vote against either the Second Reading or the Third Reading of this Bill, and thus delay it for a period of one year, but I am sure that this would be an improper way for the Conservative majority in this House to use its power at this juncture of our affairs. As my noble friend Lord Carrington said in this House on Monday, we intend to behave ourselves responsibly and, however much we regret the fact, we cannot deny that the Party opposite were returned at a General Election only four months ago with a majority of a hundred in another place. Contrary to the prospectus held out to the electorate at that time, they have now landed the country in a serious economic crisis, and for the time being they, as the Government, have the sole responsibility for getting us out of it. Therefore, whatever doubts my noble friends may have about the Government's policies—and they are sincerely held—we do not think it would be right, in these circumstances, to try to bring into operation the constitutional delaying powers of your Lordships' House. We do not intend to obstruct the Government just for the sake of obstruction. Nor, I am bound to say, do we find this particular Bill before us very amenable to amendment, unless we were to move to take out the whole of Part IV of the Bill and large slices of Part II.
My Lords, having made our position clear, I hope the fact that we do not intend to vote against the Government on this occasion will not be taken as meaning that we feel other than that the House has been disgracefully treated over this Bill, or that we feel anything but profoundly concerned about the con-
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tents of this Bill, which is intended to freeze a wholly unsatisfactory economic situation for twelve months, with little evidence that our economy will be any healthier at the end of that period. Indeed, there are good reasons for supposing that our industrial production will be down, that unemployment will be up, and that industrial investment will be declining. In addition, this Bill gives powers of compulsion to an individual Minister which ought not to be granted in peace time unless the critic is far more serious than has yet been disclosed by Her Majesty's Government. In this respect, it offends against principles which have until now been cherished and defended by all three major Parties in this country. Having, I hope, made clear our position on the Bill and our attitude to the procedures upon which we are now about to embark, I would urge my noble friends to give it a formal Second Reading.
11.36 a.m.
LORD OGMORE: My Lords, I would support the noble Lord who has just spoken on behalf of the Conservative Party, and urge my noble friends to give this Bill a Second Reading. As I see it, there is no grave constitutional issue here at all. We deal with this Bill as we deal with all Bills that come before us. I do not propose to go into the chequered career of this Bill in another place; nor, indeed, into the way in which we have been treated. I agree with the noble Lord: I think that, as a House, we have been treated disgracefully. I do not recall, in all my fifteen or sixteen years here, any occasion on which the House has been so treated previously.
But the question remains: what is the duty of this House? We are a revising Chamber. It is our duty to revise legislation that comes to us, and, if possible, to improve it. We think this Bill is susceptible of a great deal of improvement. In fact, we think a great deal of it ought not to be there at all. But, even so, I put it to the House: is it wise, is it proper, is it our duty, simply to say to the Government, "Whatever happens, however strong our arguments, however weak your reply, we shall do nothing about it. We shall not go into the Lobby against you; it will go through as it stands"? I think that is an extraordinary attitude.

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After all, what is the hurry? Why is there any hurry in this case? I have just been looking at the Minute Paper for August 8. There are a number of Bills listed there which were amended in this House, which went back to the House of Commons and were dealt with in the House of Commons. They either agreed with the Amendments or they did not. In most cases they agreed with them; and they came back here. Why is there any difference in this case? Parliament is to break up for over two months. I must say that that is an extremely good lesson in productivity in these days! The Law Courts have risen for over two months—the High Court, not the lower courts. That also is a good lesson in productivity! Why do we give this bad lesson in productivity? Why all the rush? All the proceedings of this Bill have to be taken in one day. Why? Can we not meet on Monday? Can Parliament not meet on Monday? Why is some grave constitutional issue presented because everybody wants to rush away on Friday afternoon? Quite frankly, I think this is an extremely weak case.
I think myself—and I say it with all humility—it is the duty of this House to deal with this Bill as it does with all other Bills: that is to say, to go through it clause by clause; to put down Amendments; to consider the Amendments; if necessary, to divide on them; and if we win, to send it back to the Commons for them to reconsider the matter. We must remember that in this case a very important part of the Bill—that is, Part IV—was never considered in the Commons on Second Reading. It was never considered there. The Committee stage was taken upstairs, with 25 Members—of which, I may say, none was of the Liberal Party—and they have never had a Committee stage in the House of Commons itself. On the Third Reading in the House of Commons—and, as we know, in the Third Reading debate one cannot talk about anything that is not in the Bill—the House of Commons never had the opportunity of considering the matter as they should have done, and as they would have done in the case of
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a normal Bill. Here, surely, is the classic case for the House of Lords to step in and do its duty.
Therefore, I say to the Government and I say to the House that we on these Benches have taken a very great deal of trouble to put down Amendments—none of them wrecking—which, in our opinion, would improve the Bill considerably. We hope for the support of Members of all Parties, in all parts of the House, in examining these. We hope that, if they agree with these Amendments, they will support us, if necessary in the Division Lobby. At this stage I am not going to say that we are or that we are not going into the Division Lobbies; because I do not think that is the right attitude to take in this House. What I am saying, on behalf of my noble friends, is this. We shall put our Amendments, all of which we believe are important, and none of which is a wrecking Amendment, and debate them to the best of our ability. We shall then listen to the answers from the Government Benches. If we are satisfied with those answers we shall withdraw the Amendments; if not we shall, if necessary, go into the Division Lobbies—even if we go alone.
11.42 a.m.
LORD CONESFORD: My Lords, my noble friend Lord Harlech has so admirably expressed the views which I and others hold that I would supplement what he said only on one particular point. I think I may, perhaps, claim that I have spent as much time studying this Bill as have the Liberal Party. I would supplement what my noble friend said in this respect: I hope that the Government will not think that all the matters to be raised are indicated in the Amendments on the Marshalled List. Of course, every clause has to be put to the Committee, and I have some very important considerations to put forward that will certainly be relevant to the Question, "That the clause stand part of the Bill". In some cases where I knew I had a definite point to raise, I took the step of giving notice in writing to the noble and learned Lord who sits on the Woolsack; but there are other cases where I shall raise many important points. I should not like it to be thought that the absence of Amendments from the Marshalled List

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indicated that the points to be raised are not important.
11.44 a.m.
LORD SHEPHERD: My Lords, first of all may I thank the noble Lords, Lord Harlech, Lord Ogmore and Lord Cones-ford for what they have said. In view of the various expressions of opinion that have been made in the last two or three days, I hope I can say that the House will recognise that both my noble friend the Leader of the House and I myself have always been particularly careful to have full regard to the rights and privileges of this House. In saying that, I make no apology for the time which this Bill has taken to go through another place, or for the period of time between the announcement of policy and the actual introduction of that Bill there. We have always believed that a prices and incomes policy must depend upon voluntary action by all who are parties to it, and in fact, by all within the country. It would have been easy to introduce a Bill without having taken this full regard and without having given full opportunities for consultation. If we had done that, we should have been open to far greater criticism than any noble Lord or any Member of the other place has made during the last few days.
My Lords, we have consistently sought a voluntary agreement. It is regrettable that we now have to bring this Bill before this House very late in the Session; but it is because of the necessity that confronts both the Government and the nation. Therefore, I do not think that, in introducing this Bill to-day, and in asking your Lordships to pass it, any discourtesy has been shown to the House. We could have sat right through August. When I gave the information to the House by way of a Business Statement, some ten days ago, in which I invited the House to accept the arrangements that were then proposed and which are now coming into being, I said that all of us in this House, and no doubt those in the other place, would be agreeable to sit through August; but that we had to recognise that there are many hundreds of men and women who work within the Palace of Westminster, whose interests I, for one, do not write off. I know there are many who have already lost their holidays, who have already lost the sums of money they had paid in deposit for those holi-
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days. Anyone who is responsible for business management, who is responsible for seeing that Parliament operates smoothly, cannot possibly overlook them.
I well recognise the difficulties of the Opposition and of the Liberal Party. But I suggest that we have made available time which could have been taken up. When I moved the Motion on the White Paper—the "White Bill", as it was referred to; or, as the noble Lord, Lord Byers, called it, the "Shepherd's Pie"—I offered, through the usual channels, time to discuss any particular aspect of this Bill. We could have had a further Committee stage, in advance of this Bill, when we could have discussed those major and fundamental clauses that the noble Lords, Lord Harlech, and Lord Ogmore, believe to be contrary to the public interest. The time was there; but we did not take it. We did not sit yesterday; we could have done so. I do not think the Government, in the present circumstances, could have done a great deal more. There is very little point in my carrying on—
LORD BYERS: My Lords, may I intervene, before the noble Lord leaves this point? He has made a statement which is very disturbing. Would he give an assurance that if, in fact, there are servants of this House who have suffered loss, they will be recompensed? It is not their fault; it is our fault. We have kept them.
LORD SHEPHERD: My Lords, this will have to be a matter for the authorities who run the House. I am making a point. The noble Lord knows that there are many of us here who would have been on holiday now had we not thought that our duty required us to be here. Having said that, and because there are obviously going to be continued clashes, I will not now go into the matters that the noble Lord, Lord Harlech, raised. We shall have plenty of opportunity to do so as we go through the major clauses of this Bill. I will cross swords with him then; some of the criticisms he has made I shall toss back straight on his lap. If he is prepared to debate them, I am willing to do that.
The noble Lord, Lord Harlech, rightly I thought, asked that the House should be made aware of what changes have

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been made in the Bill since the "White Bill" (or the "Shepherd's Pie") was introduced in this House. Perhaps I could tell the House what they are. May I refer to Clause 4, the little proviso to subsection (3)? The original proviso disapplied consultation requirements in paragraphs (a) and (b) for twelve months. This has been amended so that the requirement is disapplied only for six months. There is this minor adjustment from twelve months to six months in the first proviso.
In Clause 17 there is a drafting Amendment to line 30. The words, "is connected with" have been included instead of the words, "arising out of". It is a drafting Amendment of no major significance. In Clause 25(7), in line 33, after the word "order" the words "or direction" have been included. This again entails a drafting Amendment of no significance.
In Clause 28 the original drafting read as follows:
"The Secretary of State may by order apply this section to remuneration under contracts of employment for any kind of work".
The Amendment continues the wording as follows:
"to be performed wholly or substantially within the United Kingdom or on British ships or aircraft."
These words have been put in so as specifically to exclude overseas contracts. The last Amendment is in Clause 32, line 32, where nearly at the end of the line we have included the words:
"but so that an order under this subsection shall not affect provisions which have taken effect before the making of the order."
This is in substitution for a provision empowering the Minister to change the operative date of orders which have already taken effect. Those are the only Amendments that were made during the Report stage. I think the House will agree that they do not in any way change the basic policy, the basic concept, of what we discussed on August 3. My Lords, with those very few words, I hope that the House will agree to give this Bill a Second Reading and that we can then move into Committee.
On Question, Bill read 2a, and committed to a Committee of the Whole House forthwith.
11.53 a.m.
LORD SHEPHERD: My Lords, I beg to move that the House do now resolve itself into Committee on the Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Shepherd.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD GRENFELL in the Chair.]
Clause 1 agreed to.
Clause 2:
References of questions to the Board
2.—(1) The Secretary of State, or the Secretary of State and any other Minister acting jointly, may refer to the Board any question relating to wages, salaries or other forms of incomes, or to prices, charges or other sums payable under transactions of any description relating to any form of property or rights or to services of any description or to returns on capital invested in any form of property, including company dividends; and without prejudice to the generality of the foregoing provisions of this subsection the Secretary of State, or the Secretary of State and any other Minister acting jointly, may refer to the Board any question—
LORD DRUMALBYN LORD DRUMALBYN moved to add to subsection (1):
"() relating to any agreement or arrangement to restrict, whether by way of maximum or minimum, the number of persons to be employed in any industry or any industrial undertaking, process or other activity, except in so far as is necessary to comply with any health or safety requirement imposed by any Act of Parliament or any order or regulation made under any Act of Parliament."
The noble Lord said: The purpose of this Amendment is to enable the Secretary of State, or the Secretary of State and any other Minister acting jointly, to refer to the Board any question relating to any agreement or arrangement restricting the number of persons to be engaged in any industry or any industrial undertaking, process or other activity, except in so far as it necessary to comply with health and safety requirements. The Amendment would apply, for instance, to any arrangement whereby the intake into an industry or undertaking is subject to a ceiling—whether in the docks, the printing industry or the like—or to where a minimum number is laid down for the manning of machines or for the carrying out of any process. These two situations obviously have a

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very considerable effect on incomes, on prices, or on both.
If the numbers admitted to an industry are limited to the point where there is a permanent shortage of skilled labour, plainly incomes in that industry will tend to be forced up. Again, if the number of employees to operate a machine or a process is kept artificially high, production costs, and therefore prices, will be forced up. It may be said that both these situations could be covered by references under paragraphs (a) or (b). But references under paragraphs (a) and (b) relate to proposals "to increase any prices" and to "any pay claims". The prices may be already far too high because of certain practices, and there might be a need to refer the matter although there had been no proposal to increase prices or to lodge a pay claim. It is true, as I understand the drafting of the clause, that the terms of the subsection are wide enough to permit such references as I have in mind; but these two situations, I submit, are common enough and important enough to warrant special mention. It seems to me particularly important that the Board should in appropriate circumstances be required to keep such situations under continuous review under the next clause. For these reasons I beg to move.
Amendment moved—
Page 3, line 4, at end insert the said paragraph.—(Lord Drumalbyn.)
LORD CHAMPION: This subsection (1), which is the meat of the clause, providing as it does for the reference of questions to the Board by the Secretary of State or Ministers acting jointly, may be very widely drawn. The noble Lord, Lord Drumalbyn, has called attention to this fact, and paragraphs (a), (b) and (c) set out the scope of possible references. We feel that the clause is wide enough at present. The noble Lord has argued with his customary cogency that to the questions mentioned in this subsection there should be added a fourth for explicit reference, if Ministers so decided—
LORD DRUMALBYN: May I interrupt the noble Lord? He talks of a fourth, there are in fact only two paragraphs at the present time.
LORD CHAMPION: I thought there were paragraphs (a), (b) and (c).
LORD DRUMALBYN: There is no paragraph (c). This Amendment would become paragraph (c).
LORD CHAMPION: Well, I cannot count, apparently. In any case it does not affect what I was saying—I remember now, it is (a) and (b) and this Amendment would add (c). What the noble Lord seems to me to be doing is seeking to add to this clause restricted labour practices in an ingeniously devised proviso, on which I congratulate him. The Government have agreed, as was made clear in another place, that the Board could usefully examine restrictive labour practices; but Ministers in another place argued that the inclusion of a specific mention in this clause was quite unnecessary as the Board do consider restrictive practices in relation to questions referred to them. The reports of the Board No. 1 and No. 14 on road haulage charges, No. 16 on busmen and No. 17 on the baking industry, are all examples of the fact that when the Board has a reference to it, it then considers the background and any restrictive practices which may appear to be applied in the particular industry, and reports accordingly.
The Government feel that this Amendment is unnecessary because of the very fact that the Board does consider restrictive practices. But there is a better reason. The Government think that if we make any specific reference to the Board about restrictive practices, the wording of the reference itself would to some extent prejudge the case. We should have to word it in such a way that we should call attention to restrictive practices obtaining, for example, in the newspaper printing industry, to which the noble Lord, Lord Conesford, has referred. The Government feel that this would prejudge the case before the Board actually considers it. Also, restrictive practices which are already well enough known to be mentioned in a reference are not those which would most easily yield to the spotlight of a report by the Board, and the Board's powers in this connection would be just to spotlight the particular restrictive practices.
The Board is a busy one. It is not likely to be less busy in future, and although it can and does examine restrictive practices in relation to pay claims, and could also do that in relation to

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charges and prices, we feel that we ought not to embark upon something such as is contained in the Amendment and accept the possibility of specific reference to the Board of these particular restrictive practices. I hope the noble Lord will be prepared to withdraw this Amendment. although I agree with what lies behind it—namely, getting at the restrictive practices which are undoubtedly a drag on our economy at the present time.
LORD CONESFORD: I agree with the Minister in what he has just said, that the Board do consider these matters when they have a reference before them, but, of course, they cannot consider them unless there is a reference before them. As my noble friend, in moving this Amendment, pointed out, paragraph (a) refers only to cases where there is a proposal to increase prices. The restrictive practice may be of such a nature that there may be no increase of price, but a possibility of diminishing the price, if the restrictive practice were abandoned.
I must contest one of the arguments put up by the noble Lord, Lord Champion. He said that the mere wording of the reference would prejudge the issue. I do not take such a low view of the Board as to think that it would be prejudiced, even if the phrase "restrictive practice" were mentioned in the reference. But, of course, the reference could be made without mentioning restrictive practice. It could refer to the number of persons used to man a particular machine. I think that there is considerable merit in the Amendment. For the reasons he has given, my noble friend does not propose to force this to a Division, but I hope that the Committee will not assume that those concerned cannot frame a reference in a way that would not prejudge the issue and, even if it happened to do so, that that would really hamper the Board.
LORD DRUMALBYN: Confirming what my noble friend has said, I do not intend to press this Amendment to a Division, but I hoped to get from the noble Lord an assurance that there could be a reference of this kind as the clause is drafted, without specifically introducing this Amendment. I should have thought it would have been perfectly easy to make a reference relating to prices with particular reference to
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manning or possible restrictive practices within the scope of the clause.
I thought it odd that the noble Lord should say that the Board was a busy one and might not have time to deal with this kind of reference. I am sure that that would not be the wish of your Lordships. The existence of restrictive practices is well known, and there is no doubt that they have an effect on costs. By moving this Amendment, all we are asking is that the Government will make it clear that, where they consider it necessary and desirable, and feel that restrictive practices have an effect on prices, they will make a reference. The clause as drafted says:
"…without reference to the generality … may refer to the Board any question (a) relating to a proposal to increase any prices … or (b) relating to any pay claims …".
It is within that generality of the powers of reference that we are asking for an assurance from the Government that they will use the Board to look into questions of this character. If the noble Lord could give that assurance, I am sure that it would be welcomed by both sides.
LORD CHAMPION: In reply to the noble Lord, Lord Conesford, I may say that the Government can refer any question relative to pay, prices or other money incomes to the Board under Clause 2(1), whether or not there is a proposal for an increase. I am not sure that I can completely satisfy the noble Lord, Lord Drumalbyn, but I think that within the clause as it now stands there is sufficient width to enable the Ministers concerned to consider carefully whether it would be possible within those terms to make the sort of reference which it is suggested should be embodied in the Bill itself. I cannot at this moment go beyond that. I cannot accept the Amendment. The noble Lord has indicated that he does not propose to press it, and that it is largely a probing Amendment. If I have not completely satisfied him, I am sorry, but we feel that we ought not to add this Amendment at this stage.
LORD DRUMALBYN: The noble Lord has gone some way towards allaying our misgivings, and in view of what he has said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question: Whether Clause 2 shall stand part of the Bill?
12.10 p.m.
LORD DRUMALBYN: I should like to raise a quite general point on this clause. We are in the part of the Bill which provides for permanent legislation. In this we are in some difficulty, because at the same time there are policies set out in White Papers which are subject to alteration from time to time. The policy set out in the White Paper on the early-warning system provides that (I think the phrase is) manufacturers will be expected not to raise their prices during a period in which a reference is before the Prices and Incomes Board. I should like to have an assurance from the Government that this is definitely part of the temporary policy, and that once the present difficulties are removed it will not necessarily be the permanent policy to impose this delay on increasing prices.
It is, of course, both proper and, indeed, popular for the Government to do all they can to hold down prices; but in our view the proper way to do this is through competition and proper management of the economy, and not by imposing delays on firms who may have to increase their prices whether or not the Minister agrees. Surely this should not permanently be a matter for the Government to decide. The present system being that when a notification of a proposed increase is given to the Minister, either he offers no objection, in which case the price may be increased after a month, or he refers it to the Board, in which case for up to three months (because the Board takes three months to report; certainly until the Board have reported) the price cannot be increased. I cannot believe that it is in the interests of the economy that this should be a permanent part of Government policy, and I should like an assurance to that effect before we leave this clause.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE ROYAL NAVY (LORD WINTERBOTTOM): I think your Lordships will agree that Clause 2 is an integral part of the Bill; we are building it into the Bill, and for that reason it will be a permanent part
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of the Bill. Surely we must distinguish between our present discontents and the situation that we see in the future. If by general agreement, by consent, we find that our prices and incomes policy is being effective, and that productivity rises, then, in the first place it will not be necessary for the Minister to refer the matter to the Board. He would be informed of the intentions of companies individuals and unions but no action need be taken. Therefore, the delay is short. If, however, he should refer the rise to the Board, then again I imagine that as experience is gained, and the organisation or background of the Board is strengthened, the delays arising between a reference to the Board and the Board's report will fall. I do not think the Government will aggregate this particular power, but I hope that the powers will be used intelligently and with the utmost despatch.
LORD DRUMALBYN: May I intervene to say that we are not talking here of a power? What I am asking about is not a power. What I am asking about is the voluntary side that is imposed without power. I am asking whether it is expected that that voluntary side is likely to be permanent, as the provisions of this particular clause are expected to be permanent. It does not follow that because you make a reference to the Board you must necessarily wait until the Board reports before prices are increased. After the references, people can do what they like, even under Part II. I hope that the noble Lord will not confuse the existence of the powers under Part II with Part I, which is going to be permanent and operative without further action on the part of the Government.
LORD WINTERBOTTOM: These are enabling powers which the Minister may use. But the noble Lord has stressed the results from voluntary action. Surely we have reasonable men dealing with a reasonable Government. If it is clear that voluntarily an individual is willing to do something, then surely this is a question of private agreement between the two persons. In an easier world, I am sure that this voluntary need will fall away.
Clause 2 agreed to.
Clause 3 [Instructions to Board to keep certain prices or incomes under continuous review]:
On Question, Whether Clause 3 shall stand part of the Bill?
LORD DRUMALBYN: I wish to raise a quite minor question, though it is of some importance, on Clause 3. Subsection (6) says:
"An order or instruction under this section may be framed in any way whatsoever, and in particular may be concerned with a specified region or locality or with named undertakings or persons."
We on this side are reluctant to allow powers of this kind in relation to a particular undertaking or a particular person. As a matter of interpretation, I know that the singular includes the plural. But does the plural include the singular; or, when it says plural, must it be plural?
LORD WINTERBOTTOM: That is a magnificent semantic exercise. As I understand the Bill, the Government have taken upon themselves the power to draft their terms of reference as widely as they wish, to cover whole industries, single industries, single undertakings or single regions. I know that my colleagues in the Government are very firm that we must have these powers to be specific and to direct our inquiries to the point where the knowledge is necessary. For this reason, the various points made in subsection (6) are an essential part of the Government's philosophy on this Bill.
Clause 3 agreed to.
Clause 4:
Principles to be applied by the Board
4.—(1) In examining any question referred to the Board under section 2 above, and in complying with any instruction or requirement under section 3 above, the Board shall, subject to the following provisions of this section, have regard to the considerations set out in Schedule 2 to this Act (which reproduces Part I of a memorandum presented to Parliament by the Secretary of State by Command of Her Majesty in April 1965).
12.18 p.m.
LORD BYERS LORD BYERS moved to add to subsection (1):
"and where any question appears prima facie to conform with the requirements of paragraph 15(i) of Schedule 2 to this Act immediate consideration shall be given to the question by
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the Board to avoid delay in bringing about the benefits of any such direct contribution towards increasing productivity in accordance with the terms of the said paragraph 15(i)."
The noble Lord said: The purpose of this Amendment, which stands in my name and that of my noble friends, is to try to improve the Bill by making it quite clear that the wage freeze or the standstill will not be allowed to apply to any arrangement which could result in an early or, better still, immediate increase in productivity and efficiency, and to ensure that the Board gives proper priority to any such arrangement and gives the most immediate consideration to it.
If we are to believe the Government, through the medium of their various spokesmen, they are opposed to the bringing into effect of any schemes which improve output per man or otherwise reduce costs through an upward adjustment of wages for a period of twelve months. In our view, it is impossible to have a viable incomes policy which consists solely of freezing everything. What we seek to do is to put a positive element into the policy. We support a voluntary standstill on incomes where there is no increase in efficiency or productivity. But our primary concern is to stimulate growth in the economy, and we cannot afford to do without that growth for a period of six or twelve months. We do not believe it is possible to get growth in the economy by a general standstill. It must be done through placing the main emphasis on improvements in efficiency. Hence this Amendment, which, as I have said, places on the Board the responsibility for sorting out pay agreements which look as though they are going to assist in getting the growth, considering them quickly and giving the go-ahead.
As I understand it, this is in flat contradiction to the extremely short-sighted policy of the Government, who believe that no pay increases must take place, even if such an increase might transform the economy. One has only to look at the various excellent reports which have emanated from the National Board for Prices and Incomes to see the strong recommendations which they make about linking up with productivity. Those recommendations are in practically all the reports. I have here the one on the conditions of service of British Railways staff, where increases in productivity are,

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as I understand it, meant to come into operation next month, when there will be adjustments in pay as a consequence. The same sort of thing was recommended in the Report on the printing industry, and we had the Geddes Report, too.
I believe that we cannot take up a position where we are going to tell these employees that the country is in such a mess that we cannot afford to enjoy the benefits of greater efficiency and we must therefore reluctantly defer these ideas for about a year. I am sorry that the Leader of the House is not here at the moment. Last week he protested vehemently that the Government were very productivity-minded—and I had always believed that they were, up until a week or so ago. But then he belied that, and I believe that much damage has already been caused by the statement by the Leader of the House when he said that productivity agreements would not cure our present ills or rectify the balance of payments in the next year. He added that one cannot argue that productivity agreements are going to tilt the balance one way or the other. This may be so, but they will contribute something if we can get them moving. He later added that he would not accept that there is a clash between standstill and productivity. He must be one of the very few people in the country who really believes that. He made the definite statement that productivity agreements which were not yet in force would have to be postponed for at least six months; and he cast serious doubts as to whether there was in fact much benefit at all in having productivity agreements in the next few months. I think it would be a tragedy if this went out as the declared policy of Her Majesty's Government.
In our view it is absolutely vital to get more and more of these agreements into operation as soon as possible, and a delay of six months would be completely intolerable. The argument that there can be no exceptions to the standstill or the freeze is, in my view and that of my noble friends, quite ludicrous. There must be certain exceptions which will prove the rule, and productivity agreements is one of them. Many of us on all sides of the House have been working for years to educate the public to believe in productivity agreements, and we say that no Government must be allowed
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to put back the impact of that programme, even for six or seven months. We believe that the Government have made a mistake, and we believe that it is the task of this House to help them to rectify it.
This is in no way a wrecking Amendment of any sort at all. If they, the Government, were in Opposition under the leadership of the Prime Minister, they would have seized on this point as reversing years of work done by the trade unions and leading managements to get people's minds away from the traditional attitude and steered into the new channels which we have been trying to pioneer. I would hope that the Government might accept this Amendment at this late stage, because in our view and, I believe, in the view of the House, it is basic to a positive incomes policy. It is clearly envisaged in Schedule 2 to the Bill that productivity will be a most important item of the criteria by which the Board is called upon to judge the various claims. One can only contrast that Schedule 2 criteria with what the Secretary of State said in Standing Committee last week. He make it clear that for the next six months there was no intention of using the criteria of Schedule 2. This is a terrible thing. Schedule 2 is based on the Declaration of Intent.
In passing, might I digress to ask the Government whether they are going to give us an explanation of the significance of the various changes which have been made in the Cabinet overnight? If the translation of the First Secretary to the Foreign Office means that we are to join the Common Market, we are all delighted. But if it means that we have in fact abandoned any prospect of getting more growth into the economy in the next twelve months, then this is a sad day indeed. I should like to say that we admire the tenacity and courage with which Mr. George Brown has tackled the job and tried to get growth and productivity into the economy. I think he must have been a very sad man indeed to have had to say in Committee—this is clearly one of the reasons why he has dashed off to the Foreign Office—that for the six months there was no intention at all of using the criteria of Schedule 2, which deals with productivity efficiency, and a lot of other things too,

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and that for the next six months of what he called the special period of twelve months, to which Part IV of the Bill is directed, there would have to be different criteria from those of the standstill, but still these criteria would not be as wide as the criteria of Schedule 2 which is based on the Declaration of Intent.
It was crystal clear from what he was made to say that productivity is going to be allowed to be stamped on for the next twelve months, and it is our purpose with this Amendment to see that this simply does not happen. We must give the right priority and the right emphasis. This I believe is a most responsible Amendment, and I ask the Government to respond in a similar way. I beg to move.
Amendment moved—
Page 4, line 16, at end insert the said words.—(Lord Byers.)
LORD DRUMALBYN: I should first like to say that I strongly support the general view expressed by the noble Lord, Lord Byers, that productivity agreements should be brought into effect with the least possible delay, even during the standstill period, and of course, one has to add, provided that they are genuine. I have an Amendment down in my name on the Order Paper on this subject, and therefore at this moment I will devote my remarks to only one particular aspect of this Amendment. We would hope that, where productivity agreements are referred to the Secretary of State, he will be able to give them his blessing right away, without referring to the Incomes and Prices Board.
I want to ask the noble Lord how far he envisages that the appropriate Minister will himself be able to sort out whether productivity agreements are genuine or not, and give his consent to any rise in wages, without having to incur the delay of referring them to the Prices and Incomes Board. It seems to me that this is very important, and it is what we should like to happen. I do not think that in dealing with this stage of Part I it would be right for me to follow up the more general argument as to what happens during the standstill period; I personally would rather reserve that for Part IV. But I think it is very
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important indeed that we should get some statement as to what the practice of the Minister will be in considering notifications, and whether or not he will refer them to the Prices and Incomes Board.
LORD CONESFORD: I hope that when the Minister replies he will tell us what he thinks would be the effect of this Amendment. The noble Lord, Lord Byers, used the opportunity to attack—and to attack with some force, on grounds with which many of us can sympathise—certain provisions of the standstill arrangement. But, of course, we are not, on this permanent part of the Statute, dealing with the standstill arrangement at all, as I understand it. Therefore, whether we agree or disagree with what the noble Lord, Lord Byers, has said, it does not seem to me prima facie very relevant to what is put in this clause. I should be very glad if the Government would give their view on the matter, because I cannot quite see what the effect would be if this Amendment were adopted.
LORD CHAMPION: As the noble Lord, Lord Drumalbyn and Lord Conesford, have said, this Amendment is a very limited one. We have had a wide-ranging speech by the noble Lord, Lord Byers, about the whole question of productivity which we shall have to consider in relation to an Amendment to Clause 28 by the noble Lord, Lord Drumalbyn, and an Amendment from the Liberal Party. When we come to that I shall, of course, have to take into consideration everything which is said upon these Amendments, including some of the things that have been said by the noble Lord, Lord Byers, at this stage.
The noble Lord indicated that this Amendment is linked to some extent with later Amendments, but this Amendment deals with the instructions to be given to the Board as to the urgency with which they are to consider certain matters. To include such an instruction in an Act of Parliament would appear to us to be wholly wrong. Decisions as to the urgency of the matters which are before the Board must be left to the judgment of the Board, perhaps advised by Ministers as to the industrial situation existing at a particular time. As will be well known, there are some questions

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involving productivity which might not be those which might, by any consideration, prevent a major industrial upheaval. There are some questions which can be considered by the Board with less urgency than some of those which have been, or would be, referred to the Board that might have in them certain elements likely to cause a national strike, possibly of devastating proportions. In the circumstances, it would be quite wrong for us here to-clay to include in this Bill wording which would prevent the Board from taking a decision as to which of these things have the greater merit on urgency, something that embodies productivity or some reference to the Board which is of major national importance. This must be left to the judgment of the Board acting on the knowledge of the industrial situation at the time and assisted, as I imagine they would be if they asked the question, by the responsible Minister.
All three parties to the development of the productivity, prices and incomes policy—Government, employers and unions—recognise the importance of productivity bargains. This is shown by the provision for exceptional pay increases in genuine productivity gains to which employees may make a direct contribution. We are not here discussing the freeze and the standstill. This discussion will come on later Amendments. The Board is the instrument of this policy to be developed by the three parties. These three parties also recognise the importance of the productivity bargains, and, of course, the noble Lord, Lord Byers, has referred to the excellence of some of the reports which have been issued in this connection.
So far as urgency of report and the length of time taken by the Board to report is concerned, although in the early stages inevitably it had to set about the task of organisation and to make up initial staff shortages, it has a good record for producing reports, particularly, I would say, when they are urgent. The Board has reported on six references within about two months or less; on another five references within three months, and on seven references within four to eight months. So I do not think that this Board has been at all tardy or dilatory in its work, moreover it has
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produced reports of the sort which have earned the just praise of the noble Lord, Lord Byers.
The noble Lord, Lord Drumalbyn, asked me a question. The whole question of what the Minister refers to the Board is, of course, a matter for him to consider within the clauses which cover this, and all the clauses, as I understand them, in which the Minister under this particular Part of the Bill may make references are permissive. They allow him to do this. And the Minister will naturally consider all the relevant factors at the time. I do not think this is a good Amendment, and I hope that the noble Lord, Lord Byers, will be prepared to withdraw it, and that we can have the major discussion upon this matter when we get to the Amendments which I have mentioned to Clause 28.
LORD BYERS: Before the Minister sits down, may I ask him whether he envisages that there will be productivity agreements in the six months of the standstill?
LORD CHAMPION: There will be productivity agreements within the period of the standstill, but not their implementation in the form of wages. I imagine that the noble Lord will be returning later to this point.
LORD BYERS: I must say I am totally dissatisfied with the Minister's reply, but I think we have elicited a fact that most of us have suspected; namely, that although productivity agreements will be made during this period they will not be implemented, and we shall not be able to get the immediate benefit of them, as is envisaged in paragraph 15 of Schedule 2. All I can say is that I think this is extremely short-sighted. We will do battle with the Government when we come to Clause 28, but I think it will be the intention of my noble friends to divide the House, particularly in the light of the Government's statement.
May I also say that this Amendment is in no way a criticism of the Prices and Incomes Board, which has done an extremely good job. But the Amendment seemed to give the Board a push in the right direction; namely, to give priority to anything which would help us out of our immediate economic difficulties. However, in the light of the discussion we

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are to have later, I beg to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question: Whether Clause 4 shall stand part of the Bill?
LORD DRUMALBYN: May I make one point? This is a very important clause, because it relates to the considerations, at present set out in Schedule 2, which the Board must take into account in reaching its conclusions. Then subsection (2) gives the Government power to vary the considerations, and the proviso to subsection (3) says that in the period of six months immediately following the passing of the Act the Government need not consult with the organisations they are required to consult with in the earlier part of subsection (3).
The point here is this: I think your Lordships are entitled to expect that at the time when this Bill is laid before you the criteria to be applied (the considerations to which the Board must have regard) should be clearly set out, so that we know what the Board will have to do. Instead of that, the position now is that we know that some of the considerations set out in Schedule 2 will have to be altered. The Government plainly appreciate the urgency of altering it, because they weigh the need for the consultations with such organisations and bodies as the Minister thinks fit in the first six months.
I think we cannot part from this clause without asking the noble Lord when the order to be made under subsection (2) will be made, because quite obviously the Board is going to be seriously hampered in its activities unless it knows the up-to-date considerations which it must take into account and the criteria to apply.
12.40 p.m.
LORD REDMAYNE: May I pursue the point made by my noble friend with reference to something that I said in the previous debate, on which the noble Lord, Lord Shepherd, gave an undertaking, though I think he will agree that it is more proper that the undertaking should be repeated on the actual Committee stage, rather than in what was in Parliamentary terms a general debate.
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The point I made was that the criteria for price behaviour contained in Clause 2, referred to in this clause, do not include in respect of prices the criterion of any increases arising from Governmental action, notably increases in taxation. I should like an absolute assurance from the noble Lord who replies that when the Secretary of State makes an order, as referred to by my noble friend, that order will specifically contain, as one of the criteria to be taken into account by the Prices and Incomes Board, the point in regard to Government action in increasing taxation.
LORD WINTERBOTTOM: I think it is generally agreed that the Schedule 2 which appears in the Bill is obsolescent. As the noble Lord has pointed out, subsection (2) gives the Government power to alter the general terms of reference given to the Board, and it is, I think, general knowledge that new terms of reference will be given to the Board in the near future. If I understood the noble Lord aright, he said that these particular terms of reference should be given to the Board at the time the order is laid, instructing the Board to start work in accordance with Clause 2. Am I right?
LORD DRUMALBYN: I was saying that the whole of the Board's work in implementing current Government policy will be hampered unless the Government state what the policy is.
LORD WINTERBOTTOM: There is going to be a revision of the terms laid out in Schedule 2. No firm date has been set for laying the order mentioned in Clause 2, but before laying the order the Government will give the Prices and Incomes Board a clear instruction on the lines along which it must work.
LORD REDMAYNE: That would include, I take it, an instruction in respect of increase in taxation; because if it does not include that, the Government are not being consistent with the policy laid down by the Prime Minister in the last three or four weeks.
LORD WINTERBOTTOM: We are not talking about taxation; that is outside this specific Bill. We are dealing with prices and incomes.
LORD REDMAYNE: Of course we are dealing with taxation. This Clause 4

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refers forward to Schedule 2 which, as I have said, sets out the criteria which should be taken into account by the Prices and Incomes Board when discussing any increase in price, and the Prime Minister himself, on a previous occasion, has said that the Board must take into account any increases or threat of increases arising from Government action; and Government action, in this connection, is taxation. Therefore, clearly, since it is not now contained in the Bill and not contained in the Schedule, we must have an undertaking from the Minister that this will be one of the criteria the Board has to take into account.
LORD WINTERBOTTOM: I apologise to the noble Lord; I had not grasped the point. Of course the Government, when laying down the criteria, will take into account all relevant factors; and taxation is one.
LORD CITRINE: May I say that when I read this Amendment I felt very strong sympathy with it, and I think that many trade unionists in the country would have sympathy with it. But I found this difficulty, which made me feel I could not support the Amendment. I am saying this in order that the noble Lord, Lord Byers, will not have any feeling that people like myself just ignored what he said. The Amendment surely means this, does it not? If a matter is to be referred to the Board, it must be referred by a Minister; and therefore if it is referred by a Minister this Amendment implies that a conclusion had been reached by the Minister that there was a prima facie case for the agreement's conforming. That would mean the Minister had declared a view of something the Board had not yet examined. Supposing the Board subsequently decided against the agreement's conforming, we should have a situation in which the Minister had said "Yes, I think it conforms", and the Board would say, "No, we do not think it would conform". I am sure most trade unionists would take the view that the Board was refusing to do something which was manifestly right, and the Board's authority would tend to be destroyed by that sort of difference between it and the Minister. Although I think the Amendment was clearly intended to have a good effect, the real
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effect, in the long run, might be very difficult and dangerous.
Clause 4 agreed to.
Clause 5 [The Board's reports]:
On Question, Whether Clause 5 shall stand part of the Bill?
LORD CONESFORD: I wish to raise one point on Clause 5, and I am a little distressed that the noble and learned Lord, the Lord Chancellor, is not in his place at the moment, because this might be thought to be of a legal nature.
LORD SHEPHERD: I am rather responsible for the absence of the noble and learned Lord. Perhaps I might make this suggestion to the noble Lord, Lord Conesford. I was watching the time, and was not anticipating anything arising on this clause. I thought that we should come to Clause 6, with the Amendment in the name of the Liberal Peers, which I imagined was going to be pretty wide-ranging. I thought it would not be suitable for the House that we should have one quick speech and adjourn for lunch. Therefore, I suggested to my noble and learned friend that he might like to absent himself from the Chamber. If the noble Lord, Lord Conesford, has a point for my noble and learned friend to answer specifically, particularly if it is a legal point, I should like him to be here to deal with it. I am happy to suggest that we adjourn now until two o'clock, when the noble Lord, Lord Conesford, can make his point on Clause 5 and my noble and learned friend will be here to deal with it.
LORD CONESFORD: I am most willing to agree. In case it helps at all, I was going to ask about subsection (6) about the law of defamation. I imagine that it may also be of some interest to the noble Lord, Lord Goodman, and I dare say that he would prefer that it should be dealt with by the Lord Chancellor. I am happy to accept the noble Lord's suggestion.
LORD SHEPHERD: If we are going to get into the question of the law on defamation, certainly it will be the noble and learned Lord the Lord Chancellor who will deal with it. I hope it is convenient for the House if we adjourn until two

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o'clock. I beg to move that the Committee stage be adjourned until two o'clock.
Moved accordingly and, on Question, Motion agreed to.
[The Sitting was suspended at ten minutes before one o'clock and resumed at two o'clock.]
LORD CONESFORD: I should like to ask the noble and learned Lord the Lord Chancellor whether he would say something about subsection (6). May I remind the Committee that that subsection says this:
"For the purposes of the law relating to defamation absolute privilege shall attach to any report of the Board."
Those, I think, are quite exceptional words. In fact, I cannot at the moment recall any other Board having been given this absolute privilege, but I must admit at once that I have not fully examined this matter. In fact, I did not notice this provision until my last reading of this Bill, and rather astonishingly, the matter does not appear to have been raised in another place.
The ordinary effect of giving absolute privilege is that a person defamed has no remedy, even if there has been malice. No doubt it may be necessary sometimes to give an absolute privilege of this sort, but I think it is quite exceptional. I should like to ask the noble and learned Lord the Lord Chancellor whether he will tell us what other cases there are of a Board being given this absolute privilege; why it is thought necessary, and perhaps go on to explain how far it would give any protection to other parties who may repeat what is said in one of these reports. I notice that the noble Lord, Lord Goodman, is present. He has much more knowledge and experience than I have in this matter; but I think he, too, would like to hear what the Lord Chancellor has to say about it.
2.3 p.m.
THE LORD CHANCELLOR (LORD GARDINER): It has been my experience that the noble Lord, Lord Conesford, always notices everything, and I am sure he is quite right to raise this point before your Lordships. It was in fact raised
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in another place and an Amendment was moved. This is a point which has given the Government considerable concern, and it is not, I think, an easy point. Broadly speaking, absolute privilege has been confined to Parliament and to courts of law; and others, of course, are justified in publishing what Parliament or courts of law have said. Everybody would like to have absolute privilege for himself. As your Lordships will appreciate, the difference between absolute privilege and qualified privilege is that absolute privilege means what it says; qualified privilege is a privilege against any claim being made against you, provided that you say what you honestly think and do not act maliciously.
In considering most carefully whether the Board's reports should be made the subject of absolute or qualified privilege, one has to bear in mind that almost anything can amount to evidence of malice. Whether in the particular facts of the case it does amount to malice is a matter for the judge or the jury to decide. But this means that there is no real difficulty in starting an action for defamation on something which is the subject of qualified privilege because one can usually allege that something or other as evidence of malice. But, of course, the same may be said of administrative tribunals, for instance, whose reports are the subject of only qualified privilege.
What the Government took into account was, first, that this Board has, I think, as the noble Lord, Lord Byers, indicated this morning, gained considerable public confidence. It is not a Board which is going to send anybody to prison, or have any direct effect. It is an advisory body. But it is most important that it should feel free to say what it thinks. Here, I do not think one can take subsection (6) by itself; it has, I suggest, to be read in conjunction with subsection (5):
"In framing any report the Board shall have regard to the need for excluding, so far as that is practicable, matter which relates to the private affairs of any person and the publication of which would or might in the opinion of the Board prejudicially affect the interests of that person."
I believe this provision to be unique. I do not know of any other body upon whom has been placed that express duty, a duty which itself safeguards to a considerable extent the reputations of those

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forming the subject matter of the reports by the Board. In the end, the Government considered that the whole thing was a question of balance, and that if that positive and statutory duty was placed upon the Board, then it would be right that their reports should have absolute privilege.
LORD GOODMAN: In attending this debate to hear the melancholy discussions on this Bill, which must be regarded as melancholy on both sides of the House, I never for a moment expected the interesting matter of defamation to arise, or I should have attended with much greater enthusiasm. I am not sure that the noble and learned Lord the Lord Chancellor has dealt with the points that have, I think as a matter of high public interest, been raised by the noble Lord opposite in this matter.
First, the subsection to which he refers as providing protection is a novelty in the Bill, in the sense that it enjoins the Board to exclude from their reports extraneous matter. But what is not clear from the Bill is what would be the effect of neglect of that subsection by the Board if in their report they in fact included matter which turned out to be defamatory of a private person. I think it is probably clear from this Bill that, notwithstanding any such neglect, although the Board need not comply with this statutory exhortation they would still retain their absolute privilege. I think it must be clear, because the words of subsection (5) are little more than, as we say in the Law, precatory. I do not think they impose a precise obligation. I do not think they would deprive the Board of the protection. So that although one would expect a responsible Board, as this indeed is—many of us know the members—to pay high regard to this admonition, it is nothing more than an admonition and it does not deal with the point of principle.
I feel that there is a high point of principle here. Quite recently this House made clear that it was not in favour of providing new defences in relation to the law of libel to newspapers and other powerful interests. It would be sad indeed that, if it expressed that view in relation to newspapers, it should be prepared to provide a new defence to a statutory Board and to give it a right to say what it likes about anybody,
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regardless. As the noble Lord, Lord Conesford, has said in validly raising this point, the effect of the absolute privilege is simply that the qualified privilege which already exists is extended to enable the Board to have protection from malice. It seems to me wrong that there should be a statutory provision enabling a board to be malicious. As a matter of principle this seems to me wrong.
We are speaking at this moment without any Amendment being before the Committee, so that in a sense nothing that is said can be directed to providing any change. But we might urge the Government in other cases to consider whether in these matters the interests of the private individual should not prevail; whether in fact one does not give too much regard to administrative convenience in these matters, to questions of how convenient it will be for a Board to say what it pleases about somebody and have a means of doing that easily without fear of a writ. I believe that it is wrong, as a matter of legal approach, to say that all citizens should be deprived of their rights because one citizen can lightly embark upon a capricious action. This seems to me to be a wrong approach, if I may say so, with respect, to a Lord Chancellor who is more jealous of the rights of citizens than any in the whole history of his office. But I do not think one should deprive people of their rights. The courts are there to deal with frivolous and baseless actions.
This raises a matter of high principle going far beyond the mere technicalities of the law of defamation. It is another case where, in order to advance the smooth working of the governmental machine, we have become increasingly, not indifferent but unconscious of the rights of private individuals. I made this point as forcibly as I could when the Motion about the law of libel and newspapers was before this House. I venture to make the same point in this regard. Nothing can be done now in this case, but in future cases I hope that sufficient consideration will be given to the matter. This is a right which at the moment is not even enjoyed by a tribunal of inquiry; it was not even enjoyed by the Vassall Inquiry; it is not enjoyed at the moment by a tribunal set up to inquire into matters of national importance. Therefore, to give it to a

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Board inquiring into prices and incomes seems to me to lack some sense of proportion.
LORD CONESFORD: I am most grateful to the noble Lord, Lord Goodman, for supporting me in raising what is a very important point. I would also thank the noble and learned Lord the Lord Chancellor for explaining what the Government have in mind. As I listened to his explanation, the same point that struck Lord Goodman struck me—namely, that if the admirable exhortation in subsection (5) were ignored, there would be no remedy available to the injured party. As the Committee knows, I have no intention of obstructing the passage of this measure. I raised what I believe to be an important point and I am grateful for the support I got.
LORD DRUMALBYN: May I ask one question? At an earlier stage of this Bill there was some talk about the procedure adopted in considering it, and a very firm undertaking was given by the noble Lord, Lord Shepherd, that this would not be treated as a precedent. May I, likewise, in regard to this provision ask whether the Lord Chancellor will give an undertaking that it will not be treated as a precedent?
THE LORD CHANCELLOR: Yes, I will, and I would say that it ought not to be so treated. I have considerable sympathy with the views which have been expressed by the noble Lord, Lord Cones-ford, and by the noble Lord, Lord Goodman, who has such wide experience in this field. It is, in the end, a question of opinion. As I said, the Government did not find it altogether an easy point; one has, at the end of the day, to come down on one side or the other. Frankly, I must say that I am not as enthusiastic about this subsection as I am about some of the others. But I will certainly say that this will not, I am sure, be treated as a precedent.
Clause 4 agreed to.
Clause 5 agreed to.
Clause 6:

PART II
NOTICES AND STANDSTILLS
General
Power to bring Part II into force
6.—(1) Her Majesty may by Order in Council of which a draft has been laid before and
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approved by a resolution of each House of Parliament—

(a) bring the provisions of this Part of this Act into force for a period of twelve months beginning with the date specified in the Order,

(b) from time to time extend or further extend that period by a further period of twelve months,

and if the Secretary of State proposes to lay a draft of an Order in Council under this subsection before Parliament he shall first consult with such organisations or bodies as he thinks fit, being organisations or bodies which appear to him to represent to any substantial extent the interests of those particularly concerned with the Order.
2.16 p.m.
LORD WADE LORD WADE moved, in subsection (1)(d), to leave out "twelve" and insert "six". The noble Lord said: In moving this Amendment, it might be convenient to your Lordships if I were to make some reference to the following Amendment, Amendment No. 4. This is more than a probing Amendment, although it will provide an opportunity for spokesmen of the Government Front Bench to explain why these new compulsory provisions headed "Notices and standstills" are being introduced, and why it has been decided that these provisions should be introduced by an Order in Council which will be in force for a period of twelve months, with power from time to time to extend or further extend that period by a further period of twelve months. The object of this Amendment is to reduce the period from twelve months to six months; and that of the other Amendment, No. 4, is to delete the provision for further extensions. This is the first of the Amendments in relation to Part II, the Part of the Bill which introduces these new powers whereby the Government will attempt to enforce a standstill and to do so by the procedure of an Order in Council.
The object of the Amendments to which I have referred is to give Parliament a greater say in these matters. Some noble Lords may take the same view as was expressed in an article in the Economist on August 6, which was very critical of the Government's policy. The article contains this sentence:
"While the new temporary incomes policy is two-thirds based on muddle, the prices policy is nonsense through and through."
Some noble Lords may feel in those circumstances that the only course one

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could adopt would be to oppose the Bill root and branch, but whatever views one may have about the Bill, even if one considers that it is ill-thought-out, and even if one considers that it may lead to confusion, we have a duty to try to amend it. That is what we are attempting to do.
I do not think that it is any answer to this particular Amendment to say that these provisions may never come into effect. We must assume that they will be, or may be, acted upon. If an Order in Council is laid introducing these new powers dealing with prices and dividends and wages the Order in Council will be unamendable; I do not think that is in question. This also applies to the controversial Part IV which we shall come to later. Parliament can only approve or disapprove. If one turns to Clause 6(1) one reads as follows:
"if the Secretary of State proposes to lay a draft of an Order in Council under this subsection before Parliament he shall first consult with such organisations or bodies as he thinks fit, being organisations or bodies which appear to him to represent to any substantial extent the interests of those particularly concerned with the Order."
In other words, the Secretary of State is under some obligation to consult all kinds of organisations, except the Houses of Parliament.
I suppose someone might make the debating point that if Parliament is asked to say "Yes" or "No" to an Order in Council, Parliament is being consulted. I do not think the noble Lord who replies to this debate on behalf of the Government will make that point, because I do not think it would be accepted as a serious argument. I think it is clear that the only real opportunity for Parliament to put forward any constructive Amendments, and to be seriously consulted, is now. Afterwards, once this Bill is on the Statute Book, it will be too late. It is fair to say that there has been precious little time for Parliament to consider this Bill as a whole.
It may be said that we are in a state of emergency, and therefore drastic measures are required. I agree that the situation is serious. Why it has got into this unfortunate state is another matter—and we discussed that at some length in our debate last week. I en-
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tirely agree that the economic state of the country is too grave to permit of any action that is merely destructive, and I would make it clear, as I think it has been made quite clear already by my noble friend Lord Ogmore and my noble friend Lord Byers, that our intention is not to be destructive but to try to improve the Bill, which in our view contains a great many errors. It is all the more important that the right action should be taken at this time when the economic situation of the country is so serious.
Again, it may be said that what the country needs is a breathing space. It seems to me that overhanging these debates in the last two weeks two questions have not been answered; namely, how long is a breathing space, and what is a breathing space for? Surely it should be to provide time to produce a constructive and properly thought out policy. That has not yet been done. If the intention to use this Order in Council procedure and bring in these powers under Part II is claimed to give a breathing space, then I would say that it is too long. I believe that there is a very real danger that the Government, having obtained its attempted pay pause by the passing of this Bill with the period provided by Part II and the provisions in Part IV which we shall discuss later, will be tempted to regard, and make others regard, that as a solution. It is not a solution.
I do not believe that the provisions of this Bill, which are extremely complicated—the more I study them, the more confused I find myself—will provide a solution. Therefore I think that at the outset of our discussions on Part II we ought to try to ensure that the Government will be required to come back within six months at the latest; otherwise there will be temptation to sit back and say, "Well, we have got the Bill through; now we can carry on, and that will do as a solution." It will not. There is a point of detail on which I should like to pose a question at this stage, which perhaps could be answered from the Front Bench. I notice that in Part II it is provided—
LORD SHEPHERD: Will the noble Lord help me? He refers to Part II, but we are dealing with Clause 6. Is he speaking to Clause 6 or another clause?
LORD WADE: I am referring to Clause 6, in Part II. At the very beginning of Part II there is the provision that:
"Her Majesty may by Order in Council of which a draft has been laid before and approved by a Resolution of each House of Parliament—
(a) bring the provisions of this Part of this Act into force for a period of twelve months beginning with the date specified in the Order."
In Part IV, again, there is reference to a twelve-month period. Clause 25 provides that the period of twelve months shall begin with the date of the passing of this Act and may by Order in Council be continued in force for the remainder of the said period of twelve months. It would be interesting to know why there is this difference between the procedure in Clause 6 and that in Clause 25.
The more fundamental objection, however is the one that I have mentioned, the fear that this will be regarded as a breathing space—it is certainly too long a period—with the result that the long-term policy will not be worked out and Parliament will not be consulted. I think also that this has some bearing on the subject of productivity which was raised by my noble friend Lord Byers and will be discussed later in the debate on this Bill. I will admit at once that there is a distinction between, on the one hand, a vague declaration of intent in a nation-wide agreement, to the effect that there will be better productivity, and, on the other hand, agreements at company or plant level as a result of which there will be increased productivity which must be of benefit to the economy as a whole. It would appear that during the six months pause no such agreements will be approved.
Furthermore, if the new powers under Part II, and in particular under Clause 6, to which I am referring, are introduced, discussions about productivity will be deferred for very much longer than six months. It may be argued that during the six months period there is nothing to stop management and union representatives from discussing new agreements dealing with productivity and higher pay which might come into effect at the end of six months, but it would appear to me that if we embark on the procedure under Part II as proposed in Clause 6 these discussions are far less likely to take place. Discussions on the
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Fawley type of agreement will not, I fear, take place if Clause 6 of Part II is in operation. That is how I see it. I think those who get round the table will say to themselves, "There are these powers which are going to last a year, and maybe another year, and maybe yet another year, so it is not much good coming to an agreement because it may not be approved." I think that this clause will seriously prejudice the chances of these productivity agreements.
I should like to conclude by repeating the remarks I made at the outset. We are not trying to throw a spanner in the works. I recognise that we are dealing with a serious situation, so far as the economy is concerned. There are many of us who have very grave doubts as to the way in which the provisions of this Bill will work out. It seems to me that the proposals in Part II and those later on in Part IV will tend to make the situation worse, rather than better. Furthermore, it is essential that Parliament should be consulted at every possible stage, and therefore I believe that this period of twelve months, with power to extend it a further twelve months, is too long. So I beg to move the Amendment.
Amendment moved—
Page 5, line 39, leave out ("twelve") and insert ("six").—(Lord Wade.)
LORD SHEPHERD: The noble Lord, Lord Wade, has expressed doubts two or three times during the course of his speech. If I may say so, his doubts really stem from the fact that he does not understand the purposes and functions of either Part II or Part IV. He seemed to get them completely mixed up. That may be due to the fact that the noble Lord has not yet had an opportunity to study the Bill fully. Therefore, since this Amendment clearly raises the broad issue of Part II, I think I should try to explain it to the noble Lord and to the Committee.
One should first realise that Part II will remain a permanent feature of the Bill, when it becomes an Act. This does not mean to say that it will be enforced, but it will be a permanent feature, whereas Part IV will die within twelve months of the passing of this Bill into an Act of Parliament. That is the first answer that I would give to the noble Lord as to the

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reasons why Clause 25, the operational clause (if I may use that term) of Part IV, and Clause 6 are so framed. Clause 25 reads as follows:
"(1) At any time in the period of twelve months beginning with the date of the passing of this Act…".
This means that Part IV dies. There is nothing which you and I can do about it: Part IV dies automatically twelve months from the date of the passing of this Act. If Part IV had to be continued, it would be necessary for the Government to come to both Houses of Parliament with a new Bill. There is no way whatsoever—and we have done this deliberately—by which Part IV can be continued, other than by a new Act of Parliament.
Part II, however, is a permanent feature of the Bill, though it will not necessarily be in operation. It would be brought into operation by an Affirmative Resolution of both Houses of Parliament. Initially, it would be for twelve months. That is an arbitrary figure, but in the view of the Government it is sufficient to deal with some of the basic difficulties, to which I shall come shortly, for which we need Part II. Because we recognise that we may need to extend the period, we have included power to extend it, again by Affirmative Resolution; that power is in paragraph (b) which the noble Lord wishes to exclude. But that does not mean to say that, having invoked this power, it necessarily has to continue for twelve months, because subsection (5) says:
"Her Majesty may…at any time revoke an Order in Council made under subsection (1)…".
So the Government are taking power for twelve months, and they have power to extend the period by legislation; but they also have power to revoke the Order if they think it right and proper so to do.
LORD WADE: I do not want to keep interrupting the noble Lord, but it is therefore clear that at no stage will these powers be amendable by Parliament.
LORD SHEPHERD: It is true that there is no means of amending the Order, but Parliament has power to reject it. My experience is that the Order will be made only after there has been consultation, and the whole basis of this Bill is voluntary agreement to exercise general restraint. There can be consultation and
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there will be consultation, just as consultation is taking place continuously in Parliament. Consultation is always possible. Certainly, in this House at least, it will always be possible to raise this matter and to have it debated.
I should not have thought it could be said that the Government were taking extreme powers. The Government would bring Part II into operation only if it was considered fundamentally necessary. The Government believe—and I have stressed this time and time again—that we can get voluntary agreements under Schedule 2, which covers the Declaration of Intent agreed between the C.B.I. and the T.U.C. last April, and that we shall be able to get the necessary restraint.
Is this course necessary? The noble Lord, Lord Harlech, referred to the "economic mess" into which the Government have got the country. I do not propose to go through many of the distasteful figures which I have given in previous economic debates regarding the increasing seriousness of our economic situation which culminated in the events of October, 1964. It is interesting to note that, during the period of the Conservative Government, our share of world trade dropped from, I believe, 20 per cent. to 13 per cent., largely due to inflation and inability to keep our prices basically competitive in the world markets. I do not intend to make any Party point, as I hope the noble Lord will accept; I seek merely to stress that we are not dealing with a short-term matter. In fact, we are dealing with a deep-rooted malaise in terms of the rise in incomes outstripping increased earnings from production.
In 1961 the increase in money incomes was £1,300 million, yet the earnings by way of increased production were £800 million; in other words, in 1961 there was a deficit of £500 million. In 1962 the increase in incomes was £1,100 million, yet the increase in production was £200million—a deficit of £900 million. In 1963 the increase in incomes was £1,600 million, but although the increase in earnings was infinitely better it still showed a deficit of £600 million. In 1964, which was the last year that noble Lords opposite were in office, incomes increased by £2,300 million, whereas production rose by only £1,500 million—a deficit of £800 million. Therefore, during those four years, 1961 to

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1964, the increase in money incomes outstripped the earnings from increased production by £2,800 million. This is a very serious situation, and the real significance of it is that it is a continuing one. Again, 1965 was not good. The pressures were there from a booming economy and, let us be quite frank about it, the pressures are still there. If we did not obtain a voluntary incomes restraint during the next twelve months, we should again see a very large increase in incomes over production. The Government cannot stand idly by.
I would remind the House of the speech which was made by the noble Lord, Lord Brand, during an earlier debate, in which he drew attention to a report of the O.E.E.C. That Report said that the Government:
"must have a wages policy for dealing with the problem of wages just as they must have monetary or fiscal policies for dealing with the problem of demand. We are fully aware that to do so requires a decision at the highest political level and a political understanding of the need for it".
That was 1961. As I said, we set out on August 3 to try to obtain a prices and incomes policy. I would not accept that we have failed. Certainly the T.U.C. set up this early-warning system, and so did the C.B.I. It would be wrong to say that both organisations have failed, but I think it is generally agreed that we did not meet with all the success that both parties deserved, due to the very heavy pressures that lay within the economy. Therefore, we have had to take these special powers.
Let us consider Part II. We do not strike at the voluntary agreement or at voluntary negotiation. The noble Lord, Lord Harlech, was utterly wrong when he said that this Bill struck at the very principles of freedom. If I may say so to the noble Lord, I am not sure what we mean by freedom. If we mean the freedom of living in a jungle, where the strong can beat the weak, that to me is no form of freedom. There is freedom where the weaker are protected. Perhaps the noble Lord, Lord Harlech, will read what my right honourable friend who is now the Foreign Secretary said the other evening in a fifteen-minute speech of tremendous emotion—he was really speaking, suppose, not to the House
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of Commons but to his trade union friends throughout the country. In that speech he said to the unions, "Of course, you are strong. You can do what you like. Some unions are stronger than others; but there are some that will suffer for it." That, to me, is not freedom, and I am quite sure that to the noble Lord, Lord Harlech, it is not, either.
This Bill does not strike at anybody's freedom. All it asks, in Part II, is that the unions and management should continue their voluntary restraint, and that they should voluntarily notify their two organisations, the T.U.C. and the C.B.I. But if that should fail, then the Government say, "All right. We must take these powers", and we make an Order that the claims of that particular section of industry or particular section of workers are clearly out of line with the principles of Part II. By making that Order we say, "You must notify us of your increase, and for thirty days you shall not proceed with it". I do not believe that that strikes at any man's freedom—at least, not freedom as I understand it.
What does the Order mean further than that? It means that, if the Government refer a claim to the Prices and Incomes Board, the Board shall have three months in which to consider the case and all the facts that are behind it. Does that strike at any individual's freedom? I should not have thought so. Then, at the end of that three months, whether the Board has or has not reported, it is up to the parties to the claim, taking into account the report, if available, and taking into account the national interest, to decide whether they should proceed, fully or in part. This Part does not strike at collective bargaining or at collective agreement. I would hope that your Lordships' Committee will understand that this lies behind Part II.
The noble Lord asked us to agree that the period of operation of the Order should be reduced to six months. That would not help the noble Lord in terms of Parliamentary discussion, because, whether it is six months, nine months or twelve months, the noble Lord does not suggest that the matter should be dealt with in any way other than by an Order. It seems to me that twelve months is the right period—and, let us face it, we are dealing only with the operation of the

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Order, not with the operation of the Part. The Part, in fact, may never be brought into operation; this may well be so. If we get the voluntary agreement, then it will not be brought into operation.
LORD WADE: I am sorry to interrupt the noble Lord. I appreciate the fact that, if the voluntary proposals work, this provision may not be brought in, but, after all, it is there in the Bill, and we have to consider the possibility that it will be brought in. The noble Lord suggested that, in moving this Amendment, I was admitting that this must be dealt with at all times by the Order-in-Council procedure. By virtue of our procedure, I can amend only in this way, but I do not want it to be thought that I admit that the Order-in-Council procedure is desirable or necessary.
LORD SHEPHERD: I, like most noble Lords, enjoy making a debating point, and I was doing so then. But this is the point of the noble Lord's Amendment. It does not, even if it is accepted, give to Parliament increased powers or opportunities of consultation over and above what is in the Bill; and, therefore, we really come down to whether it is six or twelve months. I would suggest that twelve months is the right period.
I sit down with this thought—and my mind goes back to this particularly because I see the noble and gallant Viscount, Lord Montgomery of Alamein, sitting opposite. We are in some economic difficulty. We need a period of restraint—and particularly will this be seen when we come to Part IV. I agree with the noble Viscount—and he has said this to me many times—that we should not talk about the Dunkirk spirit, in the sense that Dunkirk was a defeat. I think that most of us have in mind that Dunkirk was a great display of guts and grit by the British people, fighting back from adversity, but, seeing the noble Viscount opposite, I would rather refer to one of his earlier battles, if not his first battle, in the desert—Alam Halfa. This, noble Lords may remember, was a battle in which the Germans made their last attack upon the Alamein line. The noble Viscount fought it with 25-pounders against their tanks. It was a victory, even though we did not chase them afterwards; we had to wait a few weeks.
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But that battle made Alamein and the future campaign possible.
I take up the point of the noble Lord, Lord Wade, that if we fail to make use of this period of restraint when we get it, we shall have failed, even though in one sense we shall have succeeded. We have to make a special effort to get that productivity about which the noble Lord, Lord Byers, spoke. But I do not believe that, if parties are really determined to get productivity agreements in the interests of the workers and of the companies, that depends upon getting something now; I believe that the men who are prepared to make those agreements are prepared to wait. I have perhaps digressed a little, but we are dealing with the spirit of Part II.
VISCOUNT MONTGOMERY OF ALAMEIN: May I congratulate the noble Lord on his knowledge of the conduct of the war?
LORD SHEPHERD: It is only because I read the noble and gallant Viscount's books. I hope that the Committee will not accept the Amendment of the noble Lord, Lord Wade. I hope that the Committee now has a clearer understanding of the position, after my few words upon the spirit of Part II, and with that, I hope we may proceed to the next Amendment.
LORD HARLECH: I had not intended to speak on this Amendment—indeed, I do not hold any particular brief for it—but we have had from the noble Lord, Lord Shepherd, something of a homily about not confusing Part II of the Bill with Part IV. Indeed, he rather castigated the noble Lord, Lord Wade, for muddling the two up. I must say that he then went so wide in his speech that it seemed to me that, for the most part, he was talking about Part IV rather than Part II.
Certainly, in my speech on Second Reading (if I can call it that, because we were supposed to take the Second Reading formally) I said that certain provisions in this Bill—and I was dealing particularly with Part IV—were an infringement of our normal freedoms. And when I said that, I had particularly in mind the power that was going to be given to the First Secretary to interfere in wage agreements that have already

1811
been concluded between management and labour and, indeed, in agreements between the Government and certain sections of the community like the doctors. If this is not an infringement of our normal freedoms, I do not know what is. That is what I was referring to in my Second Reading speech. I do not feel that it really arises at present on Clause 6 of the Bill.
LORD MESTON: May I ask the noble Lord, Lord Shepherd, a very simple, elementary question? Let us suppose that in October, 1966, the National Incomes Board reports on the question of the rates of interest that should be charged by the building societies. If Part II is in operation, is it open to the Minister acting on that report—I do not say that he will do so—to make an Order that those rates of interest must be reduced? It is a simple question.
LORD SHEPHERD: This is the trouble. The noble Lord is now on Part IV.
LORD MESTON: No, I am not—
LORD SHEPHERD: Let me finish. If the noble Lord reads Part II, he will see that the only power the Government or the Ministers have is to refer the claim to the Prices and Incomes Board. Once the Prices and Incomes Board has made its report then it is up to the parties, taking the public interest into account, to decide what to do. The point that the noble Lord made really arises on Part IV and not on Part II.
LORD MESTON: If I have the permission of the Committee to speak again, I should like to say that we have been told that the building society rates of interest do not come within Part IV at all.
THE MARQUESS OF ABERDEEN AND TEMAIR: May I be quite clear on this? I am thinking of the man on the shop floor. We have this necessity to increase productivity. If on the shop floor the production is increased, can the workers get more money in less than twelve months? I hope I am not egotistical in referring to my own experience: but I may be the only Member of this House who has been a member of a trade union and who, while at work, was exceeding the rule of the production line.
1812
I did not get any more money for it. My shop steward came and checked me and said I was not to do it. Coming to the present-day man on the shop floor who, with his trade union colleagues does more work, can he get more money in less than twelve months?
LORD BYERS: May I intervene before the Minister replies? He went very wide in his speech; in fact at one moment I thought he was going to blame the noble and gallant Viscount, Lord Montgomery of Alamein, for the economic mess we are in. I think we should remind the noble Lord—
VISCOUNT MONTGOMERY OF ALAMEIN: I thought they were trying to get me to get them out of a mess.
LORD BYERS: I was going to say that in those days, one should remind the Committee, we had brilliant leadership, both military and civil, which we have not got to-day. But I want to ask the noble Lord this question because he certainly confused me when he said the Government will bring in Part II only if it is proved to be necessary. What was it that the Prime Minister was stating on July 20, when he said we were definitely going to have a wages standstill for six months followed by a period of restraint? If we are not going to bring in Part II unless it is necessary, and if we are not going to bring in Part IV unless there is a disaster, are we not wasting a little time?
LORD SHEPHERD: I think the noble Lord, Lord Harlech, was right in his complaint about the shortage of time and that perhaps noble Lords have not really had the opportunity of understanding the Bill. Part II is nothing to do with the standstill announced by my right honourable friend on July 20. Part IV refers to the standstill. Part II is concerned with the "early warning" system and with the reference of such claims, in the judgment of the Secretary of State, to the Prices and Incomes Board. The matter of the six months' restraint does not arise in Part II. The reply that I would give to the noble Marquess, Lord Aberdeen and Temair, is that his speech could well be repeated to my noble friend Lord Champion on Clause 28.
LORD CHAMPION: Please do not bother.
LORD BYERS: The noble Lord will surely clear up this point. From what he said, if Part IV is to implement what the Prime Minister said on July 20, there is no doubt that Part IV is going to be implemented. This is not what the Goverment have said. The Government have said that Part IV will be implemented only if the voluntary system does not work.
LORD SHEPHERD: The noble Lord is not so naïve as he is trying to make out. I am quite sure that the noble Lord, Lord Byers, knows what Part II does. If he does not, after what I have said, then Heaven help him! Part IV could be used to implement the statement made by my right honourable friend the Prime Minister; but we do not wish to invoke it unless the voluntary agreement (which we believe we can get and which we are hopeful of getting) is not forthcoming. If we get that agreement, Part IV will not be necessary. But Part IV will be brought in only to deal with those people who are not working in the national interest. Does that satisfy the noble Lord?
LORD WADE: No.
LORD SHEPHERD: Then I cannot help him.
LORD MESTON: The noble Lord, Lord Shepherd, appears to be a great militarist. Has he ever heard of the Sword of Damocles?
LORD CITRINE: I must say that I cannot square the Explanatory Memorandum with what the noble Lord, Lord Shepherd, has explained to the Committee. Paragraph 16 of the Explanatory Memorandum, which is attached to the Bill, says:
"Clause 15 empowers the Secretary of State or…another Minister…to direct that any award or settlement referred to the Board shall not…be implemented until the Board's report has been published or until three months after the reference…"
So there is a temporary standstill, whether we like it or not, for three months. I am not dissenting from this; but I think it is confusing to mix the standstill referred to in Part IV with that in Part II where, without doubt, we have a temporary standstill while the Board considers the matter and until the report is made. I do not dissent from that: but it is a matter of clarity.
LORD WADE: I am afraid that some noble Lords will be even more confused now than at the outset of this Amendment. I would direct the Committee's attention to the fact that the heading of Part II is "Notices and Standstills" and also to a reference to the Board making a resolution in a standstill which is the object of Part II. How this cannot be a standstill at all, I do not understand. I am afraid that while recognising, perhaps, that the major battles will come on some of the other clauses, I still must say to the Committee that the reply of the noble Lord, Lord Shepherd, has been far from clear.
On Question, Amendment negatived.
Clause 6 agreed to.
Clause 7 [Notice of intention to increase prices or charges]:
7.—(1) The Secretary of State may by order apply this section to any prices for the sale of goods and to any charges for the performance of services, including charges for the application of any process to goods.
(3) When notice of intention to increase prices or charges to which this section applies has been duly given to the appropriate Minister—

(a) those prices shall not be increased until after the expiration of a period of thirty days beginning with the date on which that notice of intention is so given, except that if at any earlier time the person giving that notice of intention receives written notice from the said Minister stating that it has been decided not to refer the notice of intention to the Board, this paragraph shall apply only until that earlier time,

(b) if under section 2(1) or 2(3) of this Act the notice of intention is referred to the Board by a reference published in the Gazette within the said period of thirty days, those prices or charges shall not without the written consent of the Minister or Ministers who referred the notice be increased until the date of publication of the Board's report on the reference.

3.0 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (1), to leave out "for the sale of goods and to any charges for the performance of services," and insert:
"at which goods are normally sold or charge sat which services are normally performed".
The noble Lord said: I beg to move the Amendment standing in my name; and perhaps it would be convenient if we discussed Amendment No. 6 at the same time. This Amendment assumes

1815
that the Government continue to believe in competition and that they do not intend to hamper it by interfering with normal marketing promotions. At any given time some firms are likely to be launching new products, or offering special introductory discounts; others will be making sales drives with special offers and others will be disposing of old stock at reduced prices, and so on. It would be absurd were they to be condemned to go on selling at these abnormal prices, even for another thirty days, if the special promotion was due to end right away. It would be equally absurd if they could not return to normal trading conditions without the consent of the Minister. I hope that the Government do not intend to entangle industry in any red tape of this kind.
There is the additional point about normal prices. They are obviously prices of general application; you can move from one normal price to another by increasing or reducing the price. It sometimes happens that firms or manufacturers make contracts or agreements that certain prices should run, but in the meantime the normal price may be raised. The contract price may run on until the end of the contract and that price will then also be raised. It may well happen that a price has been increased before July 20 but that some contract prices which are still running on are due also to be increased to bring them into line with the normal prices after July 20. As the contracts come to an end, so the prices would automatically be increased. It would be absurd if the prices of contracts were to be held down with the effect that some people would be getting the same goods at cheaper prices than others.
As I read the Bill, Part IV deals with this point quite satisfactorily, but Part II does not seem to do so. I hope that in respect of the point I am on now the noble Lord will be able to say that common sense will prevail and that when they talk about prices they mean the normal prices; and that this is the way the Government, and if necessary the Attorney General, will interpret this phrase. Even though it is not actually in the Bill, they must surely refer to normal prices and not to particular trade promotions, and not, so to speak, to
1816
surviving prices of a previous era of the general price level. With that explanation I beg to move the Amendment.
Amendment moved—
Page 6, line 38, leave out from ("prices") to ("including") in line 39 and insert the said new words.—[Lord Drumalbyn.]
LORD WINTERBOTTOM: I am glad I managed to guess the intentions of the noble Lord. I should like to separate my reply into two halves, because the noble Lord, Lord Drumalbyn, asked two separate questions. The second point I was preparing to cover is the Amendments on Clause 26 and Clause 27. This question is on contracts, and so, with the permission of the Committee and that of the noble Lord, I shall deal with the Amendment as it stands on the Order Paper.
The noble Lord is quite right in thinking that the Government do not wish to hamper normal commercial methods of sales promotion, and perhaps it will be of assistance to the Committee if I say at this stage that Clause 10 is an attempt to cover this point. When first read the Bill, I was a little confused about what would happen and how one would compare the sale prices of blouses at Harrods and the prices of blouses at Marks & Spencer, but in fact this is a hazard which does not exist. The Amendment is unnecessary because of Clause 10, which specifies which prices shall be taken for comparison in ascertaining whether a particular price represents an increase. There is a provision in Clause 10 for making comparisons between transactions which are not in all respects comparable, if there are no transactions which are exactly comparable. It is very unlikely that a Clause 10(3) comparison would ever need to be made, say, between sales prices and out-of-sales prices. If it were needed, the subsection insists that a "fair adjustment" must be made "to take account of the differences". This is really rather a theoretical argument.
But although—and I think that this is the key point in answering the Amendment of the noble Lord—the Government intend that the "early warning" system should continue to apply mainly to manufacturers' prices and not to wholesale or retail ones, and no problem therefore will generally arise from the sales promotion

1817
campaigns of retailers, introductory offers, et cetera, the Government do not renounce the right to raise these particular facts. But they do not in normal circumstances intend to use the powers. In the main they are intended for use against rises in manufacturing prices.
LORD DRUMALBYN: I am obliged to the noble Lord, Lord Winterbottom, for his explanation. I did not think that Clause 10 entirely covers the point. It seems to me to deal with a rather different form, the case where a manufacturer changes his packing or changes his design a little, and pretends that the product is entirely new and charges a much higher price. Surely that is the case which is dealt with in subsection (3), not the point that at any given time the prices of certain firms—even manufacturing firms, because some manufacturers sell direct to the customer—may be below normal. I think I may take it, from what the noble Lord, Lord Winterbottom, has said, that although, in my view, it is not actually in the Bill, the Government do not intend to be unreasonable about this matter; and as we have now established that, I think I may safely ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (3), to leave out paragraph (b). The noble Lord said: I think this is an important Amendment because here, as the noble Lord has said, we are dealing with a more permanent aspect of the policy than is covered by Part IV. The fact is that under Part II undertakings will be able to increase their prices, or do whatever they think fit, after the report of the Board is published, whatever it says. The compulsory aspect is purely, as the noble Lord, Lord Shepherd, has said, to impose a delay, so there is no reason why a reference to the Board of the proposed increase should result in a standstill of up to three months in respect of prices. This may mean that prices will have to be increased at the end of the period by more than they otherwise would have been increased. Obviously, the firm may have to recoup the amount it has lost in the intervening period. It could mean, in the meantime, severe difficulties for the undertaker. There does not seem to be any provision for the Minister to allow a smaller increase than proposed, pend-
1818
ing the Board's report, yet it may be very urgent to have at least some increase.
It seems to me that the provision in regard to prices is far too inflexible. It could result in an artificial scarcity, due to the disinclination of the industry to sell until the standstill period is ended. One can see why it is in the Bill. It is due—I say this not in a critical spirit, because I quite understand it—to the refusal of trade unions to admit that, as the noble Lord, Lord Shepherd, said on the consideration of the "White Bill", price increases and pay claims cannot reasonably be treated in the same way. If prices are not increased in an industry where profits are not excessive and costs are rising, that industry may well see its profits disappear and turn into losses. It is deprived of what it has, and what it must have if it is to carry on at all. That is quite different from wages at a time when prices are increasing. People may be marginally worse off for a time, but they can carry on, at least unless they have been excessively imprudent in the past.
It is impossible to build a successful policy on a falsehood, and to act as if prices and wage claims can be treated alike is to practise a falsehood. It would be much better if the Government dropped paragraph (b) altogether. That would not prevent them from referring suggested increases in prices or charges to the Board. If the Board considers it necessary, as it probably would in almost every case, the industry or profession would defer in time to the Board's opinion. Let me say, in passing, that the Board's opinion may not always be right. I have moved this Amendment because it is extremely important that it should be realised that wages and prices cannot be treated on exactly the same basis. One understands that if prices go up, we run the risk of pressure for an increase in wages; but, as I said on Second Reading, there are lean years and fat years. It is important that everyone in the country should recognise that and that wages should not go up automatically because prices go up. We ought to know that, particularly in an island such as we inhabit, where we are so dependent on overseas trade and prices and international influences. I should like to see this paragraph removed from the Bill, because I do not think it will help. I beg to move.
Amendment moved—
Page 7, line 13, leave out paragraph (b).—(Lord Drumalbyn.)
LORD WINTER BOTTOM: I agree with the noble Lord that this clause will cause difficulties to individuals, companies and organisations, but doing nothing at this stage will also cause a different set of problems to the same people and organisations. I think every one agrees that action must be taken now, because within our economy over the last months and years an inflationary chain reaction has been building up which has imposed upon us the unpleasant necessity of taking drastic action against forces which might well destroy our economy. The Government have framed a policy in this Bill, which is only a continuation of earlier policies, to enable us to use administrative delay as one of the factors for bringing our economy under control. We admit that there is delay, and that this may cause hardship; but the hard fact is that it is necessary; otherwise it would not be in the Bill.
The noble Lord has rightly pointed out the relationships between prices and incomes. My noble friend Lord Champion will be dealing with the wages aspect, but I would say that it is utterly impossible to have a wages standstill if we do not do our best beforehand to ensure a prices standstill. These two elements in our economy are interlinked and must be controlled together. For this reason the Government resist this attempt to remove paragraph (b) from the clause.
LORD DRUMALBYN: Before the noble Lord leaves that matter, would he give consideration to this point? He said that action must be taken now; otherwise it would not be in the Bill. But this is a long-term provision. The provisions for standstill are in Part IV and have nothing to do with this. Surely we can deal with the long-term aspect, apart from Part IV.
LORD WINTERBOTTOM: If it becomes necessary, through lack of ability to co-operate, to bring Part II into effect, then these powers of delay will become necessary. That is why we must retain them. I assure the noble Lord that reasonable men would be administering this Bill when it becomes an Act. Under the Bill it is not necessary that the freeze
1820
should last for the whole period of three months. There is a provision in Clause 7(3) for the Minister to end a temporary standstill at any time, and I am absolutely convinced that if a firm or individual came to the administrators of the Bill with a properly prepared and documented case, showing that goods would be withdrawn from the market, the standstill would be removed at an earlier stage than the three months envisaged in the Bill.
On Question, Amendment negatived.
3.17 p.m.
LORD REAY LORD REAY moved, in subsection (3)(b), after "until" to insert "thirty days after". The noble Lord said: I beg to move Amendment No. 8, and with the Committee's permission I will speak also to No. 9. This is a modest Amendment, which I expect will arouse a certain amount of sympathy in the noble Lord, Lord Shepherd. In return, I trust that he will not remind me that I am not speaking to Part IV of the Bill. I feel tempted to ask for some initial clarification. The Amendment is based on the assumption, about which I am now confused, after the exchanges that have taken place between noble Lords opposite, that prices and wages cases can be held until the moment the Board reports. The noble Lord signifies his assent and on this assumption, I move this Amendment.
In one sense, the Amendment might be said to strengthen the Bill. It deals with the period between the ending of any freeze and the reversion to the ordinary incomes policy as outlined in Part I of the Bill. What is likely to happen after a freeze? What has tended to happen in the past, where the Board has reported that there is a particular claim for a rise in wages or in prices which, in their view, is outrageous and highly inflationary, is that under the provisions of the Bill from the day that the report is made public the union or industry can totally disregard the recommendations of the Board and implement the rise which the Board has said it would be against the national interest for them to have.
The purpose of the Amendment is to provide for thirty days to elapse between the publication of the report of the Board and the date when it will be possible for the firm or the union concerned to disregard the recommendations of the

1821
Board. After the period of thirty days there is no question of further statutory control. The object is simply to provide a "cooling-off" period when it will be possible to debate in various media—letters to the newspapers, debate in Parliament—and to test public reactions to the threat of a rise in wages or prices. It seems to me that this might have a salutary effect, because while it would be open to the institution concerned, after thirty days, to defy the recommendations of the Board, it would do so with the greater knowledge of public opinion, of Parliamentary opinion and what the Government thought about it, and also of any threat of legislation that might follow.
The point is that we do not have a long-term prices and incomes policy at the moment, and no real step has been taken to lay the foundations of one. I think this is a modest Amendment, and that it should command a certain amount of sympathy from noble Lords opposite. I do not claim that it makes the smallest movement towards establishing a prices and incomes policy—which I hope will be one of the functions of the Government in the future—but it is a step towards bridging the gap between the freeze and the time when such freeze gives way to an ordinary incomes policy. I hope that the Amendment will have the support of your Lordships as a reasonable one. I beg to move.
Amendment moved—
Page 7, line 18, after ("until") insert ("thirty days after").—(Lord Reay.)
LORD SHEPHERD: Initially, this Amendment is one that I should have thought would command considerable sympathy from those who recognise some of the advantages of the legislation in the United States and in other countries on the Continent. The use of the phrase "a cooling-off period" might attract sympathy, but I think there would be some difficulty and, if I may say so, some danger. Perhaps I may clarify one small dispute that arose between myself and noble Lords opposite as to what we refer to as a standstill. The standstill that I had in mind when I was talking about Part IV was the six months' standstill announced by the Prime Minister and the restraint that follows. I gather that the noble Lord, Lord Reay, was thinking of the standstill the noble Lord, Lord
1822
Wade, referred to; that is, the three months while the Board is considering the matter referred to it, and the thirty days after the Secretary of State has been notified of an intended rise in prices. The noble Lord, Lord Reay, is now considering a standstill period for consideration before a claim is sent to the Board. This standstill period is not being regarded as a means of delaying either a pay increase or a price increase as a period of delay in itself. This, I think, would be wrong. If we were to do this, I think we should say clearly that this is what we have in mind.
The object of the thirty days period is for the Secretary of State to consider the matter before sending it to the Board, and then to give the Board three months in which to make its Report. In most cases, it reports before the three months are up, and this is a remarkable performance on the part of the Board. I feel that to tag on to what is clearly a period for consideration another statutory period for delay would raise considerable difficulty with those organisations, upon whom we shall depend for co-operation within the prices and incomes policy. I hope that the noble Lord will see that we are sympathetic to the idea, but that it would endanger the whole position of the Board with the C.B.I., the T.U.C. and other organisations which from time to time will be asked to submit information.
LORD REAY: I do not understand the distinction in principle which the noble Lord is trying to draw between various parcels of delay. One is the notice to the Secretary of State before it is referred to the Board. The second is while the Board considers it. I am now suggesting a third. This does not seem to me to differ in kind from the other two delays, but seems to extend them, and for a particular purpose, for which I have given the reasons and will not repeat. If the noble Lord is saying that this would make the period too long for one to be able to retain the co-operation of these bodies, this is obviously a different reason.
LORD SHEPHERD: The noble Lord must recognise that if his thirty-days period were included there would be a standstill for a different reason from the standstill which we have felt necessary for consideration. It would mean there were

1823
two different types of standstill. I am sure that if we accepted, as the noble Lord now suggests, a further thirty days, this would raise considerable difficulties with the two organisations upon whom we are dependent for this voluntary agreement, and also for their support of the National Prices and Incomes Board. There will be two different types of delay, and I think this would be wrong.
LORD BYERS: May I put it to the noble Lord that it might be absolutely right to have two different types of standstill? As I understand it, the thirty days is first required for the Department to have a look at the matter. The next three months is the maximum required by the Prices and Incomes Board for consideration. What my noble friend is suggesting is that when the decision is given, there should then be a period of an entirely different form whereby public opinion can be moulded one way or the other. But what we have in the Bill as it stands is an immediate invitation to the parties to put into practice what they wanted to do, despite the fact that the Board will have ruled against them. I should have thought that a cooling-off period was an important thing to have in a Bill of this nature.
LORD WADE: The noble Lord, Lord Shepherd, will be aware that Mr. William Rogers, speaking on behalf of the Government when this question was debated in another place, made some favourable remarks about this Amendment. I should have thought that this would be the kind of Amendment that might well be accepted. I will not go over all the ground about the different kinds of standstill. We have established the fact that there is a Part II standstill and a Part IV standstill, and we are now talking about the Part II standstill. But there is the reference to the Board, and
what is suggested here is that when the Board have reported there should be a cooling-off period of thirty days. I should have thought that this would be helpful. Incidentally, if it is a decision of vital importance affecting the country as a whole, then there would be an opportunity for Parliament to give it consideration. I come back to my old point that we are tending to forget Parliament altogether. Surely this proposal of a thirty days period would be the kind of suggestion that the Government might well accept.
LORD COOPER OF STOCKTON HEATH: There seems to be a complete misconception of what is intended by Clause 2, and I am amazed to hear the phrase "cooling-off period" brought into debate. The whole purpose here is, first of all, to oblige the trade union movement and business people to give notification if they intend to claim more, and for a month we are not allowed to do anything at all. Then if the Board wish to look into the situation, a period of three months will elapse before we are allowed to do anything. But this was never intended to be the end of collective bargaining and the significance of the three months' period is that it provides for an assessment: the Prices and Incomes Board within three months can at least have made an adjudication. The purpose of the adjudication is to try to persuade employers and unions to have some regard to the public effect of the actions they may take. It would be most unfortunate to drag the time out any longer than is necessary, and four months is quite adequate for this purpose.
3.30 p.m.
On Question, Whether the said Amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 19; Not-Contents, 72.

CONTENTS

Airedale, L.

McNair, L.

Saye and Sele, L.

Amherst, E.

Meston, L.

Sherwood, L.

Asquith of Yarnbury, Bs.

Moynihan, L.

Sinha, L.

Barrington, V.

Ogmore, L.

Swaythling, L.

Byers, L.

Ponsonby of Shulbrede, L.

Terrington, L.

Carnock, L.

Reay, L. [Teller.]

Wade, L. [Teller.]

Gladwyn, L.

NOT-CONTENTS

Addison, V.

Blyton, L.

Brockway, L.

Archibald, L.

Bowden, L.

Brown, L.

Attlee, E.

Bowles, L. [Teller.]

Burden, L.

Campbell of Eskan, L.

Latham, L.

Segal, L.

Caradon, L.

Leatherland, L.

Shackleton, L.

Champion, L.

Lindgren, L.

Shepherd, L.

Citrine, L.

Llewelyn-Davies, L.

Sinclair of Cleeve, L.

Clwyd, L.

Lloyd of Hampstead, L.

Sorensen, L. [Teller.]

Cohen of Brighton, L.

Longford, E. (L. Privy Seal.)

Stocks, Bs.

Collison, L.

Maelor, L.

Stonham, L.

Cooper of Stockton Heath, L.

Morris of Kenwood, L.

Stow Hill, L.

Crook, L.

Moyle, L.

Strabolgi, L.

Darwen, L.

Nathan, L.

Strang, L.

Faringdon, L.

Peddie, L.

Summerskill, Bs.

Francis-Williams, L.

Phillips, Bs.

Taylor, L.

Gaitskell, Bs.

Plummer, Bs.

Twining, L.

Gardiner, L. (L. Chancellor.)

Rathcreedan, L.

Walston, L.

Granville-West, L.

Ritchie-Calder, L.

Wells-Pestell, L.

Haire of Whiteabbey, L.

Rhodes, L.

Williamson, L.

Harvey of Tasburgh, L.

Robertson of Oakridge, L.

Willis, L.

Henderson, L.

Royle, L.

Winterbottom, L.

Hilton of Upton, L.

Rusholme, L.

Wise, L.

Iddesleigh, E.

St. Davids, V.

Wootton of Abinger, Bs.

Kirkwood. L.

Sanderson of Ayot, L.

Wynne-Jones, L.

Resolved in the negative, and Amendment disagreed to accordingly.

LORD CHAMPION: My Lords, I beg to move that the House be now resumed for the purposes of making a Statement.
Moved, That the House do now resume.—(Lord Champion.)
On Question, Motion agreed to, and House resumed accordingly.

ROYAL COMMISSION ON ASSIZES AND QUARTER SESSIONS
3.38 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, with the permission of the House, I should like to make a Statement about the setting up of a Royal Commission. My right honourable friend the Prime Minister is making a similar Statement in another place during the course of this afternoon.
As the House knows, I have for some time been considering the arrangements for the trial of civil actions outside London. But as these arrangements necessarily affect criminal business too, the Government have now decided that a far-reaching inquiry into the whole of the present system of assizes and quarter sessions is desirable.
Her Majesty has been pleased to approve the recommendation that a Royal Commission should be appointed with the following terms of reference:
"To inquire into the present arrangements for the administration of justice at Assizes and at Quarter Sessions outside Greater London, and to report what reforms should be made
1826
for the more convenient, economic and efficient disposal of the civil and criminal business at present dealt with by those courts."
My right honourable friend the Prime Minister hopes to announce the names of the Chairman and other members of the Royal Commission after the Recess.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am sure the whole House will be grateful to the noble and learned Lord the Lord Chancellor for giving that important Statement to us this afternoon. I think probably the whole of the House, the legal profession and those concerned in these matters, will welcome a full ranging examination of this problem, which has been the subject of a great deal of discussion of late.
May I ask the noble and learned Lord one or two brief questions? I know there will be many questions to be considered, but I hope these will not fall outside the range of the matters to be covered by the Royal Commission. First, does the noble and learned Lord envisage that extensive consultations and inquiries will be necessary before the Royal Commission can come to some conclusion? I know people always ask for speedy answers from such Commissions, but this one does not brook of any delay and, as I see it, only the legal and the local authority circles, particularly in the Assize towns, should have to be consulted, and I would hope the noble and learned Lord takes the view that there should not be a tremendous amount of outside consultation, although obviously that which is necessary will be done.
Second, will the Royal Commission be able to deal with points like the time

1827
wasted on commission days, if it is wasted, which to some of us seems to be the case? Will it deal with the phasing of quarter sessions in various areas? I believe at the moment this is arranged more or less informally between the town clerks and the county clerks of the places concerned, and by no means is there always a harmonious result, either for the judge who may be the chairman of the quarter sessions or indeed for the Bar.
Third, will there be some fairly far-reaching review of civil matters which are at present tried before quarter sessions? I am loth to suggest the end of the traditional civil and administrative jurisdiction of quarter sessions, but the fact remains that there are, under the Public Health and Local Government Acts, a number of appeals which I should have thought could easily go either to the county court or, in some cases, to a public inquiry. Finally, if this is the case and there are borderline issues between administration and justice which the Royal Commission feels would not necessarily be best dealt with either by the county court or by a local government inquiry, say under the Ministry of Housing and Local Government, is there the possibility of a new body of inspectors, responsible to the Lord Chancellor himself, being set up to deal with these matters?
3.43 p.m.
LORD OGMORE: My Lords, on behalf of my noble friends and myself, I should like to thank the noble and learned Lord on the Woolsack for making this important Statement to us to-day. We feel that this whole subject has long been overdue for examination, particularly as regards the civil jurisdiction of assizes.
I would ask three questions. First, is any consideration going to be given by the Commission to the location of the district registries of the High Court? In isolated and sparsely populated districts such as mid-Wales it is important that there should be district registries nearby even though the number of Assize courts may be cut down. Secondly, may I ask him to look into the question of the jurisdiction of the county courts, which as the noble Viscount, Lord Colville of Culross, said, affects the question? Third, may I
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ask the noble and learned Lord to inquire into whether the complexity of the matter, and not the value of the subject matter at stake, should be the question which determines whether a man goes to the county court or to the High Court?
THE LORD CHANCELLOR: My Lords, I am grateful to the noble Lords for what they have said. With reference to the points raised by the noble Viscount, I would agree that I do not think it is necessary for there to be very extensive inquiries. I cannot quite agree that only legal bodies and local authorities are concerned, because I believe a matter of considerable relevance is the convenience of parties, witnesses and jurymen and I would hope that their convenience would be studied with at least as much care as that of the lawyers.
SEVERAL NOBLE LORDS: Hear, hear!
THE LORD CHANCELLOR: I think all the points raised by the noble Viscount would be within the terms of reference of the Royal Commisssion, as would also be the location of district registries, they being, of course, part of the High Court. Naturally I cannot say to what conclusions they will come, or even which specific subjects they will deal with, but your Lordships will have observed that the terms of reference have been drafted, intentionally, very wide so as to pose the broad question: how, where and by whom should those cases, both civil and criminal, which are now taken at Assizes, and cases of a civil character taken at quarter sessions, be heard? So it will open to anyone who favours Crown courts or a decentralisation of the High Court, or any other form, to say so.
In answer to the second point raised by the noble Lord, Lord Ogmore, I do not think the jurisdiction of the county court will really come within the terms of reference of this Royal Commission, unless of course they are of the opinion that any of the cases now heard either at Assizes or at quarter sessions ought to be tried in the county courts.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am grateful for what the noble and learned Lord the Lord Chancellor has said. On the question of consultation, despite the chuckles from noble Lords on the other side of the House I

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had not intended to ignore the claims of jurors and of witnesses, but I was speaking of consultation. Will the noble and learned Lord say whether there is any association which represents witnesses or jurors and with whom there could be consultations? I have not heard of one and it may well be that thought should be given to this. But with respect I would have thought this ought to be the job of the Royal Commission itself and not a matter for consultation.
THE LORD CHANCELLOR: My Lords, I think there could be both. We have the science of sociology: there is the National Council of Social Service, Citizens' Advice Bureaux, and those who are professionally concerned with ordinary members of the public. But I would agree that it is of importance that there should be on the Royal Commission somebody who is not a lawyer at all but who will regard primarily the convenience of the ordinary people, remembering that the law exists for the people and not vice versa.
LORD OGMORE: My Lords, I am not quite clear about the answer the noble and learned Lord gave me. Am I to take it that if the Royal Commission feels, as many of us do, that the jurisdiction of the county court is now wrongly based, that it should be a question of complexity and not value, it could make a recommendation of that kind? Could it say, "This type of case should go to the county court", irrespective of the value of the subject matter?
THE LORD CHANCELLOR: Yes, if it thought that some of these civil cases now being taken at Assizes should be heard by county courts it could say so. I should then have to consider it, or the Government would, because it could hardly be satisfactory that certain classes of actions should be tried at county courts instead of Assizes, whereas High Court actions in London should remain as they are. I apprehend that any change in the jurisdiction of the county court should apply inside London as well as outside.
LORD BLYTON: My Lords, could the noble and learned Lord tell me whether the terms of reference brings within its ambit the expedition of certain civil cases and divorce cases in the provinces?
THE LORD CHANCELLOR: Divorce cases are heard outside Greater London, and that would certainly be within the Commission's terms of reference.

THE BRITISH NATIONAL EXPORT COUNCIL
3.52 p.m.
LORD RHODES: My Lords, I should to like to repeat a Statement which has been made by my right honourable friend the President of the Board of Trade in another place. It reads as follows:
"The British National Export Council was established for an initial period of three years in 1964 as a partnership between industry and Government for the purposes of stimulating the growth of our exports, and of bringing together under one central organisation the bodies concerned with the promotion of British exports to various parts of the world. The Council was sponsored by the Federation of British Industries and the National Association of British Manufacturers (now merged in the Confederation of British Industry), the City of London, the Association of British Chambers of Commerce and the Trades Union Congress. Its activities have been financed by funds raised from industry, business and commerce, matched by a contribution from the Government.
"It has been represented to Her Majesty's Government that there would for practical reasons be advantage in deciding now whether the Council should continue in being after the expiry of the three-year period. The sponsoring organisations have all expressed a strong wish that it should continue, and this wish the Government fully share. The Government attach the highest importance to the work which the Council has so successfully begun, and believe that there will be ample scope for promotion effort of this kind for many years to come. I have therefore informed Lord McFadzean, under whose energetic leadership the Council has made so much progress, that the Government strongly endorse the need for the Council to continue its work after the end of the three-year period, and intend to continue financial support for its activities on the

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present basis of matching the contribution of industry, business and commerce. I have also asked Lord McFadzean to convey to all members of the Council and of its Committees the Government's high appreciation of the time and energy which they voluntarily give to this vital work in support of our export trade."
LORD ERROLL OF HALE: My Lords, I am sure that noble Lords in all parts of the House would wish me to thank the noble Lord, Lord Rhodes, for having read out this Statement, with which I am sure we can all agree. May I ask the noble Lord two questions. He referred to the Government contribution which, broadly speaking, I understand matches the contributions of industry and commerce. Could he give the House an indication of the present scale of the Government contribution? Secondly, what is to be the future of the various national Committees, covering the different parts of the world, under the B.N.E.C.? Are they to continue in much their present form, or what is their future to be?
LORD RHODES: My Lords, in answer to the noble Lord's first question, Her Majesty's Government provide a grant of £333,000 for B.N.E.C.'s own activities to which the matching principle applies. In addition some £160,000 was provided for agreed activities, including the scheme for trade missions and collective market research, which B.N.E.C. administers on behalf of the Government.
With regard to the second question, yes, indeed, the Committees are carrying on. The noble Lord will know which they are; the Committees for the U.S.A., for Canada, for Latin America, for the Middle East, the Far East, and the Committee for Europe are the principal ones. Here I am glad to take the opportunity, having seen something of the work the chairmen and the members of these committees have put in over the last few years, to add my voice to that of my right honourable friend the President of the Board of Trade in thanking these gentlemen for having given of their time and spent the time they have given so well.

PRICES AND INCOMES BILL
3.58 p.m.
Committee stage resumed.
Clause 7 agreed to.
Clauses 8 to 11 agreed to.
Clause 12 [Notice of increase in company distributions]:
On Question, Whether Clause 12 shall stand part of the Bill?
LORD REAY: I beg to move that Clause 12 be deleted. I approach this clause with a certain sense of mystification. What I wonder is why this clause is necessary. Given that Part II of the Bill is brought into operation, it appears to require that dividend increases would have to be notified. It seems to me that generally this is information that would be available to the Government in the Press; these facts are published. I should not have thought this clause necessary as a practical step. On the other hand, if it is not necessary as a practical step, is it economically necessary? If it is practically necessary to help the policy of a dividend freeze, given the context of deflation and run down of reserves, et cetera, when we cannot expect firms to be expansive and cannot expect dividends to be offered at a higher rate, it is unlikely that dividends will be increased. Therefore, is the clause for economic reasons not unnecessary? If it is unnecessary for either reason, it seems to me there is a prima facie case for omitting the clause from the Bill.
But if it is necessary, for either practical or economic reasons, then I should like to ask, what is the purpose of the policy that this clause is designed to assist? Certainly, the dividend freeze looks to us like a domestic political concession to those who, quite rightly, wish to have fairness over the field of incomes. But, with great respect, I have suggested in this House before that this objective should be phrased differently, and that the method of imposing a freeze on unearned income (which would be a political concession here) should be by raising the rate of assessment for surtax in the following year, in order that it should measure off equally with any rise in wages that had occurred during the

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course of that year. This would have the same effect, from the point of view of social justice, without involving the Government in a further economic act of interference, in this case with the decisions of directors of companies.
I should like to know whether there is or is not an economic policy that is responsible for this, or is it simply a piece of political tactics? There could certainly be an economic policy behind it. Is it this: to keep up the confidence of foreign holders of sterling by showing that there is a further factor of determination on the part of the Government, in which case the reason would be a sort of politico-economic one? Or is it—and this seems to be perfectly respectable—that the Government are motivated by the belief that companies have in the past tended to concentrate too much on dividends and too little on earnings, and that too high a percentage generally of their profits has been distributed? If this is the case—and it would appear to be the most respectable reason of all for their imposition of a dividend freeze—and if it is, or might be at any given time, of any assistance towards the implementation of this policy, it is the only good reason for including this clause in the Bill.
What one is worried about, to some extent, is that although at the moment one may question whether there are firms capable of expansion, or that it would be correct for firms to raise the amount of dividend, surely it is possible that a freeze on the dividend might remove from them the possibility of attracting further capital for investment. If this were the case, then it would seem to me that there would be a danger of penalising the expanding and efficient firm.
In passing, I wish to draw attention also to another paragraph in the clause, in subsection (6), where it seems that if a firm refuses to comply by supplying this information then it shall be liable on summary conviction to a fine not exceeding £50. It does not seem to me that £50 would be a sufficient deterrent for a firm which is intent on increasing its dividends by some disguised means or other. Personally, I suspect that the policy that this clause purports to support is politically moti-
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vated. Economically, it might be harmless at the present time, but it could become harmful, because one never knows when this Bill may be brought into force. For these reasons, it may be argued that it would be better to leave the clause out of the Bill. I should like to know what are the economic views of the Government on this subject. I am absolutely open to persuasion that their policy is correct, if they can persuade me that it is.
4.4 p.m.
LORD CONESFORD: As there is no intention of dividing against this clause, I propose to be brief. I am confident that both the clause and the reason behind it are complete and absolute nonsense. They are based on a quite simple fallacy which I have exposed nearly once every year since I have been a Member of your Lordships' House. I have given the reasons for my view; I have never been answered, and I do not suppose I ever shall be, and I suppose that this idiocy will continue. The idiocy is a perfectly simple one. It is the belief that somebody derives some benefit if a company which does not need to retain profits available to shareholders does not distribute those profits to the shareholders. That is a complete illusion. The economic nonsense behind it has been exposed by the Royal Commission on the Taxation of Profits and Incomes.
This was in a paragraph on which I think the minority on the Royal Commission did not differ from the majority. It was more or less a unanimous view, and I shall quote the passage once again. This has, as will be observed, nothing to do with the profits of companies. The profits of companies are not here mentioned. What is mentioned is their distribution. I have always been in favour, through the abolition of inflation, of making profits much more difficult to win. But I have also been clearly of the opinion that when the profits have been won, then, though there may be many good reasons for the company retaining those profits, because it is right to add to their reserves or because it is right to plough them back and for many other reasons, the one reason on which it is always wrong to retain the profits is that it is desirable to be beastly to the shareholders.

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This is a perfectly simple proposition. The country suffers economic loss if profits not needed by the company for any commercial purpose are not distributed to the shareholders entitled to them. Nobody benefits. How the unfortunate working man, who ought to have an increase in his pay, is likely to benefit because the shareholders in a particular company which is in a position to distribute a higher dividend do not receive one, nobody has yet explained. Nor is it in the least true that the shareholders are a particular class of the community, or even consist exclusively of individuals. Of course they do not. Among the shareholders are trade unions, friendly societies, widows and orphans who are interested in monies looked after by the Law Courts, the Church of England, and all the pension funds. All these people and institutions hold ordinary shares. I wonder why it is thought sensible that money not needed by the company should not be distributed to the shareholders. As I say, I have so often made this case and I have never been vouchsafed any answer saying why it is considered useful. If, as I believe, the Leader of the House is preparing to reply, I am sure he will say that this insanity is social justice. I may have deterred him from making that remark now.
THE EARL OF LONGFORD: My Lords, I am only surprised that the noble Lord, Lord Conesford, did not interrupt the noble Lord, Lord Reay, when he used that particular expression just now.
LORD CONESFORD: I never interrupt. It does not mean, though, that I agreed with him. I must not be diverted from pointing out that this clause is nonsense by the fact that the noble Lord, Lord Reay, says he is willing to be convinced that it is sense. I always honour a young man who keeps an open mind, but I hope he will also keep a critical mind. I do not wish to delay the Committee, and this Amendment is not going to be the subject of a Division; but every time the idea is put forward that it is useful to stop the payment of a dividend to the shareholders when the company does not need the money, the economic fallacy should be pointed out.
I should now like to read the relevant passage from the Report of the Royal
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Commission on Taxation which, incidentally, I first read in my maiden speech in this House some eleven years ago. The Royal Commission and I, and many others, have always been hoping that one day we should get an answer, but I do not suppose for one moment we ever shall. What the Royal Commission said, in paragraph 536 of their Report, was this:
"The mere retention of profits cannot be rated as an economic advantage: on the contrary it would better serve the public interest that a company should be encouraged to distribute those profits which it cannot put to fruitful use, in order that there may be a chance that they may be invested effectively elsewhere. Nor is it advantageous for the economy that the level of dividends should be kept down. Whatever other considerations bear upon the problem, the market value of shares in industrial and commercial enterprises is artificially depressed and an obstacle placed in the way of raising, new capital."
That is what the Royal Commission said, and it is what every economist knows to be true.
Nevertheless, we go on persistently year after year suggesting that it is a most terrible thing if any company is in a position to increase its dividend and does so. Of course, in the present state of affairs it is extraordinarily unlikely that many companies will be in a position to increase their dividend; they will be very lucky if they are able to maintain it. But if there is a company in that fortunate position, then I say it is in the public interest, for the reasons given by the Royal Commission, that it should distribute monies which it does not itself need, and which it is therefore wasting, in order that it may be profitably used elsewhere. Although this has very little practical importance in the coming year it remains a fact that this sort of fallacy discourages investment. Whatever else may be needed at present, what we do not need is to discourage investment in British industry. I do not suppose I shall live either to hear my arguments answered or to see the day when this persistent fallacy is not further insisted on; but as long as I live I shall, at intervals of about two years, point this out to the House.
LORD SINCLAIR OF CLEEVE: May I say, very briefly, a word in strong support of what the noble Lord, Lord Cones-ford, has said, particularly in the latter

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part of his remarks. There is a reference to limitation of dividend. I am not in any way seeking to oppose, or to be seen to oppose, the standstill, but I maintain that the question of limitation of dividend means literally no increase of dividends. In the period into which we are entering no increase of dividends will mean a very substantial decrease in the total amount distributed. Therefore, limitation of dividends is not a match for limitation of prices or limitation of wages. This point is not quite so fully realised as it might be.
LORD BOOTHBY: The noble Lord will agree that it also means a considerable limitation in the amount invested, because the productive investment in industry is entirely related to the anticipation of profits. If there is to be no increase of dividends, investment is bound to fall.
LORD NATHAN: I wonder whether the Government could deal with a small but important point. Among the companies here are a substantial number which are wholly owned by important American concerns. Some of these are private companies some are close companies under the Finance Act, and some are not. I see that the word "distributions" is used in this clause, and not the word "dividends", and that the word "distributions" is defined as in the Finance Act 1965, which, of course, includes interest payable to certain "participators" in the company concerned. When exchange control consent is granted to the issue of securities by an English company to an overseas non-resident concern, permission is almost invariably granted in the case of a trading company to the remittance of dividends declared by that company for transmission in the foreign currency as well as repatriation capital. It would be most helpful if the Government could give an assurance that the clause will not be applied so as to negative the consent given by the exchange control authorities on the basis of which the original investment was made.
4.16 p.m.
THE EARL. OF LONGFORD: The noble Lord, Lord Conesford, felt certain that he would not live long enough to have his argument answered. Well,
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unless one of us is, so to speak, stricken down in the next few moments I hope that he will find himself contradicted by what I say. He is undoubtedly one of the most delightful speakers in the House and just as undoubtedly the most self-confident about his economics. I wish I felt as confident about any economic proposition as he does about all of them—anybody who does not agree with him is talking arrant nonsense, total folly. This is what adds to his charm. I do not know what his unique qualifications are for laying down the law in this way, but he makes a very good speech.
LORD CONESFORD: One of the reasons for my conviction is that I have never heard any answer by any economist. None of the economists who sat on the Royal Commission differed from the view I put forward.
THE EARL OF LONGFORD: I should think that that is extremely doubtful, but in interrupting the noble Lord has broken his rule of a lifetime. Perhaps I might begin by answering the noble Lord, Lord Reay. He submitted me to a rather crafty dialectical questionnaire. He asked what was the motive here: was it political, economic, psychological and so on? I could submit the noble Lord to the same questionnaire. Was his speech this afternoon political? Had it anything to do with his political Party? Was it based on his experience as an economist, or was it a debating speech? The truth is that one cannot split up proposals or speeches and subject them to that sort of dissection.
Some Members of the House are not so well-informed about this clause as those who have spoken. May I make it absolutely plain that there is no attempt in this Bill to impose a statutory standstill on dividends. It has nothing to do with this statutory restraint, as seems to have been implied. Therefore, I hope noble Lords who are worried by these speeches will be aware of that. The object of this very mild clause is notification. I have more sympathy with the noble Lord, Lord Reay, who argues that it is unnecessary, than with those who fear that there will be horrible results. The real point which Lord Reay raises, quite legitimately, is whether there is much point in it. These increased dividends have to be notified if an order is made affecting a certain class

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of dividends or a certain class of company and that comes into operation only under Part II. We do not know whether that will be enforced or not. If the noble Lord asks me the point of it, then I think there are two broad answers, and he may apply the epithets economic, psychological or political as he chooses. The two points I think are these.
In the first place, we are well aware that if Part II is operated it is going to deal with prices, and if the authorities concerned are going to deal adequately with prices one of the factors which it is important they should be very well informed about is the level of dividends. So the first and obvious reason—the noble Lord may say it is quite a small reason but it is on the face of it a valid and irresistible reason—is that if you have to deal with prices you must have full information for that purpose, including information about dividends. But I repeat—and I say it for the benefit, not of those who have spoken, but of the others—there is no question here of interfering with anybody's dividends by this Order.
The other point is, if you like, psychological. I put it to the Committee seriously that this is not something to be ignored in an age when you are calling for widespread restraint. If you are asking the wage-earners and salary earners and everybody else to exercise great restraint, is it seriously suggested that you ought to pay no attention to dividends at all, and that if dividends were to go up and up you should still just smile and be happy and argue with the noble Lord, Lord Conesford, that if they want to use the money that way why should they not? I seriously suggest to the House, following up the point raised by the noble Lord, that on psychological grounds one must hope that there will be considerable restraint on dividends in the times ahead.
On economic grounds we certainly hope that in an age when Britain needs all the modernisation she can get businesses will put as much by as possible, rather than spend it on what might be spectacular consumption. But, when all is said and done, I ask the Committee seriously to look at this clause carefully, realising that it does not interfere by limiting dividends by Statute but simply plays a part in what is surely the obvious policy of
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trying to persuade men of property or companies to exercise some restraint in those directions when we are calling for such big sacrifices from the workers.
LORD REAY: May I answer the noble Earl, Lord Longford? He seems to have misunderstood me to some extent. He places great emphasis of this psychological aspect of getting collaboration in this sort of thing. I suggested an alternative way in which this might be done without the danger of any economic interference. Presumably the point is not dividends as such, but really the unearned incomes of people derived from dividends. Will he deny this; and if he will not, cannot he look at the alternative, which is to raise surtax on unearned incomes if it is necessary in order to maintain a freeze?
THE EARL OF LONGFORD: I am afraid I cannot be bound by the precise formulation of every issue by the noble Lord, but I will point out that of course dividends are dealt with, in the sense that they are unearned incomes, but through the system of taxation which for many people has fallen quite strictly on dividends as it is. At any rate, there is this system of taxation to restrain dividends; but in addition we hope there will be an exhibition of restraint by those who control the distribution of dividends.
LORD HAWKE: I hope the Government will not listen to this new policy of the Liberal Party, because it is based on an entire misconception. A very large proportion of dividends do not come anywhere near an individual direct; they go to the insurance companies and so increase the value of the individuals with-profits policy, or they go to pension funds and help to secure his pension. A substantial portion of the rather meagre salary of Church of England clergymen is derived from the equity dividends received on the London Stock Exchange, and so on. The noble Lord, Lord Reay, with all due respect, is talking complete nonsense in saying that you could in any way deal with the increase in dividends by an increase in surtax. Most of the recipients do not pay surtax at all.
THE EARL OF LONGFORD: The accusations of nonsense seem now to be flowing rather freely, but I am not going to accuse anybody here of talking non-

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sense—not at all. I was very glad to try to enlighten the noble Lord, Lord Reay. I am not going to be swayed by him, but I am at least ready to listen to him, and I think it is the least we owe to one of the most promising of the younger Members of the House.
LORD CONESFORD: I am very grateful to the noble Earl the Leader of the House, but I still regret that I remain completely unanswered once more. On the statement that there is nothing in the clause before us that limits dividends, I entirely agree with the noble Earl. There was quite a lot in the speech of the principal Minister commending it in another place. He dealt with what he himself described, I think, as restraint or limitation of dividends, and of course it is in Paragraph 31 of the White Paper. I thought Paragraph 31 of the White Paper probably had some connection with the clause we are now discussing. But when he says that companies in a position to raise a dividend and not needing the money for any commercial purpose of their own should exercise restraint, meaning by that that they should not pay the money to the shareholders, I can tell him that that is something that every bad company is most willing to do.
The only companies that are really hit by this policy are the growing, efficient companies on whom the survival of this country may depend. The real case against what I still believe to be nonsense is that this is a very great discouragement of investment. What the Government are saying in this clause in effect is: "If you have any money, the only safe thing to do is to spend it; if you save it it will depreciate; if you invest it in British industry and the company fails you will lose it; if you invest it in British industry and the company succeeds it will not be allowed to pay a greater dividend". A greater discouragement of investment, a greater discouragement of the means of survival. can scarcely be imagined.
THE EARL OF LONGFORD: I am sorry, but the noble Lord has worked himself up about something that is not here. He says they will not be allowed to distribute dividends. That is absolutely false. And now perhaps I may be allowed to use the word "nonsense" which was used by other noble Lords. It is non-
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sense, and if I may make it plain, it is absolute nonsense. The noble Lord, Lord Conesford, who is extremely intelligent, knows that he has just been talking nonsense.
VISCOUNT ECCLES: I wonder whether I may ask the noble Earl the Leader of the House a simple question on subsection (9)(b). I do not understand what this means:
"any reasonable assumption may be made as to the length of the current financial year."
How does a man do that? Are we supposed to guess how many Budgets are going to be introduced within the next twelve months? I cannot see the point of that subsection at all.
LORD COOPER OF STOCKTON HEATH: May I refer to the discussion that has taken place in regard to the obligation to make notifications of dividends, about the purpose of which there appears to be some apprehension? We went through a period in 1948 and 1949 similar to the present one, but on that occasion the appeal was for voluntary restraint. In fairness to companies, they followed that out in relation to dividends pretty well. But it is an experience that trade union people do not forget, because in the two years the rate of increase in wages was cut by about 50 per cent. It was not absolute, but it was a great endeavour from the point of view of voluntary effort. But most trade unionists say that what they lost in those two years they never recovered. On the other hand, in the case of dividends forgone, the money was just stowed away and immediately there was a political change there was a very substantial distribution of those dividends that had been put away.
So the situation to-day is this, if you are to have a measure of co-operation from trade unions. We know the legislation will not work unless it appears to be fair. I know there is a lot of argument about this, but I will concede that workers regard dividends as part of the distribution of the proceeds of industry. Some workers—and this is a very interesting argument—go so far as to say that whereas they invest their labour, other people just invest capital and, nevertheless, receive rewards. If you are going to ask work people to exercise

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restraint and even to freeze wages for six months, then in all equity—and I agree that this might be psychological—you must equally demonstrate a willingness on the part of those who distribute the fruits of industry to restrain, also.
LORD BARNBY: As the question of close companies has been referred to, which I did not expect to be brought up, perhaps I might draw attention to page 6 of the White Paper. As is well-known, the circumstances of close companies are very difficult, and the high rate of money changes conventional practice with regard to the manner in which the funds of the individual members of the companies, who may also be lenders to the company, are effective.
This has caused a great deal of disquiet in the past, and in many cases a belief of harsh treatment. After saying that the companies would have to act on their own and give justification later the White Paper goes on:
"In important cases the Government will refer the matter to the National Board for Prices and Incomes for examination."
Is it to be understood from this that, unless they are "important cases", there will be a purely arbitrary decision by some other body? Having on occasions had representations made to me about the difficulties of close companies, I think it would be helpful to get some elucidation on that point.
THE EARL OF LONGFORD: Perhaps the noble Lord would let me communicate with him on that precise point in due course. But I must repeat yet again, in case somebody was not present when I said it before, that nobody's dividend is going to be limited by this Statute. There is no statutory interference with dividends. I am sorry to keep saying that, but some of the questions suggest that people still think there may be some interference with dividends through this Bill.
May I deal with the point raised by the noble Viscount, Lord Eccles, which is a technical one, and I will read rather carefully what has been supplied to me on that point. I think it is easy to understand, and certainly the noble Viscount, Lord Eccles, will understand it well enough. The need for this subsection arises because the decision to make a distribution may be taken during the
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course of a financial year, when the directors do not know what the length of the financial year will be. Therefore, some assumption has to be made. Should the length of the year prove to be different from that of the year which is taken as a basis, then the necessary adjustments required by subsection (7)would have to be made, to see whether in fact there was a distribution which represented an increase on that made in the basic year. So one has to make an assumption, because the year in which one finds oneself may not be of the same length as the year taken as the basis.
Clause 12 agreed to.
Clauses 13 to 15 agreed to.
Clause 16 [Terms and conditions of employment: enforcement]:
On Question, Whether Clause 16 shall stand part of the Bill?
LORD CONESFORD: I should like, if I may, to put a question to the noble and learned Lord the Lord Chancellor, on which I have written to him. A similar point also arises under Clause 28. It concerns the penalty subsections of this clause. It will be seen that subsection (4) provides for fines, and then subsection(5) continues:
"This section shall not give rise to any criminal or tortious liability for conspiracy or any other liability in tort."
I think I see the purpose behind that subsection: to keep the administration of this clause as simple as possible and to avoid the complexities of the law of conspiracy. What I am anxious to be certain about is that Her Majesty's Government are confident that they have not, in making what I quite see is a legitimate attempt at simplification, deprived themselves of powers which in certain eventualities they might need.
May I mention a theoretical possibility, without of course suggesting that it is likely; but it is a matter about which every Government, quite rightly, consider their powers. Let us assume a general strike. In the event of a general strike, the specific Act dealing with the legality of a general strike being no longer on the Statute Book, Her Majesty's Government would probably, I suppose, make use of the Emergency Powers Act 1920 and the subsequent amending Act,

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and Emergency Regulations would be made under those Acts. But whether or not such use were made of the Emergency Powers Acts, it seems to me possible that there might be circumstances in which Her Majesty's Government would wish to use the law of criminal conspiracy.
It may well be—I do not know—that the noble and learned Lord the Lord Chancellor is confident that the subsection we are now considering would not cause the Government any difficulty in the case that I have envisaged. But he will know, from his legal knowledge, of the very difficult questions of law which were discussed at the time of the General Strike, and of the view of, I suppose, our greatest jurist at that time, Sir Frederick Pollock, that it did constitute a criminal conspiracy. That matter was never tested in the courts, but what I want to be happy about is that the Government have satisfied themselves that they are not, by the reference in this subsection to the law of criminal conspiracy, parting with powers which they might in certain circumstances wish to use. In order to show the sort of difficulty that could arise, the ostensible object of the strike which I am imagining for the purposes of my question might seem to fall within the description of subsection (4). I hope that what I have said, together with my letter, may make the point sufficiently clear to the noble and learned Lord the Lord Chancellor. I am raising this matter in no spirit of hostility, but because I think it is of some importance, and because I should like to know that Her Majesty's Government are happy that they are not, by the subsection to which I am referring, endangering their own position in certain possible circumstances.
4.40 p.m.
THE LORD CHANCELLOR: I am grateful to the noble Lord, Lord Conesford, for raising this point; but, having considered it, I am quite satisfied that this clause does not deprive the Government of any powers which they ought to have. The fact is that the area to which this clause applies is a very narrow one. As your Lordships see, it applies only if an employer who has been forbidden to implement an award does so, or if a trade union or other person strikes,
1846
or persuades others to strike, with a view to compelling an employer to pay that which he ought not to pay. The clause says that, if that happens, the punishment for it is to be a fine of so much—that and nothing else.
Subsection (5) simply says:
"This section shall not give rise to any criminal or tortious liability for conspiracy or any other liability in tort".
That, again, is dealing only with those things which are the subject matter of this clause; and all this clause has said is, "This is what is to be the punishment if there is a strike, an incitement to strike or anything of that kind. The people concerned will not be liable for criminal conspiracy; they will not commit a tort; this fine will be the answer." But this is in no way laying down, or in any way affecting, what the law would be if there were a general strike, or in any circumstances other than those which are referred to in the clause. Subsection (5) means what it says:
"This section shall not give rise to any criminal or tortious liability for conspiracy or any other liability in tort".
That does not protect anybody except those who do one of the acts comprised in the very limited class of acts referred to in the clause. Therefore, the powers of the Government to deal with a general strike would remain exactly as they are. I think I had better not say what they are, because I think eminent lawyers—including Lord Simon, I remember—have long differed as to whether a general strike was a criminal conspiracy. But, whatever the law is, it will remain unaffected by this clause.
LORD CONESFORD: I am much obliged to the noble and learned Lord.
Clause 16 agreed to.
Clauses 17 to 20 agreed to.
Clause 21 [Regulations about notices to Ministers]:
On Question, Whether Clause 21 shall stand part of the Bill?
LORD DRUMALBYN: May I raise a small point on Clause 21? It may help us to envisage a little more clearly, by a side wind, how the Government propose to act. Clause 21 and Clause 22

1847
are referred to in Clause 25(6), which says:
"Sections 21 and 22 of this Act shall apply as if references in those sections to Part II of this Act included references to this Part of this Act,…"
This is a purely technical question, but it may have repercussions on our understanding of what the Government propose to do. My question is simply this: can Clauses 21 and 22 be invoked and applied in Clause 25 even though they have not been brought into force by Clause 6? I hope that question is clear. Is it possible to apply Clauses 21 and 22 in Clause 25 if Clauses 21 and 22 have not been brought into force by an Order in Council under Clause 6? In other words, must Part II be brought into effect before Part IV can be brought into effect?
LORD SHEPHERD: No. Part IV can be brought into effect without Part II having been brought into effect. I think that is quite clear. The noble Lord has bowled a rather fast one—and I do not mean that in any way as a criticism. According to a note I have just had handed to me, the answer is, "Yes"—but I cannot read the rest of the note. Perhaps I may say to the noble Lord that I cannot answer him straight away, but I will find out the reply for him, and will give it to him when we reach the Report stage. Would that be convenient to the noble Lord?
LORD DRUMALBYN: The answer that the noble Lord has already given me is quite clear. I am much obliged.
LORD SHEPHERD: I am glad I have satisfied the noble Lord at least once this afternoon.
Clause 21 agreed to.
Clause 22 [Offences under Part II]:
On Question, Whether Clause 22 shall stand part of the Bill?
4.47 p.m.
LORD CONESFORD: I have two questions on Clause 22. As they raise legal points, I am sorry that the noble and learned Lord the Lord Chancellor is not here.
LORD SHEPHERD: Try me!
LORD CONESFORD: I dare say the noble Lord will be able to answer them,
1848
but, should he require the help of his noble and learned friend, and if it is inconvenient to give the answers now, perhaps it could be arranged for them to be given at a later stage. There are two legal matters, which I think are of some importance and interest, that arise under Clause 22. Subsection (2) says:
"Where an offence is alleged to have been committed under this Part of this Act by a trade union…being an unincorporated body…proceedings…shall be brought in the name of that body…and…any fine imposed on conviction shall be payable out of the funds of that body".
This is a provision of great importance and, it seems to me, of considerable novelty. I am particularly interested because it happens that 21 years ago I wrote a little book on the law of trade unions, and when I was writing that book I was helped by another little book on the law relating to unincorporated associations that had been written by the lawyer who is now the noble Lord, Lord Lloyd of Hampstead.
I am very glad to see that the noble and learned Lord the Lord Chancellor is now back. I am sorry that I did not warn him of this point at the time I warned him of the other matter, but I had not at that time studied this clause. I was saying that subsection (2) of Clause 22 provides that proceedings can be brought against a trade union as though it were a corporate body, and that I believe that to be a very important and novel provision, though possibly a very useful one. What I should like to know, if the noble and learned Lord the Lord Chancellor could inform me, is whether there are precedents for this treatment of a trade union, enabling criminal proceedings to be brought against it in its own name.
The other matter that I should like to ask him about arises on subsection (5). Having, in subsection (2), treated the trade union as if it were a corporate body, the clause goes on, in subsection (5), to say that, where the defendant really is a corporate body, then, in addition to the corporation, various directors, managers, secretaries or other similar officers may also be personally liable. In the case of a trade union, there is nothing similar making any trade union officer liable. This, again, may be quite deliberate and there may be a good explanation for it. But the two matters

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on which I should be most grateful for the answer of the noble and learned Lord are whether there are precedents for subsection (2) and whether, after making the trade union liable as though it were a corporation, the Government are satisfied that there are good reasons for not following the corporation precedent by going on to place personal liability on the trade union officers.
THE LORD CHANCELLOR: I think the point here is this. First, we are dealing here with procedural matters and the provisions in question are included chiefly for the removal of doubts. Doubts might arise because unincorporated bodies, unlike corporate ones, are not legal entities, as the noble Lord knows. Such bodies consist of the possibly varied or indeterminate number of people belonging to them, and it is therefore not entirely satisfactory to rely on them as being persons for the purposes of criminal proceedings under Part II of the Bill. Further uncertainty arises on this point under the Interpretation Act which also deals with a person. It has, accordingly, never been quite clear whether a trade union, as such, was a person. It is usual to sue them in their ordinary name; but it was thought better to clarify that and make it plain that it would be so.
So far as subsection (5) is concerned, it applies only in relation to ordinary corporate bodies. Trade unions and employers' associations being normally unincorporated, rather than corporate, bodies, subsection (4) would not generally apply to the manager, the secretary or other responsible persons who operate them; although they could be liable under the general law for aiding and abetting, counselling or procuring offences by an unincorporated body. The object of the subsections to which the noble Lord has referred are simply to clarify the law, to make it clear so far as the trade unions are concerned in a sphere in which it is not always as clear as one would like it to be.
LORD CONESFORD: I thank the noble and learned Lord.
LORD BROCKWAY: I think it would be honest for me to say that I am very doubtful indeed about the consequences of this clause; I think they may be exceedingly grave. I do not want to
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make a speech, but at least I should put that on record.
Clause 22 agreed to.
Clauses 23 and 24 agreed to.
4.54 p.m.
LORD BYERS LORD BYERS moved, after Clause 24, to insert the following new clause:
Saving for employees' co-ownership etc. schemes
" . Nothing in this Act shall prejudice the operation of any scheme of employees' co-ownership, co-partnership or profit-sharing in a particular company or firm:
Provided that such a scheme shall have been in operation at least six months before the passing of this Act; and all provisions in this Act relating to terms and conditions of employment, incomes and earnings shall be deemed to disregard payments to be made to employees in accordance with the terms of such schemes as aforesaid."
The noble Lord said: I rise on behalf of my noble friends to move Amendment No. 10. We are doing this because we on these Benches are concerned that the Bill, as at present drafted, could have an adverse effect on existing co-ownership and profit-sharing schemes by making it illegal to pay members the increased share of profits which may have been earned during the period. If the Bill is not amended it will certainly discourage companies from introducing such schemes. We believe that far too little attention is paid by British industry to the potential benefits which can arise where intelligent schemes of profit-sharing are introduced. There has been a great deal of lip-service paid to this particular matter but, unfortunately, not nearly enough progress has been made along the right road.
If I am challenged on what is meant by co-partnership, I would say that it is defined in the Labour Gazette of May 1966, which says that it is a system which ensures that there shall be a sharing of profits with employees supplemented by arrangements for the employees to acquire some share in the control of the undertaking by owning share capital and in other ways.
Although there are still far too few of these schemes, it has never been seriously doubted that most of them contribute to higher productivity and higher efficiency. In our view it is essential that the proposed negative income policy contained in this Bill should not be allowed to damage schemes such as the one I

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have mentioned. This Amendment, we believe, would safeguard the position and once again would help to contribute to the growth of the economy that we sorely need. I understand that an Amendment much in these terms was moved in another place by the official Opposition, and I would hope that if we do not get a satisfactory answer from the Government on this matter we should be joined in the Division Lobby by Her Majesty's official Opposition in this House. I beg to move.
Amendment moved—
After Clause 24, insert the said new clause.—(Lord Byers.)
LORD CONESFORD: As I gather from the speech of the noble Lord, Lord Byers, that there may be a Division on this Amendment, I wonder whether it will be convenient for me to make my speech on the clause now, although it is on a totally different point. I think Members in all quarters of the Committee will think it of the highest importance that I should raise this matter on this clause, because this is the clause which deals with the possibility of bringing Part VI of the Bill into effect.
SEVERAL NOBLE LORDS: No!
LORD SHEPHERD: We are discussing the new clause proposed by the noble Lord. Lord Byers. Is the noble Lord referring to Clause 25?
LORD CONESFORD: I apologise.
LORD BYERS: As I understand it, we are still dealing with Part III of the Bill.
LORD SHEPHERD: The noble Lord, Lord Byers, has drawn our attention to one field in industry which I think has a great deal of sympathy from many quarters of the House. But in this particular Amendment we are, in fact, considering about 500,000 employees. This is the figure I have been given of those who participate in the type of partnership described in the Amendment. I think I should say to the noble Lord that Part II of this Bill could in no way prejudice the operation of any scheme so long as it is within the general understanding and agreement of Schedule 2. I think we should also be clear in our minds that the increased income the
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employees might receive—I say "might" because on occasions the company loses money and the value of their shares is reduced—will not always result entirely from increased productivity, which is the basis of Schedule 2, but from the increased profits of the company. This increase may be due to increased efficiency, but it may also be that the commodity is in short supply and the market price is a good deal higher than would otherwise be the case. I do not think there is anything in Part II of the Bill which would be detrimental to this type of scheme.
Again, in regard to Part IV, there would be nothing detrimental to the scheme, unless, of course, the authorities running the scheme decide to increase the shareholding above what was, to use the phrase "the norm" of July 20. Then it would come within recognition as an increased income. I should have thought that the operation of Part IV, which is for twelve months—again on the basis that the profit sharing was at the same rate as before July 20—would not be detrimental to these schemes.
I think the noble Lord, Lord Byers, should appreciate that from the way the Amendment is drafted, it may well be that he would be providing a loophole for directors and senior executives, because they are employees. The Amendment does not refer to such schemes as though they should embrace the entire company and the employees within the company. The noble Lord will be aware that there are a number of existing schemes—co-ownerships, co-partnerships and schemes on a profit-sharing basis—which are restricted to the senior executives and directors. I do not believe—I repeat this—I do not believe that Part II in itself will be prejudicial to the schemes which the noble Lord, Lord Byers, has in mind. Nor do I believe that Part IV would be, unless those operating the scheme intended, within the next six or twelve months, to use the basis of the scheme for increasing salaries which I think the Committee now accept need this restraint.
LORD BYERS: I do not accept the view expressed by the noble Lord, Lord Shepherd, that because this affects only 500,000 people it is not worthy of very important consideration. This argument that "It is only a little one, and there-

1853
fore it does not matter" will not, I think, appeal to the Committee. But I hope I am right in thinking that I detect more sympathy in the Minister's answer than we have had since we started this long debate at eleven o'clock this morning. The purpose of putting down this Amendment was to draw the attention of the Government once more to the fact that any of the schemes which assist in getting increased efficiency and increased growth in the economy must be watched very carefully to see that we do not do damage to them. We on these Benches will be watching the operation both of Part II and, if it is ever used, of Part IV, to make sure that schemes of this sort are not caught, and, if they are, we shall raise the matter again with the Government.
LORD DRUMALBYN: May I ask the noble Lord—this seems quite a straightforward matter—whether the schemes have to be notified to the Government? That is my first question. Are they affected by the notification provision?
LORD SHEPHERD: Which part?
LORD DRUMALBYN: In Part II. Secondly, if they are, and the Government do not intend that they should be caught, the Government could quite easily say, here and now, that they will give their consent, and the schemes will not be referred to the Prices and Incomes Commission. It seems to me to be perfectly straightforward, if it is not the intention of the Government to do this. It is an administrative matter within their own hands. Thirdly, the Prices and Incomes Standstill White Paper says clearly in paragraph 18—I know that this refers to the standstill and we are now dealing with Part II, but, a fortiori, if it refers to the standstill it should refer to Part II—
"It is not intended that the standstill should be regarded as applying to…profit-shareholding schemes et cetera."
This seems clear, and I did not doubt that the Government's intention was that they should be excepted, but it seems to me, if I may say so with respect, that the noble Lord, Lord Shepherd, could have given a little clearer assurance than he has, and I am wondering whether he can do that now.
LORD SHEPHERD: In view of what the noble Lord, Lord Byers, has said, I suspect that I may have departed a little from the brief which was given to me, and I therefore assure the noble Lord, Lord Drumalbyn, that I do not intend to go any further than what I have said. I said I do not believe that Part II will be prejudicial to these schemes. Certainly, they could be reviewed they could be referred. Again, in respect of Part IV, I do not think it would be prejudicial so long as the schemes operate during the next twelve months as I think the nation would expect—a general freeze on rises in incomes during the first six months and a very severe restraint for the following six. I think the noble Lord is correct and that Part IV will disappear at the end of twelve months, and therefore the main worry of the noble Lord. Lord Byers, must lie within Part II. I think it clear that the schemes could be referred to the Prices and Incomes Board if such an order were made, but I do not believe that that would be prejudicial in itself, because the Board would look into all the aspects arising from this type of scheme.
LORD DRUMALBYN: Perhaps the noble Lord would admit that at the end of the day they would be able to do what they like under Part II.
LORD SHEPHERD: The noble Lord must not put words in my mouth.
On Question, Amendment negatived.
Clause 25:

PART IV
TEMPORARY RESTRICTIONS ON PRICES AND INCOMES
General provisions as to operation of Part IV
25.—(1) At any time in the period of twelve months beginning with the date of the passing of this Act Her Majesty may by Order in Council bring the provisions of this Part of this Act into force for the remainder of the said period of twelve months.
An Order in Council made under this subsection shall cease to have effect at the expiration of a period of twenty-eight days beginning with the date on which it is made unless before the end of that period the Order has been approved by a resolution of each House of Parliament.
(7) In comparing for the purposes of this Part of this Act the amount of any price or charge, or the rate of any remuneration, with earlier prices or charges or remuneration paid

1855
before any specified date, so far as required for the purpose of giving effect to any order or direction under the following provisions of this Part of this Act—
(a) account shall only be taken of such earlier prices or charges or remuneration as fell within such period ending immediately before the specified date as is prescribed by the order or direction, and
5.8 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved to add to subsection (7):
"(c) allowance shall be made for any increase in prices which is necessitated by substantial increases in the cost of imported materials, or in charges imposed by any Act of Parliament or order made under any Act of Parliament or which arises from changes in supply for seasonal or other reasons."
The noble Lord said: The noble Lord will recognise the source of this Amendment, which I beg to move. It is to be found, with minor changes, in the wording in paragraph 5 of the White Paper on Prices and Incomes Standstill. The effect of this Amendment is perfectly clear. Subsection (7) says:
"In comparing for the purposes of this Part of this Act the amount of any price or charge, or the rate of any remuneration, with earlier prices or charges or remuneration paid before any specified date"—
then there are some words, and then it gives two things which have to be taken into account—
"earlier prices or charges"
and
"earlier and later prices or charges or remuneration falling within that period, account shall only be taken of the later or latest".
The Amendment is to add this paragraph (c) which seems to be necessary in order to implement clearly what the Government have said in their White Paper. It seems only right that it should be stated specifically, as one of the things which should be dealt with in the Bill itself, that allowance should be made for these things. I recognise that it is to some extent limited and I would quote paragraph 4 of the White Paper:
"This standstill period will apply except to the limited extent that increases in prices or charges may be necessary because of increases which cannot be absorbed"—
and I paraphrase that as "substantial", because if they are substantial they cannot be absorbed"—
"in costs of imported materials, or which arise from changes in supply for seasonal or
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other reasons, or which are due to action by the Government such as increased taxation."
It seems quite clear that as the Government have specified it so clearly in the White Paper, it should also be in the Bill. I beg to move.
Amendment moved—
Page 22, line 41, at end insert the said paragraph.—(Lord Drumalbyn.)
LORD BARNBY: The noble Lord, Lord Shepherd, gave an ample explanation of the short time which passed between the usual procedure—that between the business in another place and in this Chamber—and it is difficult for those who come up from the country to inform themselves about what we usually do in our discussions. My noble friend Lord Harlech dealt in an admonishing and effective way with the manner in which this legislation has been brought forward, and both the noble Lords, Lord Shepherd and Lord Wade, have allowed themselves a pretty wide field. I feel strongly about this unusual procedure. The way Part IV has been dealt with in another place has been different from the conventional practice, and two or three times this afternoon the noble Lord, Lord Shepherd, has emphasised that Part IV would not come into effect unless the voluntary system failed. There are so many factors that bear on the implementation of this that I feel myself justified in referring to it.
LORD SHEPHERD: Is the noble Lord speaking on Amendment No. 13, moved by the noble Lord, Lord Drumalbyn? He seems to be speaking on the Motion that the clause shall stand part.
LORD BARNBY: I was listening attentively, and I was under the impression that I was speaking on Clause 25.
LORD SHEPHERD: I think that the noble Lord's remarks are more appropriate to the Motion that the clause shall stand part. We are discussing a limited point at the moment.
LORD BARNBY: I am not sure that I can accept that interpretation. It has been emphasised that this has an effect upon the Bill as a whole. I was not one of those who intervened in the discussion, which had been forced upon this House by the Government, on the White Paper rather than on the Bill.

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Surely I am not ruled out from being able to speak on this clause and its effect on the Bill as a whole.
THE EARL OF LONGFORD: As the noble Lord, who is one of the oldest Members of your Lordships' House, knows, nobody can rule him out of order. That is not going to happen. May I venture to suggest that he is speaking in the wrong debate at the moment. He is not speaking on the Amendment, which I think by common consent it is agreed does not deal with his points. He really wants to speak on the clause as a whole. I am sure that that is what he wishes to do. I do not know what the House wishes, but I think that it would be much wiser if the noble Lord would give his remarks on the Motion that the clause shall stand part.
LORD BARNBY: I am always grateful to the noble Earl for any correction and guidance as to how one should speak, and if I understand him correctly there is another Amendment on which it may be possible to advance my views. May I ask the noble Earl on which Amendment he feels I should speak?
LORD CONESFORD: I wonder whether I may try to help my noble friend. He may not realise that, when this Amendment has been disposed of, the Motion that the clause shall stand part will be put and then he will be able to make the speech he wishes to make. I, also, and probably other noble Lords, may wish to speak on the same Motion, but the Amendment we are on now is that of my noble friend Lord Drumalbyn.
LORD BARNBY: I am grateful to my noble friend for his correction. I see his point, but Business has been taken in a manner so contrary to conventional practice that perhaps I may be forgiven for my insistence.
LORD SHEPHERD: I do not want the noble Lord to be accused, as I have been in recent days, of making a precedent. It is a very dangerous thing. The noble Lord, Lord Drumalbyn, was right when he recognised the meaning of his Amendment. There is some difference in wording, but for practical purposes these are the words of the White Paper on the application of the stand-
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still on a voluntary basis. It might necessitate increases of prices during the voluntary standstill period. The purpose of the Amendment would seem to ensure that it would be recognised that, in the event of a statutory standstill under the powers of Clause 26 of particular prices and charges, the increases would be permissive for one or other of the reasons given. I think that the Amendment would be more appropriately moved to Clause 26, but even if it was proposed to include it in Clause 26 the Government would resist it.
The structure of Clause 26 is that the Secretary of State may by order require particular prices or charges not to exceed the prices or charges for transactions of the same description before the coming into force of the order, and no increases can be made in prices or charges in question thereafter unless the appropriate Minister consents in writing to the increases. It is an essential feature of the provisions of Clause 26 that once a standstill order has been made in respect of a particular price or charge, traders should not thereafter, while the order remains in force, be free to increase the price without full consideration having been given to the case for this. The Minister no doubt would be expected to be more responsive to an application for a price increase subsequent to a standstill order where it was demonstrated that increases in costs were due to one of the factors outside the trader's control and that all efforts had been made to absorb the increased costs.
I believe, in the stringent circumstances now facing the country, that it would be wrong to write this proposed provision into the Bill. This is one of the factors that would be borne in the mind of the Minister, if Part IV was in operation, when making a decision as to the price that could be charged by the trader. I think that the noble Lord will agree that the White Paper was specific on this. But that is one thing; to write it into the Bill may well create a loophole that would cause considerable difficulty, particularly to traders where one trader might wish to act quite contrary to public interest while many of his colleagues were acting in the national interest. I hope, with those few words, the noble Lord will see that the point he has made

1859
is understood and will be borne in mind when an order is being made.
LORD DRUMALBYN: I am grateful to the noble Lord for his explanation, which has given me what I wanted. One does find from time to time when Acts of Parliament are being interpreted that the answer is given: "This may have been said but it is not in the Act of Parliament, and therefore we are not bound by it." The noble Lord has said that paragraph 4 of the White Paper will be one of the factors which will be borne in mind when the Minister has to decide whether or not to consent to an application for an increase in price. That is all I want. I am glad to have it on the record. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.21 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, at end of subsection (7), to insert:
"Provided that, if the said earlier prices or charges were prices or charges reduced below their normal level by reason of a sale, sales promotion campaign, introductory offer or other similar reduction of a temporary character, account shall be taken of the normal prices charged or charges made immediately before they were so reduced, whether charged or made within or before the period prescribed."
The noble Lord said: This Amendment is similar to the last, and I would only ask for the same—I was going to say the same liberal attitude which the Government displayed towards the last Amendment, towards this question of normal charges being applied once the standstill under Part IV comes into being. In another place, for example, I noted that it was said that coal prices would automatically go up on November 1 in the usual way. If that is so, one would expect that where other prices had been reduced temporarily for any particular reason, they also could be restored to the normal level without being caught by the standstill. I beg to move.
Amendment moved—
Page 22, line 41, at end insert the said proviso.—(Lord Drumalbyn.)
LORD SHEPHERD: If the noble Lord, Lord Drumalbyn, carefully studies subsection (7) I think he will see that the Minister is in a position to take a very flexible view in coming to a decision. The noble Lord refers in his Amendment to
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"a sale, sales promotion campaign". These are normally of a limited period. A sale, I suppose, may go on for a week or a fortnight. Clearly when you are considering what is the right price within subsection (7) you are not likely to consider what the trader charges for a week or two weeks; obviously it would relate to a much longer period. The point which the noble Lord has made is understood, and I am quite convinced that it is well covered by subsection (7).
LORD DRUMALBYN: I am obliged to the noble Lord for that answer. I gave the example of coal prices because there are normal summer prices and normal winter prices. But this may apply in many other cases. By "normal" one means normal for the season, as well as the regular (shall I say?) list prices. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 25 shall stand part of the Bill?
LORD REAY: On a point of procedure, there is an Amendment standing in my name to delete this clause. Does one move the Amendment before the Question, That the clause stand part, is put?
THE DEPUTY CHAIRMAN OF COMMITTEES: If the noble Lord wants to delete the clause, he will move his Amendment for the deletion on the Question, That the clause stand part.
LORD CHAMPION: Perhaps I might just add that what one does by putting something down which is italicised on the Marshalled List of Amendments is to make it clear that points are to be raised on the Question, That the clause stand part; and then eventually, if a noble Lord does not like the clause, he divides against it on the Question, That the clause stand part. But it does not preempt his position for speaking. This is a matter for adjustment between the various speakers.
LORD BARNBY: Is it in order for me to ask the noble Earl the Leader of the House (I see that he has now left the Chamber) something on this clause? Would it be preferable to make some general remarks at this stage or on the Report stage? Apart from general remarks, I am particularly anxious to make

1861
some remarks with regard to the particular point my noble friend Lord Drumalbyn has just made.
5.26 p.m.
LORD ERROLL OF HALE: As I think I detected, from a sitting position opposite, a noble Lord assenting in answer to my noble friend Lord Barnby, may I make a few observations at this stage, and say how glad I was to have the procedural complication cleared up by the noble Lord, Lord Champion? Indeed, while I can quite see that it is in order for a noble Lord to indicate his desire to speak on the Question, That the clause stand part, I think it would be unfortunate if it became the practice in your Lordships' House if one were to have the pre-emptive right to speak first on the Question, That the clause stand part by the simple device of tabling an Amendment of this sort. That is why I hope I have not given any offence to the noble Lord, Lord Reay, by rising to the Despatch Box to speak ahead of him to-day.
The fact remains that since the publication of the Bill and our examination of it a great deal of misunderstanding has arisen in regard to the application of the controversial Part IV. It is made even worse by the fact that it is questionable how necessary it is to have the very fierce provisions of Part IV, since the Chancellor of the Exchequer, speaking at The Hague on July 25, distinctly gave the impression that these powers were not needed. I quote from the Financial Times of the following day, July 26—and I quote, first, indirectly.
The Chancellor said that the new and directly inflationary measures combined with planned foreign exchange savings, particularly in the military field, would be sufficient to do the job on their own. The prices and incomes part of the package should therefore be viewed as
"a bonus on top of it all".
While the Government meant it to succeed, the Chancellor said,
"we would not be all at sea again if it failed."
This does not look like a resolute, determined Government, bent upon securing these extremely fierce controls, if this is the way the Chancellor of the Exchequer speaks about them only a day or two after they were made public, and tells
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the bankers of the world what I have just read out.
During the debate last week, a number of complications were referred to but, so far as I am aware, these have not yet been answered by the Government. Indeed, I suppose that at the moment they are still unanswerable. But the fact remains that doubts and difficulties are continuing to arise, and the explanations from official spokesmen are very interesting to say the least. In many cases, indeed, they are completely contradictory. We have had the problem of insurance. The motor insurance people have arranged an imaginative new scheme whereby premiums for bad drivers are to go up and premiums for good drivers are to go down. Commented the Board of Trade spokesman:
"It will be illegal for this scheme to proceed under the new legislation."
This is all part of the carefully prepared plan which the Prime Minister announced—so carefully prepared that when the insurance chiefs went to the Board of Trade, after discussions with the President of the Board of Trade, they found it was exactly the opposite that was intended, and the sensible scheme of the motor insurance people is now to be allowed to go through.
Then, in the White Paper we read that price increases will be permitted where the charges arise
"from changes in supply for seasonal and other reasons, or which are due to action by the Government such as increased taxation."
Here there is a great deal of doubt as to whether the tax can simply be passed or not. A Knightsbridge firm of stationers (I quote from the Evening Standard) has adopted the simple plan of adding 3d. in the pound on to the bill, rather than trying to work out all the very small increased charges in purchase tax in the complicated field of stationery, which seems a very practical and sensible way of doing it. Said a Board of Trade official:
"We have not heard of this tactic before. It is case of a retailer not complying with the call to freeze prices."
Who is right—the Board of Trade spokesman or the White Paper?
What about motor cars, where the practice has invariably been to levy the purchase tax as a separate item on the bill? As noble Lords will know, when

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they buy a new car they have a bill which says, "Price of car" so much, "Purchase tax" so much—whatever the amount is. Here is a case where the tradition has always been for the purchase tax to be shown separately and to be a separate item in the transaction. Presumably, the motor vehicle makers will be allowed to pass on in full the increase in purchase tax caused by the application of the regulator. If the motor car manufacturer is allowed to do this, surely ail other trades affected by the regulator must in fairness be allowed to do the same, although from the examples I have quoted it appears that the Board of Trade do not agree. The other day I went to buy a roll of colour film for my camera. The price has always been 10s. 6d.; and it is now 10s. 8d. I asked what was the cause of the increase, and I was told that it was Mr. Wilson. Not 2d. off, but 2d. up. I should be glad to know whether that was an illegal or a legal increase in price. I have not attempted to work out whether 2d. represents the application of the regulator in full or in part.
We have witnessed during the last few days the mortgage rate argument. I am glad to see the noble Lord, Lord Cohen of Brighton, here to-day. Perhaps he will give us his views on the way his Government have been behaving in this matter—blow hot, blow cold. Are mortgage rates included, or are they not? If they are to be frozen, and the money does not come forward, what is to happen to the house building programme?
LORD COHEN OF BRIGHTON: May I comment? So far as mortgage rates are concerned the matter has been referred to the Prices and Incomes Board. There is a meeting of the Council of the Building Societies Association to-morrow, with a request from the Minister that we should defer any question of an increase until after the matter has been carefully considered by the Prices and Incomes Board. In fact, that is exactly what the Building Societies are going to do, in deference to the wishes of the Government.
LORD ERROLL OF HALE: It will be interesting to see what will happen after October 1. That will be the date which we shall all watch with great interest and some enthusiasm.
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On a slightly lighter note, noble Lords may have noticed a little piece in last Friday's Spectator about the difficulties in which the Catering Committee of another place have found themselves. The subsidy for meals and the catering service is not to be increased, although the deficit has increased. There are two ways of dealing with such a situation, which the Kitchen Committee considered. One is to put up the prices of the meals, and the other is to put up the wages paid to the staff, because they are losing staff at the present level of wages. But as they realise, to do either of those two things would be to go beyond the principle of this Part of the Bill, and they are in great difficulty. Neither can they reduce the size of the helpings, because that would be tantamount to an increase in the price per unit sold. I do not see how they are to get out of this dilemma. As they are very clever people, and have just passed this Bill, I am sure they will be able to devise a solution.
This situation, while it occurs in rather an acute form in another place, is one which will be occurring during the coming weeks and months in many different parts of the country where prices must go up, and very often salaries or wages will have to go up if staff are to be retained, but to do so will be, if not to act illegally, at least to be liable to incur the wrath of the new Secretary of State for Economic Affairs.
The White Paper is also fierce about salaries and directors' fees. This is not specifically covered in the Bill, but I think it is relevant to the present stage of the discussion in your Lordships' House. The Government, in their rather clumsy way, think that, by publishing salaries and directors' fees individually—which they plan to do; the details being given in paragraph 28 of the White Paper—or taking powers to compel the publication of individual salaries, they will thus effectively keep salaries down. But of course exactly the opposite effect will result, because everybody whose salary is lower than the average will have a very strong case for going to his boss and saying, "I am getting only two-thirds of what Joe down the road is getting, and I demand an increase."
Furthermore, the employment agencies who specialise in staff vacancies will be

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able to tempt away the good men from firms who pay lower salaries, and give them employment with those who pay higher salaries. Even within the organisation, if the managing director's salary is fixed at £5,000 a year, it means that the good men in the firm will know that however good they are they can never get above £5,000 a year. So the only way in which matters can be put right is for the managing director to give himself £10,000 a year and so spread out the concertina to enable those below him to have the opportunity of earning higher salaries. This is, I think, an important example of the extraordinary way in which the Government go to work. They think they are going to frighten people, by publishing salaries, into keeping all salaries and directors' fees down. It is going to have exactly the opposite effect. Although they may be able to stop it for the next six to twelve months, they will only be releasing a flood of salary increases for the future. I do not want to take up more of your Lordships' time, because I know a number wish to talk at this particular stage of our deliberations. I should like to make the point to the Government that they are creating many complications and providing very few answers, and I cannot see how the Bill in its present form is going to work out satisfactorily.
LORD MESTON: May I ask the noble Lord, Lord Shepherd, a leading question to which I hope he will say "Yes" or "No"? Do the rates of interest charged by building societies come within the words
"…price or charge, or the rate of any remuneration…"?
5.36 p.m.
LORD REAY: In rising to move what I have always understood to be an Amendment standing in the name of myself and my noble friends, with the leave of the Committee I will speak to the other unnumbered Amendments for the omission of the other successive clauses in the Bill. The point of this can be explained simply. Our purpose in asking for the removal of each of the clauses of Part IV is to ask for the removal of Part IV from the Bill. We do not have separate reasons for asking for the individual rejection of all or any of the successive clauses, although that is not to say that some of them do
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not contain more that we object to than others.
If this Amendment is carried to a Division and defeated, or if it is negatived, then we should, I think, not press any of the other unnumbered Amendments seeking the exclusion of the remaining clauses from this Part of the Bill: we should immediately withdraw them as they came up or ask for them to be negatived. Of course, it will still be up to any noble Lord to press any other of them if he so wished. In any event, if this Amendment, to which I have asked your Lordships' leave to speak, were carried to a successful Division, we should still seek to move the other Amendments relating to productivity and the restraint on Ministerial powers. We may certainly press one or more of these to a Division.
The logic behind the apparent paradox of seeking to reject a clause which we may have already succeeded in amending is that it would he open to another place to return the Bill with Part IV reinserted but, if it has been amenable to our wisdom, after having accepted improving Amendments. I hope that does something to clarify what I think is Liberal policy towards the procedural treatment of its Amendments to Part IV of this Bill.
I should like, in successive order and with successive arguments, to deprecate this Part of the Bill, to deprecate the manner and methods by which it was introduced and handled in another place, to deprecate the assumption of the Government that this House would have no part to play in the revision of one of the most seriously alarming pieces of legislation that has ever come before it, and to deprecate any connivance by any element in this House at the abdication of its own political responsibilities with respect to the Bill's improvement. As I speak I shall attempt to outline the sort of measure which, I think I may be permitted to say, we as a Party broadly believed should have been—and believe still could be—introduced to replace it.
Let us look at the Bill. Its primary and urgent function—so indirectly approached—is to restrain not prices but incomes. It is evident to everyone that, so long as productivity lags, there must be stronger methods of effecting a control on the rise of incomes than the

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Government, contrary to their original confidence, have been able to exercise. It is for this reason, I have always understood from the Preamble, that this Bill "to establish a National Board for Prices and Incomes" on a statutory basis has been introduced. Part IV, however, provides for the by-passing of the Prices and Incomes Board, and for an exclusive discretionary use of the widest imaginable powers in ministerial hands. If the bastion to be assaulted is the monopoly in bargaining power of the trade unions, would it not be far better to bring the restrictive practices of labour, which are certainly a monstrous source of economic inefficiency, within the scope of the Restrictive Practices Court? After all, the Court has dealt increasingly satisfactorily with the restrictive practices of management.
Or the Prices and Incomes Board could be invested with powers—subject, of course, to ultimate ministerial responsibility—to allow or disallow wage increases, according to broad citeria laid before them. One such criterion could be that in the course of any given year the Board should attempt to confine the overall increase in wages within their estimate of what increase in overall productivity is likely to be achieved, but without prejudice—indeed with encouragement—to discriminate between claims that are more or less likely, in their view, to contribute to an increase in productivity. These alternatives are not mutually exclusive. Indeed, the circumscription of the Minister's powers by the Board is obviously a more immediately suitable adjustment for the short-term than the longer-term expansion of the powers of the Restrictive Practices Court to cover union rules, important though that is to consider even at this stage, in view of the frightening failure of this Bill to provide any remedies which will last, let alone be helpful, beyond the period of its application.
The three major respects in which we attack this Part of the Bill are, first, that the introduction of unsupervised ministerial powers over a field so wide that even individuals can be selected as the objects, without any declared criteria, of ministerial penalisation, is an insufferable
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constitutional innovation against the rights of individuals. Secondly, we attack it on the grounds that both the wages and the prices freeze, as used by the Minister, without any evident machinery whatever would be entirely impossible to operate. For one thing it would be inequitable. How would Mr. Stewart distinguish between the disguised and the honest upgrading of employees? Between "transactions of the same description" when one claim is honest and another is false, or even when both claims are honest? Who are his police to investigate rumours of infringement where neither party has an interest to raise a complaint—which is, of course, much more likely to apply in wage than in price infringements? Who are his abitrators over the vast area of all sold items—a myriad products as innumerable as the grains of sand in a desert? Will Mr. Stewart personally be able to verify, and then be able to make the necessary and just seasonal adjustment for the repeated rise in, say, the price of some vegetable?
Thirdly, we protest against this Part of the Bill because the policy of a prices freeze is likely to be not only unworkable but inflationary, at a time when the Government's other policies are deflationary; because it has all the appearances of being a concession to a political clamour without serious economic purpose; and because the Government's attitude to this is clearly ambiguous; and that together this amounts to a policy so confused that to allow it into a Bill without explanation is even in principle, let alone in detail, wrong. On the point of the ambiguity of Government policy I will quote from the House of Commons Hansard, when the Under-Secretary of State for Economic Affairs said this:
"We recognise that there will he some additional costs, due to action by the Government, such as increased taxation, which it will not be Possible to absorb altouther."—[OFFICIAL REPORT, Commons; Vol. 733 (No. 72), col. 1518: 9/8/66.]
So the Government are adding to prices in order to pursue their policy of cutting consumer demand; and they are freezing prices in order to cut consumer demand. What sort of double-thinking is that?
Finally, and most importantly, we object to it because not only does it contain no provisions and provide for no structure to last beyond the freeze, but

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it is actually likely to damage the economic prospects in the longer term—and of course here one has particularly in mind the exclusion of productivity agreements from the provisions of the wages freeze. I should like again to quote from the Under-Secretary of State for Economic Affairs in a speech which he made on August 4 in Standing Committee. He said:
"…we elected for an absolute standstill, which ruled out productivity bargains…had productivity bargains got through it would have been very hard on some groups of workers, including lower paid workers, who are not in a position to negotiate productivity agreements. While we could have argued that the economic advantage of letting the agreements through was real and valuable, it could equally have been said that it would have been unjust to large sections of the community, when justice had to be a significant part if success was to be achieved."
It is surely remarkable that in this crisis this can be a valid reason for postponing purposely the vaunted cornerstone of our long-term economic policy. Heaven knows! in conditions of threatened unemployment and insecurity for labour, and of retrenchment in private investment, it would be difficult enough for productivity agreements to be made anyway. But deliberately, for the sake of workers of inferior skills who have no bargaining power, for that reason apparently, productivity agreements are to be suspended during the freeze. Surely it cannot be beyond the trouble—although, alas! I am beginning to believe it may be beyond the competence—of a Socialist Government, to protect the worker of inferior skill from losing out wholly on wage rises, without retarding the entire productivity programme.
Our second long-term objection to this Part of the Bill is that it does nothing whatever to add to the stature of the National Incomes Board, but indeed derogates from its authority—the one institution that surely should now be built up for the implementation of a long-term policy of wage and price control.
It seems to me there could only ever have been one excusable reason for the brutal haste with which this measure was introduced; for the tactic of attaching this Bill (for it is in all but its specious title a new Bill) in the form of an Amendment in Committee stage in a small Standing Committee established for an entirely different purpose, and represen-
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tative neither of the Liberal Party nor of the whole of the Socialist Party; for being immovably obstinate—
LORD SHEPHERD: Will the noble Lord give way? I do not think he is in order to refer in those terms to a Committee of the other place. I think he should be careful in his reflections upon the other place and the way in which they carry out their work.
LORD REAY: I was not reflecting on that at all, but on the composition of the Standing Committee. I was saying that it did not contain a single member of this Party, and that it was not representative of the whole of the Socialist Party. Would the noble Lord like me to withdraw that?
LORD SHEPHERD: Carry on with what you were saying.
LORD REAY: I certainly intended to make no other criticism of the Committee at all, and I was saying, for their being immovably obstinate before the most obviously improving and enlightened of Amendments, and, from our point of view, for their blithe mixture of contempt, ignorance and optimism in thinking that no section of this House could be responable enough to consider revising a bad Bill. For all these travesties of constitutional convention one single reason only could have been excusable: that this was a measure recognised even by those who could be indignant at some, if not all, of what it contained, as a measure which, however bad, yet nevertheless, once chosen for the resolution of a crisis, needed to be put into immediate effect. If we had believed that we should not be moving these Amendments to-day.
But what reason have we got to believe that? What is the characteristic of the ministerial powers to be granted under this Bill? They are permissive. And not only that; they are permissive upon the condition of Parliamentary ratification of an Order in Council within 28 days of its being laid before Parliament. These powers could, therefore, be used, if used at all—and it is only for the sake of these powers that this Part of the Bill is before us—for probably some three weeks before the recall of Parliament. So we should he back in three weeks, anyway, if these powers

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were to be used immediately; and then what would happen to the holidays of the staff and legislators? And we should only not be recalled before the date on which we are due to return in order to ratify the Order in Council if these powers were going to be used before towards the end of September.
But if the terms of the Bill do not make it sufficiently clear that there was no need for such haste in the introduction of this Bill, let us consider some of the words of the Government. The Government might have been only too anxious—if they were still moved by any spirit of placation towards Parliament—to plead the need for immediate implementation of the granted powers. But look at what the former First Secretary, whose Bill this is, has said; after all, he might well have been impatient to enter a kingdom where he could rampage with so little inhibition upon his actions. But two nights ago he was saying that he did not believe—not just that he did not hope—that its implementation would be necessary. Perhaps Mr. Brown's enthusiasm waned when he sniffed his departure from the office he held. I certainly should not question the new First Secretary's personal capacity to discharge this function with the minimal incompetence of any gifted and honest man in such an insufferable position; but ought we not to have before the Recess his own view of whether he considers the implementation of this Part likely?
But if the Government are in no haste to introduce these measures, then why should this Bill have been bludgeoned through? The Conservatives are already on record that they would be prepared to sit through August. Is the argument really that the staff of Westminster would be losing their holidays? They cannot all be taking them at the same time. Of course, those with plans should certainly be allowed to go; certainly those who have lost anything by it must unquestionably be compensated. But could we not endure, even for a fortnight, something less than the luxury of a full staff? A few telephonists, messengers, policemen would have been sufficient. Legislators could have camped out, using their own keys, bringing sandwiches and brushing ourselves the corridors and Chamber at the same time as we
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attempted to brush the rubbish from the legislation. It seems to me most extraordinary that this tiny and perfectly manageable problem should take precedence over a Bill with implications of the magnitude it has for everyone in this country for years to come.
That this House is being treated with contempt I have already referred to, and in any case there is certainly no point in reiterating it. But I would say this. It is not as if the question was whether or not this House should insist on Amendments that were appearing before it for the second time, after rejection by the House of Commons. Certainly not. The assumption was that we should have nothing at all to say on the subject, and certainly no revisions to make, at the time of its first appearance here.
I suspect that the reason, if there was one, behind the assumption was that your Lordships would not risk the trade of your powers and place to stand up to a hectoring Government at a moment of crisis. In actual fact, Mr. Wilson included in his manifesto in any event the pledge to abolish the powers of this Chamber; he will do it, if he wishes to, in his own good time; and I sometimes wonder whether that great, postponed event when the Conservatives finally decide to risk a confrontation between the Houses will arise only when that measure is a measure introduced to abolish this House for ever.
I have always been ashamed at what seemed to be the prevailing reason for this House not insisting on its rejection of the War Damage Bill. I would only say now that confrontation—if this House has the mind to expose itself in carrying a Division—would be a confrontation not between the two Houses but between the Government and Back Benchers of all Parties in both Houses who resent the methods of the Government. For the methods of the Government have recently been the methods of autocracy. To one's ears, the sound of the Division bell in the House of Commons has become the gong to announce the next new dictates of Government, capriciously selected and savagely executed, unprepared and undiscussed; and these dictates have replaced the free and considered discussion of legislation by Parties and individuals proper to a democratic society.
LORD BARNBY: We remain in Committee and I propose to address myself at once to the point which I strove to raise on the last Amendment moved by my noble friend, Lord Drumalbyn. It was to try to get from the Government some interpretation of a point precisely relevant to that Amendment. I read this morning in the Press, with astonishment and dismay, a paragraph about an announcement, I think of the Monopolies Commission, which dealt particularly with prices, and in this particular case the reason for the reference was an allegation about prices charged for detergents, with gaudy names. I cannot quote it from memory but other noble Lords may remember it more easily. The criticism was that those detergents contained in their selling prices exaggerated amounts expended for advertising. Well, that certainly is a novel philosophy. It really means that any substantial amount spent for advertising any product in general use can be definitely suspect and can he brought under regulations. That is what I am now complaining of: excessive expansion of Governmental tribunals and other kinds of bodies.
My purpose in raising this point is that it also applies to synthetic fibres. Synthetic fibres contain in their selling price an amount allowed for advertising substantially greater than that which applies to detergents—it is freely believed to be an amount up to not less than a third of the selling price. I raise this matter because should there be any criticism which would require a rapid reduction in the selling price of synthetics, clearly that would have an immense impact on the price of natural fibres. That, in turn, could have a very disturbing effect on the whole of the textile industries. The noble Lord, Lord Shepherd, who is probably better informed than most of us on this subject, will know that it could materially alter overnight the basic prices of textile fibres. Under the Bill which we are discussing all kinds of penalties can arise, because obviously, as he knows well, one must work on averages. The difference between one type of product and another from the same fibre can change the price. I do not want to elaborate on that point, because I hope the noble Lord, Lord Shepherd, will be able to say something about it, but I can
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assure him that the state of mental disquiet which will follow from all this, on the part of those who have to deal with the end product, based on fibres subject to such repeated changes of price, would give plenty of work for tribunals and Government agencies which would have to interpret specific questions in this connection.
I return at every opportunity I can to my feelings of dismay about this Bill. We are having more bureaucracy, more regimentation. I disagree with the noble Lord, Lord Shepherd, who argued that there is no interference with freedom. That argument could be levelled against all types of legislation that introduce a factor which has not been familiar hitherto. As the noble Lord, Lord Wade, emphasised, the Bill itself should properly be regarded in the light of the needs which brought it about. What are the circumstances which have changed in the last week? Certainly we have seen Government bonds go to their lowest price ever. The dollar premium is nearly as high as it ever was. In so far as I have been able to read the announcements of Ministers, we have seen no correction, as has been suggested here, regarding expenditure on overseas aid. We have had no correction of the restriction on overseas investment, which could contribute so much to our balance of payments which has led to all our troubles. There have been references to it in this House, but there has been no declaration of Government intention on denying sales of arms. On the contrary, a spokesman for the Government in this House quite recently said that our selling policy must be governed by high moral consideration. That seems to be a way which is not going to help business. Government investment is going to be slowed down. That again is going to militate against the balance of payments. We have an economic war against Rhodesia, to which no end seems in prospect. That is an additional cost.
I would conclude by saying that it seems regrettable that there has been no answer to this appeal which is being made for further explanation of how the banks are going to provide for companies which have habitually leaned on their banks. The noble Lord, Lord Shepherd, the other day in Committee, was good enough to say where I should look in the OFFICIAL REPORT of another place.

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I have sought the reference, but cannot find it. I have read the OFFICIAL REPORT of yesterday and the day before, where this matter was fully dealt with by questions, but still it does not appear to take into account the point raised in The Times newspaper in its financial article two days ago, which said that it is feared that virtually for the first time in history the banks will have to go back on commitments already entered into. When they are right up to their ceiling, and you are going to take all this support out of the economy, how are the banks going to avoid extreme pressure? Maybe it is the aim of the Government to produce a minimum of 500,000 unemployed. It will quickly grow to a number much larger than that. We know well that the recovery from a deep depression is a slow process. We are here considering the Part of the Bill which got such a severe mauling in another place. I hope that on these two points, in particular, we may get some explanation from the Government Front Bench.
6.6 p.m.
LORD CONESFORD: I hope that the matter that I am going to raise, which I believe to be important, will not be considered less important if I try to make it brief. Until I heard the noble Lord, Lord Reay, I had no conception that we were discussing the War Damage Bill; it came to me as a complete revelation. And I may say that I was a little astonished that he still seemed to think that he was proposing an Amendment. To "leave out Clause so-and-so" is not an Amendment. That is why it is not numbered. What he meant was that he was speaking against the clause standing part. It is quite helpful for the Paper to say leave out Clause so-and-so to make it clear that its inclusion in the Bill is objected to; but it is not an Amendment.
I was also a little astonished by part of the noble Lord's speech, because I thought it was generally agreed among all sections of the Committee that, whatever we thought about this Part of the Bill—and some of us think as strongly as he does—we were distinguishing what was going to be raised in Committee from what we thought appropriate to a Second Reading.
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The important question which I wish to raise, and which I raise on this clause, is this. This is the clause which brings into operation, or provides for the bringing into operation, of Part IV. Her Majesty's Government, in both Houses, have made quite clear that they hope that they will not have to bring in Part IV, and I appreciate their reasons. But what I think has not been realised is how intolerable is the position of employers if they leave this Bill as it will be without Part IV. They wish the prices and incomes standstill set out in the White Paper to come into force by voluntary means. They have made it absolutely clear that they want it to come into force by voluntary means, and only to rely on the powers under Part IV if voluntary means fail.
In my submission, what they have not done is to make tolerable conditions for employers who wish to do what they are asking should be done. Let me give some examples. If noble Lords will examine the White Paper Prices and Incomes Standstill, which sets out the policy which Her Majesty's Government desire should be operated voluntarily, they will find that paragraphs 19 to 23 deal with existing commitments; that is to say, commitments where the employeeis entitled by law by the terms of his contract to a higher payment than that which he has hitherto received. Her Majesty's Government desire that that higher payment should be postponed for six months. But what is the employer expected to do? Suppose he thinks, as he may think, "It would be a patriotic thing if I carried out Her Majesty's Government's request"; what would happen then? The employer could be sued in the courts for the higher payment that is due under the contract and the courts would say that there was no answer to the claim. The fact that Her Majesty's Government had issued a White Paper saying that they desired something different would not affect the decision of the courts. The courts would be bound to say: "If you have the contract for the higher payment, you are entitled to it."
But, say the Government—and this is the reason I gave notice to Ministers opposite that I was going to raise this matter—let the employer and either his employees or the trade union representing them get together to see whether they

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could not agree to a postponement. Suppose they do, suppose most of them agree, but that there are one or two men who do not agree and say, "No, we rely on our contract of employment. We hold you to the bargain", what do Her Majesty's Government desire or advise that employer to do? Do they invite him to pay the man who objects and to refuse it to all the rest, or to refuse it to the lot and be successfully sued in the courts, or to give it to the lot and defeat the Government's policy? What do they wish the employer to do?
I want to put some fairly clear questions to the noble and learned Lord the Lord Chancellor. I know how much he honours and respects the rule of law. I know what lawyers feel about this, for lawyers are concerned with the rule of law and justice. As long as we have the rule of law, can the Government seriously suggest that employers ought to obey their request not to give a rise in wages, though the law of the land says that a rise in wages is due and will enforce that right if the employee goes to the court? Is it their conception of the rule of law that the employer ought to obey the Government's request and ignore the law of the land? I have read everything that was said by the Solicitor General in Committee in another place and by the Attorney General on Report, and I am left completely mystified about what it is that the Government wish the employer to do. I would ask whether they agree, first of all, that under our Constitution the employers must pay regard to the law of the land and not to any request by Her Majesty's Government that may conflict with it.
Secondly, I ask the Government this practical question. If employers negotiate with their employees, as the Government say they wish that they should, and one or two of their men refuse to agree, what then do they wish the employers to do? Finally, I ask them this perfectly simple, but not unimportant, question. Suppose in one particular place all the employees agree with the employers that they will obey the Government's request and will postpone their claim for the increased wage for six months. In the Lord Chancellor's opinion, after the expiration of those six months, will they be able to
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sue in the courts for all the arrears which have been postponed? That surely is a very important question. The White Paper assumes, I think, that they will not, but as I read the law as it will be if Part IV of the Bill is not put into operation, I cannot see why they should not be entitled so to sue.
I have raised all these matters because, while I see the great objections to Part IV—and I made clear my objections in our debate of last week—in one way the bringing into operation of Part IV would simplify the answer to the problems I have raised. Clauses 28 and 29 might in certain circumstances frustrate the contract by illegality, and Clause 30 proceeds in express terms to indemnify the employer. I hope Members in all quarters of the House will agree that I have raised a matter worthy of being raised in Parliament, a matter which deserves a clear answer. I hope that we shall get it.
LORD DRUMALBYN: Might I put one additional point to the noble and learned Lord the Lord Chancellor? On Clause 30 I have an Amendment down which draws attention to the effects of Section 3(1)(c) of the Redundancy Payments Act. This says:
"For the purposes of this Part of this Act an employee shall, subject to the following provisions of this Part of this Act, be taken to be dismissed by his employer if"—
THE LORD CHANCELLOR: This is quite a separate point under a quite separate clause. It does not arise under this clause, does it?
LORD DRUMALBYN: I am obliged to the noble and learned Lord, but surely he will see that, if the circumstances about which my noble friend has been speaking arise and an employer fails to pay an increase that has previously been agreed upon, then it seems that this particular section of the Redundancy Payments Act could also be invoked. I agree that this is a different point from the one that comes later, but this is a special case and seems to follow on the point raised by my noble friend. The section continues:
"but only if the employee terminates that contract without notice in circumstances (not falling within section 10(4) of this Act) such that he is entitled so to terminate it by reason of his employer's conduct."
If the employer has failed to pay an increase which he is directed to pay, is that

1879
within the meaning of this particular section; and if the employee then says, "I will not stand for this. I will leave and demand my redundancy payment", will he get it?
6.20 p.m.
THE LORD CHANCELLOR: I suggest that the point raised by the noble Lord, Lord Conesford, is a perfectly valid point, and is an awkward point, about the Bill. With great respect the point which was raised by the noble Lord, Lord Drumalbyn, I do not think is right. Broadly speaking, I think that nearly everything the noble Lord, Lord Conesford, has said is right, but we have to see this clause in its setting. I thought that our two days of debate on the Economic Situation, and indeed our day of debate on this Bill, reached a very high level. There was, I think, general agreement, including all Cross-Benchers, that in the situation in which the country finds itself, whoever may be at fault, there is no real alternative to a standstill of incomes and prices—prices because you will not get a standstill of incomes unless there is also a standstill of prices.
I should not have thought, from some of the speeches which have been made from the Liberal Benches to-day, that that was in the minds of noble Lords who speak from that part of the House. This is not, after all, a policy which any Government would want to operate. This is not something which is going to make any political Party popular. As we all know, quite the contrary. This is done because we know, as every political Party knows and every thoughtful person in this country accepts, that, short of disaster, an incomes and prices standstill, at all events for six months, is essential. This can be achieved in one of three ways. One can try to do it entirely voluntarily and have no provisions of a compulsory character at all; or, secondly, one can have from the start a compulsory scheme imposing penalties on everyone who ignores it; or, thirdly, one can try a voluntary scheme and at the same time arm oneself with powers which can be used if the voluntary scheme does not succeed.
I can quite understand that there may well be differences of view as to which of those three courses would be the best. The Government, I suggest rightly,
1880
thought that a voluntary scheme ought to be tried first. We believe that a large majority of the people of this country do realise the grave economic conditions in which the country is and, as a recent Gallup Poll showed, a substantial majority do believe that an incomes and prices standstill is necessary and that there is a reasonable prospect, knowing our people, that a large majority, if it is put to them, will accept it voluntarily. After all, it is not as if everybody were being asked to reduce their remuneration by 20 per cent. It is not such an appalling hardship to have to live on the same amount as you lived on in the last six months. The Government believe—I certainly believe—that the large majority of the people of this country will respond to this voluntarily.
Nevertheless, we have taken reserve powers to deal with a selfish few, if there be a selfish few, because as we all know it is very difficult, human nature being what it is, to expect people to go on doing something voluntarily if they see a sufficient number of selfish people acting otherwise. It is quite true, of course, that in what is at present a purely voluntary scheme there is power under Part IV to impose some penalties, but only after coming back to Parliament for Affirmative Resolutions of both Houses. This means that if and when—we all hope it will not happen—the Government see that a sufficient minority are acting selfishly so that there is a real danger of the whole thing breaking down, before making any Statutory Instruments applying any penal powers to anyone they have to come back and discuss it in another place and discuss it with your Lordships, and if it is to go on for more than 28 days get an Affirmative Resolution from both Houses so that, in the circumstances which have arisen, Parliament may decide that this is the right thing to do.
The noble Lord, Lord Conesford, points out that the intervening period may be a difficult one for employers. This is quite right, because if there is a pre-July 20 contract under which the employees are entitled to an increase after July 20, the Government are saying to both employers and employees alike: "Let there be no such increase for six months in the interests of the country." Now, we hope very much that there

1881
may be agreement. If in some case there is not, or if some employees say to their employers, "We insist on being paid", then no doubt the Government, through their representatives, will direct an appeal, apart from their trade union, to the employees in question. If they then start issuing a writ the employer is in a difficult position, and as Part IV will not be in force he will have no legal answer. Well, it is really for him to say what he thinks his patriotic duty is. I do not suppose that any body in those circumstances would much criticise him whatever he did. He may very well say, "If this is going to happen, obviously the Government will have to ask Parliament to put Part IV into effect and ask for Affirmative Resolutions, and of course for anything after that I shall be protected by the Act, but until then I am not."
I do not know that any of your Lordships would think that an employer was greatly to blame if in those circumstances he said, "I suppose I shall have to pay." But I can conceive of another employer saying, "It is very important that we should all hold together. Here is a large majority of the country, supported by the C.B.I., and supported by the Trades Union Congress, faced with a general appeal to everybody, in the interests of the country, to agree to a standstill for six months. If we are to allow a handful of people to defeat that, then it is going to be the worse for all of us. I do not mind; let them go to the county court; let them issue their plaint note. It will probably be weeks before the action comes on, and when the action comes on and they get judgment what are they going to do then? Distrain? On what? On the chairs in the office? By the time the men actually get their money, if this is the way people are going to behave, Part IV will be in operation and after that we shall be covered by it." As I have said, it is a difficult position for employers. Whether any of this really happens in real life we shall have to wait and see.
The noble Lord, Lord Conesford, also asked me to say specifically whether there was entitlement to the money if there is no power, if Part IV never comes into operation. The answer to that, I venture to suggest, must depend entirely on what happens between employers and employees. Obviously, there is a legal
1882
right to start with. Where employers and employees agree together to respond to the Government's appeal to have a standstill for six months, and give up the increase for six months, if that is what they agree to do, then they will have no further right. I think it depends really on what the agreement between them is.
There was a final point made by the noble Lord, Lord Conesford, who said in effect, "Here is a Government encouraging people to break their contracts." Legislation, I am afraid, often has that effect, although it is consciously passed. There is, for instance, exchange control; there is the Landlord and Tenant Act 1927, and there is the Act under which a Conservative Government interfered with the rights of landlords so as to enable tenants on a long lease to stay on even though—
LORD CONESFORD: If I may interrupt the noble and learned Lord, I think he will agree that in all those examples the Government interfered with contracts by altering the law. The distinction here is that they make a request without changing the law at all.
THE LORD CHANCELLOR: It comes in substance to the same thing, whether one says that in these circumstances employees shall not have a claim or that an employer shall have an answer to a claim.
I think the answer to the noble Lord, Lord Drumalbyn, is that ordinarily, if an employer is paying his employee the remuneration which he has always paid him in the past, but does not pay him some small increase, that would not be, I should have thought, a repudiation of the contract, entitling the employee to rescind the contract and claim under the Redundancy Payments Act. The test, as noble Lords know, is whether one party's conduct evinces an intention no longer to be bound by the contract. Where an employer is paying a man exactly what he has always paid him before, and is saying simply, "In response to the appeal of the Government I am not going to pay you this extra, because I think that is my patriotic duty", it cannot be said that he has an intention no longer to be bound by the terms of the contract. I should not have thought that a mere failure to pay a relatively small proportion of the remuneration would be a

1883
repudiation of the contract entitling the employee to go away and make a claim under the Redundancy Payments Act.
6.33 p.m.
LORD CITRINE: I am sure we are all indebted to the noble and learned Lord the Lord Chancellor for his very lucid explanation of Part IV and of how essential it is to the working of the whole scheme. He said in the course of his remarks that this is a difficult matter for the employers. I want to say with emphasis that it is probably a much more difficult matter for the trade unions. Not merely does it mean a revolution in their methods of collective bargaining, but it means that for the first time, despite the occurrence of two world wars when they declined to apply restraint to wages applications, they and their members may now in certain circumstances be subject to coercion in regard to something which they believe is reasonable and fair.
When the matter was debated on August 3, I said that I supported the Bill, particularly Part IV, and I repeat that. But I said that anybody who believes that the Government, without these powers in reserve, can secure by purely voluntary means the acceptance of this policy is living in a fool's paradise. Let us be quite clear about that. There will be enough contention, as it is, to get Part IV accepted by the trade unions. It has been stated that it is a permissive section; that after an Order in Council lasting for 28 days it will require an empowering Resolution of both Houses, and that people can fire at the measure at that stage. They can say whether, in their judgment, the Order is necessary or unnecessary. I have no doubt that in the interim period employers and trade unions will get together in an organised fashion to see whether, having regard to the restraint of both sides—both employers and trade unions—organised in large bodies of great influence, they are ready to accept something which is inherently and normally obnoxious to them. But this power is in reserve and let us keep that firmly in our minds.
I am not going to read an essay on Part IV. I want to deal with something which is much more immediate and narrow in its compass. Part IV of the
1884
Bill is the part to which the unions and the workers will look for guidance as to their duties and obligations, and the Explanatory Memorandum attached to the Bill states:
"Clause 28 empowers the Secretary of State to make orders directing that specified rates of remuneration shall not be increased from the date of the order without Ministerial consent and prescribes penalties. The clause makes it an offence for anyone to induce or attempt to induce an employer to contravene the clause and prescribes penalties …"
Naturally, I looked at Clause 28 to which this refers, and I could find there no reference to trade unions. All that I found in that clause were penalties upon an employer. I made inquiries about that, thinking that it might have been an omission not to refer to penalties provided for the workers and the trade unions, and I was informed that the matter was provided for by reason of reference to Clause 16 which has already been passed.
I regard it as very undesirable that people who are not familiar with Acts of Parliament should be driven from clause to clause to find out what really applies to them, particularly in a matter such as this which is so important to trade unions and the workers. I know that we have passed the clause, and passed Part II of the Bill, so that we cannot go back upon that. But would it not be possible for the Government to publish a simple memorandum which would provide guidance, both to employers and to trade unions, as to just what are the obligations upon them, so that they know clearly what faces them? It might even act as a reinforcement for the Government's power in reserve, by making clear to the trade unions what the Bill, when it becomes an Act, will expect them to do.
THE EARL OF LONGFORD: Obviously, I have not been able to give more than a few seconds' thought and consideration to the proposal made by the noble Lord, Lord Citrine. Anything that comes from him in his field is going to be studied by any Government, whatever its complexion, with very great care. I cannot say more, except to assure him that I will see that what he has said will be looked at with great thoroughness.
6.40 p.m.
On Question, Whether Clause 25 shall stand part of the Bill?
Resolved in the affirmative, and Clause 25 agreed to accordingly.s
LORD CHAMPION: It might be for the convenience of the Committee if I were to mention that supper will be ready from 7.30 onwards, and that we do not propose to adjourn the Committee for supper because there are considerable hopes now that we may finish by 8 o'clock, or shortly afterwards—but this, of course, will depend on noble Lords.
Clause 26:
Restrictions on increases of prices or charges
26.—(1) The Secretary of State may by order apply this section to any prices for the sale of goods and to any charges for the performance of services, including charges for the application of any process to goods.
(2) Prices or charges to which this section applies for transactions effected by a person in the course of business shall not exceed by any amount the prices or charges for transactions of the same description effected by that person in the course of business before the coming into force of the order applying this section to the prices or charges unless the appropriate Minister has given his consent in writing to an excess of that amount, or of a greater amount.
(3) This section shall not apply in relation to prices paid on any sale by auction.
Their Lordships divided: Contents, 59; Not-Contents, 14.

CONTENTS

Addison, V.

Gardiner, L. (L. Chancellor.)

Plummer, Bs.

Archibald, L.

Granville-West, L.

Rathcreedan, L.

Blyton, L.

Haire of Whiteabbey, L.

Rhodes, L.

Bowden, L.

Henderson, L.

Robertson of Oakridge, L.

Bowles, L.

Hilton of Upton, L. [Teller.]

Royle, L.

Brown, L.

Kirkwood, L.

Segal, L.

Burden, L.

Latham, L.

Shackleton, L.

Campbell of Eskan, L.

Leatherland, L.

Shepherd, L.

Caradon, L.

Lindgren, L.

Sorensen L.

Champion, L.

Llewelyn-Davies, L.

Stocks, Bs.

Chorley, L.

Lloyd of Hampstead, L.

Stonham, L.

Citrine, L.

Longford, E. (L. Privy Seal.)

Stow Hill. L.

Cohen of Brighton, L.

Maelor, L.

Strabolgi, L.

Collison, L.

Montgomery of Alamein, V.

Swanborough, Bs.

Crook, L.

Morris of Kenwood, L.

Wells-Pestell, L.

Darwen, L.

Moyle, L.

Williamson, L.

Faringdon, L.

Nathan, L.

Willis, L.

Francis-Williams, L.

Peddie, L.

Winterbottom, L.

Gaitskell, Bs.

Phillips, Bs. [Teller.]

Wootton of Abinger, Bs.

NOT-CONTENTS

Airedale, L. [Teller.]

Carnock, L.

Ogmore, L.

Amherst, E.

Gladwyn, L.

Reay, L. [Teller]

Asquith of Yarnbury, Bs.

Grantchester, L.

Swaythling, L.

Barrington, V.

Monson, L.

Terrington, L.

Byers, L.

Moynihan, L.

(4) An order under subsection (1) above may frame a description of prices or charges to which this section applies in any way, and in particular in framing a description of prices of goods of a specified class—

(a) may make distinctions by reference to the undertakings or persons selling the goods,

(b) may make distinctions by reference to the terms and conditions on which the goods are sold, the quantity sold or the undertakings or persons to whom they are sold,

(c)may make distinctions by reference to the undertakings or persons by whom the goods have been produced or dealt with, or the locality in which they have been produced,

(d) in making any of the distinctions above as regards undertakings or persons, may distinguish undertakings or persons by reference to the regions or localities where they carry on business or the scale or turnover of their business or by reference to any other circumstances, and may include or exclude named undertakings or named persons,

and comparable distinctions may be made in relation to charges for the performance of services.
6.46 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (4)(a), after "to the" to insert" class of". The noble Lord said: Perhaps it would be for the convenience of

1887
the Committee if I were to take Amendments Nos. 16, 17, 18 and 19 together. The purpose of these Amendments is to elicit from the Government some statement on how they propose to apply Clause 26 to prices and charges. Subsection (4) says:
"An order…may frame a description of prices or charges…in any way, and in particular in framing a description of prices of goods of a specified class…may make distinctions by reference to the undertakings or persons selling the goods,…".
Is it not a peculiar use of an order (which, after all, is a rather formal type of affair, quite different from the procedure envisaged in Clause 27) to relate it to a particular undertaking or person? What I am proposing here is the insertion of the words "class of," so that it reads, "class of undertakings or persons", because it seems to me that this is much more the kind of thing to which an order should relate.
What is more, it would be much better for an industry if they knew that the whole of that industry was subject to the same standstill by order, not just one particular undertaking in it. I think there is force in this argument; but I hope that, at any rate, we shall hear from the Government that when orders of this kind are made they will extend to classes of undertakings, or even to whole industries, and not to particular undertakings or persons. It seems to me that that would be invidious, and might very well work badly, resulting in further orders, covering another undertaking in the same industry, having to be made.
It is for the same reason that I have suggested that, on page 24, the words following the word" circumstances" in the first paragraph at the top of the page, paragraph (d), should be omitted. Paragraph (d) says:
"in making any of the distinctions above as regards undertakings or persons, may distinguish undertakings or persons"—
et cetera—
"and may include or exclude named undertakings or named persons".
I do not know what the purpose of excluding named persons from this particular Order would be. Surely, if there is going to be a ban placed on prices being raised it should apply to everyone in the same industry, and particular persons in that industry ought not to be
1888
excluded. By the same token, I presume that the inclusion of a named undertaking or named persons, if it means anything at all, would mean named undertakings or named persons outside a particular industry which were in some way related to it. I really do not understand this, and I am asking for some elucidation from the Government. I beg to move.
Amendment moved—
Page 23, line 35, after ("the") insert ("class of").—(Lord Drumalbyn.)
LORD WINTERBOTTOM: My noble friends who have been speaking before me on this part of the Bill have made two points which I believe will help the noble Lord to clarify his thinking on this subject. The first is that for as long as possible and as far as possible the Government wish to work on voluntary lines. We do not wish to impose a solution on anyone. The second point is that we believe that the broad mass of the British people and the majority of the organisations also broadly support this policy—not only of the voluntary principle but of the policy of a prices or incomes standstill or freeze. That being so, it seems unwise to spread the fiat too widely. We wish, above everything, to be selective in the direction of our policy. After all, I believe there have been, so far, only two cases where the voluntary principle has been ignored. One was part of a single industry and one was part of a single union. It is for this reason that we want to be able to direct our controls to where they are actually needed, to direct them towards those people not willing to obey the voluntary principle.
The noble Lord, by inserting the words "class of", widens, as he himself has said, the field on which the controls are placed. For that reason we wish to resist the Amendment. We want to be selective in the pressures we bring to bear; we want to bring them only on those people not willing to accept the voluntary principle.
LORD DRUMALBYN: I am grateful to the noble Lord for his explanation. I only hope that it will work out as he hopes. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: The noble Lord did not actually answer this particular point. I do not know whether he can give an answer to this. I beg to move.
Amendment moved—
Page 24, line 5, leave out from ("circumstances") to end of line 7.—(Lord Drumalbyn.)
LORD WINTERBOTTOM: I am sorry I did not reply to this point which is to omit the words:
"…and may include or exclude named undertakings or named persons,".
Very much the same principle applies. We want the power to name undertakings or name individuals who are unwilling to follow the policies which are accepted by their fellows in industry and in business or unions.
LORD DRUMALBYN: I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn. Clause 26 agreed to.
Clause 27:
Restrictions on prices and charges by reference to levels at 20th July 1966
(4) Prices or charges to which this section applies shall not exceed prices or charges for transactions of the same description effected by the said person in the course of business before 20th July 1966 by any amount unless—

(a) the Minister has given his consent in writing to an excess of that amount, or of a greater amount, or

(b) the direction authorises an excess of that amount, or of a greater amount.

LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (4)(a), to leave out "a greater" and insert "some other". The noble Lord said: Perhaps it might be convenient if I go a little wider than normally in speaking to this Amednment, so as to deal with the clause as a whole. It is not absolutely clear to me whether this power, in Clause 27, to
"give notice…to any person…carrying on a business…that the Minister is considering the giving of a direction"
is an entirely separate power from that in Clause 26. Perhaps the noble Lord can explain in what circumstances the Minister would make an Order and in what circumstances he would give a direction. Does he give a direction only after making an Order; or can he make an
1890
Order or give a direction? The particular point of this Amendment is that where the Minister gives his consent to an increase he can, in the words of the clause:
"consent in writing to an excess of that amount, or of a greater amount,".
I am not clear why it should only be" a greater amount". That is why I put down "some other" amount in my Amendment; because the Minister might say that he cannot agree to so big an increase while recognising the force of a claim for some increase. Why not increase it by so much? I should have thought that this was quite a reasonable thing to do. I do not see why it should either be "that amount" or "a greater amount". It is true that by the time the answer is given some time may have elapsed and it may be necessary to increase by more than the original proposal.
There is one other point that I should like to raise at this stage. Given the need for directions of this kind, the Minister must have some means of finding out what persons are selling goods or performing services at prices or charges in excess of what they were before. May I ask the Minister—because I think it is a serious point—whether he is going to rely on information? Are we really returning, in some measure, to the common informer on this? If not, on what source will he rely to obtain information that people are selling at greater prices or rendering services at greater charges than before?
I think it is a cause for considerable alarm that the Minister may conceivably be inundated with requests for increases. Under the White Paper, it seems that the Minister hopes to be able to give replies within a month. Is he, under the Bill, also expecting to be able to give replies within a reasonable time? Has he considered what the flood of applications may amount to? Is he confident that he will be able to cope with them? Has he the machinery to cope with them in the period laid down by the White Paper? If that is not so, I think he will find growing discontent with the whole system and there may well be a breakdown. I beg to move.
Amendment moved—
Page 25, line 9, leave out "a greater" and insert "some other".—(Lord Drumalbyn.)
LORD WINTERBOTTOM: I think the noble Lord has raised a number of points covering Clause 27. Two of these points relate to mechanics. I should be grateful if the noble Lord would permit me to answer those questions at Report stage, because I should like to answer accurately and I am not in a position to do so now. I agree that it is conceivable that there may be a whole flood of notices coming to the Minister. In fact, something like this will probably, almost surely, happen. Since this is, I think, an obvious risk arising from the Bill, clearly steps are being taken to meet the rush if and when it comes. Turning now to the various Amendments on the Order Paper—I make them Nos. 20, 21, 23 and 31—I hope with permission of the Committee, to take them together. I think this is an example of productivity to the rest of the nation.
LORD DRUMALBYN: May I intervene? No. 23 is not dealing with prices, but I agree the same applies to remuneration.
LORD OGMORE: May I ask the noble Lord to repeat the numbers of the Amendments he mentioned?
LORD WINTERBOTTOM: I make them Nos. 20, 21, 23, 30 and 31, spread over three clauses. This is really a difficult one, which will tax my powers of explanation. I have an answer, which I hope to understand myself by the time I have given it.
Clause 27(4) prohibits, subject to penalties, the change of a price in excess of that fixed by virtue of the direction under the clause. It does so by providing that the price shall not exceed the price of a transaction of the same description effected in the course of business by the same person before July 20, 1966, by any amount unless (a) the Minister has consented to an excess of that amount, or a greater amount, or
"(b) the direction authorises an excess of that amount, or of a greater amount."
The noble Lord, Lord Drumalbyn, wants to substitute for that "some other amount." In other words, to try to put this into figures, if the price becomes fixed at 20s., it is an offence to charge 25s. unless there is a permission to charge 25s. or more than 25s. The Amendment proposed by the noble Lord would make
1892
paragraph (a), which I have just referred to, read
"Unless the Minister has consented to an excess of that amount"—
5s. for example—
"or of some other amount."
Of course, paragraph (b) also applies. But if the other amount, that is, the excess permitted by the Minister, was, for example, less than 5s., it would be an offence to charge 25s. The permitted excess must be equal to or greater than the excess actually charged. It cannot just be any other amount. Therefore, the Amendment of the noble Lord, Lord Drumalbyn, makes no intelligible change to Clause 27(4). I hope that I have made an intelligible explanation.
LORD OGMORE: I hope that the noble Lord, Lord Winterbottom, understands the explanation.
LORD DRUMALBYN: I am bound to say that I do not see the logic in this. It seems to me quite possible, in the example quoted, to fix an amount of 22s. 6d. At any rate, it would be quite possible to have the Bill drafted in that way, and what the noble Lord has not made plain is why it was not drafted in that way. Why is it necessary to provide for either the amount asked for or a greater amount? The noble Lord might quite easily have said, "I am sorry, I cannot agree to so much, but we will go half way; we will have 22s. 6d."That would be perfectly logical and might in certain circumstances have allowed the Minister to get out of the whole of it; and it would have gone some way, at any rate, to meet the need of the manufacturer whose need might be quite severe. It does not seem to me to be reasonable to say that the request must be made in whole or not at all. Or else the Minister may agree to a still greater amount which would seem to be somewhat unlikely.
LORD WINTERBOTTOM: I have tried to satisfy the noble Lord, but the Parliamentary draftsman informed me that his Amendment makes no intelligible change to Clause 27.
LORD HARLECH: Is the noble Lord, Lord Winterbottom, saying that in certain circumstances the Minister would I be able to indicate that he would allow

1893
an increase, but not the full increase? Is that possible under the Bill as now drafted?
LORD WINTERBOTTOM: Subject to correction later, my answer would be, Yes.
LORD DRUMALBYN: If that is so, I must say that I accept the noble Lord's reservation, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn. Clause 28:
Restrictions on pay increases
28.—(1) The Secretary of State may by order apply this section to remuneration under contracts of employment for any kind of work to be performed wholly or substantially within the United Kingdom or on British ships or aircraft.
(7) An order under subsection (1) above may frame the descriptions of remuneration to which this section applies in any way, and in particular—
(b) in applying it in relation to employees working in specified undertakings or for specified employers, may make distinctions as regards those undertakings and persons by reference to the regions or localities where the undertakers or employers carry on business, or the number of employees working in the undertakings or for the employers, or by reference to any other different circumstances, and may be made so as to apply to named undertakings or persons.
7.5 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, after subsection (2), to insert:
"() Subsection (2) of this section shall not apply to any agreement between an employer and employees or any trade union or person acting on behalf of employees, whereby in consideration of higher productivity a higher rate of remuneration is to be paid:
Provided that—

(a) any such agreement shall be notified to the appropriate Minister and shall not come into effect until he has given his consent in writing;

(b) the arrangements for that higher rate of remuneration and for that higher productivity are put into effect simultaneously."

The noble Lord said: I think that this Amendment speaks for itself. The purpose of the Amendment—
LORD CHAMPION: For the sake of warning the Committee, or just asking, might we not deal at the same time with the two Liberal Amendments? They
1894
cover the same point with a trifling difference. I am sorry to interrupt the noble Lord, but I thought that the Committee might like to know that we are going to discuss them.
LORD BYERS: That would be convenient to us.
LORD DRUMALBYN: I am obliged to the noble Lord, Lord Champion. I believe that this Amendment and the Liberal Amendment have much the same purpose. The Amendment says:
"shall not apply to any agreement between an employer and employees in any trade union or person acting on behalf of employees, whereby in consideration of higher productivity a higher rate of remuneration is to be paid".
I am sure we should all agree it is vital at this time in our history to ensure that higher productivity is achieved. I understand the point of view of the Government, which can be expressed only in this way: that it is almost impossible for them to distinguish between what is a productivity agreement and what is not. I, and I am sure other noble Lords on this side of the Committee, would question that very much.
We had an earlier Amendment in which the words, "genuine productivity agreement" were used, and I noted that the noble Lord in reply to me also used the words, "genuine productivity agreement". It follows, I think, that it is possible for either the Prices and Incomes Board, or indeed the Minister himself, to distinguish between an agreement which is genuine and one which is not, and so we come to the proviso that
"any such agreement shall be notified to the appropriate Minister and shall not come into effect until he has given his consent in writing."
That will enable the Minister to judge whether it is a genuine productivity agreement, and if so, one would expect him to give his consent.
Secondly, the arrangements for that higher rate of remuneration and for that higher productivity are to be put into effect simultaneously. There have been complaints in the past that there have been productivity agreements where the higher rate has been paid but higher productivity has not been forthcoming. I think this would be a guide to the Minister as to what kind of agreement he should agree to. Let us say, quite frankly,

1895
that noble Lords on this side of the Committee do not accept that the Government's policy cannot be maintained if there are any increases of this sort. Such increases are so obviously going to contribute to the recovery of the country and the improvement of the balance of payments, and all the other things we want to see, that I am quite certain public opinion would accept that genuine productivity agreements, accepted and approved by the Minister, should be an exception to the standstill. Unless this is done we shall have a complete standstill—not just a standstill, but a stagnation.
I agree that it is possible, and we all hope it will happen, that during the period of the standstill plans may be made for a further leap forward. We hope that will happen, but we can never really regain lost ground, and noble Lords on this side of the Committee believe that it is possible to make an exception of productivity agreements in this way. We think this a very strong case to answer, and we shall find it hard to he convinced by argument that this cannot be done. I beg to move.
Amendment moved—
Page 25, line 44, at end insert the said subsection.—(Lord Drumalbyn.)
LORD BYERS: I should like to follow the noble Lord, Lord Drumalbyn, and move, on behalf of my noble friends and myself, Amendments Nos. 27 and 28, and to say that I support Lord Drumalbyn's Amendment.
LORD SHEPHERD: The noble Lord can speak to the Amendments, not move them.
LORD BYERS: Perhaps I might have some guidance here, because it will almost certainly be necessary to vote on these Amendments; therefore formally they should be moved.
LORD CHAMPION: They will be moved later.
LORD BYERS: I thank the noble Lord, I should like to say that I support the argument put forward by the noble Lord, Lord Drumalbyn, and the Amendment to which he spoke. I do not intend to repeat the arguments which I put forward on Clause 4 this morning (which
1896
seems as though it might have been last week), but in answer to that debate the noble Lord, Lord Champion, made it clear that although productivity agreements could be negotiated during the standstill period, they could not be implemented during the standstill or even during the period of restraint. I do not think that "implemented" is the right word—"honoured" might be a better description.
If the Government persist in this attitude towards productivity, it will do lasting damage to the economy. There is no short-term gain to be had by refusing the implementation of schemes which will give us greater efficiency, if only for a week. It is important that we should have that extra contribution to our national economy and if we do not do this, there will be long-term damage to the economy. The same thing applies to the need, referred to in the second Amendment, for encouraging the abandonment of restrictive practices in return for an adjustment of the wage structure. Tremendous strides have been made in this field and we cannot afford to have a standstill in a progressive matter of this sort.
I referred previously to the desirability of protecting the criteria in Schedule 2 of the Bill, and I still think that it makes a great deal of sense to remind ourselves what that Schedule says, in paragraph 15:
"Exceptional pay increases should be confined to the following circumstances:
(i) where the employees concerned, for example by accepting more exacting work or a major change in working practices, make a direct contribution towards increasing productivity in the particular firm or industry. Even in such cases some of the benefit should accrue to the community as a whole in the form of lower prices;…"
With this principle we agree, because we have been putting it forward for years. Surely this is a positive incomes and prices policy. This is the right attitude for a Government to take. We cannot get by with the idea that there must be no exceptions. We need every contribution we can get, if only for a day or a week. There is widespread support in another place, and in the country, for recognition, in a Bill dealing with an incomes policy, of the fact that productivity and efficiency are still regarded as a basic requirement of that policy, and we seek to introduce it into the Bill by bringing in these Amendments. I hope

1897
that we shall have the full support of Her Majesty's Opposition in this House.
LORD COOPER OF STOCKTON HEATH: I do not think that noble Lords give trade union leaders or work-people sufficient credit for their agility in negotiating in difficult circumstances. If we allow negotiations to proceed during standstill on the basis of productivity, we shall drive a carriage-and-four through these arrangements. It is easy to devise agreements that can come within the description of a productivity agreement.
LORD BYERS: This Amendment specifically refers the matter to the Board. The noble Lord is surely not saying that the Board will be taken in by phoney agreements.
LORD COOPER OF STOCKTON HEATH: I am saying, from my experience in the trade union field, that it is very difficult to discriminate between ordinary and productivity agreements, because ordinary agreements are payments for work done and productivity agreements are paid on a piece-work system; but this turns on the whole question of equity. I would draw your Lordships' attention to the fact that many workers who could not possibly negotiate productivity agreements are going to be asked to agree to a standstill for six months. This may sound a contradiction in terms, but while those in manufacturing industry can make any kind of productivity agreement, in services such as hospitals and local government they would have a standstill without that possibility. My noble and learned friend the Lord Chancellor made the position clear.
We are reluctant to make this standstill, but we think it is in the best interests of the country. It will affect many people. The railway men, for example, who came to an agreement to terminate their threatened strike, will have to wait from September until March, 1967. And there are the doctors—we can understand how they feel about it. There are 6½ million people with agreements in the pipeline who have entered the standstill for six months and if we play about with this (and I think that this is a fair description of what noble Lords are asking), if productivity
1898
agreements are to be excepted, we shall have the whole situation down around our ears very quickly. I regret to say this, because I have been right through the exercise. I have had to deal with petitions about clearing the pipeline and productivity agreements. I am convinced—and I hope that my remarks are helpful—that if we make exceptions, we shall not be able to maintain this standstill for six months.
VISCOUNT BARRINGTON: I know very little about the subject, but I cordially agree with what my noble friend Lord Byers said. Sometimes exceptions have to be made. That case was eloquently put by the noble and learned Lord the Lord Chancellor in the case of the Burmah Oil Company, when he pointed out that every now and then it is in the public interest to make exceptions. Would not the noble Lord agree that this is one such case?
LORD COOPER OF STOCKTON HEATH: I do not know whether I am called upon to answer, but I would say that productivity agreements—I could recite many, but I instance only the recent one of British Oxygen—are made for large groups of people, and the effect is similar to ordinary negotiations for large groups of people. If productivity agreements are to be accented, all we have to do in the trade union movement is to use our wits and, instead of going for ordinary agreements, find some context that could be regarded as productivity, in order to break the standstill.
LORD ROBERTSON OF OAK-RIDGE: I hope that a humble Cross-Bencher may be forgiven if he intervenes for a moment in this argument between political giants. I do so on my own direct experience of industrial relations, and also on such experience as I have of a more indirect nature. I feel that I must say why, if this matter goes to a Division, I shall vote against these Amendments. I fully agree with the noble Lord, Lord Drumalbyn, when he said that an increase in productivity must be accepted as an essential for this country at this time. And the noble Lord. Lord Byers, said the same thing in other words. I should hate to be thought as disagreeing with that. But what I feel is that productivity agreements are often imperfect these days and difficult to

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reach and they are not as common as the speeches from the Conservative and Liberal Benches seem to imply. Incidentally, I should not regard as a productivity agreement an agreement that mentions stopping a restrictive practice and receiving more wages for doing so.
I think what must be recognised is that the whole technique of evolving productivity agreements requires more thought than it has had; and I hope that the Royal Commission on industrial relations which is now sitting will give this matter very close attention. At the present time, many of these agreements, which seem good to start with, end up by giving rise to demands for more wages from other sections of the same industry, from other industries and from other parts of the country. It is my firm belief that if the Government concede this point they will find their hopes of getting voluntary agreement to work this scheme quite illusory; they will have to use their compulsory powers, and, even so, they will find it extremely difficult to hold the reins.
LORD CITRINE: I had to leave the Chamber for a few minutes, and when I returned I was just in time to hear the noble Lord, Lord Byers, make a reference to restrictive practices. I therefore presumed that we were debating Amendments Nos. 27 and 28 together; and I now gather that we are also discussing Amendment No. 24. On Amendment No. 27, I entirely agree with what the noble Lord, Lord Cooper of Stockton Heath, has said. Both of these Amendments seem to me, to quote an old aphorism, to be" paved with good intentions", and we know where that often leads.
No Government up to date has tackled the question of restrictive practices, in so far as they apply to trade unions and members of the unions. Why is this? It is an obvious thing. There have been demarcation disputes. We all recall those between the boilermakers and ship constructors, which at one time figured in the Press almost every day. Why did the Government not tackle this position? Why was it that, when the Restrictive Practices Court was set up, what are described as trade union restrictive practices were deliberately excluded from the purview of that Court? I think I can tell your Lordships why. First of all,
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this has never been defined. I would say that this Amendment would be meaningless unless there was included in the Bill a definition of restrictive practices. I do not believe that even the ingenuity of the noble Lord, Lord Byers, whose tenacity on these matters I greatly admire, would be sufficient to give a definition that would cover all the things he has in mind.
May I point this out to show the difficulty? The Amendment refers to "restrictive practices arising out of trade union rules". In my trade union days I used to be very familiar with trade union rules, and I can assure the noble Lord that very few unions have any precise rules dealing with restrictive practices, or advising their members in that respect. There were, in days gone by, unions which had that kind of rule, but to-day I think you would have to search extremely diligently to find a union that lays down standards for its members, as to the quantity of work, and so on. Even with the printers, who are constantly in the public eye on this matter (I have not looked at this recently), I should be surprised to find that they laid down any rule so precisely as to enable this Amendment to have any serious practical effect.
What happens is that groups of members devise these rules, and apply them, in many cases, from a long tradition of many years. And let me say this about it. The rules have usually been established and accepted by employers because of the manifest injustices which they did to trade unions in the days when they were weaker than they are to-day. Even the rule about work referred to earlier by the noble Marquess, Lord Aberdeen and Temair, was aimed at securing a fair day's work for a fair day's pay. But vigorous young men, in the flush of their manhood, could naturally work faster than older men, and the rules were based on getting a good fair average. So do not let us assume that every trade union practice is socially and industrially harmful. Some of them are detestable; and much of my trade union life was spent in trying to reconcile the differences between trade unions, even in the sense of what class of worker should do particular jobs.
I would say that if this matter were to be put into this Bill without further

1901
clarification and, as I have already said, definition, it would be the most difficult thing in the world to tackle. Sooner or later it will have to be tackled, but I suggest that it would be most unwise to insert it into a Bill of this kind.
7.27 p.m.
LORD CHAMPION: We have had—and it is one of the tremendous advantages of this House as at present composed—the voices and experience of both sides of industry brought to bear upon this Amendment and the other Amendments, all of which have been put down with the best intentions in the world. We have heard from the noble Lord, Lord Cooper of Stockton Heath, whose trade union experience is rivalled here only by that of the noble Lord, Lord Citrine, who has experience of both sides of industry; because he has also managed a nationalised undertaking.
LORD OGMORE: What about Lord Williamson? May I say that I have the greatest regard for the noble Lord, Lord Williamson, who is an old friend of mine?
LORD CHAMPION: I was talking about the voices which we have heard in this connection. The noble Lord, Lord Robertson of Oakridge, of course, has tremendous experience in the management of an industry which was a comparatively lowly paid industry and has had to fight its way up. I am bound to say that I personally, as a railway man, am grateful to the noble Lord for his management of the industry when he was in charge of that great undertaking.
Time after time from this Box I have found myself agreeing with the noble Lord, Lord Byers, and other noble Lords in this House who have raised this question of productivity. What they have said, and what I have said from this Box in answer to them and in agreeing with them, was, in effect: "Get our productivity right, and most of the country's economic difficulties will be solved". This is not something that can be solved in six months on an incomes freeze, or in the twelve months of freeze and restraint.
In this matter of generally increasing and improving the country's investment, and all that is necessary for it, all the
1902
Government have been able to do in this direction cannot operate rapidly over the wide field that we hope to cover. We have to do something more than make certain things available to people: we have to change climates of opinion. This is an extremely difficult thing to do, and is a very slow process. But we cannot wait until we have changed climates of opinion, and so on; because we have an immediate and critical situation on our hands. The disease from which we suffer—and it is the disease of consuming more than we can produce—is one that demands the immediate application of shock treatment. How often have I heard the noble Lord, Lord Byers, exhorting the people that if they behave differently we shall be cured of our economic ills! This has failed. Of course it has failed. This Bill is strong medicine. It is strong medicine that I, as a Minister, hate having to assist to apply. In this case I think we are right to apply it.
In this matter of pay pause, my mind goes back to the attempt at the pay pause by the then Chancellor of the Exchequer, Mr. Selwyn Lloyd, in 1961–62. This was wholly voluntary in the private sector, but I should say that it was unjustly enforced in the public sector. Most of us remember the great difficulty we had in this connection because we denied to the nurses the increases they ought to have had. In that period the selfish workers made, and had granted, pay claims, and the others found themselves having to catch up: trade union leaders being impressed by the people in the branch rooms, and elsewhere, saying, "Look, you are letting them get away with it. The differential that used to apply between us and them has now widened", or, "They have sneaked ahead of us as a result of our not taking responsible action."
This attempt to catch up is always there, and when you catch up the other union attempts to sneak on ahead. Catch-as-catch-can operates over the whole field, and it did during the 1961–62 period. It also affects people who manage undertakings. For part of this time I was on an important board. Time after time we were trying to keep wages down to what the Government regarded as the right sort of figure, if increased at all. Time after time it was borne in upon us as managers of that undertaking:

1903
"You are losing labour. If you do not come up to the same standards as the rest you have had it, and you will not be able to man the factories." We do not want this catch-as-catch-can attitude to ruin this attempt at a sensible restraint over the whole field.
Both the Amendment of the noble Lord, Lord Drumalbyn, and the Liberal Amendments spoken to by the noble Lord, Lord Byers, would exempt productivity bargains from the First Secretary's powers to hold up implementation during the twelve months in which Part IV may be enforced, always provided that, in the case of the first Amendment, the Minister was satisfied that the productivity increase was genuine and, in the case of the Liberal Amendments, that the Board was so satisfied. The difficulty of establishing whether the productivity increase is genuine was pointed out by the noble Lord, Lord Robertson of Oakridge, and others with vast experience in this field—brave words, spoken when meeting across the table in negotiation, which mean absolutely nothing.
As the then First Secretary said in another place, we were getting agreements where productivity was assumed, and the cash was being taken. That is quite another matter altogether. And how right this is! As I have said, I have a vast amount of sympathy with the ideas behind these Amendments, and I dislike having to advise the Committee to reject them, but I do so on the main ground that if we allowed a genuine productivity agreement to be implemented during the standstill, it would disturb other workers and unions, because it would be inequitable as between workers in a position to get this sort of agreement and those who are not. There is bound to be this problem. The whole experience of trade union leaders in this field, and the whole experience of every employer, points to the fact that once we begin to talk in this connection about productivity agreements being permitted we shall be back to catch-as-catch-can. This we must avoid. This we intend to avoid during this difficult period. It was a matter of shock treatment and, frankly, I should not like to see the Committee agree to any of these Amendments because I believe that, although they might do a tiny bit of good in
1904
one particular case, they would destroy what we are trying to do over the whole field covered by the Bill. I confidently ask the Committee to reject these Amendments.
LORD DRUMALBYN: I can only speak for myself, but the impression the noble Lord's speech made upon me was to emphasise what a long way we have to go in changing the attitude of people throughout the country if we are really going to get the increase in productivity that we require. There are two ways of tackling this—and I am not going to delay the Committee. One is to highlight, or spotlight, certain agreements that are quite obviously going to increase productivity. Give them great publicity and say, "This is the sort of thing we want to see throughout industry." Inevitably they will be on a fairly narrow line to start with, but over a comparatively short period they might suffice to show industry the way in which they are expected to go, and the way in which they will have to go if we are to get this increase in production.
The other side of this question is the fact that, as the noble Lord said, this would be regarded as inequitable by other industries in which this increase cannot be achieved. But, surely, it must be clear to anyone who thinks about it that it is only on the basis of those industries which can be seen to be increasing productivity that an increase in productivity in the country as a whole can take place. It is on the backs of those people who are in a position to increase productivity that the whole of the rest of the economy is carried. We have to face the fact that those industries which can increase productivity must be given the encouragement to do so, and that the others can get their increases only when that has happened, and not before.
LORD CHAMPION: I wonder whether the noble Lord will permit me to interrupt? What I ought to have said, and perhaps did not stress enough if I did say it, is that there is nothing to prevent negotiations from going on during this period. You do not negotiate this sort of thing and get it into operation in a very short time. Of course, negotiations will be permitted during this period and, by gosh! we hope there will be many genuine agreements arrived at. The

1905
other thing I might have said is that if it can be shown that there is a possibility of the sort of thing for which the noble Lord is appealing, the Minister may have to consider during the second six months whether it would be advisable in the national interest. I should have stressed that before.
LORD DRUMALBYN: I am grateful. I am sure that what the noble Lord has just said is quite right and would have the support of the whole Committee. The point I was making, and what I had in mind, and what I think noble Lords above the gangway also had in mind, was that in a period of standstill the mere fact that you select certain kinds of agreement and say, "The Minister agrees with this; this is what we want to encourage", gives all the more emphasis to it. This standstill gives the opportunity to give a lead which will never come again. This is where selection really can operate. The noble Lord can select very special kinds of agreement and say, "We are giving the gold medals here". This is what I certainly had in mind and I believe that it would work. I am very sorry that the noble Lord, Lord Champion, does not think that it would.
LORD BYERS: I must say I am extremely depressed at the speeches which have come from the opposite side of the Committee on this matter. When I listened to the noble Lord, Lord Cooper of Stockton Heath, I thought I was back in the Stone Age. What he has been saying is that during this period when we are all agreed that we want the maximum efficiency, we must not take the efficiency which we can get from one group of people because we cannot get it from everybody.
SEVERAL NOBLE LORDS: No, no!
LORD BYERS: Oh, yes; this is what he is saying and it is this horrible attitude which I thought the trade union movement was giving up, that because you cannot give the benefit to everybody you must deny it to one. The point here is not the benefit you give to the person but the benefit the country gets through the increased productivity and improvement in efficiency.
The noble Lord, Lord Robertson of Oakridge, talked about productivity agreements not necessarily being genuine. In these particular Amendments it is up to the Minister, or to the Board, to make quite sure that the genuineness of the productivity agreement is really tested. When the noble Lord, Lord Champion, talks about the necessity to change the climate of opinion, that cannot be done by going back on everything we have said in the last two or three years about the necessity for increased efficiency and productivity.
I feel we must put this to the test. I have looked at our Amendment, which was designed on the basis that we would have incorporated into Part IV the National Incomes and Prices Board. But one of the weaknesses of Part IV is that there is no reference to the Board in it; everything is done by the Department and by the Ministers. Therefore, it would be wrong for me to invite the Committee to divide on that particular Amendment because it would not make sense of Part IV. But I am going to advise my noble friends and the Committee to divide on the Amendment of the noble Lord, Lord Drumalbyn, which I think is extremely well drafted. I hope we shall have the pleasure of their company in the Lobby.
7.37 p.m.
On Question, Whether the said Amendment (No. 24) shall be agreed to?
Their Lordships divided: Contents, 9; Not-Contents, 56.

CONTENTS

Airedale, L. [Teller]

Barrington

Ogmore,L.

Amherst, E.

Byers, L.

Reay, L. [Teller]

Asquith of Yarnbury, B.

Carnock, L.

Terrington, L.

NOT-CONTENTS

Addison, V.

Bowles, L.

Champion, L.

Archibald, L.

Brown, L.

Chorley, L.

Blyton, L.

Campbell of Eskan, L

Citrine, L.

Bowden, L.

Caradon, L.

Collison, L.

Cooper of Stockton Heath, L.

Llewelyn-Davies, L.

Shackleton. L.

Crook, L.

Lloyd of Hampstead, L.

Shepherd, L.

Darwen, L.

Longford, E. (L. Privy Seal.)

Silkin, L.

Francis-Williams, L.

Montgomery of Alamein, V.

Sorensen, L. [Teller.]

Gaitskell, B.

Morris of Kenwood, L.

Stocks, B.

Gardiner, L. (L. Chancellor.)

Moyle, L.

Stonham. L.

Goodman, L.

Nathan, L.

Stow Hill, L.

Haire of Whiteabbey, L.

Peddie, L.

Strang, L.

Henderson, L.

Phillips, B.

Swanborough, B.

Hilton of Upton, L. [Teller.]

Plummer, B.

Wells-Pestell, L.

Iddesleigh. E.

Rathcreedan, L.

Williamson, L.

Kirkwood, L.

Rhodes, L.

Willis, L.

Latham, L.

Ritchie-Calder, L.

Winterbottom, L.

Leatherland, L.

Robertson of Oakridge, L.

Wootton of Abinger, B.

Lindgren, L.

Royle, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 28 agreed to.
Clauses 29 to 37 agreed to.
Schedules 1 and 2 agreed to.
Schedule 3:
EXCLUSION FROM SECTIONS 7 AND 8 OF PRICES AND CHARGES REGULATED UNDER OTHER ENACTMENTS.
1. A Minister shall not have power to apply section 7 or 8 of this Act to any price or charge to which this paragraph applies, and any order under the said section 7 or direction under the said section 8 which is so framed as to be capable of referring to such a price or charge shall have effect as if it contained express provision for its exclusion.
2.—(1) The said prices and charges, with the exception of those relating exclusively to Northern Ireland, are as follows:—
LORD INGLEWOOD LORD INGLEWOOD moved to add to to paragraph 2(1):
"(I) rates and charges with respect to which the Minister of Housing and Local Government is empowered to make orders by section 40 of the Water Act 1945."
The noble Lord said: I beg to move the Amendment standing in my name. When this Bill was first published there was some uncertainty as to whether water undertakings of all kinds were covered by the general exemption in Schedule 3, paragraph 2(1)(i). The case of the water undertakings is clearly similar to that of other industries listed whose charges or maximum charges—and I would stress that phrase, "or maximum charges"—are subject to control by the Minister of Housing and Local Government or some other Minister. After all the debates in another place that uncertainty remains, and it is our duty here to-night to see that the position is made clear. The British Waterworks Association, whose members supply 95 per cent. of the British population with water, and include among their
1908
members water boards, local authorities and water companies, in all cases, both large and small, are very concerned at the position as it now is.
When this Bill was before another place a Member sought clarification, and he moved an Amendment which he thought was appropriate. He hoped and thought it possible that the Minister might say that water companies were covered by the general provision in sub-paragraph (i) to which I have referred; but he thought, too, that it might be clearer if a separate provision were inserted, and he therefore moved an Amendment that would have made it easy for the Government if they agreed with him that that was the best way. He thought it was possible it could be said from the Treasury Bench in another place that the general provision did not cover water companies, since power to revise water charges arises in most cases under Section 40 of the Water Act 1945, and not, to quote the sub-paragraph to which I have already referred, under Local Acts or Provisional Orders.
I am sorry if at this late hour I have to speak in somewhat technical language but this is a most important point. It is one which is not difficult for the Minister to clear up, but I am sure that noble Lords will agree it must be cleared up. In fact the honourable Lady the Parliamentary Secretary to the Ministry, who replied in another place, gave a most remarkable reply. It was short, which was a merit—and its only merit. For the rest, parts of her short speech were confusing; they were irrelevant; one sentence was prejudiced, and one was clearly wrong; and she had no excuse that she was replying very late at night because in fact it happened just before lunch. The noble Lord opposite who is to reply

1909
will, I am sure, take great trouble this evening to make the position clear.
In order to show that I am not exaggerating, I want to quote from the Minister's speech in another place. After the opening sentence she said:
"Local authority water concerns would not be involved in any event"
if the Amendment before that House, worded exactly the same way as this Amendment, were accepted. In that she was wrong, since Section 40 of the Water Act 1945 would apply in most cases; and where it does not apply there is no exclusion proposed under the Amendment I am now commending to your Lordships. The Minister continued:
"The reason why it is felt by the Government that private water undertakings should come in is that it is unlikely that the bodies listed in Schedule 3 as private undertakings would come under the Ministry of Housing and Local Government in relation to maximum rates, so that precise rates could not he laid down."
If the Minister was talking about companies or boards, I can assure your Lordships that they are all subject to Section 40, under which maximum rates can be set down by the Minister, and there is an appropriate revision procedure laid down, too.
She then went on to say:
"Many undertakings charge less and Government Departments would wish to have increases in rates subject to that maximum."
I would say that that sentence is not understood. She then continued:
"There is therefore a distinct difference between water undertakings and all the others listed in the Bill."—[OFFICIAL REPORT, Commons, Standing Committee B. col. 439; 3/8/66.]
That in fact is not so, because if noble Lords say that the difference between the control of water undertakings and other undertakings is the fact that they are controlled as to their maximum and not their precise charges, then I would say that if noble Lords will look at the other specific Amendments to this Schedule they will find that the words "maximum charge" occur three times. The honourable Lady then continued:
"I have a strong interest in this, since there was a sharp increase in water rates recently in my own constituency."
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I should think that this showed that she was prejudiced. She continued
"As it is a necessity of life, I was sorry that this could not be brought under the Prices and Incomes Board."—(Col. 440.)
Water is not the only necessity of life, and if noble Lords will look at the first specific exception in this Schedule they will see that the prices of iron and steel products can be fixed. Water is as much a necessity of life as the other exemptions.
I would therefore submit to your Lordships that the reply which the honourable Lady gave to Members of another place was totally unsatisfactory and, beyond that, just not intelligible. No one can deny that the position is unsatisfactory. We must clear it up here this evening. I would submit that there is merit in my contention that water undertakings should be specifically listed among the exemptions. If the noble Lord says that water undertakings are fully covered by paragraph (i), I am willing to beg leave to withdraw my Amendment. But my feeling is that it would be much better, and would avoid a great deal of uncertainty, if we were to accept my Amendment as it stands.
I would here say to your Lordships that when this Amendment was moved in another place no objection was raised as to the drafting. If, in the interval, noble Lords and their advisers have thought up objections to the drafting, and if in those circumstances the noble Lord suggests to me that he has better words to propose, then again I would beg leave to withdraw the Amendment. He has an opportunity to move a revised Amendment on Third Reading. We cannot possibly leave this position as it was left by the honourable Lady in another place. I have not just picked sentences out of the honourable Lady's speech to make it sound ridiculous. I have quoted it sentence by sentence except for the introduction and one sentence—the whole speech, which is totally meaningless.
I have known the noble Lord who is to reply for some time, and I look to him with confidence to clear up all these doubts, which are not fair to water undertakings, large or small, whether they are water boards, local authorities or statutory companies. Since there is a recognised procedure, a statutory procedure, for governing their charges, there

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can I submit, be no possible advantage or excuse for proposing a substitute procedure under this Bill. It would seem to me to be sheer folly, since all that we require is already written into other Statutes. I hope that the noble Lord will be able to give me a satisfactory reply. If not, I shall have to reconsider my position as to whether I ask noble Lords to support me in the Lobby. I beg to move.
Amendment moved—
Page 44, line 10, at end insert the said subparagraph.—(Lord Inglewood.)
8.5 p.m.
LORD ILFORD: The case for my noble friend's Amendment seems to me to be abundantly clear. In paragraph (2) of Schedule 3 there are enumerated a number of different charges. I do not want to read them all to your Lordships. There are the charges for iron and steel under the Iron and Steel Act. There are transport charges under the Transport Charges etc. (Miscellaneous Provisions) Act; fares and other charges for carriage, on tramways or other services to which the Schedule or the Transport Act apply; road services licensed under the Road Traffic Act; charges in respect of any service authorised by an air service licensing authority; charges with respect to which the Transport Tribunal are empowered to make orders, and so it goes on. Every case which comes to one's mind in which charges are fixed by some statutory body has been expressly provided for in this Bill.
Paragraph (2) ends with a general subparagraph which, as my noble friend has pointed out, relates only to those cases where charges are approved by some body under a Private Act. In the case of these water undertakings the charges are not approved under a Private Act; they are approved under Section 40 of the Water Act. Therefore, sub-paragraph (i) of paragraph 2(1) of the Schedule certainly does not apply to these water charges.
It is significant that the draftsman has considered it necessary to make express provision in respect of every other type of charge, but no express provision in respect of this charge. And when one looks at the general paragraph one sees it is restricted to charges made under a
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Private Act. In those circumstances, it seems to me to be abundantly clear that these water charges have really been overlooked by the draftsman and by the Government, and that it is necessary, if they are to be exempted from this Bill, which appears to be the view of everybody—I say "everybody", because it appears to be the view of the Minister of Housing and Local Government that they should be exempted—then some express provision will have to be inserted in this paragraph of the Schedule. I hope that the noble Lord who is going to reply for the Government will be able to make some proposal of that kind, and I am quite sure that he would accept the position that the Schedule as it stands at present does not extend to these water charges. If, as I am quite sure, he concedes that point, my noble friend and I would be quite ready to leave it to him to introduce some appropriate Amendment at a later stage.
LORD WINTERBOTTOM: The noble Lord who has just spoken has carefully pointed out that a number of activities, industrial and public services which are controlled by statutory boards, are in fact exempt from the operations of this Bill. This does not mean to say that these particular organisations or services are exempt from the moral implications of the Bill. It is intended that these activities should be covered by the same criteria as are applied to the various industries and individuals and organisations which are at the moment brought within the purview of the Bill. With this point in mind, I should like to attempt to satisfy the noble Lord, Lord Inglewood. It seems that it is going to be a difficult task, but I will do my best. He will forgive me if I speak at some length—
LORD INGLEWOOD: If the noble Lord will allow me, I would say that the task is quite easy. The common sense is simply to accept my Amendment.
LORD WINTERBOTTOM: I am afraid that is too easy for us. I will now try to explain the position. The powers of the Minister of Housing and Local Government under Section 40 of the Water Act 1945 relate both to privately-owned water undertakings and to the larger local authority water

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undertakings. The object of this Amendment—
LORD ILFORD: Would the noble Lord forgive my interrupting? He has spoken of private undertakings. These are, of course, statutory companies, and the expression "private undertaking" is not really appropriate to these companies.
LORD WINTERBOTTOM: They are under statutory control, but are privately owned. They are a sort of hybrid. That is the situation that exists.
LORD ILFORD: The capital is certainly private owned, but their charges are regulated by the Minister's Order in the same way as the local authorities'.
LORD WINTERBOTTOM: For the sake of this evening's argument, let us say that "privately owned" means water undertakings where capital is privately owned but which are under the statutory control of the Water Act 1945. The object of the Amendment, as I was saying, seems to be to exempt both types of water undertakings from the power of the Secretary of State under Clause 7, which requires notice of intention to increase prices, and from the power of the Secretary of State, acting alone or jointly with another Minister under Clause 8, to require standstill for prices or charges referred to the Board. In fact, the powers of Clauses 7 and 8 do not apply to local authority water undertakings.
LORD INGLEWOOD: Could the noble Lord explain that a little more? Most of these water undertakings are under the impression that they do. Could he explain how they are excepted?
LORD WINTERBOTTOM: The publicly-owned elements would be included under Clause 1 in the general ragbag. The powers of Clauses 7 and 8 apply only to the privately-owned undertakings. The proposal, in effect, that privately-owned water undertakings should be exempted, as are the publicly-owned ones, is misconceived. The statutory provision for the regulation of these rates differs from that in the case of the various prices and charges listed in Schedule 3. The power of the Minister of Housing under Section 40 of the Water Act 1945 permits him to prescribe for a period of five years the maximum rates that may be charged. We know that rates are very
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often below the maximum. Where an undertaking is at present charging below the prescribed maxima—and in many cases this is so—these undertakings are free to make increases without reference to the Minister, provided that they do not exceed the prescribed maxima. There is no such latitude in the case of the prices and charges listed in Schedule 3. Each proposal for a price increase is subject to determination by the statutory authority concerned.
In the event of Part II of the Bill being brought into force and of a decision that it was necessary to make use of the powers of Clause 7 to introduce statutory early warning, it might well be thought desirable to require prior notice of intention by privately-owned water undertakings to increase their rates above the existing level, even though they would not exceed maxima prescribed by the Minister of Housing. Again, in the event of a decision that it was necessary in the national interest to refer to the National Board for Prices and Incomes the level of water rates charged, it would seem desirable to have power, as in the case of other prices and charges, to require a temporary standstill on increases until the Board had reported. So the two halves of industry are to be treated separately. The publicly-owned or authority-owned water systems will be governed by the same criteria as the activities listed in paragraph 2 of Schedule 3. The privately-owned water undertakings will be treated like any other privately-owned industry.
LORD INGLEWOOD: I have never heard a reply in either House of Parliament which I thought was quite so riddled with prejudice and quite so ignorant of the situation which in fact exists. The constant repetition of the words "privately owned", which my noble friend has already explained to be inappropriate in these circumstances, is, I think, most unfortunate. There are, as we all know, water supplies in this country furnished by water boards, by local authorities, and by statutory companies. The noble Lord, with his experience of industry, knows as well as I do that under the legislation the so-called privately-owned companies are controlled in every way as to their charges. They are not allowed to make profits which enable them to pay more than a dividend as laid

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down. Furthermore, they cannot accumulate profits because the amount of reserves or balances that they can carry forward from year to year is laid down perfectly clearly. What he has said, therefore, is completely irrelevant to the situation which we are here considering. This distinction may please some of those who are always prejudiced in these ways as between the public and the private sectors, but it has no merit when it comes to the facts of the case. I thought that the reference to morality at the beginning of the speech was inappropriate.
What I understood the noble Lord to say—he will correct me if I am wrong—is that the Government proposed to exempt the water boards, such as the Metropolitan Water Board and those similarly constituted, together with the water undertakings which are directly controlled by local authorities, from the provisions of Clauses 7 and 8, but that such bodies as the Newcastle and Gates-head Water Company, who equally have their charges controlled by a statutory procedure, are in fact to be treated differently, as if there were something wrong in the whole basis of their constitution. They are to be required to go through an entirely different procedure before, for any reason, any of their rates can be changed.
In conclusion, I would ask the noble Lord whether his advisers have furnished him with a copy of a draft circular which I believe has been distributed among water undertakers in this country, which in effect means that the officials of the Ministry of Housing and Local Government propose administratively to frustrate the intentions of Parliament in this matter and to override the decisions of Parliament in the past about the charges of water companies which this House and another place have from time to time fixed for the various water undertakings. I must ask him to look at this matter again, even at this late hour. It is not worthy of this country to make a distinction of this kind and to leave the position as confused as it at present is, not only by the honourable Lady in another place, but by the noble Lord here this evening.
LORD ILFORD: I, for my part, am unable to understand how the Govern-
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ment propose to exempt local authorities. I hope the noble Lord will explain when he comes to reply. I should like to join with my noble friend in protesting against this differentiation between local authority undertakings and what the Minister has called private undertakings. They are not in any sense private undertakings, except that their capital is owned privately. They are controlled entirely by their special Acts of Parliament, and their charges are subject to control under the Water Act in precisely the same way as the local authorities' charges. There is no justification whatever for the noble Lord's seeking to draw a distinction between what he calls private companies and public supplies of local authorities. In conclusion, may I say that I was delighted to hear that in the case of those private companies their charges are frequently found to be below the maximum fixed by the Minister. That is a tribute to their administration for which they are entitled to call credit.
LORD WINTERBOTTOM: An accident of history has split the water industry into two separate types of ownership. This necessitates a different treatment within this Bill. This is unavoidable and cannot in fact be altered. However, the end result will be that the water prices will remain controlled in a similar manner under the Bill in the case of the so-called privately-owned industry and by the pressures and directives given by the Government to the local authority water suppliers.
On Question, Amendment negatived.
Remaining Schedule agreed to.
House resumed: Bill reported without Amendment; Report received; Bill read 3a.
8.21 p.m.
THE EARL OF LONGFORD: My Lords, I beg to move that this Bill do now pass, and perhaps the House, even at this late hour, will allow me to say a few words. On behalf of the Government I should like to thank particularly the noble and learned Lord the Lord Chancellor, the noble Lord, Lord Champion, the noble Lord, Lord Shepherd, and the noble Lord, Lord Winterbottom, who have borne the heat and burden of the day in defence of the Government's policies. Also I should like

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to thank all my own colleagues, particularly the noble Lord, Lord Citrine, and the noble Lord, Lord Cooper of Stockton Heath, who have spoken up valiantly on occasion. Just as much, I should like to thank the silent ranks who have come here without even the reward of being invited to make a speech and have voted so well that the majority was never lower than 45, whereas in another place I believe the Government majority on occasion fell well below that figure. So there is a great deal of credit to be attached to the noble Lord, Lord Shepherd, and all those who assisted him in organising this result.
I should also like to thank the noble Lords who lead and comprise the Conservative Opposition and the Liberal Opposition. I know I must not use the word "co-operation", because that has been rejected by noble Lords opposite, but I would assure them that we have found them completely frank and, though critical and even sharp on occasion, entirely friendly and constructive, and, above all, anxious to waste no time. We should like the Conservatives, Liberals and noble Lords in other parts of the House to feel that we are grateful for the way they have tackled the Bill. Perhaps my last words should be delivered, not as a member of the Government, but as Leader of the House, whose responsibilities extend, of course, to the House as a whole. This House of Lords of ours has been faced recently with a number of difficult problems, situations and challenges. I feel that each one of us, in our different ways, has responded to these challenges with all the strength and patriotism in our power. In the last few months, and particularly the last few weeks and last few days, this House has nothing to be ashamed of and much of which it can be proud. I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(The Earl of Longford.)
LORD OGMORE: My Lords, before the Bill is finally passed I should like to express, on behalf of my noble friends and myself, our gratitude to the noble Earl the Leader of the House, and to his ministerial colleagues, including of course the noble and learned Lord on the Woolsack, the noble Lord, Lord
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Shepherd and the others who have borne the heat and burden of this day from the Government side. They have been very courteous; they have listened to all our arguments, and sometimes, I think, they have even agreed with them. At all events, I have much enjoyed it. I have been here since 11 o'clock, with a small break for lunch, and I must say that I have greatly enjoyed the day. I think the business has been conducted throughout in the best possible of tempers. Tempers have not been strained, or even frayed, and no one has walked out; and that is, I think, something on which to congratulate the noble Lords.
Time after time through the stages of this Bill Ministers have said how much they sympathise with the Amendments that we on these Benches put up, and that they appreciated that we were putting them up as part of our duty. We were very glad to hear that, because we, too, felt that we were doing our duty. There was no intent on our part to be obstructive or to have filibusters, or anything of that kind.
Before I sit down I should like to say—because unlike some of the Parties in this House we do not have a vast machinery in the Liberal ranks—that I am very grateful to my own supporters for coming here to-day, and particularly to my noble friends Lord Byers, Lord Wade and Lord Reay, for the way in which they have carried the burden of the Committee stage. May I say about Lord Reay that he has worked extremely hard preparing the Amendments. He is a young man, and I think he is the sort of man whom we ought to be very glad to see in this House. With those few words, may I repeat my thanks to the noble Earl and his colleagues for the very happy and efficient way in which they have treated this matter.
LORD HARLECH: My Lords, if it is now the order of the day I should like to thank my noble friend Lord Drumalbyn for carrying the heavy burden of the day, and I should like to thank my noble friend Lord St. Aldwyn for so successfully preventing anybody in the Conservative Party from voting in any Division. But although, perhaps, at this stage we can be slightly frivolous, I was grateful to hear the closing words of the noble

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Earl the Leader of the House, because I think they indicated some of the really serious doubts which we have had about the way the House has been treated in recent weeks. I was grateful to him for that.
I do not know whether we need to pat ourselves too much on the back about the heat and burden of the day. Many of your Lordships were previously in another place and, quite obviously, to sit from eleven till half-past eight, with an hour-and-a-half off for lunch, is not to my mind a very heavy burden. But I would add my thanks to those which have already been expressed, to noble Lords who have taken part in the debate.
On Question, Bill passed.

FUTURE BUSINESS
LORD SHEPHERD: My Lords, the House may wish to know that we propose to adjourn now and reassemble tomorrow at 11 o'clock, the Royal Commission to be held at 12 o'clock.
PIER AND HARBOUR PROVISIONAL ORDERS (BLACKPOOL PIER AND GREAT YARMOUTH NEW BRITANNIA PIER) BILL.
Returned from the Commons, with the Amendments agreed to.
  FINANCING OF U.N. DEFICIT
  FINANCING OF U.N. DEFICIT
  TURFING OF THE MONMOUTH BY-PASS
  TURFING OF THE MONMOUTH BY-PASS