Sitting of 5 July 1967

Preamble
The House met at Ten o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORDERS OF THE DAY

  GREENWICH HOSPITAL BILL
  Order for Second Reading read.
  10.5 a.m.
  The Under-Secretary of State for Defence for the Royal Navy (Mr. Maurice Foley): I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is twofold and both parts are to remove anachronisms. Even the most lynx-eyed critic of the administration of the affairs of Greenwich Hospital will hardly complain about the first Clause which, in effect, removes the requirement that Greenwich Hospital should seek the approval of the Treasury on each instance when making certain investments of its capital.
  Some years ago the Treasury, in line with modern practice, agreed the terms of reference for, and composition of, an Advisory Committee of experts in finance and property and, under its guidance, the Hospital's income and capital resources have improved. My predecessors in annual debates have paid tribute—as, indeed, I did last month—to the wisdom of the advice of these experts and their willingness to give it without fee.
  The Comptroller and Auditor General noted on the Hospital's Accounts for the year 1962–63 that the Treasury had agreed, for a trial period, that its approval need not be sought for individual investment transactions and that, in so doing, the Treasury had had regard to the Department's intention to seek amendment of Section 40 of the 1865 Act at the next convenient opportunity. Thus, the first purpose of the Bill is to put, instead of the provisions of Section 40, a new provision; that the Treasury, for those investments, shall prescribe the source from which the Hospital and the Secretary
  1732
  of State shall take advice rather than giving the advice in each instance themselves.
  The second purpose of the Bill is to remove what I consider to be another anachronism. This is the waste of Parliamentary time occasioned by the enactment in 1885 of a requirement to lay the Estimates for the current year before the House and obtain a Resolution on them. I do not believe that, in this day and age, the use of valuable Parliamentary time can be justified in this way. The position has changed vastly since 1885, when there was no Welfare State and when the Hospital provided the bulk of non-effective benefits for sailors and their dependants. Nowadays about £25 million a year is voted for these purposes, and while in 1885 a declaration in the Greenwich Hospital Estimates of the Admiralty's intentions gave the House an opportunity to consider the provision being made for those who had served the country, Greenwich Hospital nowadays performs a charitable function in supplementing the State provision from a total income of about £500,000 a year.
  I can claim for Her Majesty's Government in 1967 that we are finding time to stop wasting time.
  10.9 a.m.
  Mr. Humphrey Atkins: I welcome this modest Measure and assure the hon. Gentleman that we approve of its aims and shall give it our support.
  The Under-Secretary described the Bill as having two purposes. The first enables the Greenwich Hospital authorities to invest money without seeking the approval of the Treasury for every transaction; and there cannot be any argument with that. There is no doubt that the Advisory Committee which assists the Hospital to invest its money does an extremely good job. I referred to this, and congratulated the Committee on its work—which it does freely and voluntarily for Greenwich Hospital—in the debate at the beginning of last month. Of course, what the hon. Gentleman proposes by the Bill in this respect only gives legal effect to what is happening now, and that is why one cannot but support it.
  I also support the Bill's second intention. It is gratifying to find the Government taking the advice of the Opposition

  1733
  so quickly, for it was only in November of last year, in our annual debate on this subject, that I urged this course on the Under-Secretary. Obviously, I cannot take all the credit for this, because it has been in the mind of successive Governments of both parties for some time.
  I do not quite know why we had the 1885 Act, but I believe that in the early 'eighties some mismanagement of the affairs of the Hospital required that Measure so that Parliament could keep a close eye on everything that was done. I do not believe that today, when the multiplicity of affairs that engage our attention is so great, there is the need, nor is it even desirable, to spend our time each year debating the Hospital's affairs.
  I should like the hon. Gentleman to confirm that safeguards still remain, because it is important that Parliament should not give up what control it has without them. As he will still be required to place a copy of the Accounts of the Hospital in the Library I assume that, if there is any question, the Accounts can be examined by the Public Accounts Committee. I believe that the affairs of the Hospital are also his responsibility, and that of the Secretary of State for Defence, so I assume that we will still be able to put down Parliamentary questions on the conduct of the Hospital and of the school, and will also be able to discuss their affairs on the Adjournment if we shall feel it necessary.
  It is important that we should still retain the right to question the hon. Gentleman in the exercise of his duties to the school, whose affairs take up most of the time in our annual debates. The Under-Secretary is Chairman of the Committee of Management, on which there ate always two hon. Members. They are, at present, the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) and myself. I am not quite sure whether their presence is the result of a Statute. If it is, we can be certain that two hon. Members will always be on that Committee. If not, perhaps the hon. Gentleman can assure me that it is the Government's intention to continue this practice. The Members act as a form of watchdog, and if they believe that things are going wrong they can bring the matter to the attention of the House. I am sure that the Under-Secre
  1734
  tary's answers will be satisfactory. If so, we shall do nothing to impede the progress of the Bill.
  10.13 a.m.
  Commander Harry Pursey: I am sorry to have to upset the mutual admiration society formed by the two Front Bench spokesmen over the attempted murder at the crossroads of the Greenwich Hospital and the Navy's orphanage Estimates, before the body is sewn up. The Under-Secretary of State said that the two Clauses of the Bill remove anachronisms. That is nonsense, as I shall show later. He also said, and in this he was supported by the hon. Member for Merton and Morden (Mr. Humphrey Atkins), that it is a waste of Parliamentary time to debate these Estimates annually. I will give some examples of the results of these debates on the Hospital's pensions and orphanage policy, which is the greatest charity scandal of the century.
  At first sight, this Bill, presented on behalf of the Admiralty, appears to be a very tiny, weeny innocent Measure, but it will have serious consequences for the widows and orphans of the Royal Navy and Mercantile Marine because it completes the Admiralty's cloak of secrecy which has been thrown increasingly in the last two decades round our largest and oldest nautical charity and the Navy's orphanage. In future, the House is to be denied its centuries' old right and duty to discuss the annual Estimates of the Greenwich Hospital, with its £4 million capital and £½ million income, the malpractices in the awards of charity pensions to widows and orphans, and the failure to continue to provide free education and maintenance for the sons of poor naval and mercantile marine seamen, particularly orphans, as was the intention nearly three centuries ago.
  An important point to make forthwith is that this decision is being made by a Labour Government, which should be on the side of widows and orphans, and largely because of the great Left-wing Socialist reformer, the hon. Member for Huddersfield. East (Mr. J. P. W. Mallalieu). The hon. Gentleman sat for several years as a member of the Board of Governors of the orphanage. In the current Labour Government he has been,

  1735
  first, the Under-Secretary of State responsible for the Hospital and, secondly, Minister for Defence (Royal Navy). As such, he strongly resented any criticism, and became more pro-Admiralty than the admirals.
  What is to be the future position of these annual Estimates? Are they to continue to be presented to the House, as are some other Estimates, without the Government providing time for the debate? Will the annual Accounts continue to be examined and reported on by the Comptroller and Auditor General, and dealt with by the Public Accounts Committee, as at present? Are new regulations for the orphanage still to be made by Orders in Council?
  Or is an annual report to be presented in the same way as that of the Royal Patriotic Fund Corporation? That report is made to Her Majesty the Queen under an Act of Parliament of 1903, and other Acts, and provides much more information than is given by the Greenwich Hospital Estimates and Accounts. The Corporation presents a report not only of the annual general meeting but of Committee meetings and the accounts of its school.
  Greenwich Hospital, therefore, is not the only Forces charity which has to present its accounts to this House by Act of Parliament. Why should there not be a more detailed annual report by the Hospital, as there was earlier in this century? I gave notice to the Under-Secretary of State that I would ask these questions, so I hope that we shall have some constructive replies.
  The idea that these Estimates should be dealt with, not by the full House but by a Committee—or not at all—has been put forward in recent years mainly by Tory Members but supported by recent successive Labour hon. Members serving on the Board of Governors, the present one being my hon. Friend the Member for Stirling, Falkirk Burghs (Mr. Malcolm MacPherson).
  What is the reason for the Bill? It cannot be shortage of Parliamentary time, because in recent years the debate has taken only a couple of hours. Last year the debate was on a Friday afternoon, and this year it was on a Monday morning. In some earlier years the Esti-
  1736
  mates have gone through "on the nod". The Admiralty's obvious purpose is completely to stifle all criticism of the award of these charity pensions, and particularly the serious changes in policy for the orphanage in what has become, as I have already said, the greatest charity scandal of the century. In fact, directly the Bill was available it was named "The Pursey Muzzlement Bill".
  The cause of the recent criticisms of the orphanage can be put quite shortly. Here was a school, established in 1712, for the free education and maintenance of the sons of poor seamen, preferably orphans, and in the last two decades it has been turned into a fee-paying school for the sons of officers, at the expense of seamen's orphans, who are refused entry at a school especially established for them, and of seamen's widows who have to pay fees.
  Probably the most important question today is why these Greenwich Hospital Estimates have been debated in the House for more than a century. It is not because of the 1885 Act mentioned in Clause 2, or even the 1865 Act mentioned in Clause 1. The reason goes back two centuries or more before those dates. I will take simply a few salient landmarks. The Royal Hospital at Greenwich, now the Royal Naval College, was a Royal Palace and founded as a hospital by the Charter of William and Mary in 1694, nearly three centuries ago, in the same way as Chelsea Hospital was founded for the Army and still continues as such.
  The first three objects were the relief and support of disabled seamen, the sustenance of widows of seamen and the maintenance and education of the children of seamen happening to be slain or disabled. This obviously meant an orphanage and for this purpose the Royal Hospital School was established 18 years later, in 1712.
  There are two main reasons, among other, why the affairs of the hospital and the orphanage have always been the responsibility of Parliament. At various times, Acts have been required for income for the hospital by deduction from the pay of seamen and other provisions and grants from the National Exchequer. The orphanage was regulated by Orders in Council which were laid before the House. In 1695, only a year after the

  1737
  Charter, in consequence of a speech from the King, the Registered Seamen's Act was passed, enacting that 6d. per month should be paid out of the wages of all mariners to the use of the Hospital. That is the reason why the Mercantile Marine is as entitled to all the benefits of Greenwich Hospital and the orphanage as the Royal Navy. This followed the practice of 1588, when a similar contribution was made to the Chatham Chest, later the Greenwich Chest, so that we are here dealing with a nautical charity with a record of nearly 400 years.
  In 1714 there was a debate in the House on Greenwich Hospital and early in 1727 there were four debates, including the King's Speech, and debates on the Estimates and Accounts which, under the Bill, are to be abolished after 240 or more years.
  To show how secrecy has developed in recent years, I will give illustrations from the regulations of the orphanage and details in the estimates. Even early in the last century, the regulations for the orphanage were published in the Navy List and also in Maxwell's privately printed for sale "The Naval and Military Almanack", yet those regulations are not published today. I have a Navy List for 1836 and the Almanack for 1841. The Navy List also published the Greenwich pensions, but even those are not published today.
  The main points of the regulations for the orphanage from the first were concerned with the four classes of orphans to be considered first—those with fathers serving whose families were numerous and in need. A certificate was necessary in all cases, signed by the minister and churchwardens of the parish, stating that the boy
  "is a proper Object for this Charity".
  These regulations have been completely brushed aside, because today the sons of officers are being entered instead of the sons of poor seamen, preferably orphans.
  The Under-Secretary has referred to the Greenwich Hospital Act of 1865 and 1885. I will pass on to matters within my own personal knowledge. I was an orphan and educated at the school at Greenwich, now the National Maritime Museum, between 1903 and 1907. The affairs of Greenwich Hospital, both as
  1738
  regards the pensions and the orphanage, were then an open book. I have a copy of the 1909 "Memorandum on Greenwich Hospital" printed by the Stationery Office and presented to Parliament. This is a 34-page foolscap document which gives full details of estates, investments, capital and income and also of the pensions to officers and widows and education facilities for sons and daughters and, in particular, full details of the regulations of the Royal Hospital School. There is no current document like this Memorandum. Why not?
  In 1933, the orphanage was transferred from Greenwich to the new school at Holbrook which, although it cost more than £1 million, has never been completed. Two hostels are still missing and instead of 1,000 boys being accommodated, as at Greenwich, the number is only 695, or only two-thirds of the number which should be there and for which the main buildings were built. This was an important period from the point of view of the House and these Estimates and Accounts which will no longer be subject to public debate.
  In 1934 the Committee of Public Accounts passed some caustic remarks in paragraph 19 of its Report headed
  "Expenditure on new school at Holbrook".
  It commented on the lavish scale of expenditure and the failure to provide accommodation for the full number of boys and said:
  "The drain upon the resources of the Hospital is not without its effect upon public funds".
  The Committee stated:
  "The Treasury should have been specifically informed … that, in addition to the capital cost of the School, heavy expenditure, amounting to over £23,000 per annum would be involved … and … the contribution to Age Pensions might have to be reduced".
  In 1935 the Committee of Public Accounts again dealt, in greater detail, with the excessive costs of the school which had exceeded the original amount by nearly £400,000, that is to say, £1,070,000 instead of £700,000, and yet two hostels were and still are missing. The Committee's Report said:
  "Your Committee has come to the conclusion that the conception and carrying out of the plans for the new School were marked by insufficient regard for the effect on the accommodation provided, and on the financial resources of Greenwich Hospital and its other obligations."

  1739
  The Committee also made stringent criticisms of the Admiralty's failure to inform the Treasury of the effect on public funds as regards pensions.
  The 1935 Estimates were debated on Friday 19th July of that year. Three hon. Members took part, from both sides of the House, including members of the Public Accounts Committee, and the Conservative Civil Lord of the Admiralty replied. Scathing criticisms were made of the excess expenditure on the new school and the effect on public funds. Yet this is the organisation which the Admiralty and the Under-Secretary of State today ask should have carte blanche to do as it wishes, without public check, with the charitable funds for pensions and the education of the sons of seamen. I shall not develop that point today, but I shall take another occasion when opportunity offers.
  In 1944, the last year of the war, the late Sir Herbert Williams, then Conservative Member of Parliament for Croydon, South, and certain of his colleagues made a speciality of dealing with Prayers and similar documents, and they dealt with the Greenwich Hospital Estimates. That was the position in 1945, when I entered the House. I hope that I have established that there was nothing new in the Estimates being debated. In 1945, it was known that there was to be a debate, but it came on at one in the morning and was over in half an hour. I made my maiden speech in that debate, but it took only a few minutes, a mere two and a half columns in HANSARD. Perhaps I have since made up for that brevity.
  What was the position at that time as regards the regulations for the school and the Estimates? The regulations for entry of orphans were still published, and the Estimates gave far more details than the current ones do. For example, the salaries of officers and masters were given, and there were even details regarding a gardener and a gardener's boy for the superintendent, later succeeded by the headmaster.
  As a result of my speech, the Financial Secretary to the Admiralty, the late Mr. John Dugdale, decided to make changes in the board of governors of the orphanage. These changes included the
  1740
  appointment of two Members of Parliament, one from each side of the House. The first Labour Member was the present Chancellor of the Exchequer, who was succeeded by the two Members I have previously mentioned. The first Tory member was Sir John Maitland, who did not stand at the last election, and he was succeeded by the hon. Member for Merton and Morden, who is on the Front Bench opposite this morning.
  The intention for the Members of Parliament was that they should hold a brief for the widows and orphans. I quote from the speech of the Financial Secretary to the Admiralty on 29th November, 1945:
  "My hon. and gallant Friend the Member for East Hull (Commander Pursey) talked about the school being 'posh'. It is a very good expression. That is one of the troubles we have been faced with recently at the Admiralty. There has been a tendency, as there would be at any school, to step up the education to greater and greater heights, and the greater the heights the harder it is for boys who may not be quite so intelligent to get in. It is not every child of every seaman who reaches the highest level of intelligence. Many of them do, but not all. If one sets a very high level of entry, it may well be that some may be excluded. The Admiralty are now trying to see whether means can be found by which the school can be kept at a level at which all the sons of seamen who are qualified to go to it can in fact go. We do not want to see public funds originally set aside for the benefit of the sons of seamen being used to set up a `posh' secondary school to-which anyone can go. That would be a misuse of public funds. Therefore, we want to see that the standard is kept at such a level that it will both deal with the boys who are meant to be dealt with and will at the same time provide an adequate training for men who are going into the Royal Navy."—[OFFICIAL REPORT, 29th November, 1945: Vol. 416, c. 1724.]
  If I may say so, I could not have stated it better myself.
  What the Financial Secretary and, presumably, the Admiralty then wished to avoid is exactly what has happened. I summarise it in this way. There has been a misuse of public funds. Hence, the reason for my criticisms and those of other hon. Members over the last 22 years. The appointment of the two Members of Parliament was one of the worst things that could have happened for this orphanage. As so often occurs —"Put the critics on the board, and that will muzzle them". The Members of Parliament, instead of being on the side

  1741
  of the widows and orphans, became more pro-Admiralty than the Admiralty and supported the "establishment".
  Two disastrous decisions were made which have rightly caused critical discussion on the Estimates. In 1949, the Admiralty decided—one of the Members of Parliament was responsible for the idea—to enter commissioned officers' sons at the expense of ratings' sons, and since then over 500 ratings' sons and orphans who would otherwise have been entered have been denied admission to the orphanage.
  In 1957, only 10 years ago, a second and more serious breach was made in the regulations. A decision was made, again with the support of the Members of Parliament, to charge fees because of the lavish expenditure on the orphanage, and this after free maintenance and education had been provided for over two centuries. The result can be briefly stated. Senior officers with £3,000 a year salary and with their fees reimbursed from the naval education fund pay nothing from their own pockets. A seaman's widow, on the other hand, with a bare £4 a week pension, has to go out to work and pay fees for her orphan son to be educated at the Navy's orphanage. The Under-Secretary of State cannot and does not attempt to deny this charge. [Interruption.] If he wishes to, I shall give way. Let us have no muttering under the breath. Let us put all our cards on the table. I am stating the facts. This is my argument against the veil of secrecy which is now being made more thick.
  The Under-Secretary of State cannot and does not deny that charge. He argues that each widow's case is dealt with compassionately and there is no hardship. What utter rubbish. Obviously, it is a hardship for any seaman's widow to have to go out to work and employ another woman to look after her younger children in order to pay fees for her orphan son to be educated at the Navy's orphanage. No one will deny that argument or convince me that it is not 100 per cent. correct. In other words, the whole thing is a complete charitable racket.
  These charitable scandals are legitimate cause for drastic criticism of the Estimates. It has been said that I make
  1742
  the same speech every year. [HON. MEMBERS: "Hear, hear."] Is it not marvellous what support I get from the Front Bench at the wrong moment? But that is nonsense. So let us have no misunderstanding about it. Obviously, the speech has had to be based on the Estimates, the number of boys and their fathers, the number of orphans, the fees paid and so on. But I have contested the speeches of the Minister and the Front Bench Opposition speaker and developed different arguments from time to time. As long as the fact remains that a seaman's widow must go out to work to pay for the education of her son at this orphanage I shall go on repeating it at every opportunity, both in the House and outside.
  There is no method of defeating this Bill, but it will be interesting to hear other speeches on it today. I shall not name individual Members, but I am surprised that certain other hon. Members, particularly Opposition hon. Members who have taken part in the debates on the Estimates over the years, are not present today to support me in my protest. I assure the Admiralty that it has made a false step, because instead of muzzling criticism the Bill will provoke it.
  The Admiralty is the trustee of Greenwich Hospital, and will still be liable to answer Questions. I have not asked Questions on the subject for a year, but I shall start doing so again and so keep the pot of criticism boiling. The subject may well be considered suitable for an occasional Adjournment debate, as the hon. Member for Merton and Morden said. With ingenuity, a great deal can be said in 15 minutes. [HON. MEMBERS: "Hear, hear."] More support from the Front Bench at the wrong moment. But it is nice to know that at least my hon. Friends there are listening to what is going on. Whether they will take it in or it will make any impact on them remains to be seen, because I doubt whether a diamond drill would make any impact on them.
  There will also be an opportunity for debate on the Navy Estimates. Hitherto, debate on the Greenwich Hospital Estimates would have been out of order, because there was a separate opportunity for debate. That will not now be so, and it will not require much ingenuity

  1743
  to be in order in discussing matters for which the Admiralty is responsible.
  This is a sad day for the widows and orphans. It is sad that future debates on the Estimates on their behalf are to be denied to hon. Members. It is an even sadder day for me after 60 years' knowledge of the hospital and orphanage and the Estimates. It is especially sad that this foul blow has been struck by a Labour Government and that the names of four Labour Ministers who should have known better are on the Bill. Once again a charity for poor boys has been exploited for boys who are much better off. Nevertheless, I shall go on fighting this nautical charity scandal as long as I can on behalf of the seamen's widows and orphans, naval and mercantile marine, with no punches barred.
  10.44 a.m.
  Mr. Malcolm MacPherson: I sympathise with my hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey) in one respect. Although, as far as I know, few hon. Members who have heard his annual speeches on the subject sympathise very much with his argument, he has shown admirable persistence and continuing interest in the school. We must have some admiration for him for that. But his arguments are without foundation. I believe that it is impossible that a widow living on £4 a week pension is being charged fees. I do not imagine that there is a widow in the country who is living on £4 a week pension, let alone being charged fees.
  My hon. and gallant Friend knows that in arguments of this sort the thing to do is not to put up a general case about widows living on £4 a week, but particular cases about Mrs. So-and-So who is in such and such circumstances, and see what is said about them. No charge of this sort concerning the school has ever been sustained in a particular case. All of us who are connected with the school would be thoroughly ashamed if it was.
  The school's problems are considerable. It is not an average sort of school; it is not the sort of school that is set up by a local education authority and which roughly follows the same pattern as others. When my hon. and gallant Friend raises the question of charging fees at all, he raises a thorny and diffi-
  1744
  cult matter. He might well put up a general argument against charging fees in a school of this sort, rather than saying that fees are charged in cases where widows and other parents cannot pay them. This is a difficult problem, but in the matter of fee-paying we are in what might be called a mixed economy. Even a Labour Government does not condemn fee-paying everywhere. There may be arguments in favour of it here and there. In my recollection, my hon. and gallant Friend has not taken up this argument, but it is a question that affects the management of the school seriously and would repay a good deal of discussion.
  I must apologise because I missed a little of my hon. and gallant Friend's speech. I had to reply to an urgent telephone message and therefore I am not sure what he said in the earlier part of his speech. When I returned, he seemed to be talking about the school buildings. If so, he was on to a striking subject. They were built in the 1930s and are thoroughly unsuitable today. They were built with no proper sense of proportion, financial or otherwise, and it is easy to condemn the buildings and physical apparatus of a school of this sort. But none of us here is responsible; it happened in a different generation. Many things happened in the 1930s that many of us would heartily disapprove of. If the school were built today I would hope that the buildings would follow a very different pattern. But this is not a practical and immediate question.
  One thing said by my hon. and gallant Friend should be contested. He suggested that putting two hon. Members on the Committee of Management was putting critics on the Board to muzzle them. That is not so. The hon. Members on the Board are not necessarily essentially critics. They might or might not be very complacent about what goes on at the school; they might or might not be critically minded. Putting them on the Board will not muzzle them. They can still speak in the House as much as they want. The hon. Member for Merton and Morden (Mr. Humphrey Atkins) made the point that whenever it becomes necessary he or I can bring matters to the attention of the House. Any hon. Member can raise any question that seems worth raising on the Floor of the House. The critics are not being muzzled or anything like it.

  1745
  After spending such a comparatively long time on my hon. and gallant Friend in a short debate, I should now say that I support the statement of my hon. Friend the Under-Secretary of State at the beginning of the debate. The Bill is desirable and necessary. The saving of Parliamentary time is not to be disregarded, but I do not think that any of us would regard this as a crucial argument. We do not want to save Parliamentary time on something which it is well worth debating. But we do not want to single out one school in the whole country and debate its affairs in the forum of Parliament. It is not good for the school. What we should debate are the public issues concerned with the policy of my right hon. and hon. Friends on the Front Bench, rather than the school.
  If school issues arise, the last place that they should be discussed is in an open public forum. They should be discussed either in the Board of Management or among parents or staff. They should not be discussed in a place of this sort, when an annual debate serves no valuable purpose at all, to the school or nation. We are accustomed to discussing education and groups of schools. This is good, but to single out an individual school and discuss its affairs, even once, let alone annually in this forum is not commonsense.
  It contributes to the continuance of the very idea which my hon. and gallant Friend the Member for Kingston upon Hull, East uses as the basis of his argument—that this is not a school but an institution. This is what the members of the Board and, I hope, hon. Members would feel is wrong. It was at one time an institution. It should now cease to be in any respect an institution and should become simply a school, doing the best that it can for the youngsters whom it is educating.
  As usual, I am in disagreement with my hon. Friend, and I hope that the Bill will go through with no difficulty. I congratulate the Under-Secretary of State upon bringing it in.
  10.50 a.m.
  Mr. Simon Wingfield Digby: The detailed interest in this subject of the hon. and gallant Member for Kingston upon Hull, East (Commander Pursey) is well known, and he has shown
  1746
  it over a number of years. This should not blind us to the fact that three important principles are raised in this Bill. The first, in Clause 1, is the subject of Treasury control. I am delighted to see that Treasury control has been curtailed, but it has not been curtailed sufficiently. Those of us with experience of office know how niggling the Treasury can be about little matters and how sometimes its criticism seems to fall short when really large sums are involved.
  I do not see why the Secretary of State for Defence cannot be trusted to get right advisers for the investment of these funds and for the purchase of land. If I were contemplating buying land or a farm, the last people from whom I should want private advice would be the Treasury. The farmers of the Treasury have absolutely no qualifications whatever for offering advice and I doubt very much whether they would even put me on to the right valuers.
  There is too much of this "grand-mamma" stuff about the Treasury, and I am very sorry that the opportunity has not been taken to throw off the shackles of the Treasury a little more. The second point has to do with Parliamentary time. The Under-Secretary of State referred to this a good deal. It is true that we are short of Parliamentary time, and this is a fairly small matter to debate, even at the times when it arises.
  At the same time the hon. Member had a good point when he said that this is one of the few occasions when we can talk about those who have served their country well in the Armed Forces. There has been a tendency to reduce the number of occasions on which hon. Members can raise matters of this kind. It is all very fine to say that we can raise anything we like on Adjournment debates, but very often that is not the best way of criticising the actions of the Executive.
  We all know that often very little attention is paid to what is said in Adjournment debates. The third point deals with Parliamentary control of the Armed Services and the Executive. There are many of us who believe that the Executive is getting more and more powerful and that it is getting harder and harder for hon. Members on either side of the House to obtain explanations about the actions of the Executive.

  1747
  It is a pity to continue this, and to relax this control further. I can remember, when I had the honour of serving at the Admiralty as a Minister, a party of German Members of Parliament having a long talk with me, and studying how it was that Parliamentary control over the Armed Forces was exercised so successfully, compared with overseas democracies. We have to think very carefully before relaxing that kind of control. There is a tendency for the present Government to downgrade the Services, to speak less of them in this House.
  Mr. Foley: No.
  Mr. Digby: I am sure that the hon. Member is an excellent representative of the Navy; he is a very fine man. But he is only Under-Secretary of State and the Minister now responsible for one of the great Armed Services, the Navy, whereas the Army was represented by the Secretary of State and the Navy by the First Lord of the Admiralty. He had a very high precedence, particularly if he took along with him to a meeting one or two members of the Board.
  We have to think twice about whittling away the occasions when we can discuss in this House the actions of the Executive over the Armed Services in particular, which are very big money spenders. I realise that this is a reasonable Bill, but we have to be careful about Parliamentary control, which is above all control of expenditure. We must watch the Executive, even when it is passing fairly innocuous Measures like this.
  10.57 a.m.
  Mr. William Hamling: I apologise to my hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey), and to hon. Gentlemen opposite for not being in my place at the beginning of this debate.
  Mr. Speaker: Order. If the hon. Gentleman would speak up, it would help the reporters.
  Mr. Hamling: I normally speak rather too loudly. I do not wish to follow the hon. Member for Dorset, West (Mr. Wingfield Digby) in his excursions into the general questions of Treasury and Parliamentary control, beyond saying
  1748
  that I do not accept that this Government have downgraded the Services. As he knows, and he has been here longer than I, this process of amalgamating the Services, co-ordinating administration, has been going on for a very long time and I do not regard this Bill as an example of it.
  I do agree with him in what he has said about the saving of Parliamentary time and the discussion, even for part of a day, of the administration of one school. My hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) pointed out that this is a school and not an institution.
  It seems a little unusual that out of all the boarding schools in the country to which the sons and daughters of men in the Services go, this school should be singled out for special attention. There is a school in my constituency with boarding facilities for the sons and daughters of serving men. Why should not that have a special occasion for debate? We may ask why this particular school is to be exempt from Treasury control. Every other school is subject not only to Treasury control but to control of all sorts of other institutions and local authorities. One cannot complain too much about that.
  It is a pity that the "Pursey Benefit" has to go. It is rather like the passing of ancient institutions and ancient traditions and the destruction of old monuments that my hon. and gallant Friend the Member for Kingston upon Hull, East should be deprived in this way of this annual exercise into the Greenwich Hospital and Travers Foundation. It is a Parliamentary tradition which will be long remembered and which will be mourned today—although perhaps not mourned too much.
  When I first saw the Bill I thought that the purpose was to silence my hon. and gallant Friend, until he himself admitted that he will take every opportunity in the debate annually of the Navy Estimates to do what he has been doing every year since Adam was a lad. I would, however, remind him that the Navy Estimates may go, too, and that we may be left not with the Navy Estimates but with the Service Estimates.
  There is a very serious point in all these matters, and it is the fact that what was once a charity is now a school. As with

  1749
  so many other charitable institutions which began for one purpose, that purpose no longer exists. It may well be that the original purpose no longer meets the present situation, but a Labour Government ought very seriously to consider how long we can persist, in public education, in advocating one policy while in one particular part of it, notably this school, we are pursuing another policy. I refer to the payment of public fees in order to support and assist and—what is the word?—the word is "subsidise"; it is used on the other side of the House quite often. That is the word that I wanted. Public fees are being used to subsidise the education of people who are well able to pay for education.
  It is rather strange that a Labour Government should be persisting in spending a lot of money in the payment of fees to a boarding school for middle-class people who send their children there. If we are to do it in respect of one school, why not in respect of all others? It calls into question very seriously the educational policy of the Government. I am surprised that we have no representative of the Department of Education and Science on the Front Bench to deal with this question, especially bearing in mind that we have been told time and time again that this is no longer an institution but a school.
  Secondly, how far can we go on running a school like this with two types of student—with students from different social classes, and still with the orphan children there? It would be interesting to know exactly what is the proportion in the school of orphan children compared with 20 or 30 years ago and compared with the number of sons and daughters of more endowed families, materially and financially. I wonder whether at some stage in the operation there might not be a preference in favour of one against the other. I wonder whether we can get the mixing of social classes in the school which we might feel to be socially desirable but which might not be so easy to achieve. I wonder whether my hon. Friend the Under-Secretary of State—if he seeks permission to reply to the debate—can satisfy us that, in practice, this works well.
  1750
  It is a very serious point when we have a charitable foundation founded for one purpose, and then circumstances change and there may well be a change in direction, and ultimately a situation in which the original purpose of the foundation is lost altogether and the charity is taken over by the Establishment for their own children and the type of children for whom the foundation was established are no longer to be found in that institution.
  11.5 a.m.
  Mr. Kevin McNamara: I do not wish to detain the House for long but certain points must arise from a debate on the past and future of this foundation. My hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) said that this is no longer an institution but a school. That may well be so, but we cannot talk about the school without considering its traditions and the way in which it had its origin.
  My hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey) gave us a history of the origin and organisation of the school and we are entitled to know certain facts and figures about the school. Its past must be of concern to all of us, remembering the debt we owe to members of the Royal Navy and the Merchant Marine, for whom the school was established. I agree with my hon. Friend the Member for Woolwich, West (Mr. Hamling) that the present Government have not denigrated the Armed Services. They have brought dignity into the lives of Servicemen, who have been treated more humanely than under any other Administration. For this we can justly take credit.
  What are the percentages in the school of children of serving or ex-officers, of children of widows, of orphans, of children of ratings and non-commissioned ranks, and how many children in the school have serving other-rank fathers? Why has not more use been made of the school for children of widows and orphans from the Merchant Marine? The school is available for pupils whose parents were in the Merchant Marine, and althougth there is a splendid institution in my constituency which serves many such people on the East Coast—

  1751
  fishermen and sailors, for example—the Greenwich Hospital Foundation nevertheless existed to help the sons of those in the Merchant Marine. We are entitled to know what will happen to them, because, as my hon. Friends have said, there seems almost to be a take-over bid by the Establishment. That may not be the case, but the evidence and the debate have suggested it, and we should be given either a categorical denial or an explanation by my hon. Friend the Under-Secretary of State.
  This is an important debate. Anybody who knows my hon. and gallant Friend the Member for Kingston upon Hull, East as well as I do will also know that, whether the Bill is passed—as I am sure it will be—or not, it certainly will not be a "Pursey Muzzlement Bill," because, unlike many hon. Members, he knows how to use the rules of the House to get his point of view across on as many occasions as he wishes. It is regrettable that some people should fail to appreciate not only the great interest but also the great concern of my hon. and gallant Friend in this school. He is a distinguished old boy of the school and reflects great credit upon it. Perhaps many other schools would be far better if their old boys paid as much attention and concern to the future of their schools, once they have left, as he has paid in this case.
  11.10 a.m.
  Mr. Foley: With the permission of the House, I speak again to reply to points which have been raised in this debate. The principal ones were covered in a debate less than a month ago. On the questions which seem to imply that the character of the school is being changed or that the change is being accelerated and there is a take-over bid by officers and wealthy people, I ask hon. Members to look at the statistics which I gave nearly a month ago showing who gets into the school and who does not.
  Questions were asked by my hon. and gallant Friend the Member for Kingston upon Hull, East (Commander Pursey) about the Merchant Navy. The school is open to children of Merchant Navy personnel. Priority is given to orphans of Merchant Navy personnel and Royal Navy personnel. If there are hints that this is not so, the onus is on the person
  1752
  concerned to substantiate his allegations. This has been said time and again since 1945. I have taken the trouble to read the debates from then onwards.
  My hon. and gallant Friend has participated in all those debates. I would not go so far as to say that he monopolised them, but there was a measure of consistency in all his speeches which I associate with the greatest inaccuracies. It is unhelpful to use language and nuances which can be seen as mischievous and selective quotations suggesting a gross misuse of funds and so on without a shred of evidence to substantiate them. He made selective use of quotations from the Estimates in 1935. We have had these debates since then and the Select Committee and the Comptroller and Auditor General reported in 1963. There was no suggestion or hint that there was anything wrong or any misuse of funds.
  The first main purpose for producing these amendments is to regularise the existing situation. Everyone likes to have a dig at the Treasury. The hon. Member for Dorset, West (Mr. Wingfield Digby) has done so and others have joned him. This is an occasion on which the Treasury has been sensible enough to realise that this advisory body could manage affairs better than the Treasury. The amendment is framed in such a way that while the Treasury will have the ultimate view if need be, we can get on with the day-to-day transactions which we have been doing highly successfully since 1962.
  The second amendment is more fundamental. The 1885 Act included a reference to an annual Parliamentary debate. At that time most of the funds of the charitable foundation were going to the dependents of Servicemen in terms of welfare support. In moving the Second Reading, I suggested that in this day and age we have to look at things as they are. At the time of the 1885 Act there was no Welfare State. It was therefore important in reflecting concern for those who had served the country well that there should be this debate on the distribution of welfare funds. Today the situation is quite different.
  Today £25 million is voted annually for the benefits for sailors and their dependents. Under the fund we are discussing part of the total income of £½

  1753
  million a year is devoted to pensions. We are looking at this Act and the suggested amendments in relation to the realities of today, not those of 1885, nor of 1903 when my hon. and gallant Friend was at this school. It is interesting to look back and see that the cost per boy for food, clothing and education was £26 per annum. Today it is £464. There is a great difference. The school opened for 1,000 boys. At that time there was no question of having an expanding sixth form and taking boys up to 18 and 19. It is well to understand that provision for sleeping accommodation and so on for little boys is different from that required for older boys.
  I should like to deal with the major comments made on the two Amendments. I refuse to take up the innuendos and nuances of my hon. and gallant Friend. On every conceivable occasion when the annual debate has taken place he has been invited by the Minister responsible to give facts and to substantiate his allegations. I said this less than a month ago and I am still waiting for a single fact or a single case to come from him. In the absence of facts, one is led to the conclusion, without questioning his sincerity, that he is obsessed with this matter. He has repeated the statement time and again and he believes it, but no one else in the House does and he cannot substantiate it.
  Commander Pursey: That is a serious challenge which has been made over and over again, and it is absolute nonsense. Every one of the cases I have quoted in this House, including that of the widow who was getting only £4 a week, I have sent to the Minister at the time. Every time the reply has come back to me that the woman is earning a certain amount of money and, because of that, she is outside the limit for free education for her child. Let us nail that nonsense to the mast once and for all. There is no question of any obsession. All the facts and figures I have used have been given in answer to Parliamentary Questions provided by the Department. Every one of the cases I have quoted has been given with the names of the individuals concerned. Correspondence has come back and the Minister has refused to budge.
  There was even the case of one woman with three young children. Obviously in
  1754
  debates we do not indicate the area concerned in such a case because of the Press, and certainly do not give the names of the individuals. Once and for all it should be realised that the argument that I am obsessed, that I have bees in my bonnet and never produce the facts, is absolute nonsense.
  Mr. Foley: My hon. and gallant Friend may say that, but I repeat that in the debate on the Estimates last November the then Minister for the Royal Navy, who is now Minister of State, Board of Trade, said that he had written to my hon. and gallant Friend five times and had no reply in relation to these allegations. I have been occupying my present chair since early in January and I have not had a single letter from my hon. and gallant Friend, or from any hon. Member, raising questions of abuse in terms of entrance or funds relating to this charity.
  A month ago, when my hon. and gallant Friend made the same speech as he has made today, I invited him to substantiate the charges but to this date I have had absolutely nothing from him. I am willing, as my predecessor was, to investigate any facts brought forward and to look at what might seem to be an abuse. So far—I can speak only for my term of office—I have had absolutely nothing. The House can draw its own conclusions from that.
  A reference has been made to what this change will mean in terms of any further annual debate. The hon. Member for Merton and Morden (Mr. Humphrey Atkins) raised this question, as did some other hon. Members. My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) wrote to me posing two questions in advance of those which he has raised today. It may be helpful to deal with this in as clear a way as possible to indicate to the House what we are relinquishing and what we are retaining. He referred to the possibilities of an annual report on the lines of the report submitted to Her Majesty the Queen by the Royal Patriotic Fund Corporation. This has been asked for on a number of occasions. The parallel which has been instanced of the Royal Patriotic Fund Corporation, when explored, is immediatley seen to be different.

  1755
  As the House will know, by virtue of my office I am the Chairman of the Management Committee and any questions about the running of the school, or the administration of the pensions, can be addressed to me. The House will also be aware that there is a nominated Member from each of the two major parties in the House serving on the Management Committee. This situation is quite different from that of the Royal Patriotic Fund Corporation.
  From what I have said hon. Members will appreciate that there is no question of secrecy. So long as I retain my present position, I will continue to answer in the House any Questions about this subject. The major parties will continue to be represented on the Management Committee and to provide an independent means of interpreting the feelings of hon. Members to that committee and communicating with the House. The Accounts will be published by Statute and in addition I will make sure that the current estimates are put in the Library for the information of hon. Members. There is no question or hint of secrecy. Hon. Members can ask Questions at any stage, or visit the school, or initiate Adjournment debates and be fully satisfied if they have any anxieties or queries.
  I was asked whether the Order in Council procedure would continue for alterations in the administration. I want to make it clear that nothing proposed in the Bill in any way alters the legal obligation of the Secretary of State to obtain the approval of Her Majesty in Council to regulations established from time to time under the Greenwich Hospital Act. There is no question of any behind-the-scenes operations to change the nature of the administration of the Act.
  My hon. Friend the Member for Woolwich, West (Mr. Hamling) asked about payments from public funds and about the education policy of the school. In a sense, it can be said that all the money of Greenwich Hospital is public money, but none of it is voted by us on the occasion of these annual estimates. In our Estimates and Accounts we show that we get a form of direct grant for the school, that is to say, £4 per head. This must be voted, along
  1756
  with all the other money for education, and it comes in the Education Estimates. In addition each year we receive about £4,000 out of the Consolidated Fund in lieu of the merchant seamen's sixpences. This has its origins in antiquity. These are sums voted by the House and are not on the estimates which we are now discussing. They provide further fields for exploration, for those who wish it, into the nature and functioning of Greenwich Hospital.
  If my hon. Friend reads the debate of just over a month ago, he will see that the education policy of the school was then covered. He will be aware that the Management Committee includes a number of eminent educationists who devote a great deal of time to it. Clearly, if there are grounds for anxiety, he knows better than I do the remedies and the ways in which he can elicit information.
  I think that I have answered all the questions and I hope that the House wilt now agree to give the Bill a Second Reading.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Committee Tomorrow.

  MATRIMONIAL CAUSES BILL [Lords]
  As amended, (in the Standing Committee), considered.
  MATRIMONIAL CAUSES BILL [Lords]

    Clause 2.—(ANCILLARY RELIEF AND PROTECTION OF CHILDREN.)
    11.15 a.m.
    Sir John Hobson: I beg to move, in page 2, line 20, after 'desirable', to insert:
    or where it appears to the county court that the amount of any order is likely to exceed £500 per annum or £2.000 lump sum and the parties have not consented to the jurisdiction of the county court'.
    This is about half time in a morning's play, but I do not intend to suck any lemons about this Bill. We desire only to make one or two minor Amendments and, we hope, improvements to it. I feel myself to be something of an intruder as I was not a member of the Standing

    1757
    Committee, but I see that the two legal "Lyons" of the Labour Party are present and, no doubt, solidarity will be restored to the Labour benches after the earlier events of this morning.
    The purpose of the Amendment is to provide that where it appears to a county court at any stage in ancillary proceedings that the order which it is about to make may exceed £500 per annum, or a lump sum of £2,000, the rules of court, which the Rules Committee is to draw up, must provide for the transfer of the proceedings to the High Court. Every hon. Member now present is, of course, aware that the present limits of jurisdiction for ordinary commercial matters in the county court is £500.
    While everybody knows that that is likely to be increased, it is unlikely to be more than doubled, so that the limits proposed in the Amendment are greatly in excess of any limit to which the commercial jurisdiction of the county court is likely to be raised in the immediate future. Therefore, even if the Amendment were accepted, there would be a substantial difference and a substantial breach in the monetary jurisdiction of county courts comparing matrimonial matters and what many might think to be the less important matters of commercial payments between one citizen and another.
    The Bill provides for a discretion for the county court judge himself to transfer proceedings when he considers that to be desirable. But I would have thought it to be quite wrong to leave a question of the limit of the payment to the discretion of the county court judges. We do not leave a discretion to county court judges in commercial matters to decide when to remit to the High Court. It is for the general convenience, not only of the parties, but of the administration of the law, that all questions of jurisdiction should be carefully defined and not left to the individual discretion of different county court judges, all of whom may exercise it in different directions, some not feeling attracted to the jurisdiction and therefore having no desire to exercise it, others, like most courts, desiring to extend their jurisdiction as widely as possible and considering themselves far more competent than anybody else to deal with questions which are of considerable importance to the parties.
    Sir Barnett Janner: Is the right hon. and learned Gentleman suggesting that High Court judges never differ from each other?
    Sir J. Hobson: No, I certainly do not, but in the division of jurisdiction between High Court and county court it is a little odd to leave it to individual county court judges to decide in each individual case.
    The dividing line between the two in these matters ought to be determinate, defined and certain, and what the Bill is here doing is to leave it variable, incalculable and completely uncertain. As a matter of principle, that seems to be quite wrong, and a principle which one would never apply in any other jurisdiction. To apply it to divorce jurisdiction, when large sums of money may on occasion be at stake, seems very odd.
    I also appreciate that the Rules Committee could deal with this under its general power to make rules on these matters in such cases as it may specify. It is possible that the Rules Committee will itself lay down the division between the county court and the High Court and itself say which cases should be transferred on ancillary matters by the county court to the High Court. If Parliament does not do it, I hope that the Rules Committee will, because there should be a certain and calculable and known division. But, if there is to be such a division, Parliament and not the Rules Committee should undertake to determine it.
    11.30 a.m.
    In Committee, the Attorney-General endeavoured to justify the vagueness of the present position by saying that
    "the amount of a claim for maintenance is not necessarily an indication of the difficulty or importance of the particular case for the parties concerned."—[0FFICIAL REPORT, Standing Committee F. 22nd June, 1967; c. 94.]
    That argument is true wherever one tries to divide jurisdiction. In every case, where some matters are remitted to the county court and some to the High Court, precisely the same argument would be available.
    We all know of important arguments of principle which can take place on 21d. difference in a rate, in a wage or something of that sort. This does not mean that we should, therefore, leave it entirely at the discretion of the inferior

    1759
    court to say which of the two courts, the High Court or the county court, should have jurisdiction in a matter which may affect important questions between the parties.
    It is not the ease or difficulty of taking the decisions which ought to indicate who should take them. I suspect that many decisions taken by a Cabinet are very simple, but this does not mean that the Cabinet ought not to take the responsibility of making them, as they affect matters of major importance. Equally, as between parties in these circumstances, when large sums of money will be at stake, with annual payments over a long period of years, perhaps, and involving important issues between former spouses, I submit that, if the amounts are likely to be as large as a lump sum over £2,000 or an annual payment of £500, we ought to let the High Court deal with the case in the same way as it deals with important questions of finance in commercial cases.
    Mr. Gordon Oakes: When the right hon. and learned Gentleman speaks of an amount exceeding £500 per annum, does he mean the total amount of the order? For example, if maintenance were allowed of £5 a week for the wife and £2 for each of three children, does he suggest that that should go to the High Court because it would exceed £500 per annum in total?
    Sir J. Hobson: I concede that the Amendment is not tightly drawn and it could, no doubt, be improved in another place. I think that, where the total amount of money which is to change hands as between husband and wife will exceed £500 per annum, the case should be transferred to the High Court. The Amendment is always subject to the two parties consenting to the jurisdiction of the county court in any case. They have the right to go to the High Court, but, as the Amendment is drafted, it is intended to secure that, if the parties wish to stay in the county court, they may consent to remaining within that jurisdiction. If, on the other hand, parties wish to exercise the right, they may insist on going to the High Court.
    Mr. Ian Percival: I support the Amendment. My right hon. and learned Friend the Member for Warwick
    1760
    and Leamington (Sir J. Hobson) has put the major argument so cogently that I need say little more. The matter is of special importance in this case, where the parties have no choice. There is some illogicality in leaving it to courts of limited jurisdiction—the county court is a court of limited jurisdiction—to fix what their jurisdiction shall be. It is the job of Parliament, which establishes the court and in all other spheres limits its jurisdiction to lay down certain rules. It is our job, surely, to define the jurisdiction here and not leave it to be decided by each individual judge, and as I have said, the matter is of special importance in cases such as this where the parties have no choice.
    The avowed purpose of the Bill is to save legal aid funds, and no one on this side quarrels with that object. The means proposed for ensuring that is that all legal aid cases of the kind referred to in the Clause shall be tried in the county court, but it would be wholly invidious to single out legal aid cases and say that they shall be tried in the county court. To do that would be to put legal aid cases in a second-class category of litigation. When the legal aid scheme was first started, it was said over and over again that legal aid cases should never become second-class litigation. To avoid that dilemma, we have to make it obligatory for all cases of this kind to be started in the county court.
    It has not been sufficiently appreciated that this is a substantial departure from the practice which has prevailed hitherto. It has been common to have courts with concurrent jurisdiction. It has been common to put parties in peril as to costs if they choose one jurisdiction rather than another. This has been the approach to the choice between proceeding in the High Court or the county court. Where the county court has jurisdiction, a party is still free to proceed in the High Court, but he does so at his own peril as to costs if he has chosen the wrong court. In this case we make it obligatory upon all parties, whether legally aided or paying their own costs, whether they wish to avail themselves of the High Court facilities or not, to go to the county court.
    Mr. Alexander W. Lyon: The hon. and learned Gentleman describes this as a substantial departure. Is that

    1761
    so in anything more than form? For years, county court judges have been dealing with just such cases. They take a case at the beginning and they go through to the end. The district registar deals with awards of maintenance of £500 or even as much as £2,000. Is there any substantial departure?
    While I am on my feet, may I raise the other problem posed by the Amendment? How is one to know before a case begins that an order is likely to exceed £500 per annum? In the case of a county court action where one limits one's demand, one can limit the amount at issue to less than £500. Is one now to say that, in every undefended divorce case or every proposed defended case, a person should limit the amount of maintenance which is likely to be claimed? How is that to bind the other party, who may wish to claim other maintenance in excess of that?
    Mr. Percival: I shall try to deal with the point briefly, because no one wishes to embark on a long discussion about it.
    I can only repeat that, although there is a certain amount of overlapping at present, and it may well be that in some cases the same people would continue doing the same work, there will not, if the Clause goes through unamended, be the element of choice that there normally is where there is concurrent jurisdiction. With respect, nothing that the hon. Gentleman has said detracts from the force of that general principle.
    On the second point, there would be some difficulty, and there would be marginal cases. What we are dealing with here is what should be covered by the rules to be made under the Clause on the question of transfer. The details could be dealt with there and the wording tied up. This would be a general injunction or instruction to those who make the rules to provide for what is here proposed, and the tidying up could be done there.
    The hon. Gentleman asked, "How does one know before one starts?". With respect, there are many cases in which it is pretty obvious—it might not even be in dispute. In many cases the difference between the parties is not as to whether there should be an order, but as to what the amount of the order should be. There are cases in which even the
    1762
    lowest of the starting figures is higher than the figure of £500 or £2,000. The parties may be arguing whether an order should be for £600 or £700, or whether the lump sum should be £2,500 or £3,000. In these cases there would be no difficulty.
    In other cases one would have to look at the admitted amounts of income and apply the broad general rule of one-third, or one-fifth, or whatever it is. Again, one would see what the likelihood would be and whether the figure would be about that which has been postulated.
    Lower down the scale we should get more difficult cases, but we are not posulating that the transfer must be made before the proceedings have started. A county court judge may say, "I would like to hear a little more about this case before I decide whether to transfer it." When he has had the affidavits of the parties—if the proceedings are by way of affidavit—he will be able to say whether there is this likelihood. At the margin there will be difficult cases, but that is true of any situation where a line is drawn. I am in no way sidestepping the difficulties when I say that. The nearer one gets to the line the more difficulties arise.
    I return to my main point. I was going to say that here we are making the choice of the particular jurisdiction, but, in fact, we are depriving the parties of a choice. That is a very different thing from providing concurrent jurisdictions between which the parties make their choice, at that own peril as to costs. We are saying at the moment that they must use this jurisdiction. In my view, it is incumbent upon us to depart from accepted principles as little as possible, and we do that by widening the possibilities open to a party who wishes to take advantage of High Court proceedings.
    The Amendment would have that effect. It would give those who were able to satisfy the conditions postulated in it the choice of going to the High Court, and I suggest that it is a sensible and practical Amendment.
    The Attorney-General (Sir Elwyn Jones): As the House knows, Clause 2(2) requires the rules of the court made under the Bill to provide for proceedings beginning in county courts for maintenance and other forms of ancillary relief to be

    1763
    transferred to the High Court where the transfer appears to the county court to be desirable. The Government take the view that it would be undesirable to fetter a county court by requiring it to transfer proceedings where the amount of any order is likely to exceed a particular sum and the parties have not consented to the jurisdiction of the county court.
    For many years all the registrars of county courts which are likely to be designated as divorce county courts have had experience, as district registrars, of hearing applications for maintenance in the High Court without any pecuniary limit. The hon. and learned Member for Southport (Mr. Percival) talked about the element of choice which presently exists, but over a wide field there is no choice, because all undefended divorces in the provinces, and most in London, have for many years been tried by county court judges sitting and dressed up as commissioners, and they and the district registrars have in practice been dealing with these matters—as far as I am aware, satisfactorily—for many years.
    It cannot be said that county court judges will not be able to deal with appeals from county court registrars on applications relating to these matters. As commissioners of the High Court they have been dealing with them for many years, without any dissatisfaction. I submit that it would be quite arbitrary to put limits, as proposed, on the jurisdiction of a county court, to deal with proceedings for ancillary relief.
    There is substance in the point made by my hon. Friend the Member for York (Mr. Alexander W. Lyon), who pointed out that the likelihood of the amount of any order exceeding the sum specified in the Amendment might not appear until late in the proceedings, when the registrar had considered the evidence and heard the parties. It would be an appalling waste of time if the hearing were then rendered abortive because proceedings had in those circumstances to be transferred to the High Court.
    We think it better that it should be left to the discretion of the county court whether a transfer to the High Court is necessary, and that there should be no fetter upon that discretion.
    Amendment negatived.

    Clause 5.—(ASSIGNMENT OF COUNTY COURT JUDGES TO MATRIMONIAL PROCEEDINGS.)
    11.45 a.m.
    Sir J. Hobson: I beg to move, in page 3, line 43, to leave out 'by such county court judges' and to insert 'in such places'.
    This is in the nature of a probing Amendment, designed to discover what the Clause is about and what the need for it is. The right hon. and learned Attorney-General attempted an explanation in Committee which was not quite up to his usual standard of clarity and helpfulness. It threw almost no light—not even a candle beam—on a slightly mysterious and dark place. He said something that anyone reading the first 15 words of the Bill would have known—that not all places would be designated as county courts, and not all county courts would be assigned as divorce county courts. That has nothing to do with the question. Here, we are acting not in respect of courts, but in personam in respect of individual county court judges.
    Why is it necessary for the Lord Chancellor to have the invidious power of drawing distinctions between the classes of county court judges which we now have? If we have a designated county court—which will, under the Bill, alone be entitled to exercise jurisdiction in these cases—with a person sitting in it, clothed in the appropriate robes as a judge and qualified to sit as a county court judge in a county court, why is it necessary to go any further and inquire whether or not the Lord Chancellor has disqualified him or withdrawn his divorce licence, as it were—in the same sort of way as a heavy vehicle licence is withdrawn in the case of certain drivers—leaving him to deal with only light cases?
    It is a curious position for the Lord Chancellor to be in. Will it be a sweet or a stick for the county court judge? Will the Lord Chancellor now be able to interfere with the independence of county court judges by suggesting to some who do not want to do so that they will jolly well be made to try county court divorce cases—or, in the case of a judge who likes to try such cases, telling him that if he does not do this, that or the other he will be disqualified from doing so?

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    Were I to hold the position of a county court judge I would always welcome being relieved of this duty, and I might be put in an awkward position if the Lord Chancellor was not willing to grant me the disqualification I required. Is it suggested that in this day and age some county court judges are not fit to try undefended divorce cases? We remember that in the past there were some rather curious characters on the county court bench. I do not think that we have them now.
    You may remember one such judge, Mr. Deputy Speaker, who set out upon his appointment with what he considered the ample equipment of a library which consisted of two books. One was "Everyman's Guide to the Law" and the other was "Ruff's Guide to the Turf." His somewhat inglorious career terminated with the presentation of a bankruptcy petition against him in his own court. I do not think that the class of county court judges which the country now enjoys contains anyone who ought to be disqualified from exercising the jurisdiction of trying undefended divorces.
    How will the Lord Chancellor make it known to litigants that he has exercised this discretion? Will the Law List contain names with and without stars, so that if one is considered to be a county court judge qualified to try undefended divorces one has a star, and if one is not considered to be qualified one does not have a star? This will be a very invidious distinction to draw in the Law List. Or will it perhaps be published in the London Gazette? How will the parties know whether a judge sitting in the designated court, in the appropriate robe, is disqualified? How will the Lord Chancellor make public to the parties those who are entitled to try such cases?
    What has not been brought out so far is the position of deputy county court judges. Any county court judge can appoint a deputy and can choose any person to sit, for up to 14 days. Is it intended that deputy county court judges will be able to try undefended divorces in the exercise of the jurisdiction during the first fortnight of their appointment? Is this power intended to give the Lord Chancellor some control over the deputy county court judges, because he has to be
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    notified during the first fortnight, and he then approves or disapproves, after that period has expired?
    We are a little puzzled as to the purpose of this power which the Lord Chancellor seeks, enabling him to draw an invidious distinction between individual county court judges. We wonder whether this power is not really intended to give the Lord Chancellor the power not only to designate county courts, but from time to time to designate the places within a county court district at which the hearings should take place. Is there a geographical and not a personal discretion intended?
    The county courts are by definition courts to be held under the 1959 Act for each of the districts of England and Wales. The county court for Lincolnshire, for instance, covers a very wide area and sits in a large number of places. If it is designated just by itself, under Clause 1 as a designated county court, it could presumably sit in any of the courts within its district over the area of Lincolnshire.
    May it not be that what was really intended was that within the area of designated county courts the Lord Chancellor should say whereabouts it should sit, not who the judge should be, provided that he was otherwise qualified? This is a probing Amendment designed to discover whether the Attorney-General can enlighten us a little more than he did in Committee as to what the Clause is intended to do.
    The Attorney-General: I am sorry that I did not even shed a candlelight of clarity upon the necessity for Clause 5 in Committee. I will endeavour to do so now. The fears expressed by the right hon. and learned Gentleman the Member for Warwick and Leamington (Sir J. Hobson) about the Lord Chancellor being faced with invidious distinctions between county court judges who are worthy of exercising jurisdiction in undefended divorce cases and those who are not, will not arise, nor will any fear or expectation that to be granted that jurisdiction will be a kind of merit award, which might or might not be welcomed by the particular county court judge.
    The necessity for Clause 5 arises because under the County Courts Act, 1959, proceedings begun in a county

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    court are normally heard by the judge of the court in which the proceedings had begun and not by the judge of any other circuit. The purpose of Clause 5 is to enable the Lord Chancellor to secure that any county court judge may dispose of an undefended matrimonial cause, or any matter arising in the course of such a cause at any divorce court, whether or not he is a judge of that court.
    Under the existing system by which matrimonial causes are tried by county court judges sitting as Special Commissioners of the High Court, most if not all of the judges outside London have at least one divorce town on their county court circuit, at which divorce cases may be tried. There are some circuits on which there is no divorce town, because it is, in practice, more convenient for the judge to sit at a neighbouring centre or another circuit.
    In addition the "floating" judges, who have no circuits of their own, do help when help is needed, sitting in divorce cases from time to time at different divorce towns. The intention is that the same kind of arrangements should continue and jurisdiction in undefended divorce cases is given to the county courts. Although it may be that at least one court in every county court circuit will be designated as a divorce county court, so as to enable cases to be taken there, it will not necessarily be desirable for cases to be incapable of being tried on another circuit. For instance, it is thought to be more convenient for Stockport cases to be tried in Manchester, which is on a different circuit.
    That kind of arrangement could not work unless the Bill enabled the divorce jurisdiction to be exercised by any judge the Lord Chancellor might direct. As I said in Committee, all county court judges will be qualified to exercise the jurisdiction of the county courts in this respect, but this provision is necessary for the reasons of the overlap which I have mentioned.
    As to the position of deputy county court judges, it is true that they will have the jurisdiction when the Bill comes into effect. I am advised by my noble Friend the Lord Chancellor that administrative directions will be given to require a county court judge to obtain the approval of the Lord Chancellor be-
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    fore appointing a deputy to sit in divorce cases. The intention certainly is that judges, and not their deputies, should have responsibility in this important area in the administration of the law.
    Sir J. Hobson: We are very grateful to the Attorney-General for this explanation. I quite understand the position, but I am still a little mystified as to why, if county court judges, particularly "floaters", are able to sit now and discharge the ordinary jurisdiction of county courts without being designated in those circumstances, this Clause is necessary. However, I see that there may be reasons, in rare cases, for making this special arrangement, outside the scope of the ordinary ability present to allow a county court judge to sit in almost any court he pleases, and, therefore, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    Clause 7.—(MATRIMONIAL CAUSES RULES.)
    12 noon.
    Sir J. Hobson: I beg to move, in page 4, line 23, after 'barristers', to insert
    'being members of the General Council of the Bar'.
    It would also be for the convenience of the House if we discussed with this, the next Amendment, in line 24, at end insert
    'of whom one shall be a member of the Council of the Law Society and the other a member of the Law Society and also of a local law society'.
    Clause 7 deals with the constitution of the rule-making body, which will in future make rules on all matters and in all matrimonial causes and proceedings. The purpose of the Amendment is to provide that the four members of that body who are to be drawn from the two branches of the profession should come from the governing bodies of the profession, either the General Council of the Bar or the Council of the Law Society, with a further provision that one of the two members of the Council of the Law Society should be a member of a local law society—in other words, should come not from London but from the Provinces. The Amendment has the support of both the General Council of

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    the Bar and the Council of the Law Society. In those circumstances, as, in Committee, the Attorney-General promised to consult both of them, I hope that he will confirm what I have said and will be inclined to accept the proposal.
    I know that it is the view of some of his hon. Friends that a diamond drill is necessary to get the Government to move in any direction. Perhaps without a diamond drill, but with sensible arguments and gentle persuasion, we shall get the Government to think that on the whole this is not a very extensive Amendment but is one of interest to the profession which might be accepted.
    The rules made by the rule-making body will in future govern the procedure relating to divorce not only in the county courts but also in all cases transferred to the High Court. It will deal not only with petitions for dissolution but with all other matters in the divorce jurisdiction, and it will make rules in relation to very important matters ancillary to the dissolution of marriage—custody, costs and, in particular, maintenance and alimony, and all the other matters which create a problem on the break-up of a marriage. It is, therefore, an important jurisdiction. Any orders which it makes are subject to annulment by Resolution of either House of Parliament.
    To that extent, the constitution of the Committee is not in dispute. The only point under discussion—having already agreed that there should be two members of the Bar and two solicitors—is whether it would be advantageous for those two members of the Bar to be on the Bar Council and for those two solicitors to be members of the Council of the Law Society. It would be useful to link the governing bodies of the two professions to the rule-making body. The Amendments are in the form of Section 99(4) of the Judicature Act, 1925, which sets up the rule-making committee for the rules of the Supreme Court, which makes rules in the Queen's Bench Division and for other jurisdictions. It therefore brings this rule-making body in divorce jurisdiction into line with the body which makes rules for the Supreme Court in this respect. There are one or two minor differences, but it makes the two bodies equal and the same in their representation of the two branches of the
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    profession, with the same qualifications and limitations. Since the Amendment has the fairly general support of the profession, I hope that it will be acceptable to the Government and the House.
    The Attorney-General: It might be convenient for me to inform the House that, without the uncomfortable exercise of the application of a diamond drill, the Government are disposed, in view of the strong representations which have been made by the professional bodies concerned—the General Council of the Bar and the Law Society—to accept the Amendment.
    I ought to explain why there was some reluctance about doing so. It arose not from any lack of confidence in the members of those bodies, and the intention of the Lord Chancellor in fact would have been to consult them about the representatives and who should serve on the Rules Committee. But the fear was that the work of the Committee might be impeded if, in the course of the lengthy task of redrafting some rules or some consolidation process—in the mid-stream of that work—two representatives of a Committee of 10 had to be changed, because that could delay matters until the new members or member had played themselves or himself in. However, it is appreciated that the term during which members of the professional bodies serve is fairly substantial. Moreover, I have no doubt that the difficulties of the Rules Committee will be borne in mind when changes are contemplated.
    In the circumstances, therefore, and in view of the feelings of the professional bodies about the matter and the fact that any interference with the work of the Rules Committee would appear, on reflection, to be only minimal, I am disposed to accept the Amendment.
    Sir J. Hobson: May I exercise my right of reply only to say how grateful we are to the Attorney-General, the Lord Chancellor and the Government? I know that both branches of the profession will also be grateful.
    Amendment agreed to.
    Further Amendment made: In page 4, line 24, at end insert:
    'of whom one shall be a member of the Council of the Law Society and the other a member of the Law Society and also of a local law society'.—[Sir J. Hobson.]
    Motion made and Question proposed, That the Bill be now read the Third time.
    12.7 p.m.
    Mr. Oakes: Although I welcome the Bill, how little have we progressed and what little have we done? We have spent some hours—valuable, precious hours—in the Chamber, we have spent two mornings in Committee, and we have spent the best part of an hour in the Chamber today. But what have we done in the Bill? We have changed the colour of judges' robes from red to black and, flowing from that change of colour, we have permitted solicitors to appear in undefended divorce cases and have slightly cheapened the cost to the Legal Aid Fund.
    But it is a matter of regret to me that we have spent that time and yet have done nothing whatever to deal with the tangled mass of incoherence, injustice and inhumanity which we have in our divorce laws. I sincerely hope that during the next Session of Parliament, if my hon. Friend the Member for Pontypool (Mr. Abse), who has done so much in this matter in previous Parliaments, has the opportunity, the House will be able to do something to help those people who desperately need help and who need saving from the archaic practices which we have in our divorce courts at the moment.
    12.9 p.m.
    Mr. Leo Abse: I wish that I could congratulate the Government on a Bill of divorce reform. It must have become evident through all the proceedings of the Bill that there was and remains an opinion that the Bill as constituted is an inglorious incursion into law reform, a Bill clearly lagging behind the demonstrable need for change and a Bill which in no way meets so many of the suggestions which have so clearly and logically been made by the Law Commission.
    The Bill is a disappointment to those thousands of men and women who are living in permanent cohabitative union and who are unable to obtain a divorce because of the anachronisms within the present law or to regularise their relationships and the position of their children. It is sad that a Bill of this kind should come from a Lord Chancellor and an
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    Attorney-General of whom everybody in the profession and outside had such high hopes that they would initiate genuine, radical divorce law reform. The Measure is also an irritant to the Bar, the members of which feel that some cheese-sparing finance has been indulged in and that they have been the victims of it.
    The Bill is also an affront to solicitors. Solicitors feel extremely deeply on this issue and this feeling is clearly held by a responsible body of opinion inside the Law Society. The dust of former Governments is obviously on the Measure and it is clear that the Bill will require solicitors to take such fees that almost inevitably many of them will not wish to participate any longer in the Legal Aid Scheme. It is equally clear that those who will participate in it will be challenged about the quality and character of their work because of the requirement that they should do their work for such low fees.
    The Attorney-General suggested in Committee that I was exaggerating the differences between the view held by the Law Society and solicitors in this matter and that held by the Lord Chancellor. My right hon. and learned Friend suggested that the average fee paid to solicitors conducting cases would be £59, including advocacy, and he went on to suggest that there was little difference between that figure and the average of the Law Society's proposal of £65. But he must know—because the Law Society has told him so—that these averages are artificial and do not bear close comparison.
    The majority of divorce petitions are based on adultery or desertion. For example, of the 42,070 petitions filed in 1965, the number based on adultery or desertion was 31,064. These cases will, if these rigid proposals go through, attract the minimum of the Law Society's figures; so that a fairer comparison would be between £55 and the Law Society's proposal of £63. This makes a difference between the Lord Chancellor's proposal and the Law Society's proposal of £8 per case for approximately three quarters of undefended petitions.
    I hope that even at this eleventh hour the Lord Chancellor, with the encouragement of the Attorney-General—bearing in mind the opinion that has been expressed

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    in Committee and today by hon. Members—will reconsider these figures. I am informed that there is grave danger in the present situation that the figures of these fixed costs will be prescribed by the Rules Committee and will not be figures agreed between the Lord Chancellor and the Council of the Law Society. That is a grave and serious step to take.
    The Law Society is a responsible body. It understands and recognises the need for stringent economy to be observed in all aspects of the Legal Aid Fund, but it is lamentable that we should have reached the stage between the Lord Chancellor and the Law Society when the Society feels so strongly on this issue that it is today quite adamant in saying that it will not accept figures which are unfair and which could lead to a deterioration in the quality of the work which its members are being asked to undertake.
    My hon. Friend the Member for Bolton, West (Mr. Oakes) expressed the hope that there will come a time, ere long, when we shall have radical divorce reform. Such reform will require the full co-operation of solicitors; and if it leads to a rationalisation of work, then I have no doubt that they will be prepared to co-operate because they do not ask to be paid for work which is not done but for work which they are required to do by the law of the land.
    It is unfortunate that, without changing the present law to any radical degree, this heavy burden is being imposed on solicitors in a way which leads one to the conclusion that the legislature is dodging its task of changing the law and is seeking to get cheap divorce on the backs of the solicitors' profession. It would undoubtedly have more persuasiveness if the Bill contained provisions which consistently and logically led to a reduction of costs. Instead, this proposal is full of anomalies. Why does the Bill say that short defended divorces can no longer be taken in the county court? This work could well be done by solicitors; and if there were a serious intention to reduce costs, then there would be no attempt—and an attempt is being made here—to withdraw these short defended cases which have been very well conducted by the county court judges. No attempt would have been made to withdraw these cases from their jurisdiction.
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    Moreover, it would be more persuasive if, accompanied by these changes, there was a real attack on some of the restrictive practices which are now operating. It is most unfortunate that in a Bill in which it is being urged that we are economising and in which, it is said, the aim is to assist the taxpayer, the Attorney-General should have taken up such an entrenched position over the question of agency work by solicitors.
    Those who recently heard the Prime Minister questioned on television by a group of eminent industrialists and publicists were impressed by my right hon. Friend's determination to see that restrictive practices, wherever they exist, are ended. How can a reforming Lord Chancellor and Attorney-General justify a move which will mean increased costs and which will prevent one solicitor from handing a case over to another at a time when the county courts are being opened as a matter of deliberate policy to all solicitors? This is something beyond my comprehension.
    The Attorney-General should beware lest the belief should exist that this is a cynical Bill presented cynically. Some of the arguments that have been deployed to defend this restrictive practice and to justify the miserable amounts that are to be paid to solicitors are not only weak but border on cynicism. It is sad that we should have an estranged solicitors' profession as a result of a Bill which my hon. Friend the Member for Bolton, West objectively indicated to be a grave disappointment.
    There has been long delay in bringing about divorce law reform. This is no stop-gap Measure. It is irrelevant, puny and only exacerbates feelings on both sides of the profession. It is not worthy of the great skill and ability which we know is possessed by the Lord Chancellor, his Department and the Attorney-General.
    12.20 p.m.
    The Attorney-General: I am sorry that my hon. Friend the Member for Pontypool (Mr. Abse) has spoken in such a spirit and manner. He must not think that those who disagree with him are necessarily cynics, or that the Bill is presented in a cynical fashion. It is a modest Bill, to deal with a practical situation. It is a modest piece of law reform,

    1775
    rationalising the existing position and giving it reality, but it has the merit, unique in a measure of law reform, that it also helps the taxpayer, which is a very rare combination of events.
    No great claims are made for the Bill as a major piece of reform. It is abundantly clear on all sides that a major change in the law of divorce is now crying out to be made. My noble Friend the Lord Chancellor has here been giving the lead for a very long time, and my hon. Friend must not arrogate to himself a monopoly of virtue either in this or any other field. His recent success, upon which I have already congratulated him, must not be allowed to go to his head. Many others of us are actively anxious and concerned about problems of divorce law reform, which now appear to be reaching a stage of solution where a major step forward can be taken. There is nothing in the Bill to prejudice the outcome of a major programme of divorce law reform.
    As to the restrictive practices that have been referred to, the Monopolies Commission is now expressly charged with investigations into restrictive practices in the professions, including the Bar and the solicitor profession—
    Mr. Abse: Will my right hon. and learned Friend give way?
    The Attorney-General: I am coming to the point that I think my hon. Friend wishes to make.
    It is true that the specific matter of agency is dealt with in the County Courts Acts and will, therefore, not be expressly within the terms of reference of the Monopolies Commission. Nevertheless, the Commission will be looking at the professions as a whole, and my noble Friend feels that the effect of what my hon. Friend has in mind might seriously alter the balance between the two professions, and that if there were to be a large extension of solicitor agents doing the work in the courts it would affect quite fundamentally the relationship of the two professions. It is better to see the outcome of the Monopolies Commission's inquiry before a step forward is taken in this direction. Furthermore, it is felt quite wrong that the isolated question of
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    agency in divorce matters should be dealt with as a piecemeal matter in this Bill.
    I make no apology whatsoever for this Measure. It is useful and not only recognises the reality of the situation that has been going on in the courts, but saves the taxpayers' money.
    Fees have been discussed by my noble Friend and the professions, and though it is quite true that the Law Society has not yet accepted his suggested figures, during long discussions improvements in the scales and in the remuneration have been offered by my noble Friend. I have already indicated that his proposals fairly remunerate the solicitor for the important and valuable work he will be expected to do. I venture to say the same about the suggestions that have been made to the Bar. Discussions with the Bar will continue.
    The ultimate decision in this matter will be for the Rules Committee, upon which the professions will be represented. The House has this morning ensured that those representatives on the Rules Committee will be nominated by the professional bodies themselves, so that there will be built into the Committee having the responsibility in this matter direct representatives of the professions, who will no doubt not be lacking in the wish responsibly to press what they think are fair claims.
    But the fact must be faced that the cost of legal aid, essential as I think legal aid to be in our contemporary society, has mounted enormously during recent years and is becoming a very heavy burden on the taxpayer. If that situation were to continue it might well undermine public confidence in the legal aid system itself, and it would indeed be unhappy if the two professions were to kill the goose that has laid so many golden eggs.
    I do not for one moment say anything in criticism of the scheme—I am one of its most enthusiastic advocates—but the time had come to face the realities of the financial position. Something had to be done to check the mounting cost. This Bill will make a modest contribution in that respect. It is estimated that if all goes well it will save abut £½ million. That is not a negligible sum—we could build a couple of schools for the amount.

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    I agree that the remuneration for this important work should be reasonable, but I invite, indeed, I beg the professions not to heed the kind of language we have just heard. I should hate to accuse my hon. Friend of cynicism when he deals with solicitors' fees in this context—I am sure that his motivation is entirely publicspirited—but I invite the two professions to consider that some sacrifice might have to be made. I invite them to recollect the time, not so long ago, when this sort of work was done for nothing by the professions. That was wrong—indeed, it was intolerable.
    But we have now reached a stage when millions of £s are going to the professions for this work, and when the matter is now being reassessed in a period when restraint and sacrifices are being called for all round from the ordinary working man it is right that the professions should themselves face the fact that they must play their part. I am sure that they will do so, and do so willingly—and all the more willingly after the concessions that have been made to both branches in the course of our consideration of the Bill.
    Question put and agreed to.
    Bill accordingly read the Third time and passed.

  WHICKHAM CHEST CLINIC AND DUNSTON HILL HOSPITAL (OUT-PATIENTS' DEPARTMENT)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Walter Harrison.]
  12.27 p.m.
  Mr. Robert Woof: I feel ever so grateful for this opportunity to raise a matter of substantial importance to my constituency. The proposal of the Newcastle Regional Hospital Board to close out-patients' clinics in Dunston Hill Hospital and Whickham Cottage Hospital has aroused deep concern, not only for those who are involved in the work of the hospital but also, in particular, the general public who, to all intents and purposes, are to be offered facilities in a new comprehensive out-patients department in the Queen Elizabeth Hospital, Gateshead-on-Tyne.
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  My attention has been drawn to this regrettable idea from many sources of protest, notably Whickham Urban District Council and also the public notice section of the Newcastle Evening Chronicle, through which it called for any comments on the proposals to be sent to the secretary of the regional hospital board by 30th June.
  Before I attempt an explicit account of the nature of the protests by adding my own support to what I positively think are valid reasons why such a turning-point of policy is unfavourable to the area, I gladly pay tribute to the regional hospital board in its honourable pursuits.
  There is no more pleasing exercise of the mind than gratitude, and I want to take this opportunity to say that it is to the board's everlasting credit that it conceived the idea which brought about the major improvements in the Queen Elizabeth Hospital. No one doubts the board's conscientiousness, the painstaking services which it renders and its efforts to establish the provision of facilities which are specially geared to meet the health needs of each patient.
  I also appreciate that my right hon. Friend the Minister of Health and my hon. Friend the Parliamentary Secretary are only too anxious to vouchsafe the best they can give to the hospital service. This is borne out by the fact that more money is being spent on hospitals than ever before. The House will recognise that they realise that the National Health Service is not only a service for the sick, but is also a service to keep people in communities well. Hospitals should not be divorced from the people they serve and to close well-used clinics, especially preventive clinics, is a retrograde step. As a consequence, by presenting certain facts I want to try to convince my hon. Friend that it is imperative that they be retained.
  I have in mind the very important rôle which these clinics play. They are adequately equipped with costly modern apparatus, and the way in which they are run and organised is highly commendable to the medical staff and its professional skills. This is all very encouraging and one is deeply moved by the kind of work done there. The patients are accepted predominantly from the catchment areas

  1779
  of Whickham U.D.C., Blaydon U.D.C. and Ryton U.D.C.
  In any serious and sustained attempt to explain the new state of affairs, without exaggerating the position, I must frankly say that, after all the time which has been spent on planning activities and general ideas and the intense efforts attached to particular ends and the public money which has been spent on these modern clinics, I am left breathless by the suggestion that these clinics are to close. What makes it so significant is that if the clinics had not been serving a useful purpose and if changes were to render them obsolete, one could well understand the regional hospital board's policy, without being puzzled or dismayed, but, feeling my way to methods of reasoning, if the whole spectacle is to be made understandable. I politely suggest that that is far from being the case.
  Going on to the actual panorama of present things, it may well be argued that it might be advantageous to dispense with isolated clinics and to incorporate them into the regional board's larger clinics. I could well understand any argument to establish stringent economy of staff and equipment with greater facilities for research and investigation, but I need only stress that the clinics in question are situated at the very hub of a district with a greatly increasing population and conspicuous for the new housing estates which have been and will continue to be built and with still further increases throughout the constituency on account of the same process.
  The House, however, will agree that health is the soul that animates all enjoyment of life, and while the reduction in the incidence of notifiable infectious diseases over the last decade has changed the need for hospital beds—the difference is so greatly marked with improved methods of treatment through the discovery of antibiotics which now permit many patients to be treated in their own homes—nevertheless, there still remain health problems about which it would be dangerous to be complacent.
  It is from that point of view, being concerned about environmental health, that one of the main functions of the Whickham Chest Clinic is the prevention of tuberculosis. I am forcefully driven to the conclusion that such preventive
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  medical services differ from curative services and work efficiently only if the patient can use them easily. Every station of life has duties which are proper to it and beneficial to others. Such services recommend themselves and this thought should be kept awake in us at all times, especially when the main source of tuberculosis infection today is elderly people with coughs. They visit their doctor and at his suggestion are willing to be X-rayed. It is important that they should be X-rayed, not only for their own sakes, but because they infect others.
  Young people are particularly vulnerable to infection and are at risk especially of tuberculosis meningitis, which is one of the most deadly diseases of childhood. The mothers of young children are also at risk because of contacts and they take their children to Whickham Chest Clinic for B.C.G. vaccination which protects them against tuberculosis. In this respect, I am given to understand from authoritative sources that the figures for preventive vaccination in Whickham and district is higher than the average for the country as a whole, because of the easy access to vaccination.
  Another benefit of the service which I must mention is to check up on those who work in dusty conditions. When they feel that they are suffering from a chest disease, they are X-rayed, and we need to note that the clinic is doing an excellent job of work in examination by diagnosing pneumoconiosis and its associated diseases. In fact, at present there are 105 people in the area suffering from pneumoconiosis and kept under regular supervision.
  To do full justice to the proper value of the service I should say that 201 clinical sessions were recorded at the clinic last year, with 47 X-ray only sessions, covering 4,650 as the total number in attendance. With this in mind and without making too big an analysis, I would only say that it is of great consolation to reflect that it is part of the task of those who deserve every credit for trying to make life happier and healthier for those in need.
  Such a summary of fundamentals evokes the thought that we always wish for knowledge, and many passionately concentrate their noblest energies on the

  1781
  task of getting it. It may be said that if action were equal to reaction, there would be no such thing as evolution and that the world would probably remain a pendulum lacking impulsion to set it in motion. But disease is coeval with life itself. It is one of the attributes of life, an unstable entity in a world of flux and change. It is an ever-changing balance of forces. But I am glad to think that the out-patient clinic of Dunston Hill Hospital is rendering a similar and cherished service.
  This clinic was opened at the end of 1963 and at a cost of £6,000. It is equipped with expensive apparatus, and, like the Whickham Clinic, it is in the hands of specially trained experts. The number of out-patients who attended last year was 7,730. Patients have to go through a number of stages, most of them comparatively simple. Arrangements are made so as to obviate difficulty, which shows the high standard of organisation and management and the close-knit efficiency of medical care. Quite often, the consultants hold meetings with the clinic staff to discuss interesting cases.
  As a layman, I think that that in itself is an attraction, for the protection and promotion of people's health, and, in appealing for the clinic's retention, I emphasise that, if for no other reason, it illustrates that the new out-patient facilities at the Queen Elizabeth Hospital will not be inadequately used. I am given clearly to understand that the special outpatient facilities available there are not likely to be used on the first occasion when a patient is seen for a consultation. It will, of course, be possible for patients who are seen initially at Dunston Hill Hospital subsequently to receive special out-patient investigation or treatment at the Queen Elizabeth Hospital, and then be subsequently reviewed at Dunston Hill Hospital. All that is of cardinal importance, and therein lies the fundamental significance of the service.
  It may well be that difficulties give birth to miracles, and not every calamity is a curse, but we have to remember that the regional hospital board's future pattern of policy to close these clinics will involve constituents in the trouble and fatigue of travelling to Gateshead. It is not a question of criticising the board, to which, manifestly, we are indebted, but we have
  1782
  to make a commonsense approach, in relation to such diversity of activity, and I can think of no more agonising journey. Humanitarian considerations and inconvenience must be taken into account. The stress of travelling cannot be ignored. For many people of limited physical ability, especially old people and mothers with children, it is painfully obvious that there will be a tortuous journey as a result of having to change buses to get to the Queen Elizabeth Hospital.
  We can always control a situation which we understand, but I believe that, if the clinics are retained, they would enable relationships between out-patients and those who care for them to continue to be happily cultivated. We try to live in the light of a hard, crude alertness to events, and I was interested to read a chapter dealing with diseases of the chest in a review of the medical services in Great Britain. In that review, the report of a committee sponsored by several distinguished members of the medical profession, it was said:
  "There are dangers that, as the chest services become submerged within the general hospitals, the preventive side will receive less attention. The essential link between the public health and clinical aspects of tuberculosis control needs strengthening."
  That is part of the case which I have tried to establish. Probably, it is not alone sufficient, but, for all the reasons which I have put, including the contributory sketch which I have made in the time available, I beg my hon. Friend the Parliamentary Secretary to approach the regional hospital board with a view to reconsidering its proposal. I am sure that, if he can do anything in that respect, it will be greatly appreciated by all concerned.
  12.45 p.m.
  The Parliamentary Secretary to the Ministry of Health (Mr. Julian Snow): I have listened with great interest to my hon. Friend the Member for Blaydon (Mr. Woof), and I can well appreciate the local concern in this matter. I am grateful to him for giving me this opportunity to explain the position regarding closures in general and the present proposals in particular. Before I go further, I wish to make absolutely clear to my hon. Friend that no decision has been taken. I stress also—I think he knows this—that I made a short tour of the

  1783
  area recently, and I was left in no doubt by the advice which was offered to me that those responsible for the design and lay-out of the Health Service in his area must always remember the long history of harsh social conditions there during the past four or five decades.
  The recent trend towards greater interdependence among the various branches of medicine and also an increasing realisation of the need to bring together a wide range of the facilities required for diagnosis and treatment led to the concept of the district general hospital. This was further endorsed when the Hospital Plan was reviewed last year. The long-term plan for the Newcastle region, as for all other regions, is to provide a number of these district general hospitals to replace the numerous existing hospitals or clinics which can offer only limited services. I emphasise that nothing I say now must in any way be interpreted as a criticism of the operation of the clinics up to now.
  Available resources of capital, manpower and land do not permit building all the new district general hospitals on virgin sites. Many of these must, therefore, be provided by redeveloping in phases existing hospitals. The first phase usually plans to provide the services most required in a particular area. Completion of a phase of a new hospital inevitably involves the transfer of services to the new hospital and consequent closures of clinics and departments in existing hospitals.
  The chest clinic, either entirely independent, or in a small cottage hospital, is a legacy of the time when, as my hon. Friend said, tuberculosis was a disease much more prevalent and more feared than it is today. The decrease has been dramatic. The number of deaths in England and Wales averaged almost 8,000 in 1953–55, but in 1965 it was only a little over 2,000. In 1960, hospital authorities were given advice on the future of the chest services. Hospital authorities were advised, among other things, that the chest clinic should be integrated into the general out-patient department of the hospital and that provision should be made for a chest unit in planning new out-patient departments of general hospitals. All consultants, therefore, should have known for many years that this was
  1784
  accepted policy. As regards local consultant opinion, I am not well informed on what my hon. Friend has said, but my information is that there is no unanimity of opinion on this matter among local consultants.
  It was recognised that some chest clinics would continue to function outside the general hospital until new hospitals were built. But the aim should be the close integration of the chest clinic with the out-patient department sharing the various services and amenities of the department, as do other specialties. This would provide the chest physician with the full range of hospital out-patient services and give to patients the amenities of general out-patient departments, subject only to measures to prevent spread of infection. Nurses working in the chest unit would no longer be separated from their colleagues.
  Since 1960, some progress has been made in reaching these objectives. A more recent review of the organisation of the chest services has just been completed by a sub-committee of my Standing Medical Advisory Committee. I hope to receive its report very soon and give further advice to hospital authorities. I am told that it will emphasise and clarify the earlier advice given that chest clinics should be integrated in the district general hospitals.
  The closure of a hospital department or clinic follows a carefully devised pattern. After informing the Minister of its intentions, the regional hospital board—as was done in this case—invites comment from a number of local bodies and the closure is advertised so as to give individuals or bodies whose opinions have not been specifically canvassed the opportunity to express their views. Any objections received are carefully studied, and in some cases they are met, for example, by some adjustment to the closure timetable. Final approval of any closure is given personally by my right hon. Friend the Minister. I am sure that my hon. Friend realises that modernisation of hospital services could not proceed if all small units were retained. What is far more important, the concentration of the best available services and most effective disposition of staff, would inevitably lead to closures.
  Diagnostic services for diseases of the chest are now provided at Whickham

  1785
  Chest Clinic and clinics in general medicine, general surgery and orthopaedic surgery in the out-patients' department at Dunston Hill Hospital. These services at present serve mainly the areas of Blaydon, Ryton and Whickham, which are included in the catchment area of the Gateshead Hospital Management Committee. Queen Elizabeth Hospital, Gateshead, is one of those being redeveloped by phases into a district general hopsital. The first phase is nearing completion and will provide modern facilities for diagnosis and out-patient treatment in all specialties except maternity. It will include a new X-ray department, an out-patient operating theatre, and also a day ward to enable more extensive investigations and treatment to be carried out on an out-patient basis. Pathology and other supporting diagnostic and ancillary services are already provided at the Queen Elizabeth Hospital.
  As the facilities to be provided will be vastly superior to any of those currently existing in the group, it is considered desirable that the whole community to be served by this hospital should benefit from them, following the opening of the new out-patient department in late 1967, and it is proposed that, except in the case of maternity clinics, all out-patient clinics now held at other hospitals in the group should be concentrated at the new Queen Elizabeth Hospital.
  A memorandum summarising the proposals was circulated to the Press, and a letter seeking their views was sent to the Gateshead County Borough Council, Gateshead Executive Council, Gateshead Local Medical Committee, Durham County Council, Durham County Executive Council. Durham County Local Medical Committee, Gateshead and District Hospital Management Committee, Felling Urban District Council, Whickham Urban District Council, Blaydon Urban District Council and Ryton Urban District Council. I understand from the regional hospital board that as a result of these approaches some authorities have agreed to, or have no objections to, the new proposals.
  However, the distance of Queen Elizabeth Hospital from Whickham, Blaydon and Dunston, and the inconvenience of the bus journey, will cause expense and hardship to a number of patients, par-
  1786
  ticularly the elderly. I do not deny that the journey may be difficult, but I think there is room for the provision of a voluntary car service. I assure my hon. Friend that, if and when the decision is taken in principle by the regional hospital board, it or one of its agencies will immediately consult the transport authorities to see what amelioration can be achieved in local transport services.
  It is also said that the local population is likely to increase. It is estimated that by 1981 it will have increased by about 14,000, but this has been taken into account in the general planning of the hospital services in the area.
  Some concern has been expressed that in view of the increased distance which out-patients would have to travel to the Queen Elizabeth Hospital, there would be a reduction in the number coming forward for chest X-ray, B.C.G. vaccinations and Heaf testing, which will he detrimental from the community point of view, but responsibility remains with the general practitioner or local authority. It may cause some inconvenience to patients to travel some miles to Queen Elizabeth Hospital in Gateshead, but a better service will be provided.
  The wider range of facilities at the out-patient department there will enable the consultant to diagnose more completely what is wrong with the patient. He will not see his patient merely as a chest case. I am advised for example, that a heart condition may be associated with a chest condition, which will be more easily diagnosed in a hospital than in a clinic. But I emphasise that I am not casting any reflection on the efficiency of the existing clinics.
  My hon. Friend has said that the incidence of chest disease remains high in the area served by the Whickham Clinic. The board's medical advisers are well aware of this problem, and it will be taken into consideration when the matter is finally discussed by the board with a view to a decision.
  There need he no concern that staff will be made redundant by the proposed closures because there are unlikely to be any redundancies. But if there were, the staff concerned would be offered alternative employment.

  1787
  I remind my hon. Friend that no decision has yet been reached about the closures. All the objections will be carefully considered, and the proposals to close Whickham Chest Clinic and the out-patients' department at Dunston Hill Hospital will be reviewed in the light of the objections. The Newcastle Regional Hospital Board is not meeting until later this month to consider the objections. I am sure that the House
  1788
  would not expect me to prejudge its conclusions.
  I assure my hon. Friend that the Board and my Department are most obliged to him for his persistence in drawing to our attention the social anxieties inherent in the general situation.
  And the debate having been concluded, Mr. DEPUTY SPEAKER suspended the sitting till half-past Two o'clock, pursuant to Order.
  Sitting resumed at 2.30 p.m.

ORAL ANSWERS TO QUESTIONS
  DEFENCE

    Armed Forces (Overseas Commitments)
    Mr. Frank Allaunasked the Secretary of State for Defence if he will make a statement on the outcome of his review of the United Kingdom's overseas commitments and the size of the Armed Forces; and if he will state the proposed saving in arms expenditure involved.
    Mr. G. Campbellasked the Secretary of State for Defence if he will make a statement on the size and composition of the Army.
    Mr. Iremongerasked the Secretary of State for Defence when he intends to make a statement on the size of the Armed Forces in the future.
    Mr. Dickensasked the Secretary of State for Defence if he will make a statement on his review of the United Kingdom's overseas commitments and the future strength of the Armed Forces.
    The Secretary of State for Defence (Mr. Denis Healey): I hope to make an announcement in the near future.
    Mr. Allaun: Will the Minister bear in mind that the reports from Australia that we are due to leave the Far East by 1975 will not satisfy the Labour Party Conference, which has plans to leave five years earlier? As for the saving, would he remember what William Tell's son said to his father when he took aim with his bow, "It had better be good"?
    Mr. Healey: I am very well aware of the views of my hon. Friend, but I sometimes despair of ever satisfying him.
    Mr. G. Campbell: Will the Secretary of State bear in mind that it is likely that, in the future, there will be many tasks which can be carried out only by infantry and supporting arms, as is now being successfully demonstrated in Crater by a Highland Regiment?
    Mr. Healey: Yes, I am very well aware of that.
    Mr. Dickens: Can the Secretary of State enlarge a little on the purpose of this forthcoming White Paper? Will it be a new Defence Review, and for how long will it extend? Up to 1970? Will the House have an opportunity of debating it before the Summer Recess?
    Mr. Healey: I do not think that I have said anything about a Paper. What I have said, and maintain, is that as soon as I am able to do so I shall make an announcement to the House of the results of the studies that we have been carrying out, and the consultations that we have been having with our allies—one of which was going on this morning with the Prime Minister of Malaysia.
    Mr. Powell: For the guidance of the House could the Secretary of State say whether he expects this to be before the House rises for the Summer Recess?
    Mr. Healey: I would hope so.
    Mr. Rankin: Is my right hon. Friend aware that when he satisfies my hon. Friend the Member for Salford, East (Mr. Frank Allaun) he will be proceeding on very sound lines?
    Mr. Healey: I am aware that there are many views on the soundness of the judgment of my hon. Friend the Member for Salford, East and my hon. Friend the Member for Glasgow, Govan (Mr. Rankin).
    Sir Ian On-Ewing: Would the Secretary of State give us an assurance that, if a statement is to be made about a further reduction in our defence forces, it will be made in plenty of time for us to consider it, and if necessary, debate it?
    Mr. Healey: Yes. I am well aware that this is a matter of the greatest importance to both sides of the House, and I would certainly seek to ensure that if an announcement is to be made it will be made in time to allow the House to discuss it.

    Arms Salesman
    Mr. Frank Allaunasked the Secretary of State for Defence if, in view of the recent Middle East war, he will terminate the employment of the Government arms salesman.
    Mr. Healey: No, Sir.
    Mr. Allaun: Will my right hon. Friend take the initiative to get an arms ban summit to stop the sale of these arms? Do they not encourage competition and hostility between neighbours, both in the Middle East and in South America, when the money could be far better spent on other things?
    Mr. Healey: As my right hon. Friend the Foreign Secretary has often said, we are very anxious to get an agreement between the major arms-producing Powers to limit, or to stop, arms supplies to the Middle East and other areas of tension. My hon. Friend should be aware that although my right hon. Friend the Foreign Secretary made such a proposal in this House and in the United Nations, other major arms suppliers refused to follow it up.
    I do not think that anyone in the House would wish us to dishonour contracts already made, particularly if the Soviet Union and other Powers pour arms into certain countries in the Middle East or elsewhere. Other countries which feel themselves threatened by these arms must have the right to obtain arms in self-defence.
    Mr. Humphrey Atkins: Is it true that the Government arms salesman has intimated his wish to resign?
    Mr. Healey: No, Sir.

    Aldabra Island
    Sir T. Beamishasked the Secretary of State for Defence what representations he has received regarding the ecological importance of Aldabra Island; what assurances he has given in this respect; and if he will give further consideration to alternative sites which meet the defence requirements.
    Mr. Thorpeasked the Secretary of State for Defence what use he will make of the island of Aldabra; and what cost is involved in such use.
    Mr. Ridleyasked the Secretary of State for Defence what is the estimated cost of building defence facilities on the island of Aldabra; and for what it will be used.
    Mr. Healey: No decision has yet been taken on the use of Aldabra for defence
    1792
    purposes. I have received representations from a deputation headed by the President of the Royal Society, and representing the interests of a number of learned bodies, stressing the importance which they attached to the full preservation of the existing ecology of the island. I assured them that the scientific issues at stake would be taken carefully into account.
    Sir T. Beamish: While I confess that I am completely in the dark regarding the Government's reasons for wanting to develop a chain of island bases in the Indian Ocean, including, perhaps, Aldabra, may I ask the Minister if he is aware how grateful many people on both sides of the Atlantic will be that he has now clearly stated that he recognises the unique scientific value of this island?
    Mr. Healey: We have made this clear to the scientific interests concerned over a very long period. The only point that I would make in reply to the earlier part of the hon. Gentleman's supplementary question is that we have never considered the creation of island bases in the Indian Ocean. What we have considered is increasing the flexibility of the deployment of our air forces by creating staging facilities in various parts of that ocean, and this is still under consideration.
    Mr. Luard: Can the Secretary of State give an assurance that, before any final decision is taken about the use of Aldabra and other islands, the House will be given an opportunity to discuss the matter?
    Mr. Healey: I cannot give an assurance, but if a decision is taken by the Government it will be put to the House and if the House wishes to discuss it it will be able to find an opportunity of doing so.

    Schools (Recruiting Liaison Teams)
    Sir T. Beamishasked the Secretary of State for Defence, how many educacation authorities still refuse to allow recruiting liaison teams to visit schools; how many schools in each category are involved; if he is satisfied with the progress made during the past 12 months; and if he will make a statement.
    The Minister of Defence for Administration (Mr. G. W. Reynolds): Eleven local education authorities—five fewer than a year ago—now bar visits. This involves 43 colleges of further education, 3 technical, 42 comprehensive, 93 grammar and 224 secondary modern schools. Although the figures have thus improved, I naturally hope that all authorities will in time agree to these visits.
    Sir T. Beamish: Does the Minister not think that this discloses a shocking state of affairs which has persisted for far too long? Is there any reason at all why the names of these authorities which will not co-operate should not be published, so that they should try to justify their attitude?
    Mr. Reynolds: The authorities change from time to time, and are under political control. Most of the authorities which refuse to allow the Services in bar all employers from taking up time during the curricula of the school. They do not discriminate against the Services.
    Mr. Manuel: While congratulating my hon. Friend on his Answer, may I ask him to be sure to inform the whole of his Department that children go to school to be educated, not to listen to recruiting speeches?
    Mr. Reynolds: Part of that education is rightly to give them ideas of various careers available. I must make the point again that most of the authorities which do not allow the Services in treat all employers in that particular way.
    Mr. Goodhew: Will the hon. Gentleman now answer my hon. Friend's question and tell us whether he will publish a list of names of the authorities which have refused?
    Mr. Reynolds: It has not been done in the past, and I see no point in doing it now. The authorities do change from time to time.

    Land
    Mr. Bob Brownasked the Secretary of State for Defence (1) if he is satisfied that his Department is occupying the minimum amount of land in the United Kingdom for its requirements: and if he will make a statement;
    1794
    (2) if he will take steps to speed up the release by his Department of land to local authorities for housing or other purposes.
    Mr. Reynolds: We do keep land holdings to the minimum and 130,000 acres have been disposed of in the last five years. But before we offer land or property for disposal we must ensure that there is no likely defence use for it; and this may take time.
    Mr. Brown: Is my hon. Friend aware that in the County of Northumberland, where already a large area of land is sterilised by the Army, there is growing concern at reports that more land is to be taken as a training area? Is he further aware that in my own constituency it took not months but years for the city council to negotiate the use of land for development as a trading estate?
    Mr. Reynolds: I have said that this does take quite a lot of time. We have first of all to decide whether there is other Service use and then whether there are other Government uses before we can offer it to local authorities. The reports to which my hon. Friend is referring are presumably newspaper reports for which I am not responsible.
    Mr. Humphrey Atkins: If the land held by the hon. Gentleman's Department at the moment is at a minimum, when he brings further troops home from the Continent would it not be less than the minimum?
    Mr. Reynolds: I have answered Questions about this on several occasions. It depends on the type of equipment that these troops have.

    Nuclear Weapons
    Mr. G. Campbellasked the Secretary of State for Defence what plans he has for the development of the nuclear deterrent, or a further generation of nuclear weapons; and if he will make a statement.
    Mr. Iremongerasked the Secretary of State for Defence what steps he is takng to promote research and development calculated to provide the United Kingdom with nuclear weapons of the next generation after the Polaris missile becomes obsolete.
    Mr. Healey: I have nothing to add to what my right hon. Friend the Prime Minister said in reply to my hon. Friend the Member for Croydon, South (Mr. Winnick) on 13th June about the Government's policy in respect of a new generation of nuclear weapons; or to my reply to the right hon. Member for Wolverhampton, South West (Mr. Powell) on 1st March about the possibility of further development of Polaris.—[Vol. 742, c. 299; Vol. 748, c. 484–5.]
    Mr. Campbell: Are the Government satisfied that the present tactical nuclear weapons available to the British Army are up to date and will not need replacement before long?
    Mr. Healey: With respect, there is a Question on this matter later on the Order Paper.
    Mr. Powell: Is the right hon. Gentleman aware that we on this side of the House note with great satisfaction the terms of his reply to me and the extremely limited and guarded character of the Prime Minister's reply, to which he referred?
    Mr. Healey: I note everything which indicates agreement by the right hon. Gentleman with his own right hon. and hon. Friends with the greatest satisfaction.
    Later—
    Mr. Campbell: On a point of order. You will recall, Mr. Speaker, that the Secretary of State for Defence based his reasons for not replying to my supplementary question on my Question No. 8 on Parliamentary procedure; namely, that the question I had asked was already on the Order Paper. As it is impossible to identify any such Question on today's Order Paper, could the Secretary of State be asked to indicate the number of the Question which he thought prevented him from replying? There is only one Question on the subject—unstarred Written Question No. 15—which is quite different from the one I put?
    Mr. Healey: I apologise to the hon. Gentleman. This Question was down for Oral Answer but was changed in the last 24 hours to a Question for Written Answer. [HON. MEMBERS: "Oh."] The hon. Gentleman will read the Written
    1796
    Answer to that Written Question in tomorrow's OFFICIAL REPORT. The question which he raised was on a totally different matter, totally different from the one which he had put down for Oral Answer.
    Sir T. Beamish: Further to my hon. Friend's point of order. In view of the fact that the right hon. Gentleman made a genuine mistake, does not he feel that he should now reply to my hon. Friend's supplementary question?
    Mr. Healey: If you will allow the hon. Member for Moray and Nairn (Mr. G. Campbell) to remind me of the precise nature of his supplementary question, Mr. Speaker, I will do my best to answer it.
    Mr. Speaker: So be it.
    Mr. Campbell: I asked whether the Government were satisfied that the nuclear tactical weapons available to the British Army were up to date and would not need to be modernised before long.
    Mr. Healey: Yes, Sir. I am perfectly satisfied that the weapons we now have are up to date. Of course, when they become obsolete, we will require to replace them.
    Mr. Campbell: On a point of order. May I thank you, Mr. Speaker, for your good offices in allowing this question to be put?
    Mr. Speaker: I think that the hon. Gentleman's thanks are due to the Minister, who attempted to retrieve his error.
    Mr. Healey: I wish to express my gratitude, too.

    Aircraft (Backward Facing Seats)
    Mr. Costainasked the Secretary of State for Defence why it is necessary when civil aircraft are hired by his Department for the transportation of Service personnel, to have the seats taken out and re-installed facing backwards; and what is the cost of this operation.
    The Under-Secretary of State for Defence for the Royal Air Force (Mr. Merlyn Rees): Experience tends to confirm that the support given to the passenger by a well-designed and securely-anchored backward-facing seat would give an extra margin of safety in certain

    1797
    types of aircraft accident. My Department accordingly expresses a strong preference for backward-facing seats when inviting tenders for long-term air trooping contracts. For a long-term contract the extra costs are a matter of pence per seat per flight.
    Mr. Costain: While thanking the hon. Gentleman for that reply, may I ask him to explain why, if the safety factor is regarded as so important by the Department, all civil aircraft do not have the same facilities? Why should there be one type of safety for Service personnel and another for civilians?
    Mr. Rees: Civilian aircraft are not the responsibility of my right hon. Friend. What we are sure of in the R.A.F. as the customer is that this is what we want, and this is what we ask for.

    Royal Navy and South African Navy
    Rear-Admiral Morgan Gilesasked the Secretary of State for Defence what steps he has taken, and what plans he has to strengthen the links between the Royal Navy and the South African Navy.
    Mr. Reynolds: As my hon. Friend, the Under-Secretary of State for the Navy announced on 8th February we are continuing the liaison with the South African Navy called for under the Simonstown Agreement.—[Vol. 740, c. 1609–20.]
    Rear-Admiral Morgan Giles: Does the hon. Gentleman now realise the real importance of the Simonstown Agreement in view of recent events in the Middle East, and will Her Majesty's Government in future honour that agreement both in the letter and in the spirit?
    Mr. Reynolds: I do not know what makes the hon. and gallant Gentleman think that it has not been honoured. We discussed the matter at Question Time some six weeks ago, when he will find that I referred to the nature of the agreement and its importance to us in certain circumstances.
    Mr. Winnick: Is my hon. Friend aware that many people in this country, sickened by the racial tyranny in South Africa—despite what hon. Members say opposite—do not want good will visits of any kind to South Africa? Answer that one.
    Mr. Reynolds: I should be only too pleased to answer it, but it would be a little better if my hon. Friend would moderate his language in putting questions. There were no good will visits. There was a training visit, utilising the facilities that we have under the agreement. I appreciate the feelings of my hon. Friend and a large number of other hon. Members. I can only say that all—I repeat all—who took part in the visit irrespective of colour, race or creed, enjoyed it and were properly treated.
    Mr. Wall: Is it not a fact that the Suez Canal could remain closed for a year or more? Does not this demonstrate the full importance of the Cape route to our trade? Is it not crazy to refuse to build warships for the South African Navy when they will otherwise be built in France?
    Mr. Reynolds: I do not think there is any Minister who would be responsible for saying how long the Suez Canal will be closed, but while it is closed we are making use of facilities under the Simonstown Agreement.

    Little Aden Cantonment
    Mr. Hoosonasked the Secretary of State for Defence to what use the Little Aden cantonment will be put after the withdrawal of British Forces.
    Mr. Reynolds: This will be for the Federal Government to decide.
    Mr. Hooson: In view of the estimated cost of the cantonment, over £6 million in the last few years, does the Defence Ministry now think the cost justified?
    Mr. Reynolds: If we always looked at our overseas policy on the basis that if we have bricks and mortars there we cannot make any changes, we should never be able to make any changes.

    British Forces, Far East (Poultry)
    Mr. Hoosonasked the Secretary of State for Defence what was the cost in 1966–67 of purchasing poultry from Denmark for consumption by British forces in the Far East.
    The Under-Secretary of State for Defence for the Royal Navy (Mr. Maurice Foley): The cost of purchasing poultry

    1799
    from Denmark in 1966–67 for consumption by British forces in the Far East was £78,000.
    Mr. Hooson: As many of our own farmers are unable to sell their poultry, is it not ridiculous that British forces buy their poultry from overseas when they could easily be supplied by our own producers?
    Sir G. Nabarro: Worcestershire pullets.
    Mr. Foley: As the hon. and learned Member will know from a previous Question, the contract is placed locally in Singapore, and the suppliers, depending on availability, obtain their supplies in Europe, Australia, New Zealand, the United States and so on.

    Air Freight (Far East)
    Mr. Russell Johnstonasked the Secretary of State for Defence what is the estimated cost of flying out spare parts for aircraft and other equipment to the staging posts in the Indian Ocean and to other Far Eastern military posts where no comprehensive range of spares and stores is maintained.
    Mr. Rees: The great bulk of air freight for the Services in the Far East is carried by Transport Command without significant extra cost to the Exchequer. It is estimated that during the current financial year the total cost of all Service air freight to the Far East by commercial aircraft will be £650,000. It is not possible to say how much of this is in respect of equipment for the staging post in the Indian Ocean but the amount must be very small.
    Mr. Russell Johnston: Can the hon. Gentleman indicate precisely what kind of stores are unable to be held at staging posts and require to be shipped out in this way?
    Mr. Rees: At staging posts for Royal Air Force purposes one would perhaps keep aircraft tyres and so on. However, the aim is that major servicing should be carried out at home. There is no need for large amounts of stores at staging-post islands or any other kind of staging posts.
    Mr. Lubbockasked the Secretary of State for Defence what is the estimated
    1800
    cost of moving supplies and material by air to stations east of Suez in the year 1967–68.
    Mr. Rees: Only a comparatively small proportion of air freight required for the Services east of Suez is carried in aircraft other than those of Transport Command but £800,000 has been provided for air freight by commercial aircraft in Defence Estimates for the current year.

    Stations East of Suez (Trooping Costs)
    Mr. Lubbockasked the Secretary of State for Defence what is the estimated cost of trooping for stations east of Suez in the year 1967–68.
    Mr. Rees: The cost of trooping to stations east of Suez other than by Transport Command during the current year is estimated at £4·6 million. Of this, some £300,000 is for sea passages.
    Mr. Lubbock: Is the hon. Gentleman aware that the cost of air mobility services as given by the Defence White Paper is £140 million and that this is bigger than even the turnover of the British Overseas Aircraft Corporation? Will he say what reductions he expects to make in the costs of these services as and when we can withdraw from the Far East?
    Mr. Rees: As to the last part of the question, the hon. Gentleman will have to await further announcements. With regard to the difference between the figures, Transport Command—now to be renamed Air Support Command—has commitments in all parts of the world. However, the cost of trooping is negligible because the flights would have to take place in any event.
    Mr. Onslow: When does the hon. Gentleman hope to make a statement on the recent Report of the Estimates Committee on trooping contracts?
    Mr. Rees: Shortly, Sir.

    Royal Navy (Personnel at Sea)
    Mr. James Davidsonasked the Secretary of State for Defence why the figures given in the 1967 White Paper for Royal Navy personnel at sea exceed those in

    1801
    the 1966 White Paper; and how these extra men are disposed.
    Mr. Foley: I assume that the hon. Member is referring to the figures given in the tables in Annex G of the 1966 and 1967 White Papers. These showed that the total Royal Navy personnel "At Sea" on 1st January 1967 was 37,200 and on 1st January 1966 was 37,170, an increase of 30. Whilst the difference in total is marginal, the hon. Member will see, from a comparison of the details, that there were a number of changes in geographical disposition.
    Mr. Davidson: Can the hon. Gentleman say whether there has been a greater increase in shore-based personnel during the same period, including civil servants, or whether the trend has run counter to Parkinson's Law?
    Mr. Foley: The Question relates to personnel at sea. If the hon. Gentleman wants to inquire about details of personnel on shore, if he puts down a Question he will receive an Answer.

    Hong Kong (Coastal Minesweeper Force)
    Mr. James Davidsonasked the Secretary of State for Defence why the coastal minesweeper force based in Hong Kong is to be withdrawn.
    Mr. Foley: A coastal minesweeper force is being retained in Hong Kong for the time being.
    Mr. Davidson: Can the hon. Gentleman say whether it is the intention that the force should remain there for the foreseeable future or whether it is intended to withdraw it and rebase it in Singapore or bring it back to home waters?
    Mr. Foley: We are looking again at the detailed arrangements. I should prefer not to commit myself at this stage, but should like to see how the situation develops.
    Mr. Rankin: With such a powerful array of United States naval units in Victoria Harbour, is there any need for us to keep these forces there?
    Mr. Foley: So far as we are aware, none of the American forces in the area is there to protect the waters or to assist in the defence of Hong Kong.

    Aircraft Carriers
    Mr. Fisherasked the Secretary of State for Defence if, in view of the recent events in the Middle East, he will now reconsider his decision to cancel a new aircraft carrier.
    Dame Irene Wardasked the Secretary of State for Defence whether, in view of recent events in the Middle East, he will reconsider his policy with regard to aircraft carriers.
    Mr. Murtonasked the Secretary of State for Defence whether, in view of recent events in the Middle East, he will now proceed with the building of a new aircraft carrier.
    Mr. Healey: I have never denied the value of aircraft carriers, and I propose to make the best possible use of them while we have them. For reasons which the House debated very fully last year, we would not be justified in prolonging the life of our carrier force after 1975 with a new ship in the light of our likely overseas commitments in the longer term.
    Mr. Fisher: Is it not a fact that since the decision to cancel was taken almost every operation in which British forces have been, might have been or might in the future be involved, including the defence of Aden, has required carrier support? If we have any rôle left in the world at all outside Europe, surely we need carrier support to discharge it?
    Mr. Healey: No, of course it is not. Carriers were not used in the re-occupation of Crater the other day. I find ii difficult to answer the hon. Gentleman in view of the fact that his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who, after all, is the official spokesman of the Opposition on defence matters, argued last weekend that we should have been better off with no carriers in the Middle East or anywhere else in the world except Lake Windermere.
    Dame Irene Ward: Never mind my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). May

    1803
    I ask the right hon. Gentleman to be a little more realistic about aircraft carriers? Will he bear in mind that though they may be very expensive to build they give a great deal of employment to shipyards where employment is very necessary? In the future the right hon. Gentleman might be very glad to have some aircraft carriers to fill our derelict shipbuilding areas unless he gets on with the proper job.
    Mr. Healey: I do not quite know what the hon. Lady's feelings are on this matter, but I think most hon. Members on both sides of the House would believe that while it is important to give employment to our shipbuilding yards we should not do so at the cost of £140 million a year to fulfil a function which can be fulfilled by other means.
    Mr. Murton: In view of Her Majesty's Government's apparent inability to look after our interests in the Middle East, would the right hon. Gentleman agree that a sea-based force would be very much more appropriate than a land-based force in a base rented from a sovereign State?
    Mr. Healey: I suggest that the hon. Member should have a chat with his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) on this matter and that, incidentally, he should try to find out the policy of Her Majesty's Opposition on the matter. In debates on many occasions in this House we have said that it is the view of the Government that the jobs which are now very well done by carriers, in so far as they will still require to be done in the later 1970s, will be more cheaply done by other means.
    Mr. Mayhew: Will the Secretary of State explain the advantages of the carrier for the Aden task over land-based aircraft which led to his decision?
    Mr. Healey: Both land-based aircraft and the carrier have been offered to go to Aden to fulfil certain functions in the months following independence. I really cannot understand, if I may put this gently to my hon. Friend, how he now argues that all our troubles in the Middle East are due to the fact that we had carriers available there during the crisis, when he resigned from the Government a year ago on the ground that we were not
    1804
    ordering a new aircraft carrier for use outside Europe.
    Mr. Robert Howarth: Can my right hon. Friend say what other European countries are proposing to build carriers in future?
    Mr. Healey: None to my knowledge.
    Earl of Dalkeith: What sort of crystal ball has the right hon. Gentleman used which leads him to recognise the need for carriers now and to the belief that circumstances will have so changed in a few years' time that it will not be necessary, bearing in mind that fighters operating from this country cannot replace the rôle of aircraft carriers, especially operating so far away as the Red Sea?
    Mr. Healey: I do not think I have a better crystal ball than the hon. Member, but the Government have a responsibility to make up their mind what sort of military tasks will make sense for Her Majesty's Government in 10 years' time. This is a very important consideration in deciding what weapons we shall then require. I have never denied the value of carriers while we have them. [Interruption.] Certainly—otherwise I would have been prepared to lay off the carriers last year, because they are costing a great deal to run even now; but I do not think it makes sense to incur the capital cost of a new carrier and equip it with aircraft when, as I said, all the functions can be carried out much cheaper in 10 years' time by other means.
    Mr. Wallasked the Secretary of State for Defence if he will state what service is to take over the rôle at present filled by the aircraft carrier in the late 1970s.
    Mr. Healey: I would refer the hon. Member to page 10 of Part 1 of the Statement on the Defence Estimates, 1966.
    Mr. Wall: Will the Minister not agree that the rôle of an aircraft carrier in the Indian Ocean cannot be undertaken by a small number of expensive American-built aircraft operating from mythical island bases, and that his decision to cancel the aircraft carrier replacement programme stems from the Government's desire to end all British commitments east of Suez?
    Mr. Healey: I wish the hon. Gentleman would have a chat with my hon. Friend the Member for Woolwich, East (Mr. Mayhew), who has always argued that we should not have cancelled the aircraft carrier because we intended to go on with the commitments. If the hon. Member for Haltemprice (Mr. Wall) asks me to agree with him, he knows that I do not. As I explained earlier today and on many occasions previously—we have debated this, and the House has taken a decision—the task which we foresee for the aircraft carrier in the late 1970s—when the new aircraft carrier, if commissioned and built after 20 years' delay and shilly-shallying by the previous Administration, would have come into operation—can be carried out more cheaply by other means.
    Mr. Mayhew: Is my right hon. Friend aware that all the experience of military operations in recent years proves that if we are to maintain a rôle east of Suez we must maintain a carrier force, and that having cancelled the carrier, the Government must now, in honour, run down their east of Suez commitment?
    Mr. Healey: The question of the Government's intentions and east of Suez commitments is one which we have often discussed, and which we shall be discussing later when the conclusions the Government have reached after consultations with their allies are put to the House, but I am grateful to my right hon. Friend for making it clear that he thinks we should have had an aircraft carrier. I only say that I find it difficult to understand why he should argue now that we should have no carriers in the Middle East, when he recently resigned from the Government, and made this clear to the public, because we did not order a new carrier.
    Mr. Humphrey Atkins: Does the right hon. Gentleman recollect that no fewer than four times today he has said that anything an aircraft carrier can do will be done more cheaply by some other means? Why, in that case, is he proposing to support Aden after independence with an aircraft carrier, instead of by some other means which would be cheaper?
    Mr. Healey: With respect, I did not say that. Perhaps the hon. Gentleman will listen to what I say. I said that the tasks
    1806
    which the carrier is now carrying out, and which will remain as the Government change their commitments during the 1970s, can be done more cheaply by other means. But the fact is that with regard to Aden we have an extremely efficient carrier force now, and I propose to use it whenever this can usefully be done. I do not think that it would make sense to start building now a new aircraft carrier for use in a completely different situation in 1975 to 1995 when, incidentally, we shall have left Aden.
    Sir Ian Orr-Ewing: Will the right hon. Gentleman say what are the other means which will be used to carry out these tasks, and has he given a brief to the Future Fleet Requirements Committee about what form of seaborne aircraft are to be used after 1975, when there will be no carriers?
    Mr. Healey: We have discussed this matter on many occasions. Some of the tasks of the carrier will be carried out by other ships; others will be carried out by aircraft from existing ships, or from new ones, and others will be carried out by aircraft from land bases. We have discussed this in detail. I know that some hon. Gentlemen do not agree with me, and I respect their views, but to suggest that we have not discussed this in detail is, frankly, to fly in the face of recent Parliamentary history.

    F111 Aircraft
    Mr. Martenasked the Secretary of State for Defence what arrangements have been made to replace the F111 aircraft in the event of natural wastage being greater than expected.
    Mr. Healey: None, Sir.
    Mr. Marten: Does the right hon. Gentleman recall saying on 31st May in this House that the number of 50 takes account of natural wastage and that he had no intention of having any more? If there were a disaster, a fire, explosion or sabotage, is it not utterly irresponsible to say that he would not buy more? Why did we not have a fixed price for this?
    Mr. Healey: Any Government deciding what aircraft to have for a good front line aircraft would have to make up their mind in the light of experience and information from manufacturers on the

    1807
    likely rate of wastage. I would be under heavy attack, and rightly, from hon. Members in all parts of the House if I ordered more aircraft than were wanted to meet the requirement.
    Mr. Goodhewasked the Secretary of State for Defence if the three per cent. per annum factor for inflation in the United States of America which is being applied to the Royal Navy Phantoms, is also being applied to the F111K at the date of delivery of the aircraft, or at the date when payment is due under the Military Aircraft (Loans) Act.
    The Minister of Defence for Equipment (Mr. Roy Mason): The increases in the cost of labour and materials subsequent to April, 1965 which will be included in the price of the F111K will be determined when the aircraft have been delivered.
    Mr. Goodhew: Can the hon. Gentleman assure the House that this inflationary factor will not be in excess of 3 per cent., which we were told recently?
    Mr. Mason: I cannot give that assurance, but it is likely to be round about that figure.
    Mr. Goodhewasked the Secretary of State for Defence what are the terms on which the United States Air Force is to be supplied with spares for its F111 aircraft, which are applicable to spares for the F111K aircraft to be supplied to the Royal Air Force.
    Mr. Mason: Contractual arrangements between the United States Air Force and the manufacturers of F111 spares do not fall within my right hon. Friend's responsibilities. As my right hon. Friend has told the House more than once, we shall get spares for the Royal Air Force aircraft, under the American co-operative logistics system, at the same price as is paid by the United States Air Force.
    Mr. Goodhew: Is the hon. Gentleman saying that because his right hon. Friend is not responsible for the rates paid by the United States Air Force he cannot tell us what these rates will be when we will have to pay them? When will the Government come to a conclusion on the cost of the F111? Is it not time that we had answers which disclosed information, instead of concealing it?
    Mr. Mason: We have always been very honest with the House with regard to F111 pricing—basic cost £2·1 million, then a supplementary ceiling to be determined, and then the cost inflation which will flow from it.
    Mr. Powell: When do the Government expect to agree the supplementary ceiling for the F111K?
    Mr. Mason: We have not determined it yet. I shall let the House know as soon as the figure has been agreed upon.

    Army Families (Accommodation)
    Mr. Monroasked the Secretary of State for Defence how many houses and caravans, respectively, and at what cost have been built or purchased this year for the use of Army families returning from overseas.
    Mr. Reynolds: A programme to build 3,300 married quarters at a cost of £12 million has begun; 4,060 houses are in process of purchase at a cost of £16·8 million; and 75 caravans have been bought at a cost of £73,000.
    Mr. Monro: Would it not have been much cheaper and more acceptable to leave our Servicemen and their families in Germany?
    Mr. Reynolds: Only a small part of this cost is related to the proposed withdrawal of one brigade from Germany. The bulk of the purchases and construction are for what are becoming known as Defence Review withdrawals. I cannot accept that £28·8 million to be spent on building houses for military or civilian use and available, for the next 60-odd years will be a waste.
    Mr. Lubbock: Is the hon. Gentleman aware that production of mobile homes or large caravans could be extended quickly and easily and if they were used for the housing of Servicemen's families they would not place an additional strain on the construction industry in building private dwelling-houses?
    Mr. Reynolds: I am aware that we could buy mobile homes or caravans. We have deliberately, and I think rightly, taken the decision that if soldiers are brought back or stationed in this country they should have as good housing as anyone else if we can provide it. We are

    1809
    therefore providing mobile homes or caravans only where no other satisfactory way of dealing with the problem is available.

    Scottish Infantry (Reorganisation)
    Mr. Monroasked the Secretary of State for Defence if he will make a statement on the reorganisation of the Scottish infantry.
    Mr. Buchanan-Smithasked the Secretary of State for Defence what consultations are taking place regarding the reorganisation of Scottish infantry regiments; and when he will announce details of the reorganisation.
    The Under-Secretary of State for Defence for the Army (Mr. James Boyden): Full details have already been given in the detailed statement on infantry reorganisation published in the OFFICIAL REPORT on 11th May. The present Lowland and Highland Brigades will form the new Scottish Division. Consultations are now taking place on the various methods by which this reorganisation will be implemented.
    Mr. Monro: Will the Minister reaffirm the statement given to me on 11th May in this House that the new organisation will not in any way affect the individual eight Scottish regiments?
    Mr. Boyden: It will affect them, but I certainly maintain what was said on 11th May.
    Mr. Buchanan-Smith: Will the Minister bear in mind the very strong territorial connections between all Scottish regiments and different areas of Scotland? Does he recognise that any attempt to reduce the number of regiments could have a very serious effect on recruitment in Scotland and would be very much resented by Scottish people?
    Mr. Boyden: I note what the hon. Member says, but the reorganisation is being made so as to make it easier to reduce or to increase the numbers.
    Mr. Powell: Does the hon. Gentleman deny that the principal motive of this reorganisation—whatever he has just said —is to facilitate the reduction and not the increase of the Army?
    Mr. Boyden: No, Sir. The right hon. Gentleman will no doubt be able to discuss this more fully in the near future.
    Mr. Monro: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I will raise the matter again on the Adjournment.

    R.A.F. Clothing Allowance
    Sir G. Nabarroasked the Secretary of State for Defence whether he is aware that Royal Air Force clothing allowances for male other ranks have been unchanged for many years at £l1 8s. 2d. per annum, whereas the cost of No. 1 home dress uniform is now increased from £8 7s. 2d. to £10 16s. 8d, of No. 2 home dress uniform from £3 16s. 11d. to £4 4s. 8d, of boots, general duty, from £1 16s. 4d. to £2 2s. 11d, of shoes from £11s. 4d. to £1 15s. 0d, of towels, hand, from 4s. 7d. to 6s. 2d, and of drawers, cellular, from 4s. 8d. to 6s. 6d; and why he has allowed these breaches of the Government's prices and incomes policy.
    Mr. Merlyn Rees: The clothing allowance does not form part of an airman's income. Its object is to ensure that he can obtain his Service clothing without charge to his pay. Both the allowance and the prices charged are reviewed every three years to ensure that the allowance serves this purpose.
    Such a review was completed early this year. The principal reason why the allowance was left unchanged, despite the increased charges to which the hon. Member refers, was that experience had shown that airmen were not finding it necessary to purchase two of the most expensive items—No. 1 dress and raincoats—as frequently as had been envisaged when the allowance was last reviewed.
    Service clothing is still obtained without a charge to airmen's pay.
    Sir G. Nabarro: Pay has nothing to do with it. If a man in the Services has had the cost of all his essential clothing raised by the scale indicated in the Question, which is up to 40 per cent., is it not reasonable that his clothing allowance should be commensurately raised?
    Mr. Rees: The Question refers to a breach of the prices and incomes policy, but the hon. Member now states that pay has nothing to do with it. No airman is worse off as a result of this. Over the years the cost of items—[Interruption.] As an ex-airman I understand this, but as an ex-sergeant major the hon. Member may not. The average airman knows the cost of items and how long it takes them to wear out. I assure the hon. Member that the airman is not worse off as a result of this and it is not a breach of the Government's prices and incomes policy.
    Sir G. Nabarro: A rotten answer from the Royal Air Force.

    Hong Kong (British Forces)
    Sir G. Sinclairasked the Secretary of State for Defence if, in the light of recent events in Hong Kong, he will make a statement on the strength and rôle of British forces there.
    Mr. Healey: The rôle of British forces in Hong Kong is to assist if necessary in maintaining internal security in the Colony and in its external defence. Recently, an additional battalion has been temporarily attached to the garrison. I consider that the garrison is of about the right size at present, in the light of all the circumstances.
    Sir G. Sinclair: As the Hong Kong Government are now facing the clear prospect that China will wish to stir up further local trouble, will the Minister ensure that the splendid Hong Kong Police, who did such a magnificent job recently, will when they next have to face internal disorder know that they have behind them in reserve the backing of a credible military force?
    Mr. Healey: I agree entirely that the Hong Kong police did a magnificent job in the recent disturbances. They did it knowing that they had behind them the backing of something like 10,000 British soldiers, who were never required to be used. We know that the situation remains a difficult one, and that is one of the considerations which led us to put a further battalion there.
    Mr. Rankin: Will my right hon. Friend keep before him the fact that the chief cause of industrial unrest in Hong Kong
    1812
    are the miserable conditions in which the great mass of the people in Hong Kong are living today, and will he not agree that the situation there is something which can be solved not by military means but only by political means?
    Mr. Healey: No one who has followed recent events in Hong Kong will believe that they had anything to do with industrial conditions there. Of course, industrial conditions there are not as good as we should all wish them to be, but the fact is that they are very much better than in most other Asian countries. It is an astonishing tribute to the success of British administration that Hong Kong has been able to absorb over 3 million refugees in the last 20 years and still provide them with work and living conditions which compare favourably with those in most of the rest of Asia.

    Far East (Discussions)
    Sir G. Sinclairasked the Secretary of State for Defence what discussions he has had with the Prime Minister of Australia during his recent visit here; and if he will make a statement on the rôles and future strength of British forces in Malaya, Singapore and Thailand.
    Mr. Dickensasked the Secretary of State for Defence what recent discussions he has had with the Australian and New Zealand Governments about defence in the Far East.
    Mr. Stratton Millsasked the Secretary of State for Defence what discussions he has had with the Governments of Australia, New Zealand, Malaysia and Singapore concerning mutual defence problems in the Far East.
    Mr. Healey: The discussions are principally concerned with our defence policy in relation to the Far East and the reductions that we propose to make in our forces in that area. The Prime Minister of Malaysia has only just arrived. I was talking to him this morning and during luncheon.
    The rôle of British forces in Malaysia and Singapore is to be available, if necessary, to meet our various defence commitments in the area. As I told the House on 1st May, we propose to make reductions in their strength over the next three or

    1813
    four years. I am not yet in a position to define these further.
    A Royal Engineer squadron in Thailand will be helping the Thai authorities throughout 1967 with a programme of road building. There is also a Royal Signals team, which provides our link between S.E.A.T.O. Headquarters and Singapore, and a few individuals on detached duty.
    Sir G. Sinclair: Will the Minister keep in mind the need to maintain our forces in Singapore and Malaya at a strength which will enable our allies in that area to gather their own defences for the needs of their region before he reduces them further?
    Mr. Healey: As the House knows, because I made a statement in the House after my return from the Far East in April, our allies are satisfied with the level of reductions which we propose to make in the coming year. I have been discussing with our allies the reductions which we propose to make in the years following that. I am well aware of the importance to maintain stability in the region and to conduct any rundown in a way which will enable the local countries to find other means of meeting their requirements, and for us to carry out our remaining commitments in the area.
    Mr. Dickens: Is my right hon. Friend aware that any decision which the Government make to withdraw military bases from Malaysia and Singapore will be warmly supported from these benches, and that any attempt to replace these bases by building equivalent establishments in Australia and New Zealand will be strongly opposed?
    Mr. Healey: I try my best to form a judgment about the views of my hon. Friends and those of right hon. and hon. Gentlemen opposite about all matters which we discuss. That is one of the factors which I try to take into consideration before I reach a decision.
    Rear-Admiral Morgan Giles: Will the Minister avoid making the mistake of announcing in advance definite dates for any reductions which he may have in mind?
    Mr. Healey: I do not know quite what the hon. and gallant Gentleman means
    1814
    by "the mistake". I suppose that he is referring to Aden, where the previous Government announced a date for independence before we came into power.
    Mr. Crawshaw: Is my right hon. Friend aware that, whatever the merit or otherwise of maintaining our forces in Malaysia, there is grave concern that by virtue of our commitments under S.E.A.T.O., we may find ourselves fighting a war in Thailand similar to that in Vietnam, which would be the wrong war at the wrong place at the wrong time? Would he reconsider renegotiating this Treaty?
    Mr. Healey: The way in which we meet our obligations to S.E.A.T.O., like the way in which all members of the S.E.A.T.O. Alliance meet their obligations, is under continuous discussion within the Alliance. But I can tell my hon. Friend, as I have said in the House on many occasions, that we have never been asked to provide combat forces to fight in Thailand.
    Mr. Powell: No doubt, the Minister has inadvertently fallen into error, but will he agree that at no time did the previous Administration fix a date for the withdrawal of British forces from Aden?
    Mr. Healey: I did not say so. If the right hon. Gentleman was a little less sensitive about this matter, he might have heard me say that the British Government fixed a date for independence in Aden.

    R.A.F. Station, Acklington
    Mr. Richard Wainwrightasked the Secretary of State for Defence for what purposes substantial sums are being spent on development of the Royal Air Force station at Acklington, Northumberland.
    Mr. Merlyn Rees: R.A.F. Acklington, which is situated in one of the least congested areas of U.K. air space, has a long-term rôle as a basic flying training school and we are replacing wartime buildings with permanent buildings.

    Indian Ocean (Personnel)
    Mr. Richard Wainwrightasked the Secretary of State for Defence what is the total number of British Armed

    1815
    Services personnel stationed in the British island bases in the Indian Ocean.
    Mr. Healey: There are no British island bases in the Indian Ocean. There are about 780 British armed Services personnel stationed at the Royal Air Force staging posts at Gan and Masirah; and about 220 at the Naval shore wireless station at Mauritius.
    Mr. Wainwright: Will the Minister tell the House what proposals the Government have for reducing these numbers to figures consonant with these being staging posts only?
    Mr. Healey: With respect, if the hon. Gentleman really thinks that it is possible to run a staging post for a variety of sophisticated modern aircraft on an island in the middle of the Indian Ocean with less than 780 British armed Services personnel, I should be very grateful to receive his advice.

    Anglo-French Variable Geometry Aircraft Project
    Mr. Wallasked the Secretary of State for Defence if he will make a further statement on the future of the Anglo-French variable geometry aircraft.
    Mr. Farrasked the Secretary of State for Defence when he anticipates that the Anglo-French variable geometry aircraft will go into production.
    Mr. Rankinasked the Secretary of State for Defence what further communication he has received from the French Government about the future of the Anglo-French variable geometry aircraft.
    Mr. Spriggsasked the Secretary of State for Defence what is the present position of the Anglo-French agreement on the variable geometry aircraft; to what extent he is consulting the British aircraft industry; and if he will make a statement.
    Mr. Healey: With permission, Mr. Speaker, I will answer Questions 31, 69, 73 and 86 at the end of Question Time.

    Royal Navy (Surface-to-Surface Missile)
    Rear-Admiral Morgan Gilesasked the Secretary of State for Defence what progress is being made with the de-
    1816
    velopment of a surface-to-surface missile for the Royal Navy; and when it may be expected to be in service.
    Mr. Mason: As I told the hon. Member for St. Albans (Mr. Goodhew) on 12th April, we are still considering the alternatives, but I hope we shall soon be able to announce a decision.—[Vol. 744, c. 1189.]
    Rear-Admiral Morgan Giles: Frankly, I do not understand that Answer. If the hon. Gentleman was answering the Question, will he say what purpose these missiles are intended to serve, and are they included among other means to which his right hon. Friend has constantly referred as replacements for the aircraft carrier?
    Mr. Mason: As the hon. and gallant Gentleman knows, we recognise that there is an urgent need for tactical strike capability. There may be a gap as the aircraft carrier falls out of commission, and we are giving urgent consideration to what type of weapons will be used, but this is tied up with the shape and size of the future fleet and its requirements. My right hon. Friend will be covering this in his statement before the House rises.

    Land, Northern Ireland (Mr. Shaun Quinn)
    Mr. Forrestasked the Secretary of State for Defence whether he will now arrange for a final settlement to be made to Mr. Shaun Quinn, Arboe, Dungannon, Northern Ireland, regarding lands held by his department and if he will make a statement.
    Mr. Reynolds: An offer was made to Mr. Quinn on 20th June; and payment will be made as soon as we have his acceptance.

    South African Navy (Ships)
    Mr. Boyd-Carpenterasked the Secretary of State for Defence since what date it has been the policy of Her Majesty's Government to ban the construction in British shipyards of ships for the South African Navy.
    Mr. Mason: 17th November, 1964.
    Mr. Boyd-Carpenter: Will the hon. Gentleman accept that he was a little unfair on 31st May to imply that this had

    1817
    been the policy of the previous Government? Can he now say what is the advantage, whether to the United Nations or anybody else, of a ban which does not deprive South Africa of these warships, but merely deprives British yards of the orders, to the benefit of the French?
    Mr. Mason: I am sorry the right hon. Gentleman thought that I misled him during the course of the last question and answer session, but the previous Government, of which he was a member, supported the United Nations Resolutions of 4th December. 1963, and 18th June, 1964, during the course of which the Resolution stated that we would cease forthwith the sale and shipment of arms. The difference between us is that we acted and have guts, whereas the previous Government did not.
    Mr. Powell: Will the hon. Gentleman be sure that he gets the record right in this matter? The previous Administration always made it clear that they held themselves free to continue to supply South Africa with arms which could not be used in any repressive context.
    Mr. Mason: The previous Government hedged it with qualifications, and we did not.
    Mr. Biggs-Davison: Is it not the case, to be practical, that the South African Navy is patrolling a vast area of ocean on behalf of the Western Alliance, and is it, therefore, not ridiculous to withhold from the South African Navy warships which other members of the Western Alilance, such as France, are willing to supply, and do?
    Mr. Mason: That is completely covered by the replies given by my hon. Friend the Minister of Defence for Administration.

    Indian Ocean (Staging Posts)
    Mr. Russell Johnstonasked the Secretary of State for Defence if it is intended that the installations on the island staging posts in the Indian Ocean should be of a permanent nature or only temporary pending the withdrawal of British forces from Singapore and elsewhere in the Far Eastern theatre.
    Mr. Healey: The installations at Gan and Masirah are of a permanent nature. No decisions have been taken to develop staging posts on other islands in the Indian Ocean.
    Mr. Johnston: May we be assured that the fact that the staging posts at Gan and Masirah are permanent does not mean that the Government have a very long-term policy decision for commitment to east of Suez defence?
    Mr. Healey: If I can track the direction of the hon. Gentleman's thought, certainly our possession of permanent facilities in Gan and Masirah does not restrict our ability to determine our commitments at any time as we think best.
    Mr. Driberg: Does my right hon. Friend's Answer refer also to H.M.S. "Mauritius", which he coupled with these staging posts in his reply to Question 30?
    Mr. Healey: Our facilities on Mauritius are of a different nature.
    Mr. Thorpe: Reverting to Aldabra, which I believe the right hon. Gentleman coupled with an earlier Question, can he confirm or deny that we have had to spend £200,000 on membranes to try to solidify the surface so that aircraft can land? It has been suggested that they can land only at low tide. Does this indicate some temporary or permanent intention to stay there at great public expense?
    Mr. Healey: The rumour to which the right hon. Gentleman has referred is totally untrue. The idea that Aldabra is covered at low tide was put about during a previous Administration by a party which felt that its interests might be affected if it were decided to develop a staging post on the island.

    Cocos Islands
    Mr. Thorpeasked the Secretary of State for Defence what joint facilities Great Britain shares with Australia in the Cocos Islands; and what proportion of the cost each country pays.
    Mr. Merlyn Rees: None, Sir.
    Mr. Thorpe: While thanking the Minister for the short and cryptic nature of

    1819
    his reply, may I ask whether we can take it that no public funds are expended on the Cocos Islands for defence purposes?
    Mr. Rees: If at any time, and it is very rarely, an R.A.F. aircraft lands there, we pay for the petrol.

    Thailand (Royal Engineers Detachment)
    Dr. Winstanleyasked the Secretary of State for Defence how long it is intended that the Royal Engineers detachment which recently completed the construction of an airfield in Thailand will remain there; and what is the cost involved.
    Mr. Boyden: The Royal Engineers are helping the Thai authorities throughout 1967 with a programme of road building. The full cost of the R.E. detachment is about £850,000 a year, including £165,000 for the extra cost of these troops being stationed in Thailand which is reimbursed to the Ministry of Defence by the Foreign Office.
    Dr. Winstanley: I thank the Minister for that answer, but will he make it clear that this enterprise is not in any way some kind of concealed subsidy for the American effort in Vietnam? Will he state clearly the purpose of this airfield?
    Mr. Boyden: The airfield is support for our ally in S.E.A.T.O., and was a gift to the Thai Government. The airfield lacks facilities for operational use by medium-sized strike aircraft of the type being used by the Americans in Vietnam.
    Mr. Frank Allaun: Is not the involvement of British forces there and elsewhere in the Far East of tiny value to America, but designed to add respectability to American military adventures throughout Asia?
    Mr. Boyden: No, Sir. It is for the assistance of our S.E.A.T.O. ally—for communications. The road building and airfield are for the same purposes.

    Officers and Other Ranks (Redundancy)
    Dr. Winstanleyasked the Secretary of State for Defence if he will state the number of officers and other ranks now
    1820
    on paid leave as a result, of redundancy; and if he will make a statement.
    Mr. Reynolds: About 80 Army officers are at present without employment, but this is not exclusively on account of redundancy.
    Dr. Winstanley: I fully accept the need to discharge our liabilities to redundant Service personnel of all types, but does not the Minister agree that the figures he has given suggest that there is now a need to reduce the ceiling strengths of the various Services, so that this is not a continuing problem?
    Mr. Reynolds: This is the type of question that has been put to my right hon. Friend on several occasions today, in reply to which he has stated that he hopes to make a statement in due course.
    Sir T. Beamish: Has a decision been reached about compensation for officers and other ranks who are already redundant or will become redundant as a result of reorganisation of the Armed Forces?
    Mr. Reynolds: The decision is taken, but a great deal of detail is now being worked out and I hope that we shall be able to give the details when my right hon. Friend makes his statement later this month.

    Zambia (British Forces)
    Mr. Evelyn Kingasked the Secretary of State for Defence how many British Service men are seconded for service in Zambia; and what is the nature of their duties.
    Mr. Reynolds: No British Service man is seconded to the Armed Forces of Zambia, but we have a training team there of 187 all ranks.
    Mr. King: Does not the Minister agree that we are no longer an imperialist Power, and that stationing British troops in African States in Central Africa serves no purpose, and could be dangerous?
    Mr. Reynolds: This is the result of a recently agreed joint agreement between Her Majesty's Government and the Government of Zambia, and it is considered to be in the interests of both parties to the agreement.

    V-Bombers
    Mr. William Hamiltonasked the Secretary of State for Defence what is the rôle of the V-bombers in the context of the new policy for Aden; how many aircraft will be involved; with what types of weapons they will be armed; and what is the additional cost involved compared with the present rôle of the bombers.
    Mr. Healey: The rôle of the V-bombers would be to provide a powerful deterrent which any potential aggressor would have to take into account. They would be armed with conventional weapons. No significant additional costs would arise from stationing the aircraft at Masirah.
    Mr. Hamilton: Can my right hon. Friend visualise a situation in which we will go it alone with V-bombers? How does he see their rôle, as against guerrilla operations in this area?
    Mr. Healey: As my right hon. Friend the Foreign Secretary has made clear, there are many potential threats to the State of South Arabia when it becomes independent next year. One is the threat of direct military attack by forces now stationed in the Yemen. I believe that the presence of aircraft carriers off Aden and the V-bombers at Masirah, some distance away, will act as a very powerful deterrent to this kind of attack.

    Fast Patrol Boat "Ferocity"
    Mr. Murtonasked the Secretary of State for Defence in what circumstances his Department hired the fast patrol boat "Ferocity" from a south coast shipbuilding firm.
    Mr. Foley: The "Ferocity" was required to replace a Royal Navy fast patrol boat which had to be withdrawn from an important trial at short notice.
    Mr. Murton: Is it not a fantastic situation that we are now reduced to the state of having to rent boats?
    Mr. Foley: It was a question whether we should cancel an important exercise because of the failure of one boat and its not being available. We decided to improvise and to hire one. This is the first occasion it has happened, and I hope that it will never happen again.

    Armed Forces (Freemasons)
    Mr. Alfred Morrisasked the Secretary of State for Defence if he will institute an inquiry by a person or persons from outside the Services into the number and ranks of freemasons in the Armed Forces.
    Mr. Reynolds: No, Sir.
    Mr. Morris: Is my hon. Friend aware that there is some concern about this matter, especially about promotion, and the extent to which freemasonry may affect it? Will he agree to keep the matter under constant review?
    Mr. Reynolds: I am not aware that there is any concern in this matter. I have not encountered it during the two-and-a-half years that I have been at the Ministry of Defence, but if my hon. Friend has any other information I shall be grateful if he will send it to me.

    Majunga (R.A.F. Detachment)
    Sir F. Bennettasked the Secretary of State for Defence when the Royal Air Force base at Majunga, Madagascar, was established; for what purposes; for how long it will continue; what is its annual cost to the Exchequer; and what has been the total cost of its establishment and maintenance to date.
    Mr. Merlyn Rees: There is no Royal Air Force base at Majunga. A small detachment of Shackleton aircraft was sent there in March, 1966, to assist the Royal Navy's Beira patrol by carrying out aerial surveillance of the Mozambique Straits. The additional cost of operating the aircraft from Majunga during the first year of its existence was about £175,000; and to date the total additional cost has been about £230,000. There is no plan to withdraw the detachment.
    Sir F. Bennett: Can the Minister tell the House how much petrol has been prevented from reaching Rhodesia by this method which has not reached it overland by other methods? If he says there is no plan to remove this patrol at present can he say whether it will be weeks rather than months before this patrol is withdrawn?
    Mr. Rees: There is no plan to withdraw it. I cannot give the figure asked for. All I know is that petrol in Rhodesia is rationed and the price has gone up. This is not wishful thinking. Petrol is rationed and has risen in price from 4s. 9d. a gallon to 6s. or 8s. a gallon.
    Mr. Hastings: Has the Minister any other plans with regard to Rhodesia?
    Mr. Rees: The only plans are that we would like to see the illegal régime ended, and not receiving support from hon. Members who ought to know better.
    Mr. James Johnson: Will the Minister bear in mind that it might be useful if we could have some force in Madagascar in the event of possible difficulties in Mauritius due to the activities of the Opposition in the coming elections?
    Mr. Rees: I do not think that that arises out of the Question.

    Malta
    Sir F. Bennettasked the Secretary of State for Defence what net saving he estimates will be achieved in the current financial year as the result of the recently accelerated re-phasing of the run-down of United Kingdom forces in Malta.
    Mr. Healey: I would refer the hon. Member to my reply to the hon. and gallant Member for Winchester (Rear-Admiral Morgan Giles) on 31st May.—[Vol. 747, c. 84.]
    Sir F. Bennett: I cannot recall that exact answer, but can the Minister say whether the saving will exceed or be less than the cost of maintaining the new base at Majunga, about which we have been talking? Can he give the comparative costs?
    Mr. Healey: Without notice I cannot say what is the cost of the base at Majunga. [HON. MEMBERS: "We have just been given it."] I apologise. I was so intent on being able to give an adequate answer to the hon. Member that I failed to hear my hon. Friend give that answer in reply to an earlier Question. I can say that the saving will be substantially larger, but I would also make the point that we are running down our facilities in Malta because we think that there is no military and political purpose to be served by keeping them there. The case for our expenditure in Majunga is to serve purposes
    1824
    in accordance with a Resolution of the United Nations, and I had hoped that this was in accordance with the views of the vast majority of hon. Members on both sides of the House.
    Mr. Maudling: In view of the serious effect upon Malta of the closure of the Suez Canal, is the Secretary of State giving any further consideration to ways in which this country can help Malta?
    Mr. Healey: We are considering the problems that Malta is likely to undergo as a result of current events.

    Army Legal Services (Officers' Pay)
    Mr. Longdenasked the Secretary of State for Defence if he is now able to make his promised announcement about the pay of officers in the Army legal services.
    Mr. Reynolds: Yes, Sir. Revised pay scales which represent increases in basic pay comparable with those of the Civil Service legal service are being introduced from an operative date of 1st October, 1966. In accordance with the Government's policy for the implementation of pay awards in the public sector, payment of the new scales will be phased, a 5 per cent. increase retrospective to 1st October, 1966 being paid in July, 1967 and the balance in January, 1968.

    R.A.F. Station, Leconfield
    Mr. James Johnsonasked the Secretary of State for Defence what are his future plans for the use of Leconfield Aerodrome.
    Mr. Merlyn Rees: R.A.F. Leconfield will continue to be occupied by No. 60 Maintenance Unit which repairs and salvages R.A.F. aircraft.
    Mr. Johnson: I thank the Minister for his reply. Will he bear in mind that this airfield, which is an excellent one, might, at some future time, be of use to the municipality of the City of Hull? In view of the difficulties that are being experienced by another airfield owned by Hawker Siddeley, this may, perhaps, well be so. Will my hon. Friend bear this suggestion in mind for the future?
    Mr. Rees: I will always be prepared to discuss, in conjunction with the Board of Trade, any possible use of the airfield by the City of Hull.

ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT PROJECT
Mr. Healey: I will, with permission, now answer Questions Nos. 31, 69, 73 and 86.
The French Government have informed Her Majesty's Government that they have decided that for budgetary reasons they must withdraw from the Anglo-French variable geometry aircraft project. They have been forced to take this step solely because of the pressure on their budget for a number of years ahead; full agreement was reached on the specification, the development cost, and the production cost of the aircraft. M. Messmer has assured me that the decision will have no effect on the French attitude towards the other projects, both civil and military, on which agreements have already been reached, or indeed towards the possibility of further collaboration in the future.
Her Majesty's Government have received this decision with great regret. It raises a number of fundamental issues. We are now giving urgent consideration to all aspects of the new situation, including the industrial and military implications, possible alternative ways of replacing the V-bombers in the conventional rôle in the mid-70s and the possibility of collaboration with other countries. In the meantime, in order to preserve as wide a range of options as possible, we are authorising British firms to carry out a project study on a variable geometry combat aircraft to a modified specification. Exploratory talks with potential partners will be held as soon as possible.
I will, with permission, circulate in the OFFICIAL REPORT the joint communique reporting the outcome of my meeting last week with M. Messmer which is being issued this afternoon.
Mr. Wall: Would not the right hon. Gentleman agree that the Opposition have been continually saying to him that there is great uncertainty over this project? Having cancelled the TSR.2, and now the A.F.V.G., which, in the words of his White Paper, was to be the core of our long-term programme, would he not agree that the whole of our Defence Review has been shown to be completely "phoney"? What is he going to do about it?
Mr. Healey: I think that on reflection the hon. Gentleman—who normally takes these matters with great seriousness—will regret the words he has used and will particularly regret attempting to attract some petty party advantage—[Interruption.]—that is what it is; a party advantage—out of what is a very serious matter, not only for Britain but for Europe as a whole.
To answer the particular points he raised, I have been repeatedly and, in my view, rightly urged by hon. Gentlemen opposite to try to make a success of Anglo-French co-operation in the aircraft field. If I have failed, that is not my fault. [HON. MEMBERS: "Whose is it?"] I do not believe that anybody will be able to maintain that Her Majesty's Government share any aspect of the responsibility for the decision which the French Government, on purely financial grounds, have found it necessary to take. As for the policy of Her Majesty's Government in the Defence Review, the hon. Gentleman's statement was so ludicrously extravagant that I shall not bother to reply to it.
Mr. Farr: Is the right hon. Gentleman aware that after this gross miscalculation there is no one on this side of the House who can have the slighest confidence in any future plans which he may outline? Will he consider whether it is possible to have a 100 per cent. British alternative flying by the late '70s to try to retrieve the position?
Mr. Healey: To answer the hon. Gentleman's remark about a miscalculation, I hoped and believed, as the Front Bench opposite expressed itself as hoping and believing, when we started this project that we would be able to make a success of a major new Anglo-French venture in the sphere of advanced combat aircraft. If hon. Gentlemen opposite think that we made a mistake to try to do that, they should have said so at the time, and they should have given us some alternative way of meeting both our military and operational requirement.
To answer the hon. Gentleman's question about a purely British aircraft to meet the requirement, let me say straight away that the Government are now reexamining very closely—
Sir Frederic Bennett: The TSR2?
Mr. Healey: With respect, if we had gone ahead with the TSR2 programme as the former Conservative Government had conceived it, not only would we have been bankrupt on defence by now, but we should have had no money in the kitty whatever to support any research and development project in the next six years for any aircraft for our own industry.
On the question of a British aircraft, we are, of course, re-examining the operational requirement, in terms of scale and characteristics, for supplementing the Fl11 forces in the late 70s in the light of our tasks and commitments as they are emerging from our consultations with our Allies and Commonwealth partners. If we find, as a result of this examination, that the best way of meeting this requirement is to produce a British aircraft, perhaps in collaboration with others, then we shall recommend this to the House.
Mr. Rankin: Is my right hon. Friend aware that all that he does to secure cooperation between Britain and France in joint aircraft projects, particularly towards peaceful evolution in Europe, will be warmly supported by those of us who believe in the Common Market? However, is he further aware that any attempt to replace the joint British-French V.G. project by a return to America for more Fills will be bitterly resented by a good many hon. Members in this House, and will be consider—
Mr. Speaker: Order. The hon. Gentleman must be fair. I want to give a number of hon. Gentlemen an opportunity to ask questions. Questions must be reasonably brief.
Mr. Rankin: Would not my right hon. Friend consider that the funds released would be better employed in going ahead with the BAC211?
Mr. Healey: With respect, I think that on reflection all Members of the House on both sides of the Gangway would wish that I, as Secretary of State for Defence, would put as my first objective meeting all the operational requirements of our defence forces as we foresee them in the light of our likely tasks in the later 1970s. I hope there will be no disagreement between us on this. I do not see the BAC 211, excellent aircraft though this is, fulfilling the Royal Air Force's
1828
operational requirements for strike and reconnaissance.
Mr. Spriggs: In view of his statement, will my right hon. Friend remember that the British aircraft industry has proved itself as a world leader in aircraft production, and will he take this into consideration when consulting the industry before making any future plans?
Mr. Healey: Yes, Sir, and, of course, industrial considerations are very much in the forefront of my mind. However, as I say, I also have responsibility to the House and to the taxpayer to ensure that we meet our operational requirements as effectively and as cheaply as we can. As I say, we are now looking at the operational requirements. We are having another look at these in the light of the evolution of our policies as a result of our recent consultations, and we are also looking at various possible ways of meeting the requirements.
Mr. Powell: There will, of course, have to be a full debate in the House about the wreckage of the Government's defence policy. But is the right hon. Gentleman aware that he cannot disavow, as he attempted to do just now, responsibility for having made aircraft which will not come into existence at all the core of this country's long-term defence and industrial aircraft programme? Is he not ashamed that he should have rested the future of the Royal Air Force on a bluff that was called and a gamble that did not come off?
Mr. Healey: I look forward with delight to another debate on aircraft with the right hon. Gentleman. I very much enjoyed the last one, and so did my hon. Friends, and I look forward to the next. However, on the question of the future needs of our aircraft industry and the Royal Air Force, the whole of the Opposition Front Bench supported me in trying to achieve the proposed Anglo-French aircraft, and I think it shows a very shabby and sordid side to them that they should now attempt to draw a petty party advantage. [HON. MEMBERS: "Resign."] The shouting of "Resign" by hon. and right hon. Gentlemen opposite will do them no credit in the country when the country comes to look into this. As I say, I look forward very much to another opportunity to trounce the right hon. Gentleman on the Government's aircraft programme.
Mr. Lubbock: Is the Minister aware that those who believe, as we do, in the retention of European capabilities in these fields of advanced technology will be dismayed at the decision made by the French Government? May I ask him whether he will give an undertaking that no further F 111s will be purchased, as demanded by his hon. Friend the Member for Glasgow, Govan (Mr. Rankin), and has he considered the design studies carried out some time ago by the English Electric Company based on the jointly-developed Rolls Royce-Man turbomotoren engine that would have been suitable for this requirement? If we cannot co-operate with the French in developing such an aircraft, can we at least make an attempt to do so with the Germans?
Mr. Healey: I am, of course, and have been for some time, in close contact with a number of potential collaborators who might have collaborated with us on the Anglo-French variable geometry project if the French had not decided at this late day for financial reasons to withdraw. I am anxious to explore this possibility before coming to a final decision. I am particularly anxious that we shall retain our option to develop such an aircraft. It is for this reason that we are ordering a project study by British firms of a variable geometry aircraft to a modified specification. I think that this is only sensible, as I hope the House will agree. But the decision that we finally take must be determined by the defence and industrial benefit that we get in return for a given expenditure, and until we have had a very careful look at this question I do not propose to rule out any option.
Mr. Robert Howarth: Can my right hon. Friend say what effect, if any, this will have on the helicopter agreement with the French? To my mind, the agreement seemed to offer the French a particular advantage, and it could be that it ought now to be looked at again.
Mr. Healey: The French Government have indicated their firm intention to proceed with the joint production of three helicopters as planned, but we shall be studying this matter further later in the year. I am deeply concerned, as I think the whole House will be, in the light of our experience with the variable
1830
geometry project, to make absolutely certain that the continuation of the helicopter package will involve industrial, operational and economic advantage for the United Kingdom which is totally commensurate with that derived by France.
Mr. Shinwell: Do I understand from what my right hon. Friend said that because of failure due to the budgetary and apparently impoverished position of the French Government he now intends to proceed with discussions with Commonwealth countries with a view to proceeding with a project of this character? Does he realise that many of us regard him as quite blameless in the matter and will be delighted to find that he is turning his mind away from a country associated with the Common Market and in the direction of the Commonwealth?
Mr. Healey: My right hon. Friend will not expect me to endorse all the sentiments that he expresses, although I deeply appreciate the thought which lies behind them. There are a number of countries in Europe and outside with which it may be possible to agree on the development of a common aircraft, and we are urgently considering the possibilities. I do not want at this stage to rule out any possible option of solo production, collaborative production or, if this turns out to be the only reasonably economic way of meeting our requirement, purchases from abroad, but I think that the Government, in the light of this very disappointing decision by the French Government, must have an opportunity to explore the requirement and the various ways of meeting it before taking a final decision.
Sir A. V. Harvey: Will the right hon. Gentleman consider publishing a White Paper giving all the facts leading to the breakdown of these negotiations? Is he aware that until a fortnight ago he was brazening out his optimism about the project when everybody else knew that it was not coming off? Is he aware that he has shown a complete dereliction of duty as Her Majesty's Secretary of State for Defence?
Mr. Healey: I really feel that that was a rather trashy remark. On the question of the facts, I have given the facts to the House whenever I have been able to

1831
produce them. In May last year the French Government told me that they might run into financial difficulties on the phasing of expenditure. I worked very hard for nine months to see whether we could find a way round that difficulty. In January this year I was assured by the French Government that that difficulty had been overcome, and I told the House so at the time. I was congratulated by hon. Members on both sides on this achievement. Since January the French Government have had second thoughts about the requirement, and, of course, have had a General Election. I discussed the problem of the requirement, and total agreement on it was reached by myself and M. Messmer, who—I should like the House to recognise this—has behaved throughout as a good and trustworthy colleague. In fact, I could not wish to collaborate with a more valuable partner on a project of this nature.
When the French Government decided after the election that they must make substantial cuts in their expenditure both civil and military and decided that this project was one which must be cut, they took this decision after agreeing the new requirement as M. Messmer and I had agreed it and after agreeing that the cost estimates for research, development and production as put to them by M. Messmer were themselves accurate and reasonable. I regret this decision, but if right hon. and hon. Gentlemen opposite can explain to me why Her Majesty's Government are blameworthy for the decision, I shall be interested to hear.
Mr. Edelman: Is my right hon. Friend aware that the unhappy decision on the part of the French to withdraw from this project will deal a very heavy blow to the British aircraft industry in the 1970s and also to Anglo-French relations, and will he not ask the Prime Minister to raise the matter at the very highest level—as the President of France did when it was thought Britain would cancel Concord? Finally, would he himself make clear what is meant by an "all British" aircraft? Is not the case that the Home Secretary when Minister of Aviation said that never again would Britain produce a highly sophisticated technological aircraft?
Mr. Healey: On the first question, I really do not think we should be right
1832
to draw great political conclusions from the decision which the French Government thought it necessary to take, particularly in the light of the fact that I have been assured in the most absolute terms that it is the desire of the French Government to continue collaboration on other projects. I would say to my hon. Friend—and knowing he will appreciate the importance of the point I am about to make—that the industrial problem for the French aircraft industry is quite as serious as the problem for ours, because it has been made clear to me that the French Government have no intention of proceeding with developing the experimental IIIG aircraft into an operational aircraft, or indeed of producing any variable geometry combat aircraft in the rôle we were jointly discussing with each other. This does face them with very serious problems, problems which are both operationally and industrially quite as serious as those which face the United Kingdom.
Mr. Onslow: Since the possibility that the French would take this decision must have been known to Ministers and might have been expected for some months now, would the right hon. Gentleman tell the House what contingent planning has taken place in advance? Why has it not been possible to bring it much further forward, and how much longer does he expect to take over it?
Mr. Healey: First of all, because, for the reason suggested by my hon. Friend the Member for Coventry, North (Mr. Edelman), there are very powerful reasons which were outlined in the Plowden Report against this Government undertaking on their own an advanced combat aircraft for the later 'seventies. I would wish, before considering such a decision, to explore the possibility of collaboration with other countries on such an aircraft, but I have not been able to discuss with other Governments the possibility of such co-operation until the French Government had taken their decision.
Mr. Ronald Atkins: Does my right hon. Friend agree that if international cooperation fails any military aircraft which are required should be British-built and British-designed, and that to rely on the supply of sophisticated foreign aircraft is

1833
a danger to an independent defence policy?
Mr. Healey: No, I cannot agree with that as a general principle—nor can right hon. and hon. Members opposite, who decided to buy the Phantom for the Royal Navy when they decided not to buy the P1154 in that particular rôle. What I think we must all accept—and I hope the House will treat the problem with the seriousness which it deserves—is that advanced combat aircraft are very expensive indeed to produce, and an advanced combat aircraft for a country with a very small national requirement is a matter which would require the most careful consideration. I thought both sides of the House agreed when we discussed this matter in a more dispassionate atmosphere a year ago that this type of production, if it can possibly be organised, should be organised on an international scale so that the size of the ultimate market bears a reasonable relation to the amount of research and development expenditure involved. With respect to right hon. and hon. Members—I know how strongly they feel about this matter—I think I should be betraying my duty to the taxpayers and to the electorate and to the country if I decided without examination of all the possibilities to go from one particular option to another.
Mr. Hugh Fraser: Has the Minister, in his cordial relations with M. Messmer, learned the phrase qui s'excuse, s'accuse? Furthermore, would he now be in a position to publish a White Paper with the alternatives put before this country quite clearly? As so many people in the Royal Air Force and the House of Commons, including myself, believed that this project would not come off, surely there must have been contingency planning going on in the Defence Department, and surely it is time that it should be published, and published quickly?
Mr. Healey: I recognise the depth of emotion which made it difficult for the right hon. Gentleman to get his first phrase out. Of course, before the Government finally take a decision, or when they finally take the decision, they will explain all the considerations which led them to take that decision.
Mr. Orme: Is my right hon. Friend aware that not everybody on this side will view this with dismay? If the French
1834
have got a problem in relation to finance, so has Great Britain. This aircraft is needed for a world military rôle. Therefore, should we not review our world military rôle rather than look at the future of British aircraft which we shall not need if we contract our present position in the world?
Mr. Healey: I recognise the depth of feeling of my hon. Friend and of some of those who feel like him. This is one of the matters which make me and the Government as a whole very anxious to consider the operational requirement, the various ways of meeting it, and the cost in relation to industry and military benefit before taking a decision. It may further interest my hon. Friend to know that the reason why I was unable to meet M. Messmer earlier than last Thursday was that he was visiting French troops east of Suez.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order.
Mr. Emrys Hughes: On a point of order. In view of the unsatisfactory nature of the reply, I wish to give notice that I will raise the matter on the Adjournment.
Mr. Speaker: The House is grateful to the hon. Member for a worth-while contribution.
Following is the Joint Communiqué:
Mr. Denis Healey, Secretary of State for Defence, Mr. Stonehouse, Minister of State for Technology, and M. Messmer, the French Minister of Defence, met in London on 29th June.
2. M. Messmer informed the British Ministers that the French Government had been forced to make a number of budgetary economies and in particular in the defence field to withdraw from the Anglo/French Variable Geometry aircraft project which was being negotiated.
3. This decision, which has been taken on purely financial considerations, has no effect either on the agreements already reached on the other aeronautical programmes, or on the possibility of new agreements.
4. The Ministers signed supplement number three to the Memorandum of Understanding of 17th May, 1965, authorising the second stage of the development programme for the Jaguar.
5. The Ministers decided to hold a meeting in September to discuss the progress of the collaborative helicopter programme.

BUSINESS OF THE HOUSE (SUPPLY)
Ordered,
That this day Business other than the Business of Supply may be taken before Ten o'clock.—[Mr. Crossman.]

ORDERS OF THE DAY
  SUPPLY
  [23RD ALLOTTED DAY] [2nd Series]
  SUPPLY

    SCOTLAND (INDUSTRY AND EMPLOYMENT)
    3.58 p.m.
    Sir Keith Joseph: I beg to move,
    That this House regrets that Her Majesty's Government has not taken the action which is urgently required if Scotland is to make the economic progress that is essential for her future prosperity and development.
    It is for me a matter of pride to be taking part in a debate on Scotland. I know very well that a large number of my hon. Friends have a great deal of trenchant comment to make on Government policy, and I shall not attempt to cover any detailed points which they will want to make. May I first declare a personal interest: two companies with which I am connected are active in Scotland.
    This Motion deplores the lack of effective action by the Government to meet Scotland's troubles, but nothing would be gained by pretending that the job of any Government is easy in this respect. Scotland had a very heavy preponderance of outdated and heavy industry and an inheritance of housing and other social assets which, after the war, rapidly became obsolete. It was the skill of Conservative Governments during their 13 years of power which set in hand the transformation of the Scottish economy and notably shifted the balance of industry from heavy and old-fashioned to modern and sophisticated. In the same way, the transformation of housing and social environment was begun.
    However, a great deal remained to be done when we gave up power in 1964. I repeat that it is not easy for any Government to achieve this transformation and certainly not to do it quickly. Nor is it easy for work to be taken to the workers. We are one of the few great industrial economies which deliberately seek to take work to the workers, but we should not conceal from ourselves that this can be an inherently difficult operation.
    1836
    The Secretary of State said in August, 1966:
    "Scotland is in a far better position today than it has ever been."—[OFFICIAL REPORT, 2nd August, 1966; Vol. 733, c. 378.]
    This was nearly a year ago. He went on to say that he paid full credit to my right hon. Friend the Member for Argyll (Mr. Noble) and previous Secretaries of State. That was a very proper tribute. Unfortunately, I cannot reciprocate it. It is not possible to say today that Scotland is in a far better position than it has ever been.
    Our debate is about jobs and industry, but there is a vital social background. There is desperate need for modern housing in Scotland and we know that the Government have twice failed to achieve their annual target, although we hope that they may succeed this year. School building is lagging, against a background of a rising school leaving age in 1970 and a rising child population.
    There has been neglect of ports and airport development. The Government's Scottish White Paper made no mention of Common Market prospects, which should have led them to put money and investment into the relevant ports and airports for eastward communications.
    After acknowledging the importance of this background, I turn to jobs and industry, and I shall not embark on selective statistics. We are only too familiar with the bellicose evasiveness of the Secretary of State and we are sure that he will give us—we hope not, but fear so—a great sheaf of selective statistics. Unfortunately, the position is only too clear and only a very few statistics will show it.
    Only three years after a change of Government, there is a risk of double counting, with both parties seeking to claim credit for some successes as being attributable to them, but there can be no dispute about these two figures. Between 1960 and 1964, 157,000 new jobs came into being in Scotland. They were real new jobs. The Government's White Paper estimated that, in the corresponding period, 1965–70, there would be 130,000 new jobs, or about 30,000 less than Conservative Governments had achieved.
    But the estimated jobs in the White Paper were of course only "paper" jobs and the events of the last year make them

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    highly improbable of achievement. Thus, on the sheer count of job growth comparison, this Government have much to be ashamed of already. During the time of Conservative Governments, Scotland virtually monopolised the influx of American companies with their high capital investment, great management skill and the corresponding benefits for Scotland. Scotland also received more English companies than any other assisted area and gained more migrant jobs than any other except the North-West.
    That excerpt from a Glasgow University survey sets a standard by which the present Government's performance must be judged. Scotland is not a closed economy. We must recognise that it is interdependent with the United Kingdom. Therefore, what is vital is the Government's success or failure in running the whole national economy. In 1964, the Socialist Government inherited a boom, which was not out of control. If anyone wishes to deny that, let him look at Paragraph 7 of this Government's White Paper of 26th October, 1964, which says:
    "Apart from special problems of individual areas, there is no undue pressure on resources calling for action ".
    So they inherited a boom which was not out of control, and this was as true of Scotland as of the whole United Kingdom.
    Therefore, the growth of jobs in 1965 and early 1966 was a legacy of conditions under a Conservative Government and it is no use this Government claiming credit for that harvest. Ships coming off the stocks now were ordered when my right hon. Friend the Member for Wallasey (Mr. Marples) was Minister of Transport—[An HON. MEMBER: "Rubbish."]—the hon. Gentleman says, "Rubbish", but it is undeniable that the harvest of ships now being completed was ordered under the previous Government.
    The Socialists stoked the boom instead of damping it and then, when they recognised that they had misjudged the economic climate—[Interruption.]—if the Secretary of State wishes to interrupt, perhaps he will make it plain. When they belatedly recognised that the economy was running too fast, they began a series of furtive efforts, made abortive by their constant double-talk and clumsiness, to
    1838
    suppress the boom, but they continued to take credit for the superficial advantages which were by-products of it.
    They inherited a boom, and, by their failure to keep it under control, they turned it into a slump; that is our charge against them. We all know the consequence of this failure of economic mastery. We remember the humiliation for the Government and, alas, for the country, of 20th July, 1966. They allowed the boom to get out of normal control during that time when, in the Foreign Secretary's importal words, "They were running the economy as no economy had ever been run before." The prosperity of 1965 and early 1966 in Scotland was due to overheating of the whole national economy rather than to any notable regional planing by the Government.
    This party of planners totally failed to see the rocks for which they were heading, and of which they were constantly warned from this side of the House. Far, far, too late, and therefore far more sharply than would have been necsssary had they acted earlier, the brakes were applied and now Scotland is in trouble. Momentum and confidence are gone and all the fine words and promises and plans of the Secretary of State are swamped by rising tides of the triple evil of Scotland—unemployment, emigration and depopulation. My hon. Friends, with their local knowledge, will provide the stories of the effect of these problems on individual areas which have been worse hit. The facts are undeniable. Unemployment is relatively high, and a relatively high proportion of unemployment is relatively long. Combined with those two facts, there is the fact that there are in some areas acute shortages of skill.
    Net emigration is at record levels.
    Mr. George Willis: Selective figures.
    Sir K. Joseph: The figures bear out all these assertions. In June, the latest month for which figures are available, there were 73,000 wholly unemployed, excluding school leavers, which made a seasonally adjusted percentage of 3·7. The underlying movement is upwards, with an average monthly increase of 2,600 in seasonally adjusted unemployment. It was the Prime Minister who, when he spoke in Scotland in March,

    1839
    1966, called a level of 3·6 per cent.—0·1 per cent. below the present figure—intolerable.
    The question we want the Government to answer is: how much higher will the figure go? We know from the record of past squeezes that there is normally a lag of 21 months between the impact of the squeeze and the peak of its economic effect. We would therefore expect unemployment to reach its peak level in February, 1968. We ask the Secretary of State to tell us what he expects unemployment to be in that month, given normal winter conditions.
    I am sure that the right hon. Gentleman will remember now, if he has not remembered before when misusing statistics against this side, that in the winter of 1963 we had abnormally severe weather conditions. We certainly hope that the Government and the country will not face another 1963 winter. But even without such bad weather, unemployment may well be much higher than it is now, and we want to know the right hon. Gentleman's estimate of the figure.
    It is not only the number of unemployed but the length of the unemployment. In Scotland, there is still a lead in this respect. There are more people unemployed for over eight weeks there than in the United Kingdom as a whole, and we all realise that but for emigration the unemployment figures would be far, far worse than they are now.
    Emigration is running at rising levels. We know some of the reasons for it. We are glad to know from The Times yesterday that there has been a slight diminution in scientific and academic emigration in recent periods, and we welcome that information. But this Government have pledged themselves to cut emigration. In that same speech in Scotland, the Prime Minister declared that the Government were determined to reverse the tide of emigration. We want to know from the Secretary of State what the Government are doing about that, and what success they think they will have.
    Emigration, too, tends to come to its peak about 18 or 20 months after the impact of a squeeze, so that we may expect that 1968 will show even worse figures than those for 1965 and 1966. At the present rate, the Government show a
    1840
    fair likelihood of achieving in two years half the emigration that, sadly, occurred during 11 years of Conservative Governments. We ask the Government for their views about this trend.
    Mr. Willis: Rubbish.
    Sir K. Joseph: The right hon. Gentleman says that it is rubbish, but his right hon. Friend the Secretary of State for Scotland used to make great play of the loss to Scotland of 174,000 people between 1951 and 1962. My reckoning is that during 1965 and 1966 half that number will have been lost to Scotland in net emigration—in two years compared with 11—[Interruption.]
    Mr. Speaker: Order. Scotsmen will get a chance of making their contribution in a Parliamentary way.
    Sir K. Joseph: I turn to new jobs. There are, of course, new jobs and we welcome all those that are brought to life in Scotland, but many of them were legacies of the last Government. There have been disappointments—Plessey, at Dundee, leaps to mind—but we welcome the 2,000 new jobs at Rank-Xerox at Kirkcaldy. We welcome all the new jobs, especially the sophisticated jobs. Nevertheless, I have here a very long list of cuts and closures, often in industries that are advanced in technology, and often in areas that are crucial.
    These losses of jobs exceed by many times the number of new jobs in advance factories in the programme announced by the Government. Of the 43 advance factories announced by the Government, I understand that seven have been completed and occupied, providing 181 jobs, and that six further advance factories have been completed. We would like to know from the Secretary of State whether the six that have been completed have been let, though not yet occupied.
    We would also like to know in how many of the Government's factories already in existence the occupants have either given notice to or dismissed labour since the squeeze began in July, 1966. What we have to look at is not just the number of new advance factories but the effect of Government policies on Government factories as a whole. I suspect that this will show a net loss of jobs since 20th July, 1966.

    1841
    After setting out these facts—and to the best of my knowledge they are facts—one must ask what are the lessons for Scotland? I believe that the first and foremost is that Scotland, as with England and as with Wales, is totally dependent on the success of the Government in controlling the national economy, and it is the present Government's failure to control the national economy that has led to the present disastrous fall in confidence, jobs and momentum of development in Scotland.
    The second lesson we have to learn is that while the squeeze has brought about an increase of competition, competition by itself, without incentives, is not really as effective as competition with incentives. Every Budget of this Government has hammered the incentives to managements, on which we on this side believe that economic progress to a large extent depends.
    If control of the economy is the first lesson, and competition, coupled with incentives, is the second, the third lesson is the importance of confidence. In all these three—control of the economy, competition plus incentives, and confidence, this Government have failed. But it is not only in their general policy that they have failed. There are strands of individual policy that are especially harmful to Scotland, and I will only touch on them.
    First, there is the change from the Toothill concept of growth areas to indiscriminate help over the whole of Scotland. We believe that this change is unlikely to encourage growth and progress nearly as much as did my right hon. Friend's use of the growth area concept enshrined in the Toothill Report. Second, we deplore the departure from free depreciation. Third, we believe the use of investment allowances, which gave help to firms and enterprises that were profitable, was a far sounder way of encouraging business than are investment grants that make no distinction between profitable and unprofitable enterprises.
    Fourth, we have on many occasions made known our views about the Selective Employment Tax and the regional employment premium. We think that these tend to encourage inefficiency. They represent a very primitive view of the economy in their bias against the service industries which, in Scotland, in the form
    1842
    of tourism, are so important. We believe that the Government have introduced the R.E.P. only as a panic measure to try to minimise this winter's likely rising trend of unemployment. We fear that it cannot be effective in time, if it is effective at all.
    We have also many criticisms to make of the Government's housing policy and of their transport policy. We would like to know from the Secretary of State whether there is to be a separate Scottish Plan for the period 1967–72, or whether Scotland is to be covered by the First Secretary's announced plan for those years.
    I turn last to the right hon. Gentleman the Secretary of State for Scotland who is meant to be in charge of the interests of Scotland. I have quoted his tribute to my right hon. Friend the Member for Argyll (Mr. Noble); it does the right hon. Gentleman credit. However, I have read the right hon. Gentleman's remarks from both the Opposition Dispatch Box and the Government Dispatch Box and, however hard I tried, I could not find any impression whatever of humility. When he was in opposition he gave no recognition of the difficulty of the job which had to be done. He was an effective representative of his party in opposition, and I well remember how effective he was. But I have formed the impression that he has not been and is not being nearly as effective in Government.
    In a recent speech, my hon. Friend the Member for South Angus (Mr. BruceGardyne) truly said of the right hon. Gentleman that his speeches in opposition were full of solutions, yet suddenly all Scotland's problems became intractable. Suddenly all the solutions which the Secretary of State had at his finger tips had become difficult.
    The right hon. Gentleman's speeches from the Opposition Dispatch Box have been shown up as empty by his performance in Government. I said at the start that the task of any Government in this respect was difficult, but the Government have made it much more difficult for themselves, first by losing control of the economy and, secondly, by keeping the right hon. Gentleman as Secretary of State for Scotland. I quote from an article in yesterday's Scottish Daily Express. [Laughter.] Hon. Members would be foolish to laugh at an organ

    1843
    which is read by so many millions of people. Writing of the right hon. Gentleman, the article says:
    "His assurances are meaningless and are unanimously criticised."
    This is not the reputation to foster confidence. [HON. MEMBERS: "Who wrote it?"] It is signed by Charles Graham. The right hon. Gentleman's speeches are as bellicose and as arrogant as ever. He may be a wiser man than he was, but if so he is hiding it. I can only say that pride comes before a fall.
    In April, 1966, the Prime Minister said:
    "The Scottish Office and every other Department of State are under instruction to do everything in their power to solve the unemployment problem, to halt migration and to improve diversification."
    So why has so little been done? Has the Secretary of State been effective in the Cabinet in Scotland's interest? We know that school building is lagging and we know that housing is lagging. The Secretary of State has not even obtained for Scotland her share of the rising number of civil servants under the present Government, and I have figures to prove that.
    As for the Secretary of State's success in securing for Scotland any of the Government establishments which have been available during the last two years, his failure seems to have been total. I have a list of five main Government establishments which might have been set up in Scotland but which instead are being sited in other parts of the United Kingdom—the Royal Mint being set up in Cardiff, the National Computer Centre in Manchester, the headquarters of the Steel Corporation in London, the Land Commission in Newcastle and the Vehicle Taxation Centre in Swansea. Obviously, Scotland could not have had more than a small share, but each of the establishments might have been ideal for Scotland.
    Surely the right hon. Gentleman has not come to today's debate empty handed. We very mch hope that he has some good news to give to Scotland. What about the tenth P.A.Y.E. computer centre with 2,000 jobs? One of the ten is still not allocated. We hope that the right hon. Gentleman will be able to tell us that he has got that for Scotland. If he has failed there, too, we can only assume that
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    he has not been representing Scotland adequately where these decisions are made.
    This will be the right hon. Gentleman's fourth Christmas in his present post. His fourth winter lies ahead. We want to know from him how high he expects unemployment to go by this coming Christmas, by next February, when the impact of the measures of 20th July should be reaching their peak, given a normal winter.
    The Government have been in power too long to escape judgment. There can be no alibis now. They inherited a boom and turned it into a slump. They have wrecked the momentum of Scotland's progress. We wait now without much hope to hear what the Government intend to do to fulfil their pledges about jobs in Scotland, about unemployment in Scotland, about emigration from Scotland and about depopulation in Scotland.
    4.26 p.m.
    The President of the Board of Trade (Mr. Douglas Jay): I think that this afternoon the House would like to hear some facts and a serious analysis of this problem rather than to follow the right hon. Member for Leeds, North-East (Sir K. Joseph) into the party political nonsense and misquotations from the Press in which he has indulged this afternoon. However, I agree with him at least in this—that if we are to bring to Scotland all the extra industry and employment needed for Scotland's future economic vitality, we must realise that this is a formidable, persistent and long-term problem which will need continuous effort without relaxation.
    The fallacy in the past has been to regard it as a temporary problem. The right hon. Gentleman professed to have discovered that this afternoon, but it is somewhat pathetic to realise now that his party introduced the Local Employment Bill in 1959–60 designed to expire altogether seven years later in 1967 on the assumption that the problem would then have been entirely solved. We in the present Government have adopted an entirely different and far more realistic line of attack.
    First, we regard it as a permanent problem requiring permanent legislation. Secondly, we have scheduled far wider areas as development areas—and I was interested to learn from the right hon.

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    Gentleman that he would debar large sections of Scotland from the benefits of this treatment which we are now giving them. Thirdly, the Government now offer a much larger and more generous range of services and assistance to developing industry in Scotland than ever before—the availability of Government-owned factories and publicly managed industrial estates, investment grants for plant and equipment at 45 per cent. this year and next and 40 per cent. thereafter, building grants for private new factory building at 25 per cent. of 35 per cent. in some cases, and now the regional employment premium and a far more ambitious programme of advance factory building than at any previous time.
    Even more important, we have used our industrial development certificate control throughout the whole country in such a way as dramatically to increase the share of new industrial development going to Scotland, and this is bound to tell increasingly in the years ahead as these factories get built and manned up. I should like to give some wholly unselective figures about this. The percentage going to Scotland of all new factory building approved in Great Britain in sq. ft. in the years 1961–64, about which the right hon. Gentleman boasted so much, was 10 per cent. In 1965 and 1966 it averaged 15 per cent., and in 1967 so far it has risen to 20 per cent. Meanwhile, in London and the South-East the share fell from 27 per cent. in 1964–64 to 15 per cent. in 1966 and the first six months of 1967. It has fallen also in the Midlands.
    Even more striking—the right hon. Gentleman asked for non-selective figures —is the rise in the absolute volume of new factory development going forward in Scotland. The total area in Scotland approved in 1964–64 averaged 4,857 sq. ft. a year. In 1965 and 1966 the average rose to 9,610,000 sq. ft., and in the first six months of 1967 it hs run at the rate of 13·;7 million sq. ft. a year, that is, about treble the rate of the years before this Government came to power. To put it another way—I can put it in various ways, as the right hon. Gentleman does not like selective figures—the total of new factory space approved in Great Britain as a whole rose by 37 per cent. between 1961–64 and 1965–66, and in Scotland, it rose by 98 per cent.
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    The estimated additional employment from new projects approved in Scotland in the relevant periods has risen from an average of 13,000 in 1964–64 to 24,000 as an annual rate in 1965–66, and it is still at an annual rate of 19,000 in the first half of 1967. To put it plainly, this means that there is more factory building going forward now in Scotland than ever before, and this is bound to affect employment in the years ahead.
    The totals which I have given, naturally, include both private and Board of Trade new factory building under the I.D.C. system, that is, everything over 5,000 sq. ft. In Scotland publicly financed factory building in 1966 was about 20 per cent. of total factory building. When I say "publicly financed" factory building, I include local authority, development commission, new town and Board of Trade building. The Board of Trade's own advance factory building programme in Scotland in total is only one part even of the total Board of Trade industrial building. The rest of our building programme consists of Board of Trade building for individual firms. This means that the advance factory programme is only a small part of the total of all industrial building going forward.
    I mention that because some people fall into the mistake of thinking that this programme is the whole of the Board of Trade's building programme, or even that it is intended to meet the whole employment problem facing us in Scotland. It is intended only to meet one part of it. However, the special value of the advance factory programme is, I believe, threefold. First, it primes the pump by initiating projects which, very often, grow thereafter, often quite quickly. Second, it enables the Board of Trade to site these factories precisely in those areas, notably coal-mining areas, which other developments have missed. Rightly, we give considerable freedom of choice to private firms in inducing them to these areas, and it is, therefore, valuable to have an alternative method of providing development in areas which might otherwise miss it. Third, it enables us to offer a ready factory at short notice, which is often a great attraction to a firm.
    Since the right hon. Gentleman struck his party political note, I shall give these

    1847
    further facts. Altogether, since November, 1964, 43 advance factors have been authorised for Scotland, including the latest nine which I announced on 2nd June. These 43 announced in two and a half years are to be compared with only 24 in the 13 years from 1951 to 1964. The 43 factories in the five programmes since 1964, including extensions, total over 900,000 square feet, at a total cost of about £4 million. Some 28 of these have been deliberately sited in areas of Scotland where coal-mining employment is expected to decline, as part of our overall plan for providing new work in those coal-mining areas.
    The House will be interested to know that, of the 34 advance factories in the four programmes between November, 1964, and this June, that is, excluding the June programme, 13 have already been completed, 18 are now building, and 10 have already been allocated. Incidentally, three of the allocated ones have already been extended at the request of the tenants. The 10 allocated include two at Bellshill taken by Honeywell Controls, one at Cumnock by Chemstrand, one at North Cardonald by Bovril, one at Blantyre by Fabri-Tek Ltd., one at Queenslie by Phillips Drill Company, and one at Stranraer by a shoe company known as Baby Dear Shoes Limited. [HON. MEMBERS: "Hear, hear."] Perhaps that is an indication of advance consumer interest.
    Mr. John Brewis: Has not one of those been taken purely as a temporary measure so that the firm may train its workers?
    Mr. Jay: I did not properly hear the hon. Gentleman's question. Perhaps he will be able to catch the eye of the Chair later.
    Mr. Brewis: One of them is taken only as a temporary measure.
    Mr. Jay: I do not know what the hon. Gentleman means by that. These factories are not temporary. Once built they will last as long as any others.
    Mr. Brewis: But the firm has taken the factory only for a month or two to use it as a training centre.
    Mr. Jay: Apparently, the hon. Gentleman is referring to one factory which
    1848
    is being used as a training facility, I understand, with a view to expansion later on.
    Most of these factories have been sited in the industrial and coal-mining areas of central Scotland, but we have also included in the programme factories at Aberdeen, Stranraer, Campbelltown, Inverness and, in this June's programme, at Banff and Dumfries.
    Altogether, now, the Board of Trade owns 25 million sq. ft. of factory space in Scotland and 12 major industrial estates, including the new estate at Bellshill, which is being rapidly developed. Altogether, nearly 100,000 people are employed in Board of Trade owned factories in Scotland alone. We plan to develop industrial estates also at Falkirk, Cumnock and Dumfries, and we are buying land in advance to ensure a quicker rate of factory building in the future. The total of publicly owned industrial property in Scotland, as well as the employment offered in these factories, is thus now rising rapidly after the previous years of neglect.
    At the same time, an encouraging number of new private industrial projects are being developed in Scotland, certainly on a bigger scale than for many years past. This is particularly encouraging in a credit squeeze period, and it shows that the powerful incentives now offered by the Government in development areas must have more than offset the supposed effects of the squeeze in recent months. The biggest of these projects—the right hon. Gentleman asked for facts—is the Rank Taylor Hobson plan for a major new factory at Kirkcaldy, to employ 6,000 eventually. Also at Kirkcaldy Nairn Williamson is planning a new unit to employ 600.
    In addition, Borroughs Machines is planning a £9 million expansion which will provide 1,000 jobs in the next four years in Cumbernauld and the Vale of Leven. Ferranti has acquired the United Biscuit factory at Edinburgh, the closure of which, I know, caused disappointment, to employ 1,000. Honeywell is expecting to expand by 3,000 above the present level at Newhouse by 1970, that being in addition to the two new large factories at Bellshill which are now virtually ready for occupation. National Cash Register has taken over the 400,000 sq. ft.

    1849
    factory at Dundee which was vacated by A.E.I., and it expects to increase its employment in Dundee by another 1,000 over the next three or four years.
    Babcock and Wilcox is expanding and diversifying, and expects its labour force to grow at Renfrew, Dalmuir and Dumbarton by 2,000 over the next five years; Chemstrand continues to expand at Drybridge, Ayrshire, with a target of another 450 jobs; and British Hydrocarbon Chemicals, at Grangemouth, backed by B.P., is to build a major new plant there which will more than double its capacity for producing synthetic rubber materials.
    In addition, Rolls Royce is establishing a new precision forge at Hillington which will employ another few hundred workers when fully developed, and I can announce today that Rolls Royce has also decided to take over the old Kelvin Electronics factory at Hillington, and that this will contribute substantially to its planned increase of at least 360 jobs in the next 12 months. Part of the new space will be occupied by a central training establishment, which will bring together the various sections of training which have hitherto been dispersed.
    I think that all this shows that, despite some disappointment and some inevitable closures, a great deal of new development by modern engineering and other science-based industries is now going forward in Scotland. The new survey carried out by the Scottish Council (Development and Industry) and published in the past few days shows that firms which have recently moved to Scotland from North America and elsewhere have greatly expanded their investment and employment in Scotland in the past three years.
    I am sure that the Scottish economy has been greatly strengthened by the participation of Chrysler in the Rootes projects at Linwood, which should ensure the prosperity of the area for a long way ahead. The recent major relaxation by the Government of hire purchase controls on the motor industry should be of benefit to Linwood as well as to many other projects.
    So also has Scotland's economy been strengthened by the Government's participation, together with trade unions and others, in Fairfields, which would other-
    1850
    wise have collapsed two years ago. In view of what the right hon. Gentleman said, I remind him that since Fairfields was given this special organised help, a number of new orders has been obtained —they were not obtained in the days of the previous Government—including that for a container ship for Overseas Containers Ltd., two survey ships for the United States Navy, and two cargo ships for Reardon Smith & Sons.
    Mr. T. G. D. Galbraith: This is very interesting, but could the right hon. Gentleman give an indication of the likely profitability of these contracts?
    Mr. Jay: I was asked for the facts, and at the moment I am giving them rather than prophesies. But in view of what the hon. Gentleman and the right hon. Gentleman have said, and in view of the encouraging record of Fairfields under the new régime, with all that that means for Clydeside, it is rather amusing to reflect that when we announced the Government's action to sustain Fairfields 18 months ago the official spokesman for the Opposition said:
    "… the whole country will see the method now selected … as being only the beginning of an extension of nationalisation into the private sector, …".—[OFFICIAL REPORT, 22nd December, 1965; Vol. 722, c. 2104.]
    If that was an example of nationalisation, I think that Scotland would like to have a great deal more of it. What the country will really note is that if the Tories had been in power in 1965 Fairfields would not have been in existence today, and these valuable contracts would have been lost to Scotland.
    I am sorry that the right hon. Gentleman has raised these polemical arguments, and I shall therefore move on. As an incentive and help to all this industrial development which has been moving ahead, the Board of Trade has been steadily increasing its rate of financial assistance in Scotland over and above what was available from the previous Government under the Industrial Development and Local Employment Acts. The total has increased from an average of £12½ million in the four years 1961–64 to an average of over £15 million in 1964–66 and £19½ million in the financial year just ended.
    Sir K. Joseph: While obviously we welcome each of the items announced by

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    the right hon. Gentleman, will the Government answer the question put to them about the trend of unemployment between now and February, 1968?
    Mr. Jay: I am coming to unemployment after giving all those figures, which are strictly unselected.
    In addition to the financial assistance of which I have spoken, the recent speeding up in payment of investment grants—of which over £5 million went to firms in Scotland between April and the end of June this year—should be a still further incentive to industrial development. In the past year the effort to build up new employment and industry in Scotland has had to fight against some of the effects of the credit squeeze and the restraints imposed by our balance of payments difficulties. Over the past three years we also had to fight against the rapid decline in employment in the coal and some other older industries.
    That is the answer to simple-minded people who are puzzled to find that, after so much effort and new development, the unemployment rate remains higher than one would wish. Because of the decline of these older industries, we have had to run very fast in order to keep still. To put it another way, everyone agreed a few years ago, and agrees now, that a great effort must be made to find new work for those released from coal and other declining industries. That is what has been very largely done; new industries have been taking the place of the old. Otherwise there would have been a serious rise in unemployment. The total fall in employment in coal-mining alone in Scotland in the three years up to mid-1966 was as much as 15,000.
    The really significant fact is that during the past year—and indeed the past two years—as a result of the I.D.C. policies and everything else I have described the unemployment rate has moved in favour of Scotland, as compared with Great Britain or as compared with the South East or the Midlands. The rate for Great Britain in June of 2·1 per cent. total registered unemployed—not seasonally adjusted—was 90 per cent. higher than in June, 1966. In the London and south eastern regions, where by and large it is very low, it was 110 per cent. higher. But in Scotland it was only 47 per cent. higher. That is a significant shift, even though it may not be all we
    1852
    wish. Indeed, the June unemployment figure for Scotland this year was lower than in both north-east England and Wales.
    Mr. J. Bruce-Gardyne: Does the right hon. Gentleman agree that if he looked back to the periods from June, 1961, to June, 1962, or from June, 1967, to June, 1968, he would find that the increase in unemployment in the United Kingdom as a whole was much more rapid than in Scotland, and that the comparison then was more favourable to Scotland than it is now?
    Mr. Jay: That rests on the assumption that there will be a much faster rise over the next six months in Scotland, and I do not believe that this is true. Experience will show which of us is right. At any rate, up to date there has been a significant shift. To be non-selective, as the right hon. Gentleman asked me, if one takes the same period over the two-year period from June, 1965, to June, 1967, one finds that unemployment was 80 per cent, up in Great Britain, about 175 per cent. up in the Midlands, 95 per cent. up in London and the South-East, but only 37 per cent. up in Scotland.
    This improvement is exactly what we set out to achieve. It does not mean that the job has yet been completed, or that there is anything for us to be in the least complacent about. There is a long and hard road yet to be trodden, but it means that the balance has been cleared and decisively tilted in favour of Scotland and the other development areas as a result of the efforts that I have described and of many others, which my right hon. Friend the Secretary of State will describe if he catches Mr. Speaker's eye later.
    It means that progress is being made in the right direction, and that as the United Kingdom economy as a whole revives generally, Scotland will be far better placed to share in that revival. As long as we continue unremittingly on the present lines, as we firmly intend to do, we shall, on the evidence of the facts before us, succeed. I fully agree, indeed I warn the House, that there are strong natural forces working against us and there is a long way to go yet.
    4.50 p.m.
    Mr. Hector Monro: From the long catalogue of events given to us by the President of the Board of Trade

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    and from the cheers of his supporters behind him, one would think that the fact that there are 24,000 more Scots unemployed was of no major importance to them. How very wrong they are. I was very glad that the President of the Board of Trade told us towards the end of his speech that he was not complacent, because this is the right tone to set, bearing in mind the extreme difficulties that many of us can see. The right hon. Gentleman was very much more frank with the House than the Secretary of State, who seems to be eternally optimistic. He appears to be quite out of touch with events in Scotland, as he showed at the week-end, when he told a meeting of the tourist industry that everything in the garden was lovely. How the Secretary of State for Scotland can tell this to a meeting of the tourist industry and say that the Selective Employment Tax was to the benefit of the industry is incredible.
    Mr. William Hannan: It is time that some of these canards were nailed. The hon. Gentleman has just said that my right hon. Friend said that the S.E.T. had benefited the tourist trade. Does he want to repeat that statement? Will he not state the truth and say that what my right hon. Friend said was that S.E.T. was doing no particular harm? There is a distinction.
    Mr. Monro: The hon. Gentleman is splitting the most enormous hairs. Anyone who read the reports of the speech—but no hon. Member opposite ever believes anything written in the papers—would have received the strong impression that the Secretary of State indicated to the tourist industry that it was doing jolly well, and all of us know that it is not. [Interruption.] If the hon. Gentleman the Member for Central Ayrshire (Mr. Manuel) wants to intervene, would he like to stand up and say something?
    Mr. Archie Manuel: I would like the hon. Gentleman to admit frankly to the House, with his usual honesty, that his constituency has derived immense benefit from this Government in so far as there are two factories at Dumfries, and he has something in the mining area? Will he not admit this and be candid and truthful?
    Mr. Monro: The hon. Gentleman is way ahead of me in my speech. I am coming to those points. There is one matter of accuracy in his statement, however. We have one factory in Dumfries. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) was right to set the tone of his speech by saying that all of the things done about jobs by the Government have turned out to be disappointing because the basic national economy was not right. One cannot isolate Scotland economically.
    The reasons for this disappointing trend is that the original policy decisions made by the Government after 1964, when we had Finance Bill after Filance Bill, have done nothing at all to stimulate the situation. We have had S.E.T. which has not produced the jobs expected by the Government. We have recently debated R.E.P. We have talked about the pros and cons of grants as opposed to investment allowances, but none of these will do any good at all if we have a stagnant national economy. There is no doubt that business and the economy must be buoyant and profitable.
    The party opposite continually set their faces against encouraging profitability, but we must have profits if we are to have investment in industry. This is what this debate is about, it is to get expansion in industry, to provide more jobs for people in Scotland. If there is no incentive to expand then business will not do so and that is what is happening now. There is a general stop on all fronts.
    Mr. Gordon Campbell: Would my hon. Friend not agree that the President of the Board of Trade seemed to make a false comparison in Board of Trade assistance over recent years because he appeared to include investment grants under the Industrial Development Act as Board of Trade assistance in the last year or two, whereas they replaced investment allowances, which was Treasury assistance, and quite different?
    Mr. Monro: I accept the point of my hon. Friend and thank him for it. The House might also bear in mind that if one works on a D.C.F. accounting system the old allowances were very much better than the present grants.
    Mr. Jay: In reply to the hon. Gentleman the Member for Moray and Nairn (Mr. G. Campbell), I would point out that I only gave figures of investment grants from 1st April of this year onwards, and for the previous period I gave the comparative figures, which did not include investment grants.
    Mr. Monro: Maybe I will be allowed to make my own speech without intervening in other people's. There are two obvious priorities, and the first is to get an upturn in the national economy. This must include lower taxation. This is of the very highest priority so that there will be more money to spend in the shops and to expand our home market.
    Mr. William Baxter: Before the hon. Gentleman leaves this point of stagnation in Scottish industry and his statement that it is getting no incentives to go forward, will he tell us the industries which he knows which are stagnant and not receiving incentive to go forward? If he knows anything about business in Scotland he will know that every business is being encouraged to go forward and expand at the greatest possible speed.
    Mr. Monro: If the hon. Gentleman had waited a little he would realise that 40 per cent. more people are unemployed in my constituency than there were 12 months ago. Industry there can hardly be expanding.
    The second priority is to have another look at our development areas in relation to growth points. Development which is taking place is not necessarily going to those areas which need it most. I would never argue for the direction of industry, but I would argue for encouragement to be given through incentives. Now that the development areas cover virtually the whole of Scotland—bar Edinburgh and Leith; and it is extraordinary that, with the Government attempting to get into the E.E.C., the Port of Leith is not receiving all the financial assistance possible in view of the important part it will have to play, being one of our closest links with the Continent from the point of view of trade by sea—all these areas are competing with one another for new industries and it is even more difficult to attract industries to specific areas in Scotland.
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    The President of the Board of Trade rightly referred to areas of pit closure. I am particularly interested in the area of South Ayrshire and Kirkconnell and Sanquhar. In an Adjournment debate last March I spoke on this matter at length and will not today repeat the arguments I used. Suffice to say that a special problem exists in these areas. I am sure that the Secretary of State and the President of the Board of Trade appreciate these special difficulties and I trust that they are taking active steps to help. They must remember that the situation will become dramatically worse when the pits close. Every effort must be made now to have jobs ready when the pits close. I have urged this readiness all along, but I cannot see the Government taking action in time.
    Mr. Alex Eadie: I appreciate the hon. Gentleman's concern with the problems of the mining areas, and I assure him that we have a joint interest in this subject. Would he subscribe to the view of his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) that only profitable industries should receive assistance? Would he be in favour of the mining industry being wiped out on the basis of that profitability argument?
    Mr. Monro: No, and I would like to see the mining industry profitable. Although I appreciate the concern which is felt by the hon. Member for Midlothian (Mr. Eadie) for the problems of the mining area, I would prefer to see those problems solved by the pits being profitable.
    I am pleased about the two advance factories being built at Sanquhar, but this is not necessarily the answer because I understand that no tenants are yet in sight. Of the 43 advance factories announced, only seven have been taken and, in all, only 181 people are employed in them. Considering the unemployment total of 77,000, that is only a small dent in the problem and the advance factory programme has not so far solved our unemployment difficulties.
    I suggest that there should be a special category for areas which face particularly special problems. Perhaps we should go back to the idea of development districts, with small areas needing

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    special help being given a name defining them as places in need of additional assistance. The blanket idea of the development area does not provide for these areas of special need. Perhaps there should be grants to local authorities to improve amenities, an important way of attracting new industries, and perhaps special and exceptional housing subsidies should be paid. Local authorities are keen to co-operate in attracting new industries, but they are already finding it hard to run their financial affairs. Selective help is required.
    Following an earlier intervention by the hon. Member for West Stirlingshire (Mr. W. Baxter), I said that unemployment in my constituency had gone up by 40 per cent. during the last 12 months. This rise has been due to the general depression in the economy. It was wrong for the Secretary of State to say at Question Time a week ago that this rise in unemployment was due to a local pit closure. The pit in my constituency has not yet closed. That disaster may yet happen.
    While these local figures are depressing—and I trust that hon. Gentlemen opposite feel depressed about them—they are reflected nationally. As my right hon. Friend the Member for Leeds, North-East said, there has been a drop of only 13 per cent. in unemployment between January and June, the lowest drop for a decade. The total unemployment figure is now exceptionally high. In June, 1966, it was 52,400, while the figure announced a week ago was 77,000; in other words, 24,000 more than 12 months ago. Hon. Gentlemen opposite cannot be proud of these statistics, particularly since they go right against the promises made by the Labour Party at the last election.
    When discussing expansion, one must look at the figures of industrial production. They went up by 7·8 per cent. in 1964 and by 4 per cent. in 1965. The latest figure available for 1966 showed a rise of 2·9 per cent., while the National Plan is based on a growth rate of 4·8 per cent. The National Plan is now completely out of the window. It is high time that the Secretary of State agreed that it was, and told us what new plans he has in mind.
    Mr. W. Baxter Mr. W. Baxter rose—
    Mr. Monro: I will not give way. The hon. Gentleman has had a good innings. Perhaps he will be allowed to have another go later.
    It is no use the Government being complacent and saying that the steps they have taken have worked, for they obviously have not. Advance factories will not cure all our problems. The Government should make every effort to create a buoyant economy in which industry is allowed to plough back its profits. The Government must ensure that the upturn takes place as soon as possible. Indeed, I would be happy to have another July Budget if it would ease things rather than restrict them. I want special help given to areas of special need, with more encouragement given to the mobility of labour.
    I hope that the Secretary of State will address his mind to the recent report on council house waiting lists. It contained many points of benefit to Scotland, if they were implemented. More opportunity should be given for industrial retraining. I warmly support the claim of my right hon. Friend the Member for Leeds, North-East for more Government Departments to be sent to Scotland. The danger signals have been flying throughout this year and I hope that the Secretary of State will give us his honest view of what the position is likely to be in the coming winter.
    This year's Budget concluded with the wonderful phrase, "Steady as she goes". Most people are now agreed that she is set steady for the rocks. Neither the Chancellor of the Exchequer nor the Secretary of State seems to be doing anything to get the economy into a shape which will encourage expansion and more industries to go to Scotland.
    It is time that the Government stopped all this humbug about everything in the garden being rosy. The Secretary of State should say tonight what steps are being taken to improve Scotland's economy, what will be done in the next six months—before we reach the crisis point this winter—and what steps are being taken to remove this infuriating complacency which the right hon. Gentleman expresses in the speeches he makes throughout Scotland.
    5.10 p.m.
    Mr. William Hamilton: I want to refer to the speech made at the opening of the debate by the right hon. Member for Leeds, North-East (Sir K. Joseph). It was an extremely unhappy speech, an extremely negative and ill-informed speech, consisting of widespread criticism with singularly little constructive thought in it. He indulged in vague generalisations about competition and incentives. We have heard all this before, but he did not spell it out or produce any evidence—nor could he—to show that there is a lack of incentive, nor that what he calls lack of incentive is an inhibiting factor in the economy at the moment.
    He was particularly ill-advised to refer to shortcomings in the social infrastructure, in housing, education, ports, seaports and industrial training. Not a single statistic could he produce to sustain a case of those grounds. He decried the use of selective statistics, but in so far as he did use them he proceeded to deploy precisely selective statistics to sustain the case he was seeking to prove.
    In October, 1964, when this Government came in, there were five Government training centres for Scotland with 529 places in them. At the end of last year, there were seven training centres in Scotland with 900 places. I give that one bare statistic to show the right hon. Gentleman that if he wants to take part—and we are glad to see him taking part—in Scottish debates, he must come armed with relevant statistics.
    Sir K. Joseph: The fact behind the charge I made was that the Government, I am told, have cut short the technical college building programme in Edinburgh and Midlothian, and thus have fallen short of the expectation of training.
    Mr. Hamilton: The right hon. Gentleman shifts his ground. He talked about industrial training, which means predominantly training in Government centres and in industry itself. If my right hon. Friend the Secretary of State takes this point at the end of the debate, he will be able to produce more up-to-date statistics than I can to show that the trend is very much in the right direction. It ill behoves the right hon. Gentleman to criticise us on that score.
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    The right hon. Gentleman spoke of failure in housing. I remind him, if he does not know, that the record of this Government in slum clearance is an all-time record in the whole of Scottish history. No other Government—certainly not his Government in 13 years—ever equalled the slum clearance statistics of today. In house building by the end of 1966 there was also an all-time Scottish record of over 50,000 under construction.
    Sir K. Joseph: I very carefully said that the Government had failed for two years to achieve their own housing target of 40,000 additions a year, and that is true.
    Mr. Hamilton: The right hon. Gentleman will be made to eat those words within 12 months. When he winds up tonight, I know that my right hon. Friend the Secretary of State will be able to tell us that we are on target.
    Sir K. Joseph: I hope so.
    Mr. Hamilton: I do not think that the right hon. Gentleman hopes so. When we looked at the faces of hon. Members opposite while the President of the Board of Trade was giving us facts, they looked as if they had lost the pools for every week of the year. They could not have looked more unhappy. When things are going well and the promise of the future is very great—although no one denies that there are problems—when future prospects for Scotland are good, it is quite deplorable that hon. and right hon. Members opposite should show their disappointment. I suspect that this is why the right hon. Member for Leeds, South-East is the "fall guy" on the Opposition Front Bench today.
    Why did the Opposition not put up the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home), "the matchstick king", to open this debate? He was the "expert" who said that the economy had never been stronger when we took over. Why was he not put up to show the shortcomings of this Government compared with his own? Or why was not the right hon. Member for Argyll (Mr. Noble) put up? We would be interested to know why the right hon. Member for Leeds, North-East was chosen.
    We are entitled to our criticisms and we shall make them, but it cannot lie in the

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    mouths of hon. and right hon. Members opposite, after their 13 years' record, to criticise this Government for what they have done or failed to do in less than three years. The right hon. Gentleman mentioned unemployment. How the Tory Party has the nerve to talk about Scottish unemployment, I do not know. We may take any year in the whole of their 13 years, or any month in any of those years, and compare it with the comparable month or any year in our less than three years and find that we come out of the comparison extremely favourably.
    I have a pile of Scottish statistical reviews, the Blue Books which were produced over the years since 1952–53. I have taken out the figures for May in each year. In May this year the numbers of wholly unemployed in Scotland were 77·8 thousand, in round figures. If one takes the May average for the previous six years of Tory Government, 1959 to 1964, when they said that they were getting on top of the job and were solving all Scotlands problems, one finds that it was higher than the average May figure for this year.
    Of course, we claim that it is still too high. Many hon. Members on this side of the House still think unemployment figures are too high. My right hon. Friend would concede that. This is part of the price we have had to pay in trying to solve the problems which were left by the party opposite, despite what the right hon. Member for Leeds, South-East said about our being left with a boom. It was a boom which was completely out of control and was engineered for election purposes. They left a balance of payments problem which we are in process of solving. We shall not get rid of it, but we shall reduce it. There are very firm indications that the gulf between the development areas—which for us means practically the whole of Scotland—and the rest of the country has been quite significantly reduced. As a result of policies which the Government are now pursuing, it will be reduced still further in the next two or three years.
    Having sought to defend the Government, I now turn to a different theme, in contrast to what hon. and right hon. Members opposite seek to do. I have paid my tribute to the efforts the Government are making. They are not negligible, but they are not enough. We can say that, but hon. Members opposite cannot
    1862
    say it. There is not enough being done in industrial training. Clearly, it has to be stepped up. That means a vast expansion in training facilities for instructors. It is not enough to provide the centres unless we have the instructors to man them. Greater incentives should be given to private industry to train within industry.
    The hon. Member for Dumfries (Mr. Monro) mentioned an imminent rundown in the mining industry. We who represent mining areas all fear the social and economic consequences of yet another rundown of the mining industry. I am sure that many of my hon. Friends who represent mining constituencies pay tribute to the way in which the Government have sought to marry a rundown of the coal industry with the bringing in of new industry, and that is particularly evident in places like the County of Fife, where there are a growing number of science-based industries. Right hon. and hon. Gentlemen opposite can claim some credit for that. I do not deny it. However, they started too late. It was more than ten years before they came round to the acceptance of the principle of advance factories. For years they had denounced the idea.
    The criticism which we make of right hon. and hon. Gentlemen opposite is not that they did nothing, but that they did too little far too late, and we are reaping the benefits or lack of them now. The present Government are trying to phase the inevitable running down of old-established industries and the creation of new ones by a combination of methods, including advance factories, retraining, the housing programme, and the rest.
    If we are to get an expedited contraction of the coal mining industry, there must be expedition in the creation of more new industries in the areas concerned and, coupled with that, a more generous acceptance of the principle of compensation for the upheaval created in the lives of people who suffer from the rundown.
    I want to put forward two propositions. The first concerns the commitment which we entered into at the last election on the need to establish publicly-owned and publicly-controlled industries in development

    1863
    areas. I need hardly remind hon. Members that it is a matter which I have raised repeatedly at Question time. It was an election commitment, and we have to honour it or give very good reasons why we do not.
    The second proposition which I make concerns the power of Government Departments to purchase what they need. In answer to a Question on 29th June, one of the Treasury Ministers said:
    "All Government Departments have power to purchase what is needed for the discharge of their functions and for purposes of internal administration".—[OFFICIAL REPORT, 29th June, 1967; Vol. 749, c. 125.]
    He then gave a list of the various Departments which spend enormous sums of money in public contracts of one kind and another. I will not read them all, but they include all the Defence Departments, the Ministry of Defence (Air), the Ministry of Defence (Army) and the Ministry of Defence (Navy), the Ministry of Health, the Ministry of Agriculture, the Ministry of Public Building and Works, and the rest. I hope that this will be followed up and that the Government will be asked what proportion for each of those Ministries is being spent in Scotland, because I am sure that the figures will show that we are not getting a fair share.
    The Government ought to use their enormous purchasing power as a great instrument of regional development. If they use the much-abused S.E.T. as another instrument further to discriminate in favour of the development areas and against areas like the South-East and the Midlands, I am certain that what has been done in the last two and a half years will be done even more and with more success in the next two or three years, and then right hon. and hon. Gentlemen opposite will have to eat an awful lot of words.
    5.25 p.m.
    Mr. Anthony Stodart: I do not imagine that it will be taken amiss if an hon. Member representing a constituency in the city of Edinburgh takes the opportunity of a debate on industry and employment to discuss the relationship of that subject to the city of Edinburgh and to consider it in the context of the recent application to join the European Economic Community.
    1864
    I do not wish to bore the House by reminding it in detail of the exclusion of the City of Edinburgh, together with the port of Leith, from the benefits which accrue to those in the development areas. I should not have been surprised if, when it was first announced in January, 1966, the businessmen of Edinburgh had raised a continual howl of indignation and that it had remained at that, because obviously they would be affected personally. But the proposal has met with universal condemnation from national bodies of repute such as the Scottish Council for Development and Industry, whose opinions are largely respected by hon. Members on both sides of the House. That body expressed its views strongly on 13th April last year when it said:
    "In terms of employment trends in manufacturing industry and of population changes, Edinburgh is less favourably placed than the rest of Scotland taken as a whole".
    More recently, in booklets on the regional employment premium which it has submitted to the First Secretary of State and Secretary of State for Economic Affairs, it has said, in a paragraph headed, "The Edinburgh Area":
    "There remains the further anomaly of the exclusion of the Edinburgh and Leith area, the focal point of growth in the East of Scotland, and containing one of Scotland's most important ports, from the Scottish Development Area. The effects of this situation will grow slowly but surely more serious as time goes on. This focal position of the Edinburgh area requires the acceleration of transition from some shrinking occupations to other and more vital functions".
    At least one leading trade unionist, Mr. Craig of U.S.D.A.W., has said:
    "Difficulties will be most pressing in Edinburgh because the city is the only part of Scotland not classified as a development area."
    The reason for the exclusion has been given by the Secretary of State to Edinburgh Corporation and by the Minister of State, Board of Trade, to me in a letter of February last year as being mainly due to the low rate of unemployment. As a rider to that I would add that a lack of manpower, which is obviously a consequence of a low rate of unemployment, is bound to result in industry having to indulge in heavier investment in capital machinery of a labour-saving nature. It means, therefore, that this is biting savagely on firms in the Edinburgh area, because there can be no doubt that, when one couples the

    1865
    virtually 50 per cent. rate of investment grant with the wholesale withdrawal of investment allowances, industry in the city has been put under a severe disadvantage.
    I wonder whether, when he replies, the right hon. Gentleman can give us an assessment of the situation as it is now, following the statement on 5th April of this year by the Secretary to the Edinburgh Chamber of Commerce that
    "seven substantial firms have uprooted themselves to settle outside the City".
    It is significant that many leading industrialists, among them the managing director of one of the outstanding firms, Ethicon on the Sighthill Industrial Estate, have expressed grave misgivings about their future plans for expansion. So much for the City of Edinburgh.
    I have always thought, and so have many other people, that the port of Leith, the Leith area itself, has reasons for being given special consideration. Indeed, when the right hon. Gentleman saw the Edinburgh Corporation in February of last year he was reported in the Press as promising to look again at Edinburgh and Leith, but saying how difficult it was to justify the inclusion of Edinburgh. The implication which it was fair to draw from that was that there might be a case for considering Leith. Prior to that the Chief Industrial Adviser to the Department of Economic Affairs had been making extremely helpful noises and favourable comments about the Leith dock area.
    In March of last year Mr. Middleton, the Vice-Chairman of the Scottish Economic Planning Council, said at a Press conference that
    "Leith needs special consideration if we are going to develop the port as we wish to develop it. Then there ought to be something going alongside in the way of industry".
    yet not many weeks ago the Chairman of the Leith Chamber of Commerce said that there was a reduction in the number of inquiries for sites in the dock area, and that a number of firms were considering moving out.
    The person whom I finally wish to call in support of my argument is a member of the Scottish Council, Dr. Flanders, who has been chairman of a
    1866
    study group. The Scotsman of 11th April said:
    "Dr. Flanders, whose committee are studying Scotland's transport facilities with a view to E.E.C., said the port of Leith was undoubtedly going to be important not just to the east coast but to the whole of Scotland. Its inability to benefit from the full investment grants could well mean that it would not be able to offer the most competitive charges. He added that Leith was going to be a 'key point' if Britain entered the Common Market. 'It must not be handicapped. If it is, it is going to affect the whole of Scotland', said Dr. Flanders. Good communications were vital to Scotland which would lie on the very periphery of the E.E.C."
    It seems inevitable that if double the grant is available only five miles away, people who are considering building factories will not build them at the Leith Docks. They will build them at Mussel-burgh or Dalkeith, with the inevitable result that double handling will have to take place, and the rates are bound to be high.
    Throughout this period the Government's attitude has been extremely confusing. Indeed, I would have said that chaos had virtually been in command. As I said earlier, way back in February, 18 months ago, the right hon. Gentleman implied recognition of the special case of Leith, and in the House on 9th March, 1966, the hon. Member for Central Ayrshire (Mr. Manuel), whom many of us regard as one of the father figures on the Government benches. asked:
    "Is my right hon. Friend"—
    he was referring to the Secretary of State for Scotland—
    "aware that … assurances have been received from the Board of Trade that incentives will be available in the Leith Dock area?".—[OFFICIAL REPORT, 9th March, 1966; Vol. 725, c. 2079.]
    I was taken to task that day, and I remember the consternation which appeared on the right hon. Gentleman's face when he heard what was being said.
    Only a few weeks ago there was a statement by the Minister of State for Scotland. I hope that he was not misquoted in the Scotsman. Under the headline:
    "Leith Docks' Part in national Plan for development. Memorandum handed over"—

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    I gather that the hon. Gentleman had been at the docks inspecting the splendid new deep-water site—the article said:
    "He pointed out that the argument so far had been about Edinburgh, Leith and Portobello. Edinburgh had made their own submissions and these must be considered. What was now being argued was the case for the Leith Dock Commission. 'In fairness to the Commission', said Dr. Mabon, 'the Government has never examined it in this strictly narrow context. This is what we will have to go into quite shortly.'"
    But, alas, on the 14th June of this year the Minister of State at the Board of Trade, when asked whether an examination was taking place, said:
    "… we have no plans for altering the present boundaries".
    and when he was pressed he said:
    "… this is not the time to alter the present boundaries".—[OFFICIAL REPORT, 14th June, 1967; Vol. 748. c. 550.]
    Can the right hon. Gentleman tell us exactly what is going on? Is an examination being made? Is there a special case? Is the Board of Trade running the Scottish Office, as we suspect perhaps it is?
    Mr. George Lawson: If the Government's policy for the development areas is as bad as the right hon. Member for Leeds, North-East (Sir K. Joseph) suggested, why does the hon. Gentleman want to drag Edinburgh and Leith into this policy?
    Mr. Stodart: I hope that the hon. Gentleman will not anticipate my speech. I shall say something about that later.
    Returning to the general situation, the position has been aggravated recently by the introduction of the regional employment premium. The industries which are particularly affected are printing and publishing, which are famous and which have built up a reputation of which they can justifiably be proud. Perhaps I might quote from a letter I received from one of the great firms in Edinburgh, Thomas Nelson, at the Parkside works.
    "When I inform you that the effect of the Regional Employment Premium on a comparable competitive company of this size in an area which qualifies for Regional Employment Premium is a free gift of some £30,000 per annum which such a competitor would undoubtedly use to reduce his prices in a manner totally divorced from his standard of efficiency … you will realise that we have
    1868
    little alternative but to consider moving our business to some other part of the country.
    To underline the absurdity of the Regional Employment Premium being applied to the country in the manner in which it has been, I would point out that we have another company, doing largely the same business, in Glasgow … if the monies which they draw are used to reduce costs it would create a disparity of just over 1s. per hour for the same operation done in Glasgow as compared with Edinburgh. Such a disparity in an industry where business is lost or won on fractions of a penny per book would be quite disastrous.
    Since the Government have declared their intention to implement Regional Employment Premium, no few than six London Publishers have telephoned to me to state in the most emphatic terms that we will lose their business unless we can reduce our prices to the level which they are expecting to get from comparable book printing houses in development areas."
    I do not know whether it is the Governments intention to remove industry from the City of Edinburgh. I was interested in a remark made by the hon. Member for Edinburgh, East (Mr. Willis) in the debate on the Countryside Commission last night, in which he advocated—and I do not disagree with him on this—setting up the Commission outside Edinburgh and a general dispersal of what he described as "office premises" out of Edinburgh.
    That, perhaps, is the hon. Member kneeling on the stool of penitence, because he and the right hon. Gentleman played a considerable part in adding over 600 extra office workers to one building in the course of 27 months. I am glad to hear the hon. Member say that we must disperse, disband and scatter some of those.
    The future of Edinburgh does not and ought not to lie in becoming a great manufacturing and industrial city. I am sure that it does not. But it should retain those industries which it has, and Leith could do with more industry at the docks. The situation is not in the least like that in the overcrowded south of England, because Edinburgh, Leith or Portobello has yet to see any signs of an overheating of the economy.
    I want to say something constructive about Scottish industry in the context of our application to join the Community. I was a little distressed to read the right hon. Gentleman's reply on 28th June to the right hon. Member for Orkney and Shetland (Mr. Grimond), who had asked

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    how long Scottish Ministers and officials had spent examining problems in Brussels. The right hon. Gentleman said:
    "The arrangements for interdepartmental consultation ensure that the interests of Scotland are borne in mind."—[OFFICIAL REPORT, 28th June, 1967; Vol. 749, c. 83.]
    The Scottish Office—and the Department of Agriculture especially—has now supplied three extremely competent attaches to the city of Copenhagen. They are outstanding in the jobs that they have to do. One is now in Brussels, at our mission there, quite fortuitously and not appointed to look after Scottish interests. He is a member of the Foreign Service and he is very largely in charge of the economic aspects of our entry into the Common Market, and, as so, is reporting to our Ambassador. When I was in Brussels I made a particular point of asking him and others whether there was any direct contact with the Scottish Office, and I was told that there was not.
    Signals or dispatches are sent to the Ministry of Agriculture, the Foreign Office, the Department of Economic Affairs and the Board of Trade, and I hope that these are being disseminated and filtered, and are getting through. I was profoundly impressed. The most important thing I learned in my fortnight over there was that there is a tremendous difference between what is said in Brussels and what is done in the various countries.
    In respect of questions such as the question whether or not subsidies on transport will be retained in Scotland, and whether development grants will be retained, the people in Brussels may say, "No", but if somebody were there permanently he might be able to find examples of what was going on and to discover whether or not our legal system would be able to fit into the situation that lies ahead if we join.
    The problems which affect Scotland in particular—remembering that we are not one of the regions of the United Kingdom but have a nation of our own, and our own office of administration—are legion. Bearing in mind, also, the fact that the ambassador is anxious to get more staff because he believes that he is short of them, I urge the right hon. Gentleman—in what I hope will be taken as no carping spirit but as a useful and constructive thought—to take the view that it would
    1870
    be a good thing for the Scottish Office and for Scotland generally if an attaché could be added to the Embassy staff to keep an eye on those problems which may affect Scotland more severely than any other part of the country. I hope that the right hon. Gentleman will bear that suggestion in mind.
    5.48 p.m.
    Mr. James Hamilton: I pay tribute to the hon. Member for Edinburgh, West (Mr. Stodart) for his very constructive speech. When his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) was speaking it came home to us that it is now becoming a six-monthly exercise to attack my right hon. Friend the Secretary of State for Scotland. In my view this is becoming an obsession with Her Majesty's Opposition. Apart from the speech of the hon. Member for Edinburgh, West, we have heard nothing constructive from hon. Members opposite.
    We can well criticise the Government, but bearing in mind the Opposition's record we can also take the view that they have a cheek even to attempt to criticise. I come from one of the development areas. Not only was it a development area during the time of Tory rule but it can be deemed to have been one ever since 1945. When the Labour Government came to power after the war they started a policy of advance factories and industrial estates and during that difficult period, to their credit, they did a remarkable job. The Tories took office in 1951, and there was then a departure from that policy. Although my colleagues before me in the House at that time exhorted the Tory Government to continue that policy, they were not prepared to do so. In fact, they reintroduced it only about two years before leaving office in 1964.
    As the President of the Board of Trade has revealed, during their period of office the Conservatives constructed 34 advance factories. Since we came back to power in 1964, 43 have been constructed. Much criticism has been levelled at the fact that the advance factories which have been constructed are not providing the jobs which are so urgently required. Two advance factories have been constructed in the industrial estate in my constituency, and they have been occupied. When the computer manufacturing firm, Honeywell Controls, at Newhouse, started there in 1946, they employed 30 people.

    1871
    They now employ 3,500, and last week they made a statement which hon. Members can read in the Financial Times that by 1970 they expect to employ 5,500 people. We also have an American firm, Euclid, in my constituency, which has started an expansion programme. By 1970 a further 1,000 jobs will be found in that part of the country. This proves conclusively what can be done where we have the desire and where the industrialists move into these areas. Industrialists have said to me many times that the workers in Lanarkshire are second to none and that they are prepared to stay there and develop their interests.
    May I make a constructive suggestion? I do not think that we have done enough about industrial training centres. We are now making progress with them, but we are not doing enough. We need the skilled craftsmen in Scotland. Without them we cannot employ the ancillaries. At the moment many of our people are unemployed, and yet we are screaming to high heaven for the craftsmen we so urgently need.
    Hon. Members opposite have referred to the unemployment figures. Too often we talk about them as if they were simply figures presented to us, and at the end of the day we may give the impression to the country that they mean nothing to us individually. I have always taken the view that it is easy enough to talk about unemployment as long as one is not one of the unemployed. The 70,000 or so who are unemployed at present are 70,000 too many. The Opposition tell us that there was a boom in 1957. There was also a boom prior to the last election. They conveniently forget to tell us that in 1963 in Scotland we had 136,000 unemployed. In Lanarkshire we then had 19,500 unemployed.
    I believe that the Government can do something to cut down the unemployment figures, especially in the construction industry. There are many construction factories in and around Lanarkshire. Many of the construction firms throughout the country are not working to full capacity. Although we were told that the squeeze would not affect Scotland. I can say categorically that it did affect the construction industry. There is now a move to expand production so that the
    1872
    fears which exist in all our minds may not be realised because of the impetus in that direction.
    But may I draw attention to the new factories which are being constructed throughout the country? It is not good enough for industrialists to go to a development area, to draw the grants from the Treasury and the Board of Trade and then, after about three years, to close their doors and move out. This has happened in my constituency, and I refer to the firm of Moffats, manufacturing gas and electric cookers. This factory was constructed three years ago, with all the grants from the Treasury. A further expansion was carried out in that factory 12 months ago, but at the end of June 230 workers were made redundant and the firm contracted. As usually happens, such firms move out of Scotland and go back to the south.
    We must also give serious thought to the price which is being paid by industrialists for coal. The steel industry is placed in a very difficult situation because it is paying 30s. a ton more for coal than its opposite numbers in the south. There is competition in the steel industry, and when there is a price difference of that character, it places the Scottish steel industry in a very serious competitive position. In their efforts to relieve unemployment in Scotland the Government should apply their minds to this problem.
    Mr. Eadie: I know that my hon. Friend is concerned about selective coal prices. We are both concerned about that. But he should bear in mind, if he is criticising the Government, that they are carrying out a policy of selective fuel prices which was started by hon. Members opposite.
    Mr. Hamilton: I am pleased that my hon. Friend made that point, because I was about to say that my criticism is in no circumstances against the Government. At the same time, I expect the Government to put right the errors perpetrated by the previous Administration.
    It is not good enough to criticise any Government unless we are prepared to put forward a constructive alternative. Lord Polworth, the President of the Scottish Development Council for Industry, made a statement a few months ago that the economy of the country was the strongest that it had been for 70 years. We should note his point of view.

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    In relation to the rating relief given to industry, we give 50 per cent., as the previous Government did, but we must also recognise that Scottish industrialists are paying more than those in the South. This could help to attract vital industry. We must have some of the scientific industries. It was said that B.M.C. and Rootes, in Linwood, were directed to their present locuses by the last Government. The Opposition oppose direction of industry and, contrary to something said on this side earlier, it has never been this Government's policy to direct industry. It was the policy of the Scottish T.U.C., but was never accepted by the Government. When private enterprise does not go to development areas which need a particular industry, the Government have the right and the responsibility to direct or finance an industry in the interests of the unemployed.
    I ask my right hon. Friend not to be complacent, just because the Opposition have put forward no logical reason why they should return to office. They try to say that they are the saviours of the unemployed and of the economy, but I want to prove beyond a doubt that this Government can fulfil their election pledges, solve the unemployment problem and give people in development areas the prosperity to which they are entitled.
    6.5 p.m.
    Mr. Russell Johnston: This debate has become an annual spectacle and is generally more spectacular than productive. We have had the usual claims, denials, affirmations and prophecies, but when one asks the age-old question, "Stands Scotland where she did?", the answer immediately comes—she stands exactly where she did. There has been no change at all.
    It would not be difficult to make a rhetorical speech, in which, on the one hand, one attacked Conservative policy—because for them to put down this Motion is unctuous humbug, as their performance was little different in most respects and in some, like housing, roads and effort towards regional development, notably worse than that of the present Government—or, on the other hand, castigated the Government for failing to live up to many of their
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    promises as quickly as they led us to believe that they would and, most of all, for failing, despite the overwhelming Labour representation in Scotland, to inspire any new revival in the last three years in industrial growth, social awareness or democratic participation. There has been no basic change in Scotland's mood. Scotland stands where she did, a nation with many advantages, skills and courages and with many short-comings. It would not be difficult or unfair to develop this theme, but it would not be very useful.
    Liberals have stood for a long time for self-government, as the only way of creating the conditions of national assertion. But it is not a question simply of the establishment of a Scottish Parliament; the key question is, what can this or any Government do? I ask that not only as a Liberal but as a relatively new Member who has been here for less than three years.
    I have steadily been driven to the conclusion that this Government, like their predecessors, lay far too much store by economic regulation and too little by economic encouragement. I suspect that many of our planning concepts are fallacious. Look at our experience. The first real attempt at planning was by the Labour Government of 1945–51 and one cannot perhaps blame them too much for making a bit of a hash of it because the circumstances were difficult and planning was in its infancy. But they failed.
    The next stage was the Conservative concept of the 4 per cent. annual growth rate, from 1962. I have never been clear about why 4 per cent. was chosen. Perhaps the right hon. Member for Leeds, North-East (Sir K. Joseph) can explain it to me. It seemed quite arbitrary. It was half again as fast as in the 1950s and twice as fast as the growth rate of the previous half-century. Again I do not think one can just condemn the Conservative Party because this projected rate failed, because we have not good criteria for judging whether it could have failed or succeeded. However, there were certain results of fixing that rate. One was that the trade unions based their wage claims on it. Second, the social services expanded on the same assumption. We often say that we should spend more on education, and this will lead to growth,

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    but, often, the more people are educated the more their power to choose is expanded, and they can choose things which are not especially productive or in the national interest to choose. Third, the nationalised industries did much of their planning on this basis.
    The Labour Government's National Plan is now stotting to a stop. I believe we must look critically at our lack of success in regulation and ask whether the emphasis should not be much more on encouraging, facilitating and easing change. In effect, I am saying that we have not been very successful yet in laying down potential rates of growth and keeping to them, and it is very questionable whether we shall be very successful in future, either, whichever of the two sides may or may not be in power at any particular time.
    What I should like to see is more emphasis on how we can help change by retraining, by providing the general infrastructure, by education, by tempering what may very often be painful changes, and in not placing obstacles in the way of industry which seems naturally to be expanding, and also by taking decision-making itself as near as possible to those affected by the decisions, remembering always that the Government themselves are now responsible for making a lot of important commercial decisions in industries over which they have assumed control.
    Having put those general questions, which is the first part of what I want to say this afternoon, I should like to turn briefly to the general economic position and start by asking a question about the coal industry, which has been mentioned already by two or three speakers.
    I wonder what the fuel policy of the Government is. We have not really had any definitive details of it. There have been some promises. The coal industry is contracting, and this is for many and various reasons, most of them not altogether under our control. The Government have said they are going to reduce coal production from the present 173 million tons a year to 140 million tons a year by 1970. I believe that is the figure.
    Mr. Eadie: I have enjoyed listening to the hon. Member, and I know how
    1876
    constructive he is, but the Government have said no such thing, and I think it wrong of him to make such a statement. This is precisely why the argument is raging at present; the Government have not made any statement.
    Mr. Johnston: Well, it may be that my information is wrong. As far as I know, it is sound. As far as I know, the official policy is that coal production, inevitably, will be reduced, but I am prepared to allow that the hon. Gentleman may be right, at any rate about the estimate. I would still say—and I do not think he will deny it—that the Government are looking for a reduction in coal production. I will not argue about the detail; my information may not be absolutely accurate as to that, and I do not know what the estimates at the end of the day may be, but, in any event, we have had a reduction of production and a reduction in the number of men in the mines from 72,000 to 48,000 between 1960 and 1965.
    What exactly is being done about the retraining of these people? That is the first of my subsidiary points, and I think it is vitally important. As to the facts and figures of Government retraining centres, at the retraining centres in Scotland in 1964 43 miners were retrained; in 1965 22 miners were retrained; in 1966 21 miners were retrained. This is not, I think, a massive contribution to retraining. Indeed, I would have thought it would make as much impact as a mouse in the Usher Hall. I do not think there has yet been sufficient emphasis by the Government on retraining. A major bar to progress in Scotland is the shortage of skilled labour, and the facilities for retraining are totally inadequate.
    We have—in June this year—76,972 unemployed, which is the highest June figure, as has already been remarked, since June, 1963, when the right hon. Member for Argyll (Mr. Noble) was responsible and we had a figure of 94,800. Emigration is equally at a new peak. For all these reasons particularly it is vital that the Government should lay much stronger emphasis on retraining than they have yet done, and I should like the Government spokesman winding up the debate to say something about this. I

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    think it is very important indeed. We have the structure of old industry in Scotland and we are hoping to get this new turnover, and yet there is still no evidence of a really dramatic effort by the Government to face this problem.
    Secondly, I think that the taxation structure devised by the Government is not well designed to give encouragement and to stimulate initiative, which are what we need. I do not want to bore the House by labouring the arguments again about S.E.T., but I fail to see this great distinction between service and manufacturing industry. It is not at all clear to me. Take the position of the tourist industry. This is an industry which everybody says has tremendous potential; everybody talks about boosting it; the Secretary of State says it is a splendid thing; but at the end of the day what do the Government do but penalise it by this particular tax?
    Indeed, the treatment of the tourist industry by successive Governments defeats logical explanation. Tourism in other countries has expanded at the rate, roughly of 15 per cent. per year, but in Scotland it has been very nearly at a standstill since 1959. It has not been advancing at the same pace as it has in other countries, and one of the reasons is that official encouragement has been poor. We know that the Irish Tourist Board receives nearly £2 million a year from the Government of that country. Compare that with the £25,000 a year which the Scottish Tourist Board has from this Government.
    Mr. John Rankin: I am interested in what the hon. Member is saying about the tourist industry. Could he give us any figures to substantiate the statement which he has made? It does not tally with my own knowledge of the matter.
    Mr. Johnston: I think that if the hon. Gentleman looks at the figures he will find that the tourist industry in Scotland has not been advancing at anything like the pace the tourist industry in Continental countries has been. At the same time, we have the new 40 per cent. investment grants which are not available for tourism. I think that extremely unfortunate.
    Finally on taxation, I still think that it is about time that some Government looked at variations in taxation as a
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    means of stimulating regional growth, whether we do it through National Insurance contributions or whatever.
    Time, however, is pressing, and I do not want to take up too much of it. Therefore, I should like to put three quick questions.
    The first question is about the position of the pulp and paper mill at Fort William. I would refer quickly to a review of Scottish industry in Barclays Bank Review last year, which said:
    "The new mill"—
    that is, the pulp mill—
    "will provide a vast outlet for the supplies of timber which will become available in rapidly increasing quantities from the post-war plantings of the Forestry Commission. During the next 20 to 25 years the Fort William Mill together with the chipboard factory at Inverness should be able to consume nearly all the smaller-sized timber coming from the Highlands. It has been estimated that output from the Commission's Highland forests will more than treble between 1965 and 1980."
    Now the E.F.T.A. tariffs have gone, and the surcharge has gone, and the wind from Scandinavia blows chill. The pulp mill itself is in some difficulty and is being forced to delay both the expansion programme and, apparently, negotiate with the Forestry Commission for new prices. The chipboard factory has closed and we do not know what will fill the gap in dealing with small wood. I should like the Minister to explain to us what the present position is and what, as far as he can say, the prospects are.
    I should also like to hear a little more about Fairfield's. It was very pleasing to all the House to hear that this has so far been successful. Certainly the aim to raise productivity by breaking down demarcations in exchange for more complete security and increased rewards is very much in line with Liberal thinking.
    Lastly, I would strongly re-echo what the hon. Member for Edinburgh, West (Mr. Stodart) said about the position of Scotland in the Common Market. What preparations are the Government making? I thought it rather unfair for the right hon. Member for Leeds, North-East to raise this point, because I do not recollect that all those special arrangements were made by the Conservative Government in 1961–62 when they were making a comparable bid. Nevertheless, I think it vitally important that there

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    should be direct representation of Scotland and of the Scottish office on the negotiating committee in Brussels.
    Secondly, and allied to that, I should like to hear more of the Government's thinking about the impact on Scotland of our joining the European Economic Community. Obviously, Leith was very much in the mind of the hon. Member for Edinbugh, West because of its links with Europe and questions of trade and air services.
    I have three short points to make in conclusion. First, we must not overrate what we as politicians can do to regulate the economy. Paradoxically, I think that if we realise that we must not overrate it we may be more successful in doing something about it. Secondly, we ought to emphasise encouragement and incentive far more. Thirdly, we must reexamine the centralisation of the administration of the United Kingdom. I think that in the end this will inevitably mean a Scottish Parliament dealing with Scottish affairs. We have in Edinburgh Scottish civil servants of very high calibre, but there is no publicly-elected body in Scotland to direct their policy, and it is time there was.
    Mr. Speaker: Many hon. Members wish to speak. If speeches continue to be of a reasonable length I may be able to call a large number of them.
    6.22 p.m.
    Mr. George Willis: I shall not follow the points made by the hon. Member for Inverness (Mr. Russell Johnston), because I want to make my own speech and not take too much time.
    First, I would refer to the speech by the hon. Member for Edinburgh, West (Mr. Stodart) and follow up one or two of the points that he made about Edinburgh and the regional employment premium. When the decision was taken to exclude Edinburgh from the Scottish development area. I supported it. I thought the decision was right in the circumstances. It was right in view of what the hon. Gentleman said, that Edinburgh does not wish to attract a large amount of manufacturing industry. I do not think that anybody in Edinburgh wants this. So it seemed to me at that time—I still think that the argument was true—that Edinburgh did not
    1880
    need the benefits of being within the development area. But the introduction of the regional employment premium has brought a new element which causes serious concern to trade unionists and manufacturers in Edinburgh.
    Manufacturing industry which has been in Edinburgh for seven years is now to be placed at a serious disadvantage compared with every other region in Scotland. One shipyard out of all the shipyards in Scotland has to face up to this competitive disability. One paper mill out of all the paper mills in Scotland is penalised in this respect, having to face this disability. That paper mill is probably further away from the centre of Edinburgh than the Inveresk Paper Mill in my constituency, which does not have to suffer this disability. In my constituency I have probably one of the best known knitwear firms in the country, and that has to face up to this competitive disability, and this means—I have sent the figures to the Board of Trade—that the cost of the jumpers that it produces will be between half a crown and three shillings more than previously. This is a tremendous disadvantage for these industries.
    One wonders what the Government expected to achieve by this. As the hon. Member for Edinburgh, West said, Edinburgh is not over fully employed; its figure has been low, but it has not been over fully employed, certainly not in its manufacturing industries. Is it desired that employment should leave Edinburgh, that some of these industries should go outside Edinburgh? I cannot see that this would serve any purpose. The people employed in Edinburgh will go if the industries move over into Midlothian. All that we shall have achieved will be the creation of a transport problem. We shall not have done anything to assist the other parts of Edinburgh.
    We are content in Edinburgh that any new industry coming to Scotland should go to the other regions there, but we want to keep what we have got. We now stand a very serious chance of losing it because of the proposal with regard to the three employment exchanges. If that happens, it will mean that Edinburgh will become even more of an office employing area. In my view, there is already considerable unbalance in the economic situation in Edinburgh. As I said last night, I should

    1881
    like to see some of the Government employment go out to other areas.
    The Scottish Development Department takes pride in the fact that in the four new towns there is office employment for 1,258 people. We could double that number tomorrow if the Government put out some of the office employment which it maintains in the City of Edinburgh. I could think of one or two departments that could easily be moved out of Edinburgh. If it is desired that some of the employment in Edinburgh should go elsewhere, this is the way to do it, rather than driving out of the town the few manufacturing industries that we now have. In Edinburgh it is difficult to accept what is happening because it threatens the jobs of a very large number of people. I take it that this matter will be looked at in the light of experience, and I hope that it will be looked at with a view of doing something about Edinburgh.
    I have said that Edinburgh does not want a vast new volume of employment but wants to keep what it has. In any case, there is not much room for new factories in Edinburgh apart from the Leith area. But there is another point that I wish to raise which often causes me considerable thought. It arises from the fact that we have now scheduled the whole of Scotland, with the exception of Edinburgh, as a development area. Anybody going to any area of Scotland with the exception of Edinburgh can now obtain the various grants and inducements offered to those going to development areas.
    It seems to me that as a result of that there is a great danger that we may create in the central lowland belt of Scotland the very thing that we have been suffering from for a great many years in the South-East and Midlands of England—a coffin area. I know that my right hon. Friend is very conscious of this, but what is happening? We are spending vast sums of money developing the infrastructure in the central lowland area—1 think it is necessary and do not quarrel with it—but considerably smaller sums in all the other areas—the North-East, the Highlands, the Borders and the South-West.
    I was interested in the very powerful and cogent speech of my hon. Friend
    1882
    the Member for Aberdeen, South (Mr. Dewar) in the debate that we had on roads. He pointed out the difficulties that are being created in the north-eastern region, and he quoted a business man, who had gone to the North in response to the efforts of the Scottish Hydro-Electric Board to attract industrialists to that area, as saying:
    "The north of Scotland has failed because Scotland ends at Dundee."
    That was a rather melodramatic statement but there is some truth in it.
    We are not providing in the rest of Scotland the necessary inducements to industrialists that are provided in the central belt. An industrialist who goes north can set up outside Edinburgh, which is a very fine capital city, with all the cultural amenities he could wish for, with very good shopping facilities for his wife and with educational facilities at hand. He can join all sorts of clubs there; or he can go west and get the same facilities in Glasgow; or he can go to Inverness. If the inducements offered in all three places are all the same, where is he likely to go? In nine cases out of 10 he will select the area most favourable—
    Mr. Michael Noble: I should like to congratulate the right hon. Gentleman, not only on his Privy Councillorship but on the fact that he is now saying exactly what I said in earlier debates, but with which he disagreed. There is no doubt at all that what he says he fears is the exact consequence of R.E.P., and so forth.
    Mr. Willis: The whole of Scotland, except Edinburgh, is eligible for R.E.P., and I am in favour of that. I welcome this £40 million, but that is no reason why I should not suggest that certain improvements might be made and that certain problems arise. All policies, when they start to operate, reveal certain weaknesses. No human being has ever devised the perfect policy—nor any Government. Hon. Members opposite should apply their minds to this fact—
    Mr. Ian MacArthur: When the right hon. Gentleman says that the whole of Scotland except Edinburgh is eligible for R.E.P., I hope he will qualify that statement by saying that only a minority of Scotland qualifies for it, because it excludes the

    1883
    service industries, agriculture and the tourist industry, on all of which Scotland very largely depends.
    Mr. Willis: It is still available to all Scotland except Edinburgh.
    Mr. MacArthur: On an arbitrary basis.
    Mr. Willis: I recognise that loans and grants can be given by B.O.T.A.C. to industrialists who choose to go to the more difficult areas, but I wonder whether the time has not come to look at the complete blanketing of Scotland with exactly the same inducements to industry in the form of investment grants, and so on. We will probably have to think in terms of giving some extra inducements to the more difficult areas. I do not want to cut the inducements to the central belt—we must develop there—but if we are to avoid the possibility of too much concentration in that area, with a consequent drain of population from the rest of Scotland, we must think through what we are doing.
    What we have done is good, but we have to think ahead and visualise some of the problems that will still be there—
    Mr. Robert Maclennan: My right hon. Friend would be less than fair to himself if he did not animadvert to the initiative and initiation of this idea of regional differentiation which he and his colleagues started by setting up the Highland Development Board with its powers to make this kind of differentiation.
    Mr. Willis: Some inducements might prove useful in these other areas. I am not certain how it should be done, but I think that there is a case for it because I agree that in most of these areas the effects of the S.E.T. are heavier than they are in the industrial areas, though not to the extent claimed by hon. Members opposite. There is a difference between the effect of S.E.T. in industrial areas and its effect in other areas, but hon. Members opposite have at times worked out a fantastic figure, which is quite wrong.
    In the Highlands we have the Highlands Development Board, which can be used to give this additional assistance and inducement and, after all, that Board covers three-fifths of Scotland. We have
    1884
    here a weapon for doing something more, and I hope that the Government will use it. I feel sure that they will. In other areas, however, we have to think in terms of giving the additional assistance necessary to prevent what I feel would otherwise happen.
    For the first time since I became a Member of this House of Commons—on and off since 1945—we can see in operation a real endeavour to plan Scotland. I have never seen this before. It is now going on, not only in the industrial belt but in the Scottish Economic Planning Council and the various other bodies set up in the North-East, the Borders, and elsewhere, to give to the Secretary of State for Scotland the advice necessary for the determination of the rate of flow of industry into these other regions. We have the Highlands Development Board, thanks to the Government and my right hon. Friend, and I think that the prospects are good.
    I would also say that I know of no Secretary of State for Scotland who has done a better job than has my right hon. Friend. For the first time we see this being done in Scotland. The right hon. Gentleman the Member for Argyll (Mr. Noble), laughs, but, as I told him on one occasion, he and his colleagues have created a tremendous mythology of what he did, but it is a mythology and does not bear very much relationship to what we in this House saw.
    For the first time we have seen this deliberate, conscious effort and, despite what has been said by the hon. Member for Inverness, it is achieving results. The speech of my right hon. Friend the President of the Board of Trade showed this. The results are being seen in the numbers of jobs. Incidentally, results were also being seen between 1945 and 1950, when about 20 per cent. of new jobs were coming to Scotland. I want the Government to pursue their present course, and at least to examine the suggestions made in this debate. If that is done, I am sure that we can look forward to a settled, growing and improving Scotland.
    6.39 p.m.
    Mr. Alick Buchanan-Smith: We have all enjoyed the speech of the right hon. Member for Edinburgh, East (Mr. Willis), and not least his attitude to the situation as between Edinburgh and the rest of Scotland.

    1885
    If I may turn a phrase slightly, we listened to the gamekeeper turned poacher. We also enjoyed the right hon. Gentleman's tribute to the previous Government's policy of growth points, and helping those areas more that needed help most.
    My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) was absolutely right to draw attention to the country's general economic atmosphere of stringency. In a period of stringency such as we have been experiencing it is inevitably the areas further away from the centre which suffer most, and for Scotland those are the areas outwith the central belt.
    I draw attention to a Question which I asked the President of the Board of Trade a week ago about the number of liquidations of companies in Scotland over the last three years. I appreciate that to some extent all liquidations illustrate the organic movement of business life in any country, but what is alarming about these figures is the rate of increase over the last three years. In 1964, there were 314 company liquidations in Scotland, whereas by 1966 the number had riesn to 617. This illustrates that Scotland has suffered from economic stringency and from the restrictive policies of Government over the last three years.
    Mr. W. Baxter: Can the hon. Gentleman indicate what capital was involved in these companies?
    Mr. Buchanan-Smith: I asked for more details, particularly about the numbers employed, but the right hon. Gentleman was unable to give that information. He could only tell me the number of companies involved. Apparently, the other information was not available. I would have particularly liked to have known the number of employees involved. That is important, because it puts into perspective the picture which the right hon. Gentleman tried to paint this afternoon about the number of new jobs created, without any reference to the number which had been lost.
    I want now to deal with the problems of those areas away from Central Scotland. I represent a constituency part of which until recently did not enjoy the benefit of being a development area. I welcome the extension of the definition of a development area to include areas
    1886
    with low unemployment but with a very high rate of migration. However, since the development area was extended to the whole of my constituency, not one new industry has come into that part of the constituency which was not formerly a development area. New industry has come to that part which already was, but what disappoints me is that not one new industry has come to that part of the constituency which has now become a development area. Therefore, although development areas are now spread to the whole of Scotland, that has not necessarily brought to those parts of Scotland the industry which the Government led us to hope that we could expect.
    In the north-east of Scotland we still suffer from the scourge of hidden unemployment in the form of depopulation. As the 1951 and 1961 censuses showed, the counties of Aberdeen, Banff and Kincardine were the three counties of Scotland which suffered the highest rate of emigration at 12 per 1,000 per annum. This problem is still not solved and the measures which the right hon. Gentleman mentioned this afternoon have done nothing yet to stem the emigration and have done nothing yet to solve the basic problems of areas such as that which I represent.
    I am becoming increasingly worried about the greater imbalance which is being created between the areas outwith central Scotland and central Scotland itself.
    Mr. Hector Hughes: The hon. Gentleman said that those measures have done nothing yet for the north-east of Scotland. Is he not aware that the President of the Board of Trade has visited the north-east of Scotland several times and that, as a result of his efforts, advance factories have been built there and new industries have been started and Aberdeen is a flourishing place?
    Mr. Buchanan-Smith: I would not have said that the right hon. Gentleman's visits had done very much good to encourage industry to go to the North-East. They have done nothing for my constituency. I do not believe that he has even visited my constituency. There are parts of the North-East to which new industry has come but, equally, industry has been deterred from going to other

    1887
    parts of the North-East. The hon. and learned Gentleman will not get a correct picture if he looks at only one side of the coin.
    Mr. George Younger: Will my hon. Friend remind the hon. and learned Gentleman that of the two advance factories announced for Aberdeen, one has not yet started building and, although the other is to start fairly soon, it has not yet started?
    Mr. Buchanan-Smith: I believe that to be correct. Certainly what the right hon. Gentleman has done has not created any jobs for the people of the North-East.
    The right hon. Member for Edinburgh, East put his finger on the important thing, which is the increasing imbalance between central Scotland and other areas of Scotland. This imbalance was recognised in the Plan for the Scottish Economy, but it has unfortunately been further emphasised and encouraged by the introduction of the Selective Employment Tax. I do not intend to go over all the arguments on that subject, but a tax with a far heavier impact on areas outwith central Scotland than on central Scotland will inevitably increase the imbalance.
    It is emphasised still more by the regional employment premium. All luck to those firms which are to benefit from the introduction of the regional employment premium, but although 37 per cent. of those in employment in central Scotland are in manufacturing industry, in other words, are in industries of a kind which will benefit from the premium, in other areas of Scotland a far smaller proportion will benefit. For example, in the Aberdeen area only 26 per cent. of people employed are employed in industries which will benefit from the premium. The position in south-west Scotland is even worse with a figure of 18 per cent., while the figure for the Highlands is only 10 per cent. The further an area is from central Scotland, the less benefit it will get from this extra money which the Government are putting into Scotland and about which they take so much pride.
    But that is only part of the picture. In my constituency one manufacturing industry, the jute industry, employs a high proportion of female labour, which does not attract the same amount of regional
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    employment premium as male labour does. For example, in central Scotland 70 per cent. of the employment in manufacturing industry is male and only 30 per cent. female labour, whereas in the North-East 60 per cent. is male and 40 per cent. female labour. Therefore, not only between manufacturing and other industries but even within manufacturing industry itself nothing like the same amount of money goes to these areas as the Government would claim. Although the premium is to act as a topping-up, particularly in central Scotland where 90 per cent. of our manufacturing industry is, at the same time it completely fails to replace what has been drained away in Selective Employment Tax from areas like the North-East, the Highlands, the South-West and the Borders.
    Representing a constituency outwith central Scotland, I am anxious that in central Scotland we should not have the kind of concentration of manufacturing industry which we have seen in the Midlands and the south-east of England. Having seen what has happened in England, if the Government and the Secretary of State allow the same thing to happen in Scotland, the right hon. Gentleman will have to take responsibility, because we in the North-East and in the other areas of Scotland want to share in the development of manufacturing industry, and we are not doing so at present.
    Another of my worries is that the Government are so much taken up with the problems of central Scotland that they do not pay enough attention to the problems of the remoter regions. I have in mind a proposed development by a distillery in Stonehaven in my constituency. This development was deferred by the Scottish Malt Distillers for the reason which has been discussed at other times in the House, that is, the confirmation of the extra surcharge on the whisky duty. Last week, I asked the Secretary of State whether he was aware of this deferment and the effect which it would have on employment in the north-east of Scotland. He replied that only the creation of a small number of jobs had been deferred as a result of that decision. He is quite right, it is only a small number of jobs, but what may be small in the eyes of St. Andrew's House, Kilmarnock, or somewhere else in

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    central Scotland means a good deal to the people of Stonehaven. We do not write off these small developments as the right hon. Gentleman writes them off.
    Much more concern must be shown for the problems of the smaller towns and remoter areas. The right hon. Gentleman went on in his reply to say:
    "… the Government are continuing to encourage industrial development through such means as advance factory programmes."—[OFFICIAL REPORT, 28th June, 1967; Vol. 749, c. 89.]
    As my hon. Friend the Member for Ayr (Mr. Younger) has already said, the advance factories are not yet in operation and are doing nothing for the North-East, and for my constituency the thought that there are advance factories somewhere else gives small comfort.
    A word now about the problem of rising costs which affects not only householders but industry as well. One example—I appreciate that it is beyond the Government's control—is the rise in petroleum fuel prices. There is a report in today's newspapers that the increase of 2d. a gallon is likely to put an extra cost of £250,000 a year on the Scottish trawling industry. This is the sort of extra cost which my hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) and others of us with fishing interests in our constituencies must regard with great concern in the present period of economic stringency. It is very difficult to carry such extra costs on top of the other impositions which the Government ask us to bear.
    Another example is the application now made by British European Airways to raise its fares not only between Scotland and England but within Scotland itself, the size of the increase being as much as 50 per cent. on, for example, the winter fare between Scotland and England. Air travel is becoming part of everyday life in Scotland, and we cannot be expected to put up with increases of that kind. I hope that the Secretary of State will strongly resist such increases in charges, particularly those which affect the air services to the remoter districts and the Highlands and Islands.
    The hon. Member for Bothwell (Mr. James Hamilton) has already mentioned coal prices. Not only are there higher coal prices in Scotland in relation to
    1890
    England, but in the North our coal prices are higher than they are in Central Scotland. This is another extra cost for areas away from central Scotland which the Government seem to do little to alleviate.
    The increase in electricity charges is a further burden. The North of Scotland Hydro-Electric Board is increasing its charges by 10 per cent. Here is a comment made in a letter sent to the Secretary of State by the President of the Aberdeen Chamber of Commerce:
    "While it is not disputed that some increase in charges must be accepted, the authority granted by you to the Board to put up its charges by 10 per cent. on 1st July, 1967, does not appear to us to match the Government's declared policy of urging industry and commerce to do everything possible to prevent price and wage increases after the end of the period of severe restraint on 30th June".
    That is what people think in the northeast of Scotland. In more picturesque language, Mr. Low, the convenor of the public services committee of the Aberdeen Chamber of Commerce, had this to say:
    "I have no doubt that industry and commerce will be asked to absorb the extra cost and not to pass it on to customers. In my view, this is another instance of the Government saying, 'Do as we say, not as we do'."
    This is the sort of thing which we in the north-east of Scotland dislike. We are asked by the Government to do one thing while they themselves do quite another.
    I have stated the problems which we have to face away from central Scotland. The Government do not take all these factors fully into account, and, for that reason, we condemn the economic policies which they are pursuing in Scotland.
    6.55 p.m.
    Mr. Alex Eadie: As the debate ranges, it becomes obvious that a period in oposition has made some hon. Members opposite more militant than they were in government. The speech of the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) is a classic example. He now rages against differential coal prices. Ever since I came into the House, I have spoken against differential coal prices, and I have been trenchant in my criticism of the Government on that score. I know what the difference costs. I know what it means for industry and for employment. I wish that the hon. Gentleman and his hon. Friends had done something about it when their

    1891
    Government first brought the system in and operated it. As I say, a period in opposition seems to make some hon. Members more militant than they were in earlier years. It is a pity that they did not join with us in urging a change of policy in years gone by.
    However, I am not sure that I should want to man the barricades with the hon. Member for North Angus and Mearns. He seemed to advocate the direction of industry. There have been a good many debates not only in the House but in other organisations outside about that. Perhaps his Front Bench spokesman will tell us what the Opposition's approach is to the idea.
    My right hon. Friend the Secretary of State has no need to fear criticism from the benches opposite to-day. His record so far is excellent. It ill behoves hon. Members opposite to be ultra-critical of him. At the last two elections, the people of Scotland expressed a decisive view on their record, and the level of representation on the benches opposite to-day demonstrates the contempt which people have for them and their attempts to solve Scotland's economic problems.
    I hope that my right hon. Friend will not apologise for his record, which is a very good one, despite the economic blasts which we have had to suffer in Scotland. He can truly claim to have sheltered Scotland from the worst effects of the squeeze and freeze. If any hon. Members doubt that, let them read the speech of my right hon. Friend the President of the Board of Trade today, which showed that the charge sometimes made against my right hon. Friend the Secretary of State of not being vehement enough in voicing the claims and rights of Scotland is quite ill-founded. The evidence before us in the debate today shows that his voice has been very loud and it must have been heard.
    My right hon. Friend the Secretary of State can claim to have seen in perspective the long-term future prospects of Scotland in relation to its potential in skill and manpower. I would expect him to be able to do this because, before he came into the House, he worked in education. He knows that we cannot discuss economic prospects without taking
    1892
    into account the available talents of Scottish men and women.
    My right hon. Friend answered a Question from me last month about the number of women graduates and undergraduates. I was greatly impressed by the answer because one of the problems we have in Scotland is the loss of skill and talent, and also because next February sees the 50th anniversary of the suffragette movement. I am sure that its members will be proud that the figures my right hon. Friend gave me show that in his period of office there has been a substantial increase in the number of women graduates and undergraduates. He said that in 1960–61 the total of women undergraduates was 4,734, and in 1964–65 there was the grand total of 7,150 women trying to get diplomas and first degrees. This shows that my right hon. Friend has realised that we must consider the talents of our womenfolk as well as all the rest of our people if we are to get the economy of Scotland right again.
    There has been discussion today about training to make sure that our young people are adequately prepared to take their place in industry. I put a question to my right hon. Friend on 28th June on the number of our younger people who could receive at least three years' post-primary education. He told me that in 1964 73·8 per cent. were getting three years' post-primary education, and he must be congratulated because in the year ending June, 1966, the figure had risen to 78·1 per cent. This means that the Government's education policy has widened the avenue of opportunity for our young people, which is bound up in the long term with Scotland's prosperity.
    There was a reference today to the Scottish Council (Development and Industry) Report, in an excellent, constructive, and thoughtful speech by the hon. Member for Edinburgh, West (Mr. Stodart). He gave some statistics and impressed the House, because the Council is a very authoritative body. But if we are to quote authoritative bodies in our discussion of the economic progress of Scotland it is only fair that we should not go right back to April but should be more up to date.
    I have here a report from The Times of 3rd July, headlined, "New blood

    1893
    gives boost to Scotland". The report says:
    "The results of a survey carried out by the Scottish Council (Development and Industry) show that during the past three years, companies moving into Scotland have invested £288 m., and now employ 102,000 people."
    It was not the Government that made this pronouncement, but the Scottish Council (Development and Industry).
    The report also reveals some excellent figures. It says, for example:
    "Last year these firms produced £473 m.-worth of goods, of which they exported £152 m., or 32 per cent.
    The Council says that the hard core of this impressive growth by new companies is made up of firms producing instruments, electronic equipment and business machinery."
    To some extent this underlines the points made by my right hon. Friend the President of the Board of Trade. The report continues:
    "In 1966, these firms had a total investment in Scotland of £65m., employed 24,400 people, and produced £105m.-worth of goods, of which £60m.-worth, or 57 per cent., was exported.
    Only two years earlier, this same sector had investment worth £33m., employed 18,900 workers, and produced £56m.-worth of goods, of which 49 per cent. went abraod.
    The Council claims that the incoming firms have made a considerable impact on the Scottish economy. They now employ 14 per cent. of total workers in manufacturing industry, produce 16 per cent.…"
    and so on.
    The employment prospects of the mining industry and the sustenance which the industry provides for people in Scotland have been mentioned today. My right hon. Friend should use his influence as much as he can to make sure that we do not have a rapid, substantial rundown of the industry in Scotland. If it runs down in that way, he will be in difficulty in providing alternative jobs for the displaced miners. I am very conscious of what has been done by the Government to try to cushion the effects of contraction within the mining industry. But I am not sure that we should not have a new approach to the whole issue. If we employ the test of profitability, for example, which seems to be the test the right hon. Member for Leeds, North-East (Sir K. Joseph) wants, certain aspects of the economy and industry of Scotland will be in a bad way.
    I ask my right hon. Friend to consider carefully the Government's policy on the
    1894
    regional employment premium. Would they give an incoming manufacturing industry about £2 per worker if it came in to make, for example, nail files or shirt buttons? It seems to me that it would be a bit ridiculous if we applied the test of profitability to the mining industry, where people are already in employment, and then tried to get an industry that might not produce anything as worthwhile as coal. It is time we looked for other ways to use coal for the nation's benefit.
    I hope that when we consider the regional employment premium my right hon. Friend will impress upon the Government that we should be considering using the oil from coal process. I know that cost is involved here, but the jobs which could be produced are fairly substantial. I wrote an article a few months ago for my trade union journal, with the assistance of information from the Library of the House. For the cost of something equivalent to an organic power station we would be able to have oil from coal-burning installations. In view of the international climate this is something which must be economically viable.
    I do not use "organic" in a derogatory sense because the miners in the area are very grateful for this project. In this month's issue of Scotland there is an article written by a colleague of mine, the General Secretary of my area trade union. He says:
    "The Dutch State Mines claimed last year to have developed a process for making from coal the synthetic amino-acid of lysine, one of the most important of the amino-acids required for building body proteins in man and animals. It was claimed that production would be possible on a commercial basis."
    I understand that there has to be contraction in the mining industry, but I do not think that hon. Gentlemen opposite always appreciate the type of contraction that one can have. Mechanisation in industry will create contraction. My point is that if we allow the men in the industry in Scotland to leave, the jobs will be lost for ever, and we will be facing great difficulty. I trust that my right hon. Friend will bring pressure upon the Government to take action over the contracttion of industry. I have enjoyed listening to the debate. Some of the speeches, from both sides of the House, have been very constructive and helpful.
    7.12 p.m.
    Miss Harvie Anderson: I will refrain from following in any great detail the speech of the hon. Member for Midlothian (Mr. Eadie), tempted as I am to enter into the realm of women's suffrage. I would also like to apologise to hon. Members for not being present at the earlier stages of this debate, for reasons which I have explained to them in advance. I am particularly grateful for being allowed to take part in this debate, because, like other Scottish Members, I am particularly concerned about the position of industry and employment in Scotland. I am even more so at present, because I see certain disturbing trends, of which I am sure the Government will be aware, and which I believe require emphasis.
    In my constituency there have been a number of closures. There has been a closure in the cotton industry and in the biscuit manufacturing industry, and there have been other closures in the Hillingdon Trading Estate, as the Under-Secretary of State will be aware. Elsewhere there are industries in Scotland ceasing to make what they have made for many years. A small but important instance would be the Scottish Co-operative Wholesale Society's soap factory at Grangemouth. We see the changing pattern of Scottish industry reflected in these closures. We also see a trend which places on the employment market in Scotland those whose skills are either limited or are no longer required.
    We have a happier picture, too, and I understand that reference has been made to this. In my constituency we have the enormous help that the Rolls-Royce project will bring, and the hope of the new Rootes and Pressed Steel project. We must do our utmost to see that we have the practical means of ensuring that those industries and developments are offered the labour force with which they can make the most effective production.
    It is with those particular problems that I wish to deal. Here is a situation in which we have a labour force, difficult to find and develop. We have problems peculiarly pertinent to the Scottish economy. I would like to quote from the remarks of the chairman of one of the largest factories in my constituency, with
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    whom I have had many discussions over a period of months on the problems which we are now discussing. He says:
    "Scotland is faced with the paradoxical situation of an unemployment rate very much higher than the non-development areas of Britain and at the same time a shortage of labour which is now sufficiently serious to retard both growth of existing firms and new firms thinking of starting up in the area or transferring their activities to Scotland."
    I am glad to see the right hon. Gentleman the Secretary of State taking a particular interest in this point, and it encourages me to go on further with this particular quotation from this very senior Scottish industrialist. He says:
    "If you look at one of the large labour exchanges"—
    hon. Members will know that there are only a few of these in Scotland—
    "you may find as many as 1,000 registered unemployed living within daily travelling distance from a factory. Half of these will be labourers and of the 500 who are not, you will be lucky to find 50 skilled and semiskilled men suitable for your particular job."
    What a tragedy it is if, when we are on the fringe of a great development pattern, certainly in central Scotland, we are not expanding the training opportunities and engaging the interest of men in retraining to match the requirements of developments of this order.
    There are one or two smaller and less important points which contribute to the situation which I have described. The most noticeable one is the length of time for which men and women are unemployed. Others will have noticed the high number of persons unemployed for over a period of eight weeks. In a country as sensitive to unemployment as Scotland, and all the horrors surrounding the factual situation, eight weeks is a very long time and it is sufficiently long to do two things.
    First it turns a man's mind to employment without any thought of the quality of employment or of his own qualities, which might be capable of retraining. At the same time it brings the first aura of apathy, which is the very last thing that we want the people of Scotland to feel. These are dangerous trends caused by the length of time that a man remains unemployed, and it covers over what is, to me, the vitally important consideration of the type of employment which we are seeking to offer in Scotland. Of course, we want

    1897
    more employment. But we also want—or, at least, I want—better employment.
    I do not wish to delay the House for very long, but I must make reference to perhaps the most serious problem of all, that of under-employment, again in respect of the central belt of Scotland. What does it mean? It means short time; it means overtime; it means unemployment benefits operating instead of or supplementary to wages. It means wage rates disrupted and it means union powers upset.
    Any solution must include housing and training, and in this respect we have not gone very far. The controversial subject of housing is very well known, but I ask hon. Members on both sides of the House to look at the July edition of the magazine Scotland and to examine carefully—and to cross-examine themselves when they have read it—the table which is set out in the article on housing. It cannot possibly be right in a £3,500 house to find that it costs annually in Government grant £87 and in subsidy from the rates £116, while the occupant of that house contributes £40 in rent. I will not develop the argument, because it is highly controversial and it would take far too long, but if people are to improve their opportunities of employment they must be able to exchange their houses. The need for more houses in both the public and the private sectors is all too clear when we see the pattern of development in industry.
    I want to dwell particularly on the question of training, and I shall quote from the Journal of the Glasgow Chamber of Commerce where there has been a powerful discussion on the subject. This month the Journal says,
    "The validity of allowing market forces to operate to establish equilibrium in training situations is seen to be defective. In Scotland, due to inadequate training in the past, there is a recognised shortage of particular skills which are needed to create viable production units and so employment opportunity for other skills."
    It seems to me that that is very important, because we must now seek methods to make the Scottish economy more viable and more strongly based. The plea which I should like to put forward is the plea for a longer-term policy in training. There are many things essential to training and to the training programme. The first is that training must be attractive to the
    1898
    man, and that means that special attention must be given to the payment which he receives during the period of his training. Secondly, it must be agreed with and accepted by the unions and that, alas, is not always the case at present. Training can either be an extension of Government training centres or by industry itself or—and I think that we are now all agreed about this—preferably by both.
    When I say that I want to see a longer-term policy for training, what does a "longer-term" mean? It is not particularly easy to assess the industrial requirements of the nation about 10 years ahead, and yet it is quite unrealistic to think in terms of a policy which does not take into account at least five years ahead. I hope that that would be taken as a minimum for an assessment of training requirements and for a training programme to meet the demand. I do not think that it would be unrealistic to take national steps along these lines and, in the process of so doing, possibly to achieve great advances in certain fields where I consider that our outlook is predominantly 19th century. That includes some aspects of apprenticeship and the length of apprenticeships which are sadly behind the times.
    This has been a very brief survey of future requirements as I see them. I ask hon. Members to look at the picture in the Scottish industrial field. They may well find that Britain's requirements, as we have often said in the House, are based on the pure scientist, the applied scientist, the development engineer and the production engineer. These form a pyramid. In Scotland today we are quite unable to support the ideas of the scientist and to translate them into hardware. It is when we translate them into hardware that we shall keep the brains, because we shall then have an objective in Scotland at which the brains can aim and there will be a practical opportunity for them to use their knowledge. That is the result for which I hope, a result which would reverse the brain drain which we are at present enduring. Those who are now frustrated because their ideas are not taken up would have an outlet, which would be developed in this country rather than being developed, as they often are today, in America. I therefore hope that the right hon. Gentleman will urge a more forward look in this direction and

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    will take a passing interest in the points which I have made.
    Before concluding I would refer, as others have done, to growth outwith the central belt. We are already facing a situation in Scotland in which about 80 per cent. of the population is concentrated in the central belt. Whatever the fate of the central belt of Scotland—and, as I have explained, in my view it is a developing picture—we cannot ignore those areas which are far beyond it. With the right hon. Member for Hamilton (Mr. Tom Fraser) and the hon. Member for Inverness (Mr. Russell Johnston), I have the honour to be a member of the Royal Commission on Local Government in Scotland. I ask hon. Members to think of the terms of reference of that Royal Commission and connect this with growth points beyond the central belt in Scotland. It is our duty as Commissioners
    "to consider the structure of local government in Scotland in relation to its existing functions; and to make recommendations for authorities and boundaries, and for functions and their division, having regard"—
    and this is the relevance to the present debate—
    "to the size and character of the areas in which these can be most effectively exercised and the need to sustain a viable system of local democracy."
    If hon. Members look at the pattern of Scotland and Scottish industrial life today they cannot avoid the dominance of the central belt of Scotland, with its heavy concentration of population, and they cannot help but wonder how we are to promote, and to promote in time, growth beyond that central belt.
    Some of us have great concern for development in the Highlands. As the right hon. Gentleman knows, I am greatly concerned about development under the Highlands and Islands Board because I cannot see reality in growth points which are paid for by the taxpayer in millions of pounds with little prospect of viability. As the right hon. Gentleman knows, when those growth points are developed, whether by the Board or any other means, the people of Scotland have a right to an assurance that the projects which are absorbing so much of the taxpayers' money will be viable.
    I shall not detain the House longer. I end as I began by saying that I am particularly grateful for the opportunity
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    to take part in this debate because there can be no subjects of greater interest and importance for Scotland than those we are discussing tonight.
    7.30 p.m.
    Mr. William Hannan: I am particularly glad to follow the hon. Lady the Member for Renfrew, East (Miss Harvie Anderson). I am sure that most of my hon. Friends welcome assistance, but the speech she has made came about 20 years too late. I remember that when we were talking about planning new towns the party opposite voted against the New Towns Bill. I recall that when there was a proposal to build a hydro-electric power station in the Highlands, it was opposed all night because hon. Members opposite did not want industry or anything resembling industry to go into those areas.
    I read the article in Scotland from which the hon. Lady has quoted. I hope that hon. Members opposite will read the latest Report of the Cullingworth Committee, which gives the lie to the suggestion—or at least shows that there are not so many municipal tenants who have motor cars. The average incomes are mentioned in that Report, which shows that heads of families have incomes of £l1 and £12 a week.
    The hon. Lady hoped that my right hon. Friend will take "a passing interest" in training for industry. That is going a little too far. He is engaged at this moment—
    Miss Harvie Anderson: If the hon. Member does me the courtesy of reading my words tomorrow, he will note that the reference he quoted as "passing interest" applied to my suggestion. I have never disputed anyone's genuine interest in this matter, and I do not think that it should be approached in the way in which the hon. Member is approaching it.
    Mr. Hannan: If I have done the hon. Lady an injustice, I certainly withdraw the remark immediately. My right hon. Friend is engaged in the process now of putting into effect the proposals of the Brunton Report on the raising of the school leaving age to 16. This is linking up the later stages of secondary education with the further education in training colleges. In that matter, the

    1901
    Government have not done too badly. In October, 1964, Scotland had five Government training centres with 529 places. Now we have seven centres with 900 places. By the end of this year two more centres will be built and four will be enlarged, providing a total training capacity of 1,400 places. This means 2,500 trainees annually. I accept that these figures, although an improvement, are quite inadequate for the purpose and for the forward look which the hon. Lady projected.
    Scottish industry must bear a very large responsibility in this matter. The Report of the Scottish Technical Education Consultative Council asks very pertinent questions. It says:
    "It is even more open to doubt whether an obligation to generate ideas on further education is recognised throughout industry. Yet the acceptance of such an obligation is surely in its direct interest."
    The Report also pleads for industry to co-operate and asks for an exchange of industry's manpower to come into the colleges to have a share in the vital teaching in fields where teachers are so scarce, in science and technology.
    Here are the figures of day release classes in Scotland compared with those in England. Scottish employers do not come out of the comparison very well, and have not done so for many years. All students under 18 attending day release classes for mining and quarrying in Scotland amounted to 33·8 per cent., and in England to 40 per cent. In shipbuilding and marine engineering in Scotland there were 42·8 per cent., and in England. 49·9 per cent. In gas, water and electricity in Scotland there were 51·9 per cent. and in England 74·7 per cent.
    Those figures are indicative of the laxity of Scottish employers and Scottish industry generally in giving attention to this vital feature concerning the progress of Scotland. The Scottish Council for Industry reported the other day
    "A remarkable story of industrial growth in Scotland"
    which disclosed that in 1966 incoming companies had invested £288 million and were now employing 102,000 people. The investment was up by 33 per cent., output by 29 per cent. and exports by 37 per cent. The key sectors of industry
    1902
    making the contribution to this success were instrument-making, electronics and business machines.
    The hon. Member for Renfrew, East was right when she said that we have a complete dichotomy and that, while our unemployment problems are not yet solved, there are instances of shortages of skilled labour. For some years past, we should have been paying more attention to the boys and girls going to junior secondary schools, leaving at the age of 15 and continuing their education at night schools, because it is from that source that we have been getting our engineers, draftsmen and others upon whom industry depends to such a large extent.
    I have listened with some restraint to criticisms which have been made about the lack of action by the present Government. It astonishes me that some hon. Gentlemen opposite refuse to recall the facts of life. Last summer, for example, before the credit squeeze, the figures of unemployment were 20,000 lower than they were when Labour came to power. Even today, they are a good deal lower than at the comparable period in 1963. The fact that Scotland's unemployment figures are going up at a slower rate than in Britain as a whole is proof that the Government's policy is being successful in protecting Scotland from the worst effects of the squeeze. I hope that the Glasgow Herald will take note of that fact, because it was extremely critical today in its leader.
    Unemployment amongst Scotland's building workers is practically unknown today. Factories are still being built or extended on all our industrial estates, and 23,000 jobs are expected to result from the industrial development certificates which have been issued. Lord Polwarth, who is not an insignificant figure in Scottish industry and is President of the Scottish Council, is on record as saying that the base of Scotland's economy is now stronger than it has been for seventy years. Do hon. Gentlemen opposite accept that statement or disagree with it?
    Scotland's science-based industries continue to expand. If a small old-established works happens to go to the wall, like the many pit closures in Scotland, it is a sign of the change which is going on. However, what some hon. Gentlemen

    1903
    opposite appear to want is to hold on to the old, hoping that the new will stand side by side with it. We have to make up our minds. It is one or the other.
    When we come to the difficulties of raising the school leaving age to 16, to help to achieve what we all want to see, I hope that the Government will not yield to outside pressures, not only on grounds of education alone but on some of the grounds which the hon. Lady has advanced. In addition, I believe that it will take young people out of circulation and remove from them opportunities for mischief and vandalism when they are offered continuity from the primary school through to further education in junior colleges or technical colleges, from all of which the nation will benefit at the end of the day.
    In the course of his speech, my right hon. Friend referred to the expansion of Ferrantis at Edinburgh. Incidentally, that is one of the places where there is a shortage of skilled labour. The accommodation which Ferrantis have taken over was formerly used by United Biscuits, the chairman of which is Lord Craigton, a former Member of this House and a former Minister who had the special job of persuading industry to come to Scotland. However, he has left Scotland to come down here—
    Miss Harvie Anderson: I am sure that the hon. Member for Glasgow, Mary-hill (Mr. Hannan) will have received a copy of the circular letter which was addressed to all Scottish hon. Members by the chairman of United Biscuits, pointing out that the reorganisation of the business would contribute greatly overall. In those circumstances, it is only fair that both sides of that decision should be on record.
    Mr. Hannan: The hon. Lady must also be fair. Let us not talk with our tongues in our cheeks. Many Scottish industrialists have been slow to contribute to efforts in the past which could have helped to solve our difficulties. If we want to be critical of this Government, it is only right to remember some of these points.
    I want to urge upon my right hon. Friend the importance of industrial training. The Scottish Council stressed it as one of its objections to the R.E.P. All credit should be given to the Government
    1904
    for agreeing to the representations of the Council, which were based upon two grounds, one of which was the point which has been made by the hon. Lady about industrial training. Lord Clydesmuir, the Council's chairman has said:
    "The original proposals did not contain any reference to training and retraining. We believe this is a crucial modification and one that will allow not only new growth to be started but existing growth to be maintained."
    The Government are to be congratulated on that. I hope that they will pursue that policy with vigour through the Minister of Labour, because the principal responsibility for training in industry is that of industry, and not the education services. I know, too, that my right hon. Friend the Secretary of State will pursue it with energy and with enthusiasm, so far as his responsibilities permit.
    7.48 p.m.
    Mr. George Younger: We are having an interesting debate on this subject, and I only wish that it could be debated more often.
    Several hon. Gentlemen opposite have indicated in their individual ways that we should not be too critical of what has been done for the Scottish economy in the past few years. However, I have no intention of being deterred from being critical by the views of hon. Gentlemen opposite. Just as I expect them to speak their minds and say what they think, they should respect us for doing likewise.
    Mr. Archie Manuel: A very brave fellow.
    Mr. Younger: I do not recall hon. Gentlemen opposite being all that squeamish when it came to being as critical as they wished to be when they were in opposition.
    In his opening speech, the President of the Board of Trade gave us a long and impressive list of the jobs which had come to Scotland. However, he was rather in the position of an honorary treasurer of some society giving us all the facts on the income side of the balance sheet but none of the facts on the expenditure side. I think that there is no time, probably not even during the worst period in our economy, when one would find it difficult to give a long list of jobs and prospects which have come along. Jobs and projects must be coming along at all times. What

    1905
    matters is the net increase in the number of jobs coming to Scotland, taking into account those that are being lost.
    I am the last person to be pessimistic, and the last thing that I want to do is to give the impression that there is nothing but loss, but there is another side to the position which the President of the Board of Trade outlined. In April there were 260 redundancies at Fred Braby and Company, Glasgow. In 1966, 300 clerical staff were declared redundant at Colville's. At Singer Sewing Machines, 350 staff were declared redundant in October last year, at Beards and Scottish Steel there were 465 redundancies in January of this year, and at William Beardmore Ltd. there were 120 redundancies in the same month.—[Interruption.] I think that it would be helpful if I were to carry on with my speech and make it in my own way.
    Mr. James Dempsey: The hon. Gentleman has referred to firms in my area. The loss of 1,450 jobs was due not to the squeeze but to the fact that there were old industries, and the owners preferred to line their pockets rather than plough the profits back into modern industries and make them competitive.
    Mr. Younger: I am grateful to the hon. Gentleman. I did not say that these redundancies were caused by the squeeze. All I am saying is that it is no use the President of the Board of Trade coming here and expecting us to listen to a story about the jobs which have come in if he is not prepared to take into account the jobs which have been lost.
    I hope that hon. Gentlemen opposite will not be led into thinking that everything is fine, merely because it is possible to refer to some period when things were worse than they are now. They are right to keep this in mind, but we would be foolish to blind ourselves to the fact that, barring one month, this is the worst June figure for 10 years. I can see almost a film coming over the eyes of hon. Gentlemen opposite when this kind of argument starts, but this is the background to the debate. It is unfortunately true that between January and June this year the unemployment rate in Scotland fell by only half the amount that it normally falls between winter and summer. This
    1906
    is something which can give nobody in the House any satisfaction. It is a figure which we must not ignore. We must not forget our duty to consider this, to discuss why it has happened, and to see what we can do to make things better.
    I think that that figure leads us to consider the general trend of the Scottish economy at the moment, and I suggest that there are three things which give us cause for concern—and many people would say grave concern—at the trend for the months ahead. First, the forward investment trend for Scottish industry can give no cause for satisfaction. I do not need to go into detail, because this has been done on many occasions at Question Time and otherwise, and my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) has mentioned it more often than most. It is a bad sign for the future.
    Secondly, the index of industrial production has been behaving in a most depressing way during the past 12 months. In 1964, industrial production in Scotland went up by 7·8 per cent. In 1965 it was up by 4 per cent. I am not in possession of the latest figures, but the most recent figures which I have show a rise of 2·4 per cent. last year. We must take this seriously. It is no use brushing these figures aside as small local difficulties which will disappear of their own accord in due course.
    When talking about the rising trend of unemployment, one has to consider, too, the length of time for which people are unemployed, and this is higher than for the rest of the United Kingdom. The fact is that 65 per cent. of those unemployed in Scotland at the moment are unemployed for eight weeks or more. This is higher than it was last month and previously. This, too, is something about which we must be concerned.
    I come now to deal with the placing of people in work by the Ministry of Labour. It is difficult to make comparisons, but if we compare May of this year with May, 1962—a comparable period of the last economic cycle—we see that in 1962, 19,654 placings were made by Ministry of Labour offices, whereas in May of this year the figure was only 12,695. There may, of course, be many reasons for this. Not everybody is placed in a job by a Ministry of Labour

    1907
    Employment Exchange, but this is another trend which we must consider seriously.
    Many hon. Members have mentioned, and quite rightly, that very soon—indeed it has already begun—there will be a further contraction among those employed in the mines. This will cause grave problems in many areas, and particularly Lanarkshire, about which the hon. Member for Bothwell (Mr. James Hamilton) was talking earlier on. Difficulty will also arise in Ayrshire, where there is grave disquiet about the effects which this will have.
    Overhanging all these matters is the problem of emigration to which many hon. Members have referred, and which appears to be running at a record level at the moment. This in itself tends to make the already serious trend in unemployment look less serious than it might be.
    In the face of all those trends, what have the Government been doing? I propose to consider, first, the interesting question of the abandonment of the growth point principle. The Government made the decision which they were entitled to make, but they now have to take the consequences of it. They decided that it was preferable to give equal inducements to all the parts of Scotland, with the exception of Edinburgh and Leith. It was a fair decision, but the consequences of it are beginning to be seen, and the right hon. Member for Edinburgh, East (Mr. Willis) was the first swallow which may make a summer. He was right to point out that when the same benefits are given everywhere, this has the effect of reducing the attraction of areas further away from centres of population.
    I realise that it is politically attractive to give these development incentives to all areas, and many people then say that it is marvellous to be in a development area, but, as my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) said, many people are beginning to realise that those at the far end of the pipeline have lost some priority, and it follows that we in Scotland who are furthest away from the overcrowded South-East, and those in the North of England, the North-East, and
    1908
    the South-West, have suffered some lowering of the attraction of industries to come to our area because so much of the rest of the country gets the same incentives as we do.
    I do not put it any stronger than that, but I want to make a last point of which I hope the President of the Board of Trade and the Secretary of State will be conscious. As far as I can ascertain, in almost every other European country the vast majority of planning experts strongly believe in the principle of growth points. Very few provide a uniform flat rate incentive over whole areas. I suspect that the right hon. Gentleman's Department think that way, too, because, as my hon. Friend pointed out earlier, within the new system under which every area is a development area there is no doubt that there is still a strong exercise of discretion, when I.D.C.s are granted in favour of the old development districts.
    It is very strange to give a blanket incentive and then still seek to attract industry to the old development districts. This happened in my area. Over a year ago I asked the right hon. Gentleman to consider the possibility of establishing an industrial estate at Prestwick Airport. He was very courteous and helpful about it, and eventually sent me a letter—which, by a coincidence was just four days before polling day—saying that he did not think that he would establish such an estate because at the moment he wished to concentrate development in the Cumnock area, which was in the former development district. I do not quarrel with that decision, but it is a slightly strange way to proceed to give a locality the benefit of being in a development area and then still favouring development districts.
    I now turn to the effects of the Selective Employment Tax and the regional employment premium. These have been much discussed and I am sure that everybody is beginning to get tired of the arguments. I urge the Government to think—and if they cannot do so publicily, to think privately—whether it is not disastrous for a country like Scotland, depending for over half its jobs on the service industries, to have the millstone of S.E.T. hung about its neck. There is no question that it is a millstone that costs Scotland £27 million net. It would be had enough if the effect were spread all over evenly, but this £27 million falls

    1909
    most heavily on those areas which are under-developed and which do not have manufacturing capacity.
    R.E.P. merely compounds this error and illustrates the futility of the theory that we prefer people to work in manufacturing industry. If they are working as well as they can and in whichever work they are doing, they are of equal benefit to the economy. I cannot agree that there is something intrinsically so special about manufacturing industry that all this money should be pumped into it, at the expense of workers in other industries. I hope that, sooner or later, this fact will get home to those who have to consider these matters, and that they will realise that this is a bad tax, which is very damaging to Scotland and ought never to have been imposed.
    Advance factories have a part to play in helping the economy in times of stress, but we should get into perspective what they can do, and we should at least question whether we are getting value for money in establishing them. I am not yet prepared to say that we are not, but I suggest that the relevant figures should be carefully studied. Of the programme announced by the Government, of 43 advanced factories, only seven have been completed and occupied, as we discovered through a Parliamentary Answer this week. A further six have been completed but are not yet occupied—because there are no tenants for them—18 are still under construction, and 12 have not yet been started.
    I appreciate that it takes time to construct such factories, but what shook me was the fact that the total number of people employed in the seven advance factories which have been completed and occupied is 181.
    Mr. MacArthur: How many?
    Mr. Younger: One hundred and eighty-one. That seems rather astonishing—an average of about 25 jobs per factory.
    The Secretary of State for Scotland (Mr. William Ross): Will the hon. Member tell me how many people were employed in the first factory that Honeywell went into in Hamilton.
    Mr. Younger: Without the resources of the Department I am not able to do so, but the right hon. Gentleman's Depart-
    1910
    ment should be able to tell him, if he passes to the hon. Member behind him one of those cryptic notes that he occasionally writes.
    I am delighted to have any number of jobs provided—10, 20, 30, 100 or any other number—but when we spend £4 million in providing these factories and the total number of jobs provided is 181, I wonder whether none of us can think of a better way of spending £4 million and providing many more than 181 jobs.
    Mr. Jay: The hon. Member must realise that he is getting the time scale wrong. By the time these 43 factories are built and fully manned up—which will naturally be some years hence—the total number employed will be far greater than the number he has mentioned—perhaps 10 times as great.
    Mr. Younger: I sincerely hope that it will be. I am questioning whether we are getting value for money. These factories are being provided at a cost of about £25,000 per job. I am prepared to be told that we are getting value for money. But nobody should be impatient if we ask this question. We must decide the best way to spend our money. We should not brush this question aside as not worth considering.
    I do not question the desire of hon. Members on both sides of the House to do the best they can for Scotland and the Scottish economy, but I suggest that the Government will be deluding themselves if they forget that they have made three crashing mistakes in what they have tried to do in the past two-and-a-half years. First, they should never have allowed the Selective Employment Tax to be applied to Scotland. Having imposed the tax, they have coupled with it R.E.P., which is its son and which makes all its effects worse.
    Secondly, they have never produced any big Government-sponsored projects. We hoped to see a Ford Motor Company project, a computer centre and many other such projects, but so far we have not had them. Perhaps the Secretary of State will be able to announce one tonight.
    I suggest that the Government have made a great mistake, and that it will become more apparent now that we have

    1911
    moved from the principle of growth points. We shall discover this every month that goes by. We shall regret having gone away from the growth point principle because this action has reduced the incentive for people to come to Scotland, and especially to the remoter areas. On these grounds we are fully justified in having initiated this debate, and I hope that everybody will find it useful.
    8.10 p.m.
    Mr. James Dempsey: The hon. Member for Ayr (Mr. Younger) criticised practically every aspect of the Selective Employment Tax except the L.E.A. grants for building hotels and public houses. This is the aspect which I would criticise in the tax. In a wide-ranging debate, we have discussed even the teaching shortage, but one thing which has been omitted is the subject to which I referred earlier. I was happy to hear the President of the Board of Trade's outline of the Government's achievements in Scotland, which are remarkable and encouraging and which would be applauded by anyone who is honest. But even my right hon. Friend cannot control the closure of older industries. I was surprised to learn that private enterprise does not have to warn the Board of Trade of closures, which prevents effective planning of full employment.
    North Lanarkshire has been mentioned, especially the new industrial estates at Newhouse, my own constituency of Coatbridge and Bellshill, but these successes have been prejudiced by abrupt closures. This is disgraceful, and I am surprised that the Government tolerate it. Three steel industries which were closed in Coatbridge were old and dilapidated because private enterprise preferred to line its pockets with profits rather than to plough them back to modernise the industries and to keep them competitive in world trade. We are paying the price; in spite of the excellent efforts of the President of the Board of Trade and his Department—especially his Controller and staff in Scotland, who are doing an excellent job in the face of these almost insuperable difficulties—we have the highest unemployment which we have had for a long time.
    1912
    I was surprised at the Answer which I received on 26th June to the effect that 8,877 are unemployed in North Lanarkshire, the main part of the county, of whom 5,437 are men. This is our main problem. There are 2,874 unemployed in the two towns of my constituency, of whom 1,787 are men. This is one of the largest totals ever and is cause for concern. I know that the Board of Trade has a number of jobs in the pipeline and that factories and employment cannot be provided overnight. It will take a few years, but what should we do in the interval?
    More than a third of Lanarkshire's unemployed are in my constituency because industries are closing rapidly without giving adequate notice to allow alternative employment to be prepared. I cannot understand why an up-to-date industry cannot have an effective trade trends department to anticipate conditions a year in advance and to forecast the feasibility of closures. Why cannot they notify the Board of Trade to enable it to help provide alternative employment? I therefore beg my right hon. Friends to help to overcome this situation.
    Container depots are being established and the Minister has insisted that they should be adjacent to railway marshalling yards, which we accept. Unfortunately, many yards and stations in my part of the country have been closed, but there are excellent sites for freightliner depots, and I hope that my right hon. Friends will use their influence to steer such employment into that part, because it is mainly for men. In this respect, we could contribute practically to a solution.
    I was surprised to hear that even industries which deal with welding and making chassis for lorries and other vehicles are not eligible to tender for National Health Service ambulances. In spite of the method of contracting by the ambulance service, now that it is the responsibility of my right hon. Friend in Scotland, I hope that he will try to devise some system by which firms in development areas will be able to tender for this work. It is constantly irritating to me—I am not a Scottish Nationalist and do not have a claymore with me—to find English firms receiving carte blanche

    1913
    from the Scottish Education Department to build training colleges in Scotland with no competition, in spite of the fact that the most reputable timber building firms in the United Kingdom are in that part of the country.
    There is no opportunity for them in the South, because they are not members of the National Building Agency. Therefore, they are given no consideration in the South and are ignored in the North by my own Education Department. I hope that my right hon. Friend will take steps to eliminate this problem and see that there is no recurrence of such a policy by St. Andrew's House.
    As a Member for a development area, I find this extremely unfair to many of our firms. The Board of Trade has tried many things, such as advertising factories and offering the provisions of the Local Employment Act, the new grants and allowances and regional employment premiums, to steer industry to these areas. If the criticism of the hon. Member for Ayr is sound, there is only one alternative, and whether we like it or not it is direction of industry.
    I attended a conference of councillors trade unionists, commercialists and industrialists, at which we unanimously agreed that the only solution to unemployment in my part of the country was direction of industry. I believe that the Scottish T.U.C. has expressed the same opinion. We are used to direction of labour; in the war, we did it all over the United Kingdom. When people in other parts boast to me about how they have solved their problems, especially their unemployment problems, I am sure that the only way it is done is by direction of labour.
    The time has arrived when thousands of our workless who are anxious to work, who believe in the two fundamental rights of society—the right to work and the right to leisure—should have those rights provided by the Government. We in North Lanarkshire and Scotland as a whole are conscious of this important desire. I understand and have the greatest sympathy with the problems of the North-East and the Highlands; but have they 6 per cent. of their population unemployed? The two busiest Government departments in Coatbridge and Airdrie are the two Ministry of Labour offices, and the two busiest officials of the British Government in my part of Scotland are
    1914
    the managers of those offices. They are excellent persons doing a difficult job in very trying circumstances.
    The present situation would have been very much worse but for the wisdom, foresight and initiative of the Board of Trade in building advance factories and developing industry. The situation would have been one of chronic unemployment and perhaps "back to the 'thirties" but for the efforts and intelligence of my right hon. Friend and his Department. On behalf of the people I express gratitude for the service which he has given our community.
    However, what has been done is not enough. We are like Oliver Twist, wanting more. We cannot await the acquisition of ground, contracting for new industries, the building of new factories and the finding of tenants. That takes time. We are looking for jobs now. One way in which an effective contribution can be made is for the two Ministers concerned to use their good offices with their colleagues of the spending Departments and encourage them to steer contracts into North Lanarkshire. We have factories which could be working to capacity and the skilled labour for work which could be done for the Post Office, the Service Departments and other technological branches.
    Ministers could play a decisive part in assisting us in that respect. Some of our works are engaged on manual activities for the Post Office and are in process of losing contracts because of technological misunderstandings. It would be a tragedy for an area with nearly 2,000 men unemployed to lose work of that nature. In addition, we have factories which could undertake work for the Royal Air Force, the Royal Navy and the Army and work in connection with telephones and so on. I appeal to my right hon. Friends to have consultations with the spending Ministries and impress upon them the necessity to steer contracts immediately into this area.
    I believe that my appeal will not fall on deaf ears. In spite of the most difficult circumstances, the Government are doing an excellent job for Scotland and Lanarkshire. I am sure that they will never rest on their laurels until as a result of a sound economic policy our people in Lanarkshire in particular and Scotland in general are within striking

    1915
    distance of achieving for the first time the possibility of full employment.
    8.25 p.m.
    Mr. John Brewis: We have covered a great deal of ground in the debate. I do not think that everything that the Government have done in the last three years is bad. They have done one or two good things, such as tightening up the I.D.C. system in the Midlands and south-east of England. This should have been done, and I am glad that they have done it. However, at the same time they have done several things which have been very unwise from Scotland's point of view.
    First, the Selective Employment Tax hits my constituency very badly indeed because we have only 14 per cent. of our people employed in manufacturing. Consequently, the tax is drawing money out of the constituency when money should be put into it.
    Another thing which has been mistaken in some ways is the extension of the development districts to cover all Scotland, except Edinburgh and Leith, and also large parts of the north-east of England. From one point of view this is undoubtedly good because areas now have a chance of getting industry which they did not have in the past. But from the point of view of a place such as Stranraer, which has a very high rate of unemployment, one which is going up, and which was in the old days a development district, it is most unfortunate, because now the attraction of other districts, such as Newcastle on Tyne or Liverpool, is such that any industry on the move is much more likely to go there than to Stranraer.
    The Government ought to have a two-tier system. There should be a one-tier system for the present development areas, but the more critical areas—these include large parts of the Highlands, part of my constituency and parts of remote areas—should have a different system whereby they get larger grant than the rest. I am told that this is not something which can be done. But we are doing it already with our investment grants. There is a differentiation between development districts and non-development districts. The system is used in various other countries; for example, in Italy there is the Vannoni Plan for getting the south of Italy going.
    1916
    So there is no real reason why this should not be adopted. Making the whole of Scotland a development district has made it very much more difficult for places with critically high unemployment to get new industry.
    It has been suggested that far too much is going to central Scotland. I do not think that this is entirely a valid criticism. I think that the solution to the problem of the distribution of industry lies in Birmingham and the Midlands. By publicity and exhortation we must induce people to move not just branch factories but entire factories from the Midlands into the development areas. I have been reading an interesting article by Mr. Loasby in Lloyds Bank Review of January. In this he points out that of 200 firms which moved out of Birmingham—either a branch of a firm or a whole set-up—nearly all of them were extremely pleased; they had not known that conditions would be so good. If we take a wide view of the distribution of industry policy I am sure that is something which we must try to do, to move entire firms out of the congested areas of London, Birmingham, and the rest.
    It is very interesting that one of the few firms which have come to my constituency and set up a branch factory at Stranraer kept its headquarters in Walsall but has now decided to move the headquarters also so that the entire firm is in Stranraer. Another firm set up a branch at Dalbeattie and it expanded enormously, so that the branch at Dalbeattie is now very much bigger than the main factory which is situated in Liverpool. I feel that this is something which we should be working at, to get a better distribution of industry policy.
    Another point I would make is on the question of planning. In the elections many people, I think, were misled by this emphasis on planning from the party opposite. They thought that, by planning, things would just happen, that industry would just move and the problem would be cured. But this has not happened, nor can it ever happen like that, but it has had the effect of making county councils and burgh councils think they could relax their efforts and need not worry and that all would come right by planning. This is a danger with the regional economic groups. They have a purpose in deciding what industry is most suitable for

    1917
    their areas. I think that they have a very considerable purpose here, but it was never intended that these groups should act as regional development groups, that they should go out and visit industrialists and attract them to the areas: it seems to me that there is a gap now, and that in regions like the southwest of Scotland nobody is going out and publicising the region and getting industrialists to move to the area.
    Earier this week I was going round the new town of East Kilbride, which is extremely interesting. When I was there I was told that in the new town they have something like 140 new factories which have come to the own in the last 20 years. Several of them were very large factories indeed, obviously of the size which would usually be in the central belt, but the vast majority were small factories of 5,000 sq. ft. or 2,000 sq. ft. The interesting thing is that they did not come so much because of the Board of Trade, but the new town development corporation had gone out—gone to America, gone to Birmingham—and by publicity and personal contact had got those factories. I could not help thinking that if some 80 or 100 of those smaller factories had been located in the smaller places of Scotland—I am thinking of small places in my constituency like Newton Stewart and Whithorn—we would have a very much happier country for employment through distribution of industry.
    I would like, lastly, to touch on one other matter, and that is the question of research centres and Government-sponsored schemes. It seems to me that there is no doubt that a good research centre, perhaps allied to one of the universities, can have a remarkable effect in bringing industry into an area. Again to mention East Kilbride, one sees there the National Engineering Laboratory, which, I am sure, has had a considerable effect in bringing more industry into Scotland. It seems to me in travelling round the outer London area, a great pity to find so many of these Government research centres—the Road Research Laboratory, the Timber Improvement Laboratory, all Government-sponsored and Government-controlled in the congested parts of the south of England. Many more of these projects
    1918
    could be located in Scotland, and they could have a very considerable influence on attracting industry—and so, of course, could many of the bigger things which we have been hearing about during the debate, things like the computer centre which, I believe, has gone to Manchester.
    I conclude on a more gloomy note. The unemployment figures for Scotland have been rising sharply. The figures for this month are the worst, with only one exception, for about 10 years and we cannot but feel extremely gloomy about this trend. These statistics drive home the fact that the economy of Scotland is an integral part of the economy of Great Britain as a whole. If things go wrong at the centre—and they have gone sadly wrong lately—that has a bad effect on Scotland. This always will be the trend and the solution is not to try to separate Scotland from England. By all means shelter Scotland against the economic hazards, but let us be clear that when things go wrong at the centre, Scotland suffers. This has been happening in the last two or three years.
    8.35 p.m.
    Mr. George Lawson: The hon. Member for Galloway (Mr. Brewis), like every one of his hon. Friends, criticised my hon. Friends for having abandoned the growth point policy. This theme has run through every speech I have heard from the benches opposite. In trying to make sense of this criticism, I am puzzled, particularly when I recall what could happen under the growth point policy.
    It was of such a concentrated nature that a part of my constituency, what we call the joint burgh of Motherwell and Wishaw—which is really a single unit—was divided in two. The Motherwell end was included within the growth point area while the Wishaw end was outwith it. Subsequently, however, Wishaw was brought within the growth point area. Indeed, the growth point policy was so concentrated that a division of this sort could not only be perpetrated but actually occurred. I should, perhaps, mention that there is no great difference between the two parts of this burgh. It is essentially an industrial town, although it was split for this purpose right down the centre, which shows how narrow the concept of growth point areas could be.

    1919
    Hon. Gentlemen opposite have, while speaking about the growth point area concept, tried to argue that there should be Lowlands, borders and various other places. They cannot have it all ways, although they try to argue as though they should. They complain about the policy of making Scotland a development area, with all the advantages that go to such areas. My right hon. Friend the Member for Edinburgh, East (Mr. Willis) and the hon. Gentleman the Member for Edinburgh, West (Mr. Stodart) know full well what these advantages are, particularly since they are crying out to have Edinburgh and Leith brought within this scheme of things.
    It makes no sense for hon. Gentlemen opposite to argue the merits of the growth point area concept, which concentrates on very small areas, and to go on to argue that they want to see factories here, there and everywhere, dotted all over the countryside, the whole thing spilling over into very large areas. They cannot have it both ways. If they want this type of policy they must think in terms of concentration and the benefits that accrue from it.
    A fair amount of criticism has been made of the industrial belt, but there is no future for Scotland if the industrial belt cannot thrive. It has a great concentration of people, skill and wealth-making capacity. We can take it that if the industrial belt is thriving the other parts of Scotland will thrive—they just could not thrive if there were difficulties in that industrial area. If we are to have growth points in the larger area sense, let us think of the very great possibilities of the industrial belt. The belt is only 40-odd miles between the two great estuaries, reaching out into the Atlantic on one side and out into the North Sea on the other. It is wonderfully accessible to the sea. It is on the main roads north and south, and has many other advantages, as is proved by the fact that it is here that industry has grown up.
    I want to see the industrial belt booming and developing in all sorts of ways. It is one of the longest-established industrial areas in the world, and it is there, perhaps more than anywhere else, that the Industrial Revolution started. In many ways, that is what the area is
    1920
    suffering from now, because so many of the old industries were and are concentrated there, particularly on the west side.
    Very great changes are rapidly taking place, and I grant that various things were done for the industrial belt by the party opposite. Nevertheless, as my hon. Friend the Member for Glasgow, Mary-hill (Mr. Hannan) said, what was done was too little and done too late—
    Mr. Noble: I am quite fascinated by what the hon. Member says. I am casting my mind back to an exactly similar debate in 1964. I cannot remember what the hon. Member said then, but I can remember a great many of his hon. Friends attacking me for saying that, in the first place, we had to concentrate on the central belt.
    Mr. Lawson: I have just repeated the kind of attack I made then. At that time the concentration was over tiny areas, and I am now talking of concentration on very much larger areas. I also say that if people or firms want to go to Inverness, or the Borders or Galloway, by all means make it easy for them to go. That is the great difference between us. The idea of growth areas—and that is a better term than growth point areas—is sensible. It is not the point but the area that one has to think of, and of how the area will affect others.
    The right hon. Gentleman has made me diverge from what I intended to say. I wanted to compliment him for various good things done in his day. A substantial part of the motor industry was brought to Scotland because of the efforts, perhaps, of the right hon. Gentleman and his friends. There was a considerable development of the steel industry in my area, where a strip mill was established at Ravenscraig. A pulp and paper mill was also established.
    Various other things were done, but I do not think that the right hon. Gentleman would grudge my saying that they were all done under great political pressure. They were not done because they were thought to be what Scotland needed, but because of the recognition by hon. and right hon. Members opposite that seat after seat was being lost in Scotland, and that unless they could do something really big they would have no seats left

    1921
    in Scotland—even in the Highland area, as the hon. Member for Inverness (Mr. Russell Johnston) knows.
    For years we have argued that if Scotland was left to the tender mercies of industrialists, including Scottish industrialists, the biscuit manufacturers and others, those industrialists would pull up or maintain their roots only as it suited them. There is no patriotism when profit is involved. The fact that Scotland was dropping behind the Midlands and the south-east of England was not due to the Government in London so much as to the failure of the Scottish industrialists to keep pace and by their readiness to shift as it suited them. We said that, circumstances being what they were, unless the Government intervened on a large, continuous and systematic scale, Scotland would become nothing much more than an area for tourists. I do not want my country to become nearly wholly dependent on tourists. I think that I am here speaking for the hon. Member for Inverness as well. We want to earn a living in ways other than merely by having tourists, not that I have anything against tourists, although I want one bit of the country which is not flooded by them. I refuse to be described as a tourist in my own country, which is the sort of thing which is now happening to us.
    A very important feature of the area of the central belt is the steel industry. We know how the steel industry grew up and how it came to be planted in this area. Many improvements have taken place in the steel industry in Scotland which, like the steel industry in Great Britain, is in bits and pieces. Some parts are very efficient while many are not efficient and many others are in between.
    Now that the industry is nationalised, there can be no doubt that there will be considerable rationalisation and that many of the existing units, including some in Lanarkshire and other parts of Scotland, will not continue. There will be a telescoping, a rationalisation, a concentration, a picking out of the most efficient parts and the knitting together of those efficient parts, as there must be if Scotland's steel industry is to be as efficient as the industries of any other part of the world. I have discussed this matter with some of the most knowledgeable people in the industry in Scotland and they have
    1922
    assured me that we have the makings of an industry able to face any steel industry anywhere.
    But considerable changes will have to be made. If there are extensive changes and a concentration of the industry, the problem with which my hon. Friend the Member for Coatbridge and Airdrie dealt with will be greatly aggravated. We should be thinking now of the substantial changes which will have to be wrought in this area and we ought now to be acting to anticipate the developments which will arise from those changes. There will have to be developments to take up the skill and the manpower which will become available. We must take such action if we are to have an area able to fit in with the rest of the development of Scotland and if we are to make Scotland as competent and as high an income producing area as any other part of Great Britain.
    One or two problems must be looked at in this connection. I am sorry that I did not hear the speech of my hon. Friend the Member for Midlothian (Mr. Eadie), who represents so much of our coal mining industry. It is a fact that the Scottish steel industry is handicapped by having to pay a substantially higher price for its coking coal than is paid in other parts of the steel industry. I understand the problems here, and they apply not just to Scotland. Higher prices are paid in parts of England, too, but for the steel industry in Scotland there is a substantial burden being carried as a result of the differential.
    A good argument can be made by the coal mining industry on this score, but I want my hon. Friends to bear another factor in mind. Coal imports are regulated. If there were a uniform price for coal charged to industry, one could justifiably say that the importation of this kind of coal should not be permitted. If, on the other hand, there is a differential, perhaps quite a substantial differential, a very good case can be made for permitting this section of industry to import cheaper coal if it can.
    Mr. Thomas Swain: Is my hon. Friend advocating the import of cheap coal when there are 40 million tons of British coal lying about?
    Mr. Lawson: I am saying that, if an Industry such as the steel industry has to pay for its coking coal a substantially different price in different parts of the country, there is then an excellent case for saying that it may import cheaper coal if it can get it. The alternative is to see that the industry is treated alike over the whole country.
    Mr. W. Baxter Mr. W. Baxter rose—
    Mr. Lawson: I should like to give way, but I have to sit down very soon.
    I put this point to my right hon. and hon. Friends on the Front Bench. They are not all here at the moment, but I shall see to it that they hear what I have to say. The steel industry in Scotland is not yet complete. There is an important unit at Ravenscraig. That unit can turn out steel cheaply of a quality as good as can be found anywhere, but, if that part of the steel industry is to be as efficient as it must be so that Scotland may thrive, the completion of the industry requires the installation of a tinplate mill. I see that one or two of my hon. Friends question that. I say it for this reason. The range of products at Ravenscraig is too narrow. If the whole of the steel making capacity is to be taken up, the range of products must be broadened, and what is necessary is the establishment of a tinplate mill.
    I realise that there can be arguments from other parts of the country about what should be done there, but I am not concerned' about them. I am concerned for Scotland, the whole of Scotland, the Highlands as well as the Lowlands. We need to have this industry efficient, and, for that purpose, there must be that complementary part added to Ravenscraig. With that done, we can look anyone in the face. We can feel that the back of our problems will be broken and we can go right ahead. It will help even Edinburgh, I am sure. With that said, urging my right hon. Friends to keep the point very much in mind, I shall sit down and let the debate proceed.
    8.55 p.m.
    Mr. Michael Noble: We have had, in many ways, an interesting and instructive debate. Without wishing to strike a discordant note in the Secretary of State's absence at the moment, I express the hope that he will next year consider publishing some form of report
    1924
    on industry in Scotland such as we have had in the past. We now have various economic planning councils all reporting to the Secretary of State. This may be very valuable for him but the councils are totally valueless to us because we never see anything that comes from them. Perhaps he would consider this matter before our debate next year, so that it can be based on the best factual information available.
    The whole tenor of the debate is important for everybody who lives in Scotland because its real hub—although this did not come out as clearly as it might have in all the speeches—is the question of the chances of employment for every man and women in Scotland over the next year or 15 months. We heard speeches from my hon. Friends the Members for Dumfries (Mr. Monro) and Galloway (Mr. Brewis) and from the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) stressing that unemployment in their areas is already increasing sharply. In my own constituency of Argyll we have also had three or four distressing closures—not of great businesses, because we do not have them in Argyll, but businesses that were very vital to their area.
    If our debate had been opened by the Minister of Labour and not the President of the Board of Trade, I am sure that he would have told the House very seriously that he and his Department were worried about the trend of unemployment in Scotland. To anybody who has studied it, the picture is very worrying at present. Even before last July, no one studying the figures carefully found them very cheerful.
    I know the enormous temptation to be selective with statistics in debates like this. But if we consider the latest figures for employment in England and Wales and in Scotland for the year July, 1965 to July, 1966—and it is because they are the latest that I have chosen them—we see that employment in Scotland rose by 4,000 jobs. Perhaps this is all right, but employment in England and Wales rose by 130,000 jobs in the same period. That means that there was three times as great an increase in employment in England and Wales as there was in Scotland for the last year for which we have had full records. This should make the

    1925
    President of the Board of Trade a little careful in quoting the statistics he gave us, designed to show how very much better Scotland was doing than it was before. Perhaps it is, but the trend is still three times as good in England.
    My second point has already been very well made by my hon. Friend the Member for Renfrew, East (Miss Harvie Anderson). She talked about the problems of her constituency and its fears of closures, but she also made an impassioned plea not only for more jobs but for a higher quality of employment and an attempt to increase the importance of the work force in Scotland. This theme went through a number of speeches today. It is true that we have not enough skills in Scotland today, and everybody has admitted this. It is true that the Government, I am sure very unwillingly, decided that one of the measures they had to take was to cut down on the technical college budgets.
    This is an important part of the training of our new skills. It is also unfortunately true that we have had, as my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) has said, a very disastrous period of high emigration. The picture that is presented to all of us who have taken the trouble to think about this is that there are very large numbers of men, mostly young and skilled, leaving Scotland because they feel that there are not enough opportunities there for them. Whether they are right or wrong, they feel that if they get on the gangway of a ship to Canada, America, New Zealand or Australia, or on a train going south, in some way the opportunities there will be better.
    Whether or not this is true, it is the impression which has been created in Scotland and it is having a much more rapid and dangerous effect than it had in the past. I am prepared to admit that part of this lack of opportunity is due to certain of the older industries in Scotland which used to boast that they had no graduates on their staff.
    I do not want in any way to detract from their share of any blame, but this picture is changing very fast and the newer industries which were attracted when we were in office, and which the Government are successfully attracting
    1926
    now, are the sort of industries which tend to employ graduate labour and to give them full recognition for their skills. This picture ought to be better, but it is worse. Let us not shirk that in our debate.
    Part of our trouble is that the people of Scotland are not finding the Government or Secretary of State entirely credible. He and many of his hon. Friends laughed when my right hon. Friend the Member for Leeds, South-East (Sir K. Joseph) quoted from the Daily Express. Newspapers have their own views, and I have been abused just as freely by the Daily Express as the right hon. Gentleman is today. The Daily Express is as lavish with its abuse as it is scarce with its praise, unless it can find something particularly good to praise.
    It is not just the Daily Express. There is a cutting here of 9th June from the Daily Record, the voice of Scotland. There is an article entitled, "What are promises worth?". Whether it is right or not, it is a very damaging sort of article to be read by young people who, if they feel that the Prime Minister and the Secretary of State make promises to Scotland which they do not keep, may well decide that there is no opportunity in Scotland for them. Unless we face up to this fact we shall not solve the problems which confront us.
    I should like to congratulate the President of the Board of Trade on having made one of the shortest speeches that I have ever heard from the Front Bench. Perhaps it was short because he was playing to us exactly the same record—I am not saying that it was a cracked record—that he played in the last two regional debates. I can remember very vividly when he was sitting on the other side of the House and the then President of the Board of Trade was making the same sort of speech as he made.
    There were tremendous abuse and catcalls, and the then Opposition said that there were jobs in the pipeline. When the President is talking about large numbers of square feet, these are not only not jobs in the pipeline; in many cases they are merely the size of the pipeline, so that as such they are not necessarily the full answer. I agree with him that in two-and-a-half years he has produced 43 advance factories and that this is enormously more than we produced

    1927
    in whatever the number of years was before that. It is also fair to say to him that in 1,000 days—as it will be next week—43 advance factories have been announced and, as we see from an Answer given last Monday, the total of the jobs which they have produced is 181.
    I take the point that in a year or two they will be very valuable, we hope, when the economy picks up. But the point which I make, and which is valid, is that through all the period when the Government could have seen, because of their own actions and the information reaching them, that the economy was running down, they decided to go for advance factories, which could not be built and could not be effective in time to help the immediate problem which we have now and shall have next winter. I make the criticism only in the narrow framework that we already have a very large number of empty factories in Scotland—well over 100, apart from the advance factories. There is ample space available for industry to expand if it is able to expand. The point is that at the moment it is not so able.
    I remember the right hon. Gentleman's predecessors at that Box, when we were on the other side of the House, reading out lists, as he did today. Very welcome they were, and they were greeted with cheers from our side of the House, as they were greeted with cheers from the right hon. Member's supporters today. They were figures of the jobs which would be created in, let us say, Rolls-Royce and Burroughs Machines. I know how they are obtained. One telephones a firm and says, "I have to make a speech. What is your plan for expansion over the next three or four years?" But on the right hon. Gentleman's own figures these 3,000, 2,000 and 4,000 were not jobs which were ready. He said that with luck they would come about between now and 1970. That is fair. It is what has been done in the past.
    But anyone with industrial knowledge—I know that the President of the Board of Trade is aware of this—knows that whether firms' plans laid down for three or four years ahead in fact come into existence depends entirely on the economic climate of the time. Suppose we disappoint the President of the Board of Trade and get into Europe. I would
    1928
    expect these figures to be enormously greater. If we do not get into Europe, these might be very much less. Though they are good cheering points for the right hon. Gentleman's back bench Friends, they do not mean a great deal in terms of the real problem which we face over the next five or six months.
    Mr. W. Baxter: Has the deception which the right hon. Gentleman is illustrating been going on for a number of years?
    Mr. Noble: It has been going on in exactly the same form from the Board of Trade. Everybody connected with it knows exactly how the operation is carried out. The cheers from the Government side of the House today were exactly the same as the cheers from our supporters when we were in office. The boos from the Opposition were exactly the same as the boos from the Opposition today. But unfortunately that does not alter the fact that the main situation today is grave.
    When the President of the Board of Trade related these matters to terms of money—£12½ million in 1964, £15 million in 1965–66 and rising beyond that—did he include the very large amount which the Government have spent on Wiggins Teape? If so, that can hardly be put to his credit—although I suppose that he could have stopped it.
    We had a most interesting speech from the hon. Member for Fife, West (Mr. William Hamilton). He wanted to know why my right hon. Friend was asked to open the debate. My right hon. Friend is shadow President of the Board of Trade and has just as much right to speak in Scottish debates as has the President of the Board of Trade. He made the fair point that the number of training places today is 900 compared with 529, but he should bear in mind that even though there were 529 places in training centres in 1964, we could not get even half of them filled because the trade unions refused to employ people who came out of these centres. In these circumstances, it would have been folly for a Government enormously to increase the number of places.
    He made a perfectly fair point, which all Governments make, about the problem of running fast to catch up with the rundown of industry. I have not the statistics

    1929
    with me, but I am certain that the rundown in mining and railway workshops during the two years when I was Secretary of State was a great deal larger in total than the rundown in the last two-and-a-half years.
    It was interesting to hear the right hon. Member for Edinburgh, East (Mr. Willis) and my hon. Friend the Member for Edinburgh, West (Mr. Stodart) practically embracing in agreement on the problems of Edinburgh and Leith and the problems of regional employment premiums. It was interesting to me to hear the right hon. Member talking about the dangers of the coffin area and the extra money which the regional employment premium would push into it to the detriment of outside areas. I hope that the Secretary of State will bear in mind—I am sure he will—the point which my hon. Friend made about the possible use of someone from the Scottish Office being very closely in touch with Brussels during the Common Market negotiations if he is not permanently there.
    My hon. Friend the Member for North Angus and Mearns, in a particularly good speech, drew attention to one or two things I have mentioned and said two extra things which I think important. First was that no new industry had yet offered to come to that part of Scotland which is now a development area. I should like to have a long debate with the hon. Member for Mother-well (Mr. Lawson) on the growth area concept, his description of it and my thoughts about it. Of all the development that has happened in Scotland, a great part has happened in those growth areas which we originally designated. I hope that if the point made by my hon. Friend about the extra cost to trawling fleets of the increase in the price of fuel is a valid one, the Secretary of State will look at it and help the fishermen concerned in some suitable way.
    If we are to regain the sort of position which we want for Scotland, it has to be done by a combination of both private and public enterprise. If the private sector is to be able to play its full part in any real development, it has to be profitable because it is only from its profits that it can make the investment which is necessary and it has got to have
    1930
    confidence in the Government. These three things are at the moment lacking. This is why, although the C.B.I. at this stage says there is some levelling out in the investment forecasts, it is levelling out at a very low level indeed and something has to be done to inject confidence there.
    We are delighted with the report which the hon. Member for Midlothian (Mr. Eadie) read from the American firms which have come to Scotland and made a success in this country. They have been a very useful asset to us. Can the Secretary of State tell the House today whether there is any information about the position of the very big enterprise in the Highlands, Occidental Oil? If he cannot do so, we shall understand it. I believe he is going to Inverness on Friday and we shall have a debate on this subject next week.
    I want also to ask him if he can tell us anything about the position of the shipbuilding industry. We have the Geddes Report, and the Working Party finished its work last month. Only when firms have been blessed by Geddes can they go ahead and order the machinery and equipment which they want, and only when a firm has been similarly blessed can a shipowner get a grant for a ship to be built. If we are to get shipbuilding going again on the Clyde, there is a high degree of urgency in seeing the Working Party's Report.
    On the public sector, we welcome the two developments about which the Secretary of State has been able to tell us in the past two years, the first one being Dounreay, and the second one being Hunterston "B". Apart from that, there has been a great silence. We have heard nothing about research and development, though we heard a large number of speeches on the subject when positions in the House were reversed. We have heard nothing about Government controlled offices. We have become aware that the Computer Centre will go to Manchester and that the Mint is to go to Wales, although I do not think that there was ever a better case for something to go to Scotland than the Mint. In spite of the huge rise in Government employment, Scotland has received no sort of share in what has been going on. I am told about the possibility of petrol rationing. Perhaps the office which is

    1931
    going to do all that might start working in Edinburgh. I dare say that the printing could be done in the right hon. Gentleman's constituency, where they are running into troubles over printing.
    We heard all these arguments about what the Government ought to be doing from the Secretary of State and his right hon. and hon. Friends when they were in Opposition, but they have failed in every one of them since coming into office, and it does not present an attractive picture to Scots.
    The hon. Member for Fife, West spoke about Government contracts. It so happens that I have received a letter from a gentleman who works for a big clothing firm in Glasgow, which has been trying desperately to get clothing contracts from one or other of the Government Departments, without success.
    On growth areas, if the Government believe that their much larger sweep of country into the development areas is right, surely they must have been prepared to increase the infrastructure money to service that much larger area. That has not happened. If one considers the whole of the north of England up to Scotland, excluding Leith, there is not a large amount of extra money above what was already planned—
    The Under-Secretary of State for Scotland (Mr. Norman Buchan): What about roads?
    Mr. Noble: As the hon. Gentleman knows, all the road programmes are planned on a rolling basis three or four years ahead. Equally, by direct Government action, the cost of petrol has risen twice—I do not talk about the extra 2d., which was not the Government's fault. When one considers the cost of air travel, it looks as if that will go up. It was interesting to see what B.E.A. had to say about it. According to the Corporation, the European firms are able to keep their fares within Europe very low because they make profits on their international and transatlantic flights. On the other hand, because B.E.A. cannot put up its fares to Europe, it will have to put up its fares to Scotland, because that is the only way it can make money. If the Government let those firms behave like
    1932
    that, I shall have even less regard for the Government than I have today.
    My serious fear is that the Scottish Office has to a considerable extent lost touch with what has been happening in the country during the last two and a half years, and I should like to quote a few particular things to illustrate my point. There were the seamen's strike, the floods in Inverness, the agricultural crisis in the store markets last year, the Highland Development Board's effort starting last November, and the tourist industry last week. In respect of each of these five things Scottish Ministers came to the Box and said that there was nothing to worry about, that everything was all right, that the strories printed were greatly exaggerated, and then a week, a fortnight, or perhaps a month later the full story came out, and they had to eat their words.
    I am sorry to have to tell the hon. Gentleman that that is the fact, and if he wants another illustration of how out of touch the Scottish Office is, I have here a Press release dated 22nd June issued from St. Andrew's House which says:
    "As promised by the right hon. William Ross, Secretary of State for Scotland, at his Press Conference on Friday 16th June, following a meeting of the Scottish Economic Planning Council a summary has been prepared of encouraging progress in physical planning and development in the various regions of Scotland since the publication of the White Paper on the Scottish economy, January, 1966."
    I suggest that that should be circulated to all the right hon. Gentleman's hon. Friends.
    The Press got it, but it did not even rate two inches in any newspaper. Most newspapers totally ignored it. I will willingly give it to anybody who would like to read it, but it is, without exception, the dullest document that I have ever read from any Press department, even the Scots'. It is dull, not in the nature of its writing, but because there is no content of which anybody can say, "Look at the record of what we have done in the last year".
    It is on that theme that I would like to conclude my remarks tonight. The main charge that I have against the Government is that, as my right hon. Friend made clear in his opening speech,

    1933
    they have had a full two and a half years in government. For the last year the storm signals have been there, and plain to see. Some time last year I made, I think, a realistic speech pointing out the real anxiety which I had about the way the situation was developing in Scotland. As with other things to which I have referred, the Secretary of State said that my statement was totally unfounded, that the Scottish economy was in a very healthy state, and that there was nothing to worry about, but if the right hon. Gentleman will go to the Board of Trade, or to the Ministry of Labour, and look at the situation today, he will find that it is almost precisely the same statistically as it was in July, 1962, when I took over as Secretary of State. The storm signals are there, absolutely clear for everybody to see, and although the President of the Board of Trade has told us what he is hoping to do in the way of factories, which may be very useful in 18 months or two years' time, the Government have not faced up to the task of tackling the problem which I believe may well be with us this winter.
    All the evidence that I can get—it is not complete, and a great deal of what I have said today links with it—is that the right hon. Gentleman has failed in what is the Secretary of State's most important single task, which is to carry his Cabinet colleagues with him to take action early enough, and effectively enough, to deal with Scottish problems.
    In 1964 the main structural problem of unemployment in the North-East, Merseyside and Wales had largely been overcome, but Scotland remained as the single really tough nut to crack. The Secretary of State took on the challenge willingly and tried to crack that nut. But in the last two-and-a-half years, if one liked to put on a postcard the record of all the things the Secretary of State has done one would find that not half the postcard was used. Unless the right hon. Gentleman can do a great deal better than that, Scotland will not forgive him.
    9.25 p.m.
    The Secretary of State for Scotland (Mr. William Ross): This has been a very pleasant debate in terms of the nature of the exchanges that have gone from side to side, although there were certain barbs an the speech of the right hon. Member
    1934
    for Leeds, North-East (Sir K. Joseph). I welcome his intrusion, or entrance, into Scottish affairs. We are delighted that he should take part. I shall have something to say about his speech later.
    The hon. Member for Argyll (Mr. Noble) made a very illuminating confession when he said that when he became Secretary of State the storm signals were already there. Earlier in his speech he said something about the Daily Express. I have a copy of the Daily Express printed a few months after he became Secretary of State. I shall not quote the abuse, because it went on for a long time—we expect it—but I want to quote his own statement on 26th October, 1962, at Strachur, when he said:
    "I do not see the problems of Scotland being settled in a couple of months, but during the next year or two."
    Then, three days later, the man who had already seen the storm signals said, at his Argyllshire home,
    "Everything is ready for a massive step forward. This country is now equipped to surge ahead industrially. What the planners call the infrastructure is ready."
    That was followed by 18 months when the monthly average of unemployment was 100,000. It was followed by a winter in which we had 136,000 unemployed in Scotland. And he presumes to lecture us!
    He talked about the unemployment situation today, as did at least three of his hon. Friends—the right hon. Member for Leeds, North-East, the hon. Member for Dumfries (Mr. Monro) and the hon. Member for North Angus and Meatus (Mr. Buchanan-Smith). I was asked to state what the unemployment figure would be next winter. I am not going to do so, because I do not presume to be a prophet in that respect—and I would advise them not to begin prophesying this year, as they did last year. Last year they prophesied that the unemployment rate would be over 100,000 and they were bitterly disappointed.
    I direct their attention to the words of the right hon. Member for Enfield, West (Mr. Iain Macleod) in 1957. In a very interesting speech, when asked the same question, he said that he did not intend to forecast what unemployment was going to be a year ahead. He said that the last time it had been done it proved disastrous.

    1935
    It was just as well that he did not. When the right hon. Gentleman prophesied that things would be all right we reached 100,000 unemployed in Scotland, after which things went well everywhere else and then we were hit again by yet another economic crisis and the figure went up to 130,000. And during these 18 or 20 months, when the monthly average was 100,000, the Prime Minister, Mr. Macmillan, was going about the country saying, "We never had it so good." But we did not have it so good in Scotland, and there was no sense of closing the prosperity gap between Scotland, the north of England and Wales and the rest of England.
    I do not see us fighting our way out of our difficulties in a year or two years. I have never said so. When the right hon. Gentleman talks about my aggressiveness on that side of the House, he must appreciate that I entered the House in 1946. I saw the build-up of industrial development in new estates. I saw the training centres and I saw them all scrapped and discarded from 1951 onwards. Why was only one of the old industrial training centres, that at Hillington, left? Not until 1963–64 did hon. Gentlemen opposite even start thinking about training. Then there were four or five, Irvine and the rest, and there will soon be nine, with a considerable expansion in the number of places–2,500 by the end of next year.
    But that is not all. The right hon. Gentleman said that we had inherited a boom. We also inherited a debt of £800 million, which killed this economy. There are two Members of the then Cabinet sitting smiling at this. What a position it was for them after all these years, when time after time they were just pulling their way out. After all this time, when they were going to do all these wonderful things, they finished by talking of a boom. They left us bankrupt, not booming, and that was not the first time that a Labour Government had to take over the country—[Interruption.]
    Sir K. Joseph: Then why, two weeks after taking power, did the right hon. Gentleman's Government publish a White Paper saying that there was no pressure on resources at home?
    Mr. Ross: We have been talking about an overseas debt, and the country must pay
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    its way. This so-called boom which never reached Scotland was being paid for by debts which we could not meet.
    In the middle of this, the right hon. Gentleman suddenly realised that there would be an election, and in a speech in Glasgow at the Highlanders' Institute—
    Mr. Manuel: The right place for him.
    Mr. Ross: —on 26th August, 1963, he said:
    "In the next few months we will put Scotland firmly on the right road to prosperity, with modern cities, schools, roads, transport and with great new housing schemes."
    What had they been doing in the previous 12 years?
    "We shall keep more of our able young Scotsmen at home with the promise of such a future and begin to cure our unemployment blight".
    Having created it, they would only "begin" to cure the unemployment.
    "We shall then win and deserve to win the next Election."
    The right hon. Gentleman was never a very good prophet. Whenever I hear him prophesy gloom, I cheer up.
    Let us look at the "great achievement" by those who condemn us today. The figure for housing in Scotland in 1952 was 39,000. The year before the right hon. Gentleman opposite took office it had reached 27,000. In 1962, when the "skeely skipper" came along, it was 26,761. So for a decade we had fewer and fewer houses being built in Scotland year after year. Where was the interest of the noble Lord in housing at that time? He came here and became Parliamentary Private Secretary to the right hon. Gentleman, but it did not help the housing figures. The position in relation to housing is such that hon. and right hon. Gentlemen opposite ought to hide their faces in shame. They made one bit of a boost in 1964; thanks to our efforts on completions during the last three months, the figure rose to about 37,000. But the houses started and the number approved that were going to lead on just were not there.
    Today we have the highest number of houses under construction and waiting to start. The number of completions is not falling, as has been suggested by hon. Members opposite, but is rising. The hon. Member opposite who dealt with this subject is not the best one at figures.

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    He relies far too much on the leaders in the Glasgow Herald. He should know by this time that they are not reliable—especially the one today.
    The same thing is true of school buildings. The hon. Gentleman spoke about school buildings and got that wrong as well. He also got the road construction figures wrong. It was not until 1960 that hon. Members opposite managed to allot £10 million for roads in Scotland. By the time they left—our first year, 1964–65 —it was about £24 million. Last year we spent £32 million on roads in Scotland and this year the figure will be over £34 million, nearly treble what hon. Members opposite spent. Yet the right hon. Member for Argyll said in 1963 that the infrastructure was there. As my right hon. Friend the Member for Edinburgh, East (Mr. Willis) said, we are planning Scotland for the first time, and the people of Scotland realise it.
    The hon. Member for Ayr (Mr. Younger) was suggesting that I should take Ayr out of the development area and deny its privileges to Prestwick. Will he suggest that to the industrialists in Ayr who are looking forward to the advantages of being in the development area with the regional employment premium? Will he go to Ayr next week and say that he advises that it should never have been applied to Ayr? Will the hon. Member for Galloway (Mr. Brewis) go to those parts of his constituency which have for the first time development area status and say the same thing? Will the hon. Member for Dumfries go and say that? Of course they will not. They just come here and nark.
    Several Hon. Members Several Hon. Members rose—
    Mr. Ross: I have not all that much time. There was not a speech from the Opposition benches in which I was not mentioned, but I did not seek to interrupt.
    The right hon. Gentleman got all these things wrong. He and others referred to new industry coming in their days. It was all right for them to have new industries coming in but it was another matter, they said, for us. The hon. Member for Moray and Nairn (Mr. G. Campbell) did not speak today. However, we had a repeat of something which he said the last time we had a debate on these
    1938
    matters. Incidentally, we have had far too few debates on Scottish industry and employment since hon. and right hon. Gentlemen opposite have been in opposition. When we were on their side we used to take two days every year. Hon. and right hon. Gentlemen opposite have been very silent. But we got a repeat today of something which the hon. Gentleman said on 26th July, 1965, when he was talking about the taxation system and the changes which were being made. He said that they
    "had the effect of frightening foreign businesses, particularly American businesses who have been so successful in Scotland in the past, from settling in Scotland."—[OFFICIAL REPORT, 26th July, 1965; Vol. 717, c. 148.]
    All right. Would he like me to read out the list of foreign businesses which have not opened up during the days of this Government? Shall I start at the beginning and go right down the list of 17 or so of those which have come in and of the others which have been expanding? There are Phillips Drill Company of the U.S.A.—at Queenslie; Chestex, making heating exchangers at Kilbirnie; the Dictaphone Company at East Kilbride; Flow Laboratories at Irvine; Fabritex Incorporated at Blantyre; Butler Buildings Ltd. at Kirkcaldy; Optical Coatings Ltd. at Inverkeithing; Andrew Antennae Systems Ltd. at Cowdenbeath; Bourns (Trimpot) Ltd. at Inverkeithing—all of the U.S.A.; Robson Lang Ltd. from Canada—and all the others. They have not been frightened away. They are coming, and coming in greater numbers, and settling; and, having settled, they are expanding.
    Hon. Gentlemen talked about advance factories. Many of these firms—and the right hon. Gentleman should know this, too—started with small factories and then, after a few years, expanded—
    Mr. Dempsey: Honeywell Control.
    Mr. Ross: Yes, I got the date wrong about Honeywell. It was about 1957 they came in. They started with one factory employing a few people, they expanded, and they are now employing thousands of people. So hon. Gentlemen should not sneer at advance factories, and should relate their cost to the eventual employment and the number of people they are presently employing. This was rather a cheap remark.

    1939
    Part of the central core of the debate has been the question of growth areas. It was amusing to hear hon. Gentlemen proclaim growth areas—the hon. Member for North Angus and Mearns and the hon. Member for Dumfries—because where were all the growth areas? Where were all the growth areas which were selected by the former Government? They were all in central Scotland. Not one of the hon. Gentlemen who spoke about this represents a constituency in central Scotland. Their areas were frozen out under the Central Scotland Plan.
    I thought a very notable contribution today was the speech by the hon. Lady the Member for Renfrew, East (Miss Harvie Anderson) and she made this point about what is to happen concerning depopulation and drawing everything into the centre. This is what my hon. Friends and I have been concerned about for years, and we do not represent those other constituencies. But we do feel about Scotland, and we do feel about the need to retain the population in those areas and the need to build them up. But those areas were completely frozen out. The Central Scotland Plan was debated in this House on 3rd December, 1963, and I can remember the right hon. Gentleman's final words. They amounted to a condemnation of that side of the House and they should have silenced hon. and right hon. Members opposite today, because he finished up by saying that that was the first time, that they were trying to put things right in Scotland.
    What they were doing was to aggravate the contrast of central Scotland with the rest of the country. If hon. Gentlemen opposite go to Prestwick and ask the Town Council there how it feels about this matter, they will see that there is nothing to prevent town councils in any development area from going forward with advance factories. I do not know why the right hon. Member for Argyll is smiling at this remark. I assure him that this is being done by many councils throughout the area and that Prestwick is thinking of it. I assure the right hon. Gentleman that they would not be able to think in these terms without the help of the Local Employment Act and the additional help that will come through the regional employment premium.
    Mr. Noble: I hope that the right hon. Gentleman will have sufficient time in which to tell us what he is going to do for Scotland and will not spend too much time talking about the past. But when talking about the past, will he remember that when the central plan was published it was also said by me that plans for the rest of Scotland would follow as soon as we could do that? Is he aware that he is totally ignoring that fact?
    Mr. Ross: It took hon. Gentlemen opposite 13 years to produce the Central Scotland Plan. How long would it have taken them to produce plans for anywhere else? What was required was not just plans but help so that hope and opportunity were given to these other areas.
    I am asked to state our policies. Our policies are to give the rest of Scotland an opportunity as well. This has been followed up by the establishment, in the various areas of Scotland, of consultative groups of people from trade unions, chambers of industry, technical colleges and universities, all coming together in each of the areas—not creating disparate demands from every little town and village for industries but determining where are the best places technically at which to concentrate them.
    I urge hon. Gentlemen opposite to consider what has happened in, for example, the border areas. We have been able to achieve a certain measure of cooperation and agreement about the lines of attack to solve their problem of depopulation. This is being done—for example, in the North-East—and we have being doing this not after 13 years in office but in quite a short time. It was only in January of last year that we were able to afford the expansion of the development area to the whole of Scotland. When one realises how short a time that was after we took office, one realises that we have not been long in getting the people in the areas concerned to appreciate what must be done for their own prosperity; and they are co-operating so that the advantages of these various measures may accrue to these areas.
    Nobody should underestimate the effect of the national economy on Scotland as a whole or on any part of it. I could quote one speech after another made by

    1941
    hon. Gentlemen opposite in which they pointed out how we must get the national economy right and keep it right. But in the past when we ran into difficulties, it was Scotland who was hit first and which was the last to recover. Reflation and boom usually landed us in another Tory disaster, and Scotland was left behind. [Interruption.] The hon. Member for Folkestone and Hythe (Mr. Costain) is interested in building and construction. He knows what happened in Scotland during the Tory years of depression. If he would compare that with the amount of work that has gone on in the construction industry in the past three years, continuously and increasingly—in housing, school-building, hospitals and industrial building—he would smile a little less and would pay more tribute to the Government for carrying out their pledges and for helping to shelter Scotland. Important investment in advance factories, for companies, many of whose names I have mentioned, has gone on. But before that, this type of development was halted.
    Mr. A. P. Costain Mr. A. P. Costain (Folkestone and Hythe) rose—
    Mr. Ross: Sorry. I will not give way. I have much to say.
    Hon. Members: Give way.
    Mr. Costain: I hope that the right hon. Gentleman realises, when he refers to me, that we set up a factory in Scotland and had to supply goods from that factory to London during his régime.
    Mr. Ross: In other words, it was worth the hon. Gentleman's while setting up a factory in Scotland, obviously because the work was there; and he will agree that the construction work has been there. The Government have clamped down on the busier areas such as London, the South-East and the Midlands.
    My hon. Friend the Member for Fife, West (Mr. William Hamilton) made mince-meat of the right hon. Gentleman the Member for Leeds, North-East. He remembers the coal mining closures in his own area in Tory days and in Labour days, and he will appreciate the plans we have made. The way we have been able to bring about recovery is something to stagger the people there—not only in getting new industry to come, but in
    1942
    getting the right kind of industry. We see that in Fife, in Dundee, in Lanarkshire, and I hope to see it in some other areas that are threatened.
    The hon. Member for Dumfries expressed concern about pit closures. He has discussed the matter with myself and the Board of Trade. He had better watch himself. Do not let him talk the N.C.B. into the premature closing of some of these pits.—[HON. MEMBERS: "Oh."]. That is what comes about. There is no need to talk about the closure of a pit when that closure is not in the near future. The hon. Gentleman is all but doing that in this case—
    Mr. Monro Mr. Monro rose—
    Mr. Ross: No, time is running short. My right hon. Friend the Member for Edinburgh, East and the hon. Member for Edinburgh, South (Mr. Clark Hutchison)—whom I am glad to see has returned, though I realise why he missed the earlier part of the debate—spoke of Edinburgh and the development areas. Hon. Members opposite must face the fact that this spread of the development areas is either worth while or not worth while. They cannot argue one minute that we should not have the spread and then say, "But, having it, let us take in Edinburgh, too".
    The simple fact is that the employment figures in Edinburgh do not justify its inclusion as a development area. Not only are its figures lower than in any other part of Scotland, but they are among the lowest in the United Kingdom. To do as is suggested would, of course, have repercussions elsewhere. In any case, I do not think that Edinburgh's future lies in manufacturing industry, or that the Corporation of Edinburgh is interested in large-scale manufacturing industry. Edinburgh's own development plan does not show that. I would ask hon. Members opposite to appreciate the justice of this case, and the difficulties that exist.
    The hon. Member for Ayr spoke about seasonal trends. I, too, am concerned and always have been concerned about seasonal trends. It is one of the reasons why the Government have introduced the regional employment premium. The regional employment premium itself, adding £40 million to manufacturing in-

    1943
    dustry in Scotland, will be a tremendous help. Hon. Members opposite seem to forget this. One of them asked what is so important about manufacturing industry. Well, what is important about it? Where do our exports come from?
    Mr. Younger: The tourist industry.
    Mr. Ross: Will the hon. Gentleman tell me how many tourists there are in Ayr today spending money, bringing in dollars and the rest?
    Mr. Younger: The Secretary of State knows perfectly well that the tourist industry in Scotland makes a very large number of American dollars and other foreign currency every year.
    Mr. Ross: Of course, that is true—but "Johnnie Walker" in Kilmarnock makes far more.
    The whole basis of our export drive is manufacturing industry, and every hon. Member opposite knows that to be true. We must get manufacturing industry modern, efficient and expanding. Who are the tourists who are going into the north of Scotland and into the North-East? They are the workers in the factories of the manufacturing industries in central Scotland. If we do not look after that base, the tourist industry will suffer.
    We have heard a lot about the tourist industry, and what I am reputed to have said. I have an account from the Tourist Board itself of the prospects in Scotland for this year. It says that in the Highland area the forward prospects for July, August and September are exceedingly good; in the Aberdeen area there is the beginning of a soaring upsurge of traffic and prospects are extremely good; in Arbroath there is expected to be a better season than last year; in Oban forward bookings for July, August and September and inquiries are increasing; at St. Andrews good trade is expected. Yet it is said that we have killed the tourist traffic. That is nonsensical.
    Earl of Dalkeith: On a point of order. Is it possible to extend the debate so as to give the Secretary of State a chance to say one word about what he is to do to help future prospects in Scotland?
    Mr. Speaker: The noble Lord knows that that is not a point of order.
    Mr. Ross: I can assure the hon. Gentleman that I am explaining what we have already done to make a stable base of manufacturing industry, and I am saying that in so doing and with the backing of the regional employment premium we are improving the prospects for Scottish industry and not harming the tourist industry.
    Mr. F. A. Burden Mr. F. A. Burden (Gillingham) indicated dissent.
    Mr. Ross: The hon. Gentleman has just appeared and I do not want to return to many years ago when he and I served together in South-East Asia.
    Mr. Burden: On a point of order. If the right hon. Gentleman wants to return to the time when he was a signals officer, it is perfectly obvious that he is still suffering from static electricity.
    Mr. Speaker: It is not a point of order, and it is not very good.
    Mr. Ross: It is not a point of order and it is not even funny, and yet it is one of the best jokes that I have ever heard the hon. Gentleman make.
    Training is absolutely essential, and it is worrying that there is a shortage of certain skills in certain areas. But there is a certain misuse of skills in certain Scottish industries and there may well be men who are skilled in a job and who might be needed in a new job, but who, because of unemployment in the past, are working at something below their skill. I shall look at this problem.
    I must tell the hon. Lady the Member for Renfrew, East and my hon. Friend the Member for Fife, West and my hon. Friend the Member for Bothwell that the main source of training for skill is with industry itself. I hope that the hon. Lady, who spoke about this subject, appreciated the statement by my right hon. Friend the President of the Board of Trade pointing out that one of the expansions of Rolls-Royce was in connection with its own training scheme. This is important and the same thing has been happening with firm after firm in Scotland. The Ministry of Labour has given £710,000 to 295 firms in respect of the training of more than 22,000 people in Scotland. We now have 19 training boards and 17 group training schemes.

    1945
    For the first time we are getting things right in Scotland. The infrastructure is being provided; the houses are going up; the roads programme is being expanded and the skills for the new industries are being provided. In 1965, 1966 and the first part of 1967 more new industry has come to Scotland than at any other comparable time in Scotland's history. It is because of this that there is confidence in Scotland among Scottish industrialists.
    Why are the Scottish Tories so despondent? It is because they see that
    their days on that side of the House are long numbered. I can assure them that there is confidence in Scotland because the Government's policies are succeeding in Scotland and nationally in getting us out of the economic difficulties and in providing for reflation ahead in a way which will ensure that Scotland gets more of its share than it has ever had before.
    Question put:—
    The House divided: Ayes 234, Noes 295.

    Division No. 427.]

    AYES

    [10.1 p.m.

    Alison, Michael (Barkston Ash)

    Eden, Sir John

    Kershaw, Anthony

    Allason, James (Hemel Hempstead)

    Emery, Peter

    Kimball, Marcus

    Astor, John

    Eyre, Reginald

    King, Evelyn (Dorset, S.)

    Atkins Humphrey (M't'n & M'd'n)

    Farr, John

    Kitson, Timothy

    Awdry, Daniel

    Fisher, Nigel

    Knight, Mrs. Jill

    Baker, W. H. K.

    Fletcher-Cooke, Charles

    Lambton, Viscount

    Balniel, Lord

    Forrest, George

    Lancaster, Col. C. G.

    Barber, Rt. Hn. Anthony

    Fortescue, Tim

    Legge-Bourke, Sir Harry

    Batsford, Brian

    Foster, Sir John

    Lewis, Kenneth (Rutland)

    Beamish, Col. Sir Tufton

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

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

    Bell, Ronald

    Galbraith, Hon. T. G.

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

    Bennett, Sir Frederic (Torquay)

    Gibson-Watt, David

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Bennett, Dr. Reginald (Gos. & Fhm)

    Giles, Rear-Adm. Morgan

    Longden, Gilbert

    Berry, Hn. Anthony

    Gilmour, Ian (Norfolk, C.)

    Loveys, W. H.

    Biggs-Davison, John

    Gilmour, Sir John (Fife, E.)

    Lubbock, Eric

    Birch, Rt. Hn. Nigel

    Glover, Sir Douglas

    McAdden, Sir Stephen

    Black, Sir Cyril

    Glyn, Sir Richard

    Mac Arthur, Ian

    Body, Richard

    Goodhart, Philip

    Maclean, Sir Fitzroy

    Bossom, Sir Clive

    Goodhew, Victor

    Macleod, Rt. Hn. Iain

    Boyd-Carpenter, Rt. Hn. John

    Gower, Raymond

    McMaster, Stanley

    Boyle, Rt. Hn. Sir Edward

    Grant, Anthony

    Maddan, Martin

    Braine, Bernard

    Gresham Cooke, R.

    Maginnis, John E.

    Brewis, John

    Grieve, Percy

    Marples, Rt. Hn. Ernest

    Brinton, Sir Tatton

    Grimond, Rt. Hn. J.

    Marten, Neil

    Bromley-Davenport, Lt.-Col. Sir Walter

    Gurden, Harold

    Maude, Angus

    Brown, Sir Edward (Bath)

    Hall, John (Wycombe)

    Maudling, Rt. Hn. Reginald

    Bruce-Gardyne, J.

    Hall-Davis, A. G. F.

    Mawby, Ray

    Bryan, Paul

    Hamilton, Marquess of (Fermanagh)

    Maxwell-Hyslop, R. J.

    Buchanan-Smith, A lick(Angus, N. & M)

    Hamilton, Michael (Salisbury)

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

    Buck, Antony (Colchester)

    Harris, Frederic (Croydon, N.W.)

    Mills, Stratton (Belfast, N.)

    Bullus, Sir Eric

    Harris, Reader (Heston)

    Miscampbell, Norman

    Burden, F. A.

    Harrison, Brian (Maldon)

    Monro, Hector

    Campbell, Gordon

    Harrison, Col. Sir Harwood (Eye)

    Montgomery, Fergus

    Carr, Rt. Hn. Robert

    Harvey, Sir Arthur Vere

    More, Jasper

    Cary, Sir Robert

    Harvie Anderson, Miss

    Morgan, Geraint (Denbigh)

    Channon, H. P. G.

    Hastings, Stephen

    Morrison, Charles (Devizes)

    Chichester-Clark, R.

    Hawkins, Paul

    Mott-Radclyffe, Sir Charles

    Clark, Henry

    Heath, Rt. Hn. Edward

    Munro-Lucas-Tooth, Sir Hugh

    Clegg, Walter

    Heseltine, Michael

    Murton, Oscar

    Cooke, Robert

    Higgins, Terence L.

    Nabarro, Sir Gerald

    Cooper-Key, Sir Neill

    Hiley, Joseph

    Neave, Airey

    Cordle, John

    Hill, J. E. B.

    Nicholls, Sir Harmar

    Corfield, F. V.

    Hirst, Geoffrey

    Noble, Rt. Hn. Michael

    Costain, A. P.

    Hobson, Rt. Hn. Sir John

    Nott, John

    Craddock, Sir Beresford (Spelthorne)

    Hogg, Rt. Hn. Quintin

    Onslow, Cranley

    Crosthwaite-Eyre, Sir Oliver

    Holland, Philip

    Orr, Capt. L. P. S.

    Crouch, David

    Hooson, Emlyn

    Orr-Ewing, Sir Ian

    Crowder, F. P.

    Hornby, Richard

    Osborn, John (Hallam)

    Cunningham, Sir Knox

    Howell, David (Guildford)

    Page, Graham (Crosby)

    Currie, G. B. H.

    Hunt, John

    Page, John (Harrow, W.)

    Dalkeith, Earl of

    Hutchison, Michael Clark

    Pearson, Sir Frank (Clitheroe)

    Dance, James

    Iremonger, T. L.

    Peel, John

    Davidson, James (Aberdeenshire, W.)

    Irvine, Bryant Godman (Rye)

    Percival, Ian

    d'Avigdor-Goldsmid, Sir Henry

    Jenkin, Patrick (Woodford)

    Pike, Miss Mervyn

    Dean, Paul (Somerset, N.)

    Jennings, J. C. (Burton)

    Pink, R. Bonner

    Deedes, Rt. Hn. W. F. (Ashford)

    Johnson Smith, G. (E. Grinstead)

    Powell, Rt. Hn. J. Enoch

    Digby, Simon Wingfield

    Johnston, Russell (Inverness)

    Price, David (Eastleigh)

    Doughty, Charles

    Jones, Arthur (Northants, S.)

    Prior, J. M. L.

    Douglas-Home, Rt. Hn. Sir Alec

    Joseph, Rt. Hn. Sir Keith

    Pym, Francis

    Drayson, C. B.

    Kaberry, Sir Donald

    Quennell, Miss J. M.

    du Cann, Rt. Hn. Edward

    Kerby, Capt. Henry

    Ramsden, Rt. Hn. James

    Rawlinson, Rt. Hn. Sir Peter

    Steel, David (Roxburgh)

    Wall, Patrick

    Rees-Davies, W. R.

    Stodart, Anthony

    Walters, Dennis

    Renton, Rt. Hn. Sir David

    Summers, Sir Spencer

    Ward, Dame Irene

    Ridley, Hn. Nicholas

    Tapsell, Peter

    Weatherill, Bernard

    Ridsdals, Julian

    Taylor, Sir Charles (Eastbourne)

    Webster, David

    Robson Brown, Sir William

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

    Wells, John (Maidstone)

    Rodgers, Sir John (Sevenoaks)

    Taylor, Frank (Moss Side)

    Whitelaw, Rt. Hn. William

    Rossi, Hugh (Hornsey)

    Teeling, Sir William

    Wills, Sir Gerald (Bridgwater)

    Royle, Anthony

    Temple, John M.

    Wilson, Geoffrey (Truro)

    Russell. Sir Ronald

    Thatcher, Mrs. Margaret

    Wolrige-Gordon, Patrick

    St. John-Stevas, Norman

    Thorpe, Rt. Hn. Jeremy

    Woodnutt, Mark

    Sandys, Rt. Hn. D.

    Tilney, John

    Worsley, Marcus

    Scott, Nicholas

    Turton, Rt. Hn. R. H.

    Wright, Esmond

    Sharples, Richard

    van Straubenzee, W. R.

    Wylie, N. R.

    Shaw, Michael (Sc'b'gh & Whitby)

    Vickers, Dame Joan

    Younger, Hn. George

    Sinclair, Sir George

    Wainwright, Richard (Colne Valley)

    Smith, John

    Walker, Peter (Worcester)

    TELLERS FOR THE AYES:

    Stainton, Keith

    Walker-Smith, Rt. Hn. Sir Derek

    Mr. R. W. Elliott and

    Mr. David Mitchell.

    NOES

    Abse, Leo

    Delargy, Hugh

    Houghton, Rt. Hn. Douglas

    Albu, Austen

    Dell, Edmund

    Howarth, Harry (Wellingborough)

    Allaun, Frank (Salford, E.)

    Dempsey, James

    Howarth, Robert (Bolton, E.)

    Alldritt, Walter

    Diamond, Rt. Hn. John

    Howell, Denis (Small Heath)

    Allen, Scholefield

    Dickens, James

    Howie, W.

    Anderson, Donald

    Doig, Peter

    Hoy, James

    Archer, Peter

    Donnelly, Desmond

    Huckfield, L.

    Armstrong, Ernest

    Driberg, Tom

    Hughes, Emrys (Ayrshire, S.)

    Ashley, Jack

    Dunn, James A.

    Hughes, Hector (Aberdeen, N.)

    Atkins, Ronald (Preston, N.)

    Dunnett, Jack

    Hughes, Roy (Newport)

    Atkinson, Norman (Tottenham)

    Dunwoody, Mrs. Gwynth (Exeter)

    Hynd, John

    Bacon, Rt. Hn. Alice

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

    Irvine, A. J. (Edge Hill)

    Bagier, Gordon A. T.

    Eadie, Alex

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

    Barnes, Michael

    Edelman, Maurice

    Jackson, Peter M. (High Peak)

    Barnett, Joel

    Edwards, Rt. Hn. Ness (Caerphilly)

    Janner, Sir Barnett

    Baxter, William

    Edwards, Robert (Bilston)

    Jay, Rt. Hn. Douglas

    Bence, Cyril

    Edwards, William (Merioneth)

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

    Benn, Rt. Hn. Anthony Wedgwood

    Ellis, John

    Jenkins, Hugh (Putney)

    Bennett, James (G'gow, Bridgeton)

    English, Michael

    Jenkins, Rt. Hn. Roy (Stechford)

    Bidwell, Sydney

    Ensor, David

    Johnson, Carol (Lewisham, S.)

    Binns, John

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

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

    Bishop, E. S.

    Faulds, Andrew

    Jones, Dan (Burnley)

    Blackburn, F.

    Fernyhough, E.

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

    Boardman, H.

    Finch, Harold

    Jones, T. Alec (Rhondda, West)

    Booth, Albert

    Fitch, Alan (Wigan)

    Judd, Frank

    Bottomley, Rt. Hn. Arthur

    Fitt, Gerald (Belfast, W.)

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

    Bowden, Rt. Hn. Herbert

    Fletcher, Ted (Darlington)

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

    Boyden, James

    Foley, Maurice

    Kerr, Russell (Feltham)

    Braddock, Mrs. E. M.

    Foot, Sir Dingle (Ipswich)

    Lawson, George

    Bradley, Tom

    Foot, Michael (Ebbw Vale)

    Leadbitter, Ted

    Bray, Dr. Jeremy

    Ford, Ben

    Ledger, Ron

    Brooks, Edwin

    Forrester, John

    Lee, Rt. Hn. Frederick (Newton)

    Brown, Hugh D. (G'gow, Provan)

    Fowler, Gerry

    Lee, Rt. Hn. Jennie (Cannock)

    Brown, Bob (N'c'tle-upon-Tyne, W)

    Fraser, John (Norwood)

    Lee, John (Reading)

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

    Fraser, Rt. Hn. Tom (Hamilton)

    Lever, Harold (Cheetham)

    Buchan, Norman

    Freeson, Reginald

    Lever, L. M. (Ardwick)

    Buchanan, Richard (G'gow, Sp'burn)

    Galpern, Sir Myer

    Lewis, Arthur (W. Ham, N.)

    Butter, Herbert (Hackney, C.)

    Gardner, Tony

    Lewis, Ron (Carlisle)

    Butler, Mrs. Joyce (Wood Green)

    Ginsburg, David

    Lipton, Marcus

    Callaghan, Rt. Hn. James

    Greenwood, Rt. Hn. Anthony

    Lomas, Kenneth

    Cant, R. B.

    Gregory, Arnold

    Loughlin, Charles

    Carmichael, Neil

    Grey, Charles (Durham)

    Lyon, Alexander W. (York)

    Carter-Jones, Lewis

    Griffiths, David (Rother Valley)

    Lyons, Edward (Bradford, E.)

    Castle, Rt. Hn. Barbara

    Griffiths, Rt. Hn. James (Lianelly)

    Mabon, Dr. J. Dickson

    Chapman, Donald

    Griffiths, Will (Exchange)

    McBride, Neil

    Coe, Denis

    Gunter, Rt. Hn. R. J.

    McCann, John

    Coleman, Donald

    Hamilton, James (Bothwell)

    MacColl, James

    Concannon, J. D.

    Hamilton, William (Fife, W.)

    MacDermot, Niall

    Conlan, Bernard

    Hamling, William

    McGuire, Michael

    Craddock, George (Bradford, S.)

    Hannan, William

    McKay, Mrs. Margaret

    Crawshaw, Richard

    Harper, Joseph

    Mackenzie, Gregor (Rutherglen)

    Cronin, John

    Harrison, Walter (Wakefield)

    Mackie, John

    Crosland, Rt. Hn. Anthony

    Hart, Mrs. Judith

    Mackintosh, John P.

    Grossman, Rt. Hn. Richard

    Haseldine, Norman

    Maclennan, Robert

    Cullen, Mrs. Alice

    Hattersley, Roy

    MacMillan, Malcolm (Western Isles)

    Dalyell, Tam

    Hazell, Bert

    McMillan, Tom (Glasgow, C.)

    Darling, Rt. Hn. George

    Healey, Rt. Hn. Denis

    McNamara, J. Kevin

    Davidson, Arthur (Accrington)

    Heffer, Eric S.

    MacPherson, Malcolm

    Davies, Dr. Ernest (Stretford)

    Henig, Stanley

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

    Davies, Ifor (Gower)

    Herbison, Rt. Hn. Margaret

    Manuel, Archie

    Davies, S. O. (Merthyr)

    Hooley, Frank

    Mapp, Charles

    de Freitas, Rt. Hn. Sir Geoffrey

    Horner, John

    Marquand, David

    1948

    1949

    Marsh, Rt. Hn. Richard

    Peart, Rt. Hn. Fred

    Steele, Thomas (Dunbartonshire, W.)

    Mason, Roy

    Pentland, Norman

    Stewart, Rt. Hn. Michael

    Maxwell, Robert

    Perry, Ernest G. (Battersea, S.)

    Stonehouse, John

    Mayhew, Christopher

    Perry, George H. (Nottingham, S.)

    Strauss, Rt. Hn. G. R.

    Mellish, Robert

    Prentice, Rt. Hn. R. E.

    Summerskill, Hn. Dr. Shirley

    Mendelson, J. J.

    Price, Christopher (Perry Barr)

    Swain, Thomas

    Mikardo, Ian

    Price, Thomas (Westhoughton)

    Swingler, Stephen

    Millan, Bruce

    Price, William (Rugby)

    Symonds, J. B.

    Milne, Edward (Blyth)

    Probert, Arthur

    Thornton, Ernest

    Molloy, William

    Pursey, Cmdr. Harry

    Tomney, Frank

    Morgan, Elystan (Cardiganshire)

    Rankin, John

    Urwin, T. W.

    Morris Alfred (Wythenshawe)

    Rees, Merlyn

    Varley, Eric G.

    Morris, Charles R. (Openshaw)

    Reynolds, G. W.

    Wainwright, Edwin (Doarne Valley)

    Morris, John (Aberavon)

    Rhodes, Geoffrey

    walden, Brian (All Saints)

    Moyle, Roland

    Richard, Ivor

    Wallace, George

    Mulley, Rt. Hn. Frederick

    Roberts, Goronwy (Caernarvon)

    Watkins, David (Consett)

    Murray, Albert

    Roberts, Gwilym (Bedfordshire, S.)

    Watkins, Tudor (Brecon & Radnor)

    Neal, Harold

    Robertson, John (Paisley)

    Wellbeloved, James

    Newens, Stan

    Robinson, Rt. Hn. Kenneth (St. P'c' as)

    Whitaker, Ben

    Noel-Baker, Francis (Swindon)

    Robinson, W. O. J. (Walth'stow, E.)

    White, Mrs. Eirene

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

    Roebuck, Roy

    Whitlock, William

    Norwood, Christopher

    Ross, Rt. Hn. William

    Wigg, Rr. Hn. George

    Oakss, Gordon

    Ogden, Eric

    Rowland, Christopher (Meriden)

    Willey, Rt. Hn. Frederick

    O'Malley, Brian

    Rowlands, E. (Cardiff, N.)

    Williams, Alan (Swansea, W.)

    Oram, Albert E.

    Ryan, John

    Williams, Alan Lee (Hornchurch)

    Oswald, Thomas

    Shaw, Arnold (Ilford, S.)

    Williams, Clifford (Abertillery)

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

    Sheldon, Robert

    Williams, W. T. (Warrington)

    Owen, Will (Morpeth)

    Shinwell, Rt. Hn. E.

    Willis, George (Edinburgh, E.)

    Page, Derek (King's Lynn)

    Shore, Peter (Stepney)

    Wilson, William (Coventry, S.)

    Paget, R. T.

    Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

    Winterbottom, R. E.

    Palmer, Arthur

    Silkin, Rt. Hn. John (Deptford)

    Woodburn, Rt. Hn. A.

    Pannell, Rt. Hn. Charles

    Silkin, Hn. S. C. (Dulwich)

    Woof, Robert

    Park, Trevor

    Silverman, Julius (Aston)

    Wyatt, Woodrow

    Parker, John (Dagenham)

    Skeffington, Arthur

    Yates, Victor

    Parkyn, Brian (Bedford)

    Slater, Joseph

    Pavitt, Laurence

    Snow, Julian

    TELLERS FOR THE NOES:

    Pearson Arthur (Pontypridd)

    Spriggs, Leslie

    Mr. Harry Gourlay and

    Mr. Harold Walker.

    PRICES AND INCOMES
    Mr. Iain Macleod: There stands upon the Order Paper a Prayer in my name—
    That an humble Address be presented to Her Majesty, praying that the Temporary Restrictions on Pay Increases (20th July 1966 Levels) (No. 9) Order 1967 (S.I. 1967, No. 830), dated 30th May 1967, a copy of which was laid before this House on 31st May, be annulled.
    As the Government have announced their intention, or told us of their intention, to annul this particular Order, and as I am in favour of bloodless victories, I do not propose to move this Prayer.

    ZAMBIA (GIFT OF A SPEAKER'S CHAIR)
    Mr. George Wallace to have leave of absence, in place of Mr. Groffrey Rhodes,
    1950
    to present, with the other Members appointed on 20th June, a Speaker's Chair to the National Assembly of Zambia.—[Mr. Crossman.]

    SCIENCE AND TECHNOLOGY
    Leave given to Sub-Committee A of the Select Committee on Science and Technology to hold sittings in the United States of America.—[Mr. Harold Walker.]
    HOUSE OF COMMONS (SERVICES)
    Mr. William Roots discharged from the Administration Sub-Committee of the Select Committee on House of Commons (Services) Mr. W. H. Loveys added.—[Mr. Whitlock.]

    HOSPITAL SERVICES (MAIDSTONE AREA)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harold Walker.]
    10.15 p.m.
    Mr. John Wells: In seeking to raise the matter of the hospital facilities in and around Maidstone, I am pursuing the letter from my town council addressed to me on 23rd March, of which a copy was sent to the Minister of Health. My town council is now concerned, and at that date was concerned, at the slowness in coming forward of the new Maidstone General Hospital, and in particular it was concerned at the absence of any accident centre at our existing general hospital. The cause for my applying for the Adjournment debate is the comparatively unsatisfactory nature of the reply which I received when I sent that letter on to the Minister.
    I must begin by praising in the highest possible terms both the medical and nursing staff at the scattered hospitals in my constituency. I believe that within the limited facilities which are available to them, they do a magnificent job. In so far as productivity can be measured in a hospital, the productivity and the throughput and cure of patients which has been achieved by the staff in recent years is marvellous. But these are old hospitals. They are virtually worn out. No amount of upgrading will bring them in line with what will be the requirements of the Maidstone district by the date of the proposed advent of the new general hospital.
    Our population has soared. In 1959 the population of the immediate catchment area was about 140,000. By 1978 it is likely to be well over 200,000. If the population increases in the Mailing Rural District at the present rate, it could be as much as 238,000. That is a very sharp increase in population. Secondly, there is the undoubted advent of greater motor traffic to this neighbourhood. Since I have had the honour to represent Maidstone in the House, we have had the advent of the M2 and the M20. The M20 is to be further extended. Although these motorways are marvel-
    1952
    lous, they bring more cars, and inevitably from time to time more cars cause major accidents.
    Our existing hospitals are situated most inconveniently in small, narrow, old-fashioned back streets. They are in the main one-way, to enable people to get by more swiftly. The fact remains that if there were a major motor pile-up—two or three coaches involved in what is called a shunt—it would place a great burden on the local hospitals. When they are taxed with what they would do, they wave their hands and say, "We have a little plan. Patients would be dispersed". But a man who has been injured in a major accident does not want to be dispersed nor is it wise to send him 15 or 20 miles to the next available hospital. It is the total inadequacy of the existing beds and the alarm felt by my town council if there should be a major accident in the vicinity that urges me in the strongest possible terms to ask the Minister to bring forward the proposed starting date for this new hospital.
    In mid-Kent we have seven hospitals of one sort and another. There is the West Kent General Hospital; Linton—in the main a geriatric hospital; the Kent County Ophthalmic Hospital; Fant Lane, which is maternity and very small, and is a G.P. unit; Preston Hall; and Lenham Chest Hospital. In addition there is the well-known and highly satisfactory mental hospital at Oakwood. I am not concerned with Oakwood this evening except to say that both the people of the neighbourhood and the chairman of that hospital are very proud of what it does. I would point out in no uncertain terms that this mental hospital is open to the inspection of anybody at any hour of the day by appointment and that the chairman will be happy for people to see what a fine hospital it is. It is necessary to say this when there is such criticism of some mental hospitals.
    To turn to our range of general hospitals, the ophthalmic hospital and Lenham General Hospital have a catchment area which is very much wider than the main catchment area I am speaking of. Perhaps by 1978 the local population will be 200,000 or more, but for

    1953
    these two specialist hospitals the catchment area will be bigger still. Therefore special notice must be taken of their position. Linton Hospital, the leading geriatric hospital in the neighbourhood, is in an old workhouse which has been beautifully developed. It is in part a day hospital which is a marvellous example of what can be done with old premises. There are modern buildings tucked in behind the old hospital buildings, but there are still 110 beds operating in the old main block. The sooner this can be wiped out and Linton Hospital completely brought up to date, the better.
    In all the statistics which the Ministry keeps producing there is reference to a further 100 geriatric beds at a place called West View, Tenterden. If the Minister were an elderly gentleman I would ask him to try to make the journey from central Maidstone to Tenterden. The communications are not easy for families visiting this place, which is not only outside my constituency but very nearly outside the next constituency. It is a very nice hospital—I have visited it and found it an excellent place—but it is a deuce of a long way from Maidstone and is therefore fundamentally unsatisfactory for the local residents in my area, in which the population is going up.
    Assuming that the existing hospitals have to continue doing the wonderful job they do with the very limited facilities they have until the new general hospital is built, I put one or two specific questions to the Minister. Is the staffing establishment of these hospitals to go up or down? Whenever one tries to get figures and facts one tends to be fobbed off with generalities. When this matter was discussed some time ago, I agree that it was unreasonable to ask about the establishment of the West Kent Hospital because it was being largely rebuilt and major work was going on. Staff was not up to establishment then and did not need to be, but now that the hospital is operating to full capacity, what is the establishment? Has it been cut back? Will it be reasonable, and will it be kept up?
    What is the establishment for the ophthalmic hospital? Is it up or down or neither? I draw attention to the fact that in an area such as Maidstone more
    1954
    and more married women are prepared to return to part-time nursing if facilities are available to them. The facilities they need are nursery facilities so that they can take their small children there and do a day's or half a day's nursing work, but two part-time nurses who are married women do not add up in the running of a hospital to one full-time nurse who can be present for any duties which the matron allocates to her. I hope that we shall not have any hard-and-fast ruling to the effect that two halves equal one whole.
    I turn back for a moment to the lack of an accident centre, and I draw attention to the fact that, at the time of the opening of the Maidstone bypass, the M20, when it was imagined that motor traffic would be creamed off, about 25,000 vehicles passed Maidstone Bridge in a day. Today, some years after the opening of the bypass, again we have 25,000 vehicles a day passing Maidstone Bridge and about 30,000 a day going along the bypass. That is a measure of the increase in the traffic flow, and, with the probable advent of a Channel Tunnel, it will increase still further. What would happen in my area if there was something like a Lewisham train accident right on our doorsteps is something which worries my town council.
    There is a series of other minor points. For example, if we have to wait for the new general hospital, I understand that at Medway, outside my catchment area, there is a modern central sterilising unit. In the two hospitals in the heart of the Borough of Maidstone, there is not the modern ancillary equipment which is needed to make use of the facilities offered by the central sterilising unit, and I am told that it is because of the shortage of cash. That seems faintly absurd, if it would make for more modern technology.
    I have referred already to the ophthalmic hospital. There again, new methods of dealing with people with hearing difficulties have caused a great increase in the throughput of patients. In a hospital like this, the out patient is of great importance, but every out patient has nearly as much record filing and paper work attached to him as an in patient. With a large throughput of in patients, the hospital is desperately short of filing accommodation, and that

    1955
    is an important matter if these hospitals have to continue for some years to come.
    Above all else, we want a quick building of our new hospital. We want the best possible facilities for our nurses and medical staff until it comes. If it is many years off, we must have new, modern equipment. I have mentioned only a couple of types in passing, but the Minister is aware of the great advance in technology. It is unreasonable that we should be held up for them because we are promised a new hospital somewhere in never-never-land. I am aware that our maternity unit is to be moved to the new site soon, which will make more beds available. However, about 100 patients every year come to London from my area, which eases our burden somewhat. If it were not eased, but if we had the new superb aids available in our hospitals, the disquiet which my council feels would be much allayed.
    I must say to the Minister, while on that point, that if more information was available, if there was a better liaison between the administrative staff and the council, if the Minister could explain to the council at every step what was being done, particularly in the difficult years ahead, and if he could mount an exercise in public relations by taking the opinion formers in my area into his confidence, there would be no need to repeat tonight's performance. Indeed, there would never have been any need for this debate had the Minister and his administrators taken the town council and its officials fully into their confidence.
    I do not ask for window dressing, but for genuine confidence and for as much modern equipment as possible. Finally, do not let us have any red herring about West View being wonderful for old people. It is out on a limb. It does not suit them and, when one is old, frequently one is very cantankerous.
    10.30 p.m.
    The Parliamentary Secretary to the Ministry of Health (Mr. Julian Snow): I think that the House is indebted to the hon. Member for Maidstone (Mr. John Wells) for speaking in so moderate a way about what is a very complex matter. If I do not cover all the points he raised, I shall examine his speech
    1956
    and write to him, but I may be able to cover most of them now.
    One of the essential points which has to be made clear—and I do not accuse the hon. Gentleman of not understanding the position, but perhaps it should be better understood locally—is that the concept of a hospital management committee is that it does not necessarily serve the same people as the people living in a local authority area. Thus, parts of a local authority area may be served by hospitals of two management committees, or again the hospitals in a hospital management committee area may serve several local authority areas. This has the advantage of increased flexibility.
    For the purpose of providing a comprehensive hospital service for the population of the central area of Kent—may I say in parenthesis that I am a man of Kent, and know the area very well—the regional hospital board has regarded an area containing a population of about 300,000 living in Sevenoaks, Mailing, Maidstone, Tonbridge and Royal Tunbridge Wells, as being served by the hospitals of the Central Kent Hospital Management Committee, the Tunbridge Wells H.M.C., and by the Sevenoaks Hospital of the Orpington and Sevenoaks H.M.C. On this broad basis as adopted by the board I am assured that there is no overall shortage of hospital beds, though it is a fact that many of the beds are in small units which could be more economically managed if they were brought together in a district general hospital.
    May I say that sometimes one comes across historical tensions between hospitals which it will be the ambition of those organising district general hospitals to eradicate so that the most economic use can be made of the available beds. This has a certain relevance in the area, as the hon. Gentleman knows.
    In the Hospital Plan published in 1962 a new district general hospital was scheduled to be built at Maidstone some time after 1970–71. This is still the intention of the board, although the flexibility of planning on which we have insisted in Cmnd. 3000, the Hospital Building Programme which we produced after a careful survey of the whole of England and Wales in May, 1966, must mean that a date cannot as yet be put on the start of this new hospital. It

    1957
    remains our policy, however, that district general hospitals should be provided where necessary, and at this moment such hospitals are being built at Chatham and Canterbury, and planning is in hand for another at Ashford. It would disturb the priorities of the regional hospital board's capital programme if a start were to be made now on a fourth new hospital at Maidstone, and would overweight the programme in favour of Maidstone.
    Although a start on a new district general hospital at Maidstone cannot be considered yet, the hospital services in this area have not been neglected, and about £350,000 has been spent over the past five years on building schemes in hospitals of the Central Kent Hospital Management Committee. These building schemes cover a wide range of services, and include the new ward block at the West Kent General Hospital, twin operating theatres at the West Kent General Hospital, a geriatric day centre at Linton Hospital, and improvements to X-ray departments.
    The hon. Gentleman mentioned the Channel Tunnel, and the whole question of accidents, and I would like to deal with this for a moment. The actual route of the Channel Tunnel roadway has not yet been finalised, but the board has extensive plans for accident emergency centres in this part of Kent. We have, on the advice of the sub-committee of the Standing Medical Advisory Committee, recommended a reduction all over the country, not just in this area, in the present number of accident and emergency units so that a 24-hour service with full medical cover may be provided. Full-scale accident and emergency departments are therefore being built and planned at only a certain number of hospitals. In this part of the country major accident centres are being developed now at Brook Hospital, Woolwich, the Medway Hospital, Chatham, and the Kent and Canterbury Hospital, Canterbury. These accident centres are each part of schemes costing more than £500,000 each. The Canterbury accident centre should open next January, the Brook Hospital centre in the autumn of 1968 and the Medway centre in the autumn of 1970.
    In addition, a further major accident centre, which will take into account any traffic increases which will arise from the
    1958
    Channel Tunnel, will be incorporated in the new Ashford District General Hospital now being planned, which should start in the not too distant future. Between them, these four major accident centres will provide a first class 24-hours a day accident service with comprehensive facilities for round-the-clock medical cover.
    While the development of these major accident centres is proceeding, the regional board will maintain the accident service at present provided in a number of smaller units such as that at West Kent General Hospital. In the long run, however, the major units must take over this work, which can properly only be undertaken at full-scale accident and emergency centres staffed and equipped to deal with all emergencies.
    The hon. Member also mentioned the question of communicating information to the local authority and improving the public relations aspect. I take his point; it is very important. But I am advised that the hospital management committee has always been on the best terms with the Borough of Maidstone and has endeavoured to provide answers to the questions put, although very often these are more pertinent to the work of the hospital management committee than that of the local authority. He will recall that the chairman of the hospital management committee, the Reverend Harcourt Samuel, who is also a member of the regional hospital board, has discussed local hospital matters with him. The hon. Member is invariably invited to openings and functions. I make the point because I know that in a Member's busy life it is not always easy to accept invitations, but I think it would be very helpful if he could get around the hospitals a little—I know that he was at one yesterday—and absorb some of the problems which are of a continuing nature and are being solved in the way that I have been describing. The press locally is always provided with copies of the minutes of the hospital management committee meetings, and its inquiries are always answered in detail. But I take the hon. Gentleman's point; public relations in these matters are very important.
    The hon. Gentleman mentioned the central sterile supplies department at the

    1959
    Medway Hospital. It is designed to serve the hospitals of several hospital management committees, including those of the Central Kent Hospital Management Committee. The complicated arrangements necessary for the efficient working of the system mean, however, that it can only be introduced gradually. It is hoped to extend the services to the Central Kent Group fairly soon, but a number of technical difficulties have yet to be overcome.
    The hon. Gentleman also talked about the establishment of nursing staff. The number of nursing staff in the group's hospitals has increased from 520 in May, 1965, to 560 in May, 1967. The present nursing establishment of the group is 561—one more than the existing staff—and so there clearly is no great problem in recruiting nurses for the hospitals of this group. The regional board keeps the nursing establishment of its groups under constant review, and no doubt the establishment will be increased at a later date. If it is part of the hon. Gentleman's case that the establishment is too low—I have not had that information—we will look into it. There has been some suggestion at various times that Linton Hospital has not had its share of the increased number of nurses. I have gone into the figures, and it is clear that when the number of beds at Linton Hospital was increased the establishment of nurses was increased to take account of the increased load of work.
    I also take the hon. Gentleman's point about the distance of travel to old people's homes and the like. This is very important. In another connection we have been studying the need fully to acquaint the transport authorities with the transport needs for this sort of establishment, but it is not always very easy to secure bus transport in the way one would like.
    As to part-time nurses, I agree with the hon. Gentleman that two part-time nurses cannot be regarded as equivalent to one whole-time nurse. The statistics used by hospital authorities and my Department are based on the number of hours worked by a nurse compared with a fortnight of 84 hours worked by a full-time nurse.
    The hon. Member said that a number of cases were referred to teaching
    1960
    hospitals. This is not a matter for criticism.
    Mr. John Wells: I did not say specifically teaching hospitals. I said hospitals outside the area.
    Mr. Snow: I am sorry. I understood the hon. Member to refer to teaching hospitals. He mentioned 100 cases going outside the area.
    This brings me back to my original comment that we must get away from the idea, whether at hospital or at group level, that they serve a rigid area. That is wrong for a number of reasons. First, it does not give the necessary flexibility of usage of all the beds available. Secondly, medical facilities may be better in one area for certain specific illnesses or diseases than in others and we must have the capacity to juggle in the market of beds available.
    I think that I have covered most of the points which the hon. Member raised. I hope that he will not accuse me of being patronising if I say that he is right to raise this issue. There is a limitation on the capital resources available for the plan. It must be remembered that the capital needed, certainly for equipment, for acute hospitals nowadays is so large that it is necessary to reduce the number of small peripheral units in order to make the equipment available to the whole population. This expensive equipment can be located only in district general hospitals. That is the essential point which is sometimes not appreciated. I know that the hon. Member understands it, and the public must understand it. We hear about the wonders and of the marvellous development of equipment. It cannot possibly be located and financed for use in small hospitals.
    I therefore hope that he understands that whereas there must be, and always will be, grounds for criticism, by and large the area about which he is so properly concerned is receiving its full share of available resources. I hope that what I have said about plans for the future will demonstrate to him that we have very much in mind the developing economic interests of the area.
    Question put and agreed to.
    Adjourned accordingly at eighteen minutes to Eleven o'clock.

MINISTRY OF DEFENCE
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  Sonic Bangs (The Wash Coast Area)
  CONTEMPT OF COURT (COMMITTALS TO PRISON)
  CONTEMPT OF COURT (COMMITTALS TO PRISON)
COMMONWEALTH AFFAIRS
  Caribbean Commonwealth Countries (London Consultations)
  Caribbean Commonwealth Countries (London Consultations)
  St. Kitts (Detainees)
  St. Kitts (Detainees)
  Malaysia and Singapore (Defence Agreement)
  Malaysia and Singapore (Defence Agreement)
HOME DEPARTMENT
  Transfer of Prisoners (Mr. Ogilvie)
  Transfer of Prisoners (Mr. Ogilvie)
  Industrial Civil Defence Service
  Industrial Civil Defence Service
  Rough Sands Tower Radio Station (Incidents)
  Rough Sands Tower Radio Station (Incidents)
TELEPHONE SERVICE
  Faults (Weekend Emergency Repairs)
  Faults (Weekend Emergency Repairs)
HOUSING
  National House Builders Registration Council
  National House Builders Registration Council
MINISTRY OF LABOUR
  Wage Claims (T.U.C. Vetting Committee)
  Wage Claims (T.U.C. Vetting Committee)
  Transport House (Salary Increases)
  Transport House (Salary Increases)
SCOTLAND
  Petro-Chemical Project (Invergordon)
  Petro-Chemical Project (Invergordon)
  Highlands and Islands Development Board (Decisions)
  Highlands and Islands Development Board (Decisions)
  Timber Sales (Thinnings)
  Timber Sales (Thinnings)
NATIONAL FINANCE
  Bank Credit (Sheep and Cattle Dealers)
  Bank Credit (Sheep and Cattle Dealers)
  Central and Local Government Employees
  Central and Local Government Employees
SOCIAL SECURITY
  "Circumstances of Families" Survey
  "Circumstances of Families" Survey
WALES
  New Airport, Severnside
  New Airport, Severnside

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

ELVINGTON COUNTY PRIMARY SCHOOL, EYTHORNE
2.36 p.m.
LORD PARGITER: 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 Department of Education and Science will give authority for the Kent County Council to proceed immediately with the rebuilding of the Elvington County Primary School, Eythorne, which has for a long time been in a dilapidated and to some extent dangerous condition.]
BARONESS PHILLIPS: My Lords, the Kent authority have submitted this project for the 1969–70 major school building programme which my right honourable friend the Secretary of State for Education and Science is currently considering. He hopes to announce the programme shortly.
LORD PARGITER: My Lords, while thanking my noble friend for that reply, may I ask whether she is aware that even if approval is given to this rebuilding it will be some two years before the school is ready for occupation again? Is she further aware that it was built in 1928 almost entirely of matchboarding, as a purely temporary measure; that rebuilding actually commenced before the war and was stopped, obviously, because of the war; that nothing has been done since; that the electrical wiring, for example, which was estimated to have 20 years' life is now 40 years' old; that the school is heated by combustion stoves—
SEVERAL NOBLE LORDS: Order!
LORD PARGITER: And whether or not—
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, I think I must ask my noble friend whether he is putting a question.
LORD PARGITER: My Lords, I am asking my noble friend whether she is aware of these conditions and whether, having regard to all these circumstances and the fact that the chief fire officer has reported adversely on the school, something may be done to expedite this rebuilding and bring it into a much earlier programme.
BARONESS PHILLIPS: My Lords, my right honourable friend the Secretary of State is aware that the physical conditions in the existing building are very bad, and the Kent authority have taken steps to implement the recommendations made by the county fire officer following his recent inspection of this school. I will convey the facts that my noble friend has now given to the House to my right honourable friend, but he is well aware of the conditions obtaining in the school.

B.E.A. PASSENGER AIRCRAFT
2.38 p.m.
THE EARL OF KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can make any further statement on the decision, urgently required, to order new passenger aircraft for B.E.A.
THE PARLIAMENTARY SECRETARY BOARD OF TRADE (LORD WALSTON): My Lords, since your Lordships' debate on May 9, both B.E.A. and the Board of Trade have carried their economic studies further. As your Lordships are aware, there are major financial and practical problems, and in any case it is necessary to have regard to the proposed European airbus, which itself is the subject of a meeting later this month between British, French and German Ministers. I am very conscious of the difficulties facing B.E.A. and hope that it will soon be possible to reach a decision.
THE EARL OF KINNOULL: My Lords, while thanking the noble Lord for his reply may I ask him whether, in the event of the A.F.V.G. project being cancelled, the European airbus project will be in danger of the same fate?
LORD WALSTON: My Lords, I can assure the noble Earl that there is no connection between these two projects. The outcome of the European airbus project will be decided entirely independently and is, as I have said, the subject of discussions to be held between our own Minister and the German and French Ministers later this month.
EARL JELLICOE: My Lords, in view of the great urgency of this matter may I ask the noble Lord whether he can hold out any hope that the decision will be taken and announced before the Summer Recess?
LORD WALSTON: No, my Lords; it would not be right for me to say categorically that a decision will be taken. As the noble Earl will be aware, it must depend to a large extent on the decisions taken in regard to the European airbus, and therefore we are not entirely our own masters in this matter. The meeting will be taking place later this month, and in the light of the outcome of that meeting a final decision will be taken on the other matter. But whether it will be possible to make an announcement before the Recess I cannot say.

WATER SUPPLIES AND LEAD PIPING
2.40 p.m.
LORD DOUGLAS OF BARLOCH: 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 any steps are being taken to limit the lead content of drinking water to the International Standard Limit of the World Health Organisation, namely 0·05 milligrams per litre (approximately one ten-thousandth of an ounce per pint).]
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, the responsibility
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for securing a supply of pure and wholesome water lies with the statutory water undertakers. As to safeguards against an excessive lead content and other impurities, my right honourable friend's predecesors for many years have advised undertakers to carry out chemical examinations of the water they supply; and they do so. Where they consider that the nature of the water demands it they reduce the acidity by alkali treatment; or they can prohibit, by means of bylaws, the use of lead pipes. Moreover, an independent check is performed by medical officers of health who take their own samples to test water purity. My right honourable friend considers that adequate safeguards exist and that the water supply underakers are well aware of the existence of this problem. He therefore sees no case for prescribed standards. I am, of course, aware of the correspondence on this subject in the Lancet; but since the chemistry involved is rather complicated, I suggest to my noble friend that I should write to him in greater detail.
LORD DOUGLAS OF BARLOCH: My Lords, may I ask my noble friend whether his reply indicates that in fact the water supplies of this country conform to the recommendations of the World Health Organisation, or are very near to them?
LORD KENNET: My Lords, it is difficult to answer "Yes" or "No" to that question, because the variable in this matter is not so easily controlled at the level of how much lead there is in the water but rather at the degree of acidity of the water, since it is acidity in the water which is capable of dissolving the lead in the pipes, and there may be lead pipes anywhere.
LORD SALTOUN: My Lords, may I ask the noble Lord a question in this connection? This information is rather surprising to me, because I have always understood that it is pure water that dissolves lead and that the best way to stop water taking up lead was to adulterate it a little. Is that not the case?
LORD KENNET: My Lords, I said that the chemistry was complicated. While I am ready to do my best to pursue this matter this afternoon, I would suggest that if I write to my noble friend to answer his Question more fully perhaps I could send the noble Lord a copy of it.
LORD DOUGLAS OF BARLOCH: My Lords, may I ask my noble friend whether it is not the case that the ability of the human body to excrete lead is extremely limited and that comparatively small amounts will build up to a toxic level; and is that not the purpose of the Standard Limit of the World Health Organisation? Secondly, does it not appear from recent papers in medical journals that lead poisoning is more common than might be supposed and that cases might remain undetected for many years, and perhaps for ever?
LORD KENNET: My Lords, it is true that it has been known that cases have gone undetected, but I would not agree that the recent reports of three cases, spread over a good many years, which appeared in the Lancet indicate a high incidence of this condition.
LORD LEATHERLAND: My Lords, in view of this Question, I wonder whether my noble friend could give the public an assurance that even though there may sometimes be slight impurities in the water, there is sometimes arsenic even in beer, and that in both cases there is no danger to the public if they consume them.
LORD KENNET: My Lords, here we are talking about the general level of purity of British water supplies, and I can give the House and public the assurance that it is not had and is getting better all the time.
LORD DOUGLAS OF BARLOCH: My Lords, may I ask my noble friend whether, in this connection, it is not necessary to have regard to other sources of intake of lead, such as lead additives in motor fuels and lead deposits from polluted atmospheres?
LORD KENNET: My Lords, that is another question, of which I should require notice.
BARONESS SUMMERSKILL: My Lords, I wonder whether the noble Lord could say how many areas have introduced by-laws to prohibit the use of lead pipes.
LORD KENNET: Not without warning, my Lords.

THE ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT
BARONESS PHILLIPS: My Lords, at a suitable time after 3.30 p.m. my noble friend Lord Beswick will be making a Statement on the Anglo-French variable geometry aircraft.

PRICES AND INCOMES ACT 1966 (COMMENCEMENT OF PART II) ORDER 1967
2.44 p.m.
LORD SHEPHERD LORD SHEPHERD rose to move, That the Prices and Incomes Act 1966 (Commencement of Part II) Order 1967, be approved. The noble Lord said: My Lords, I beg to move that this Order be approved, and in doing so may I also move the second Motion standing in my name on the Order Paper:
"That this House takes note of the Prices and Incomes Policy of Her Majesty's Government."
My Lords, I have always sought to be frank with your Lordships. Some weeks ago I drew attention to the congested state of business for July, and I think it was generally agreed that this was usually so in July, though some occasions were worse than others. I am quite frank when I say that this year congestion is particularly bad. I hope that we shall have completed some 102 Acts of Parliament this Session, and this will, of course, be a great credit to the House, and particularly to the noble Lords who will sit out the late hours during July. I commence with this explanation to explain why we are taking this Order this afternoon, and why I issued a House of Lords Paper detailing the Prices and Incomes (No. 2) Bill which is at present before another place. Both the Order and the Bill need to be passed by the Summer Recess, since Part IV of the Prices and Incomes Act 1966 lapses on August 11.
Apart from that, there are other important Bills yet to come. I hope to persuade the House not only to take the Order to-day but also to have a wide-ranging debate on the Government policy in the field of prices and incomes, and in particular the proposed legislation. I hope that, by so doing, we may perhaps agree that when the Bill comes to your

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Lordships' House we can take the Second Reading fairly formally. And since the details of the Bill are now before the House in the form of a White Paper, I hope that it will then be possible to take the Committee stage fairly shortly after the Second Reading.
Certainly we will use italic notices in our daily Notices and Orders of the Day so that noble Lords may be well informed of the proposed dates, and I hope to make a Statement some time next week. I think I should also say that if noble Lords wish to put down Amendments on this House of Lords White Paper they can do so, and the Amendments will be printed and distributed in the usual way. If this course is acceptable to the House—and I sincerely hope it is—it will be possible to phase other business, and we can make the most use of the available time between now and the end of July. In concluding this explanation I think I should make it quite clear that the Order stands by itself, and that, while the Bill is closely related, in that it strengthens Part II of the Act which is activated by this Order, I am not asking the House in any way to approve the House of Lords White Paper.
Almost a year has now elapsed since we discussed the prices and incomes policy. That was before the enactment of the present Act. The need for legislation applying to prices and incomes was being considered in the shadows of a deep, severe national economic crisis, with very heavy pressure on sterling. Your Lordships were mindful of the problems that confronted previous Governments in trying to deal with inflationary pressures. Everyone was well aware of the surge in prices and incomes during 1964 and 1965, and of course in previous periods. The policy of prices and incomes pursued after 1964 was not intended to be a short-term policy from which one could expect immediate or large results. It represented the initiation of a longer-term effort, in the closest consultation and co-operation with managements and the unions, to develop an effective policy on a voluntary basis which was bound to require important changes of attitude.
This is not to say that the results of the tripartite co-operation were fruitless. The machinery for a voluntary early-warning system was worked out and has proved itself under the strains of the
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past year of standstill and severe restraint, although one must recognise that the Government have had the wide reserve powers of Part IV of the Act. The Government, management and the unions have been able to hammer out agreement on the considerations relevant to prices and incomes behaviour. But, of course, in the application of these considerations progress was far from satisfactory, and the increases in incomes particularly were out of line with the trend of growth of real national output.
The twin aims last July were a reduction in the inflated level of demand and the obtaining of a breathing space from the unduly rapid rise in money incomes. The series of economic measures has achieved the first of these aims. I need hardly reiterate the results in terms of improvement of our balance of payments, including the progress made towards repayment of our external debt, but I may say that whereas in 1964 the deficit on visible trade alone was some £543 million and in 1965 some £269 million, it was reduced again in 1966 to some £110 million. For the first quarter of 1967 the deficit was some £19 million, seasonally adjusted, as compared with the average quarterly deficit in 1966 of some £28 million.
Turning to the response to the call for a standstill, I cannot help but recall the words of the noble Lord, Lord Erroll of Hale, on August 3 last year, when he said:
"It is still very much in the balance whether there will be this degree of voluntary cooperation."—[OFFICIAL REPORT, Vol. 276 (No. 48), col. 1338.]
Few noble Lords, few who were concerned, would have disagreed with the noble Lord at the time. There were some 6 million workers who, under settlements already made, were expecting an increase in pay or a reduction in hours, or both, during the twelve months after July 20, 1966. These workers were being called upon to forgo the implementation of their agreement for some six months.
Although the Government had sought the wide reserve powers of Part IV, it was clear that the success of a standstill would depend on the extent of voluntary co-operation. It is now beyond dispute that there has been an overwhelming response to this call for a standstill and severe restraint. The credit for this lies

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with management and the unions and the ordinary folk throughout the community. There has been a remarkable recognition of the national interest in a situation where the Government were taking severe measures to restore the basis of viability to our balance of payments. The full statistics for the first half of 1967 are not yet available, but it is clear that support for the policy of severe restraint has been widespread. The index of hourly wage-rates rose between December, 1966, and May, 1967, by nearly 2 per cent. but, of course, much of this increase was in consequence of the implementations of commitments that had been deferred under the standstill. I will return to this point in a moment.
It has been said that the standstill has not been applied to prices because prices continue to rise while pay has been held down. The movement of prices and pay should be considered together over the whole period since July 20, 1966. Between July and December, 1966, the retail price index rose by just under 1·5 per cent. and the hourly wage rate index was virtually unchanged. But between December, 1966, and May, 1967, the retail price index rose by under 1 per cent. while the wage rate index rose by nearly 2 per cent. Of course, no one likes to see prices rising while one's pay is stationary, but it is misleading to talk of a failure to exercise proper surveillance over prices. I need not remind your Lordships of the considerations involved in dealing with prices which are determined by world market conditions and by other seasonal factors. The economic measures taken in July included some which led to increases in prices—the purchase tax regulator and the increase in certain postal charges, to name a few. The Prime Minister made this explicitly clear on July 20 when he referred to the criteria for prices under the standstill. Of the 2½ per cent. increase in the retail price index since July, 1966, about 1 per cent. has reflected these measures and the effect of selective employment tax. Much of the remainder has been due to seasonal increases and higher rents and rates.
It is clear that the manufacturers have co-operated properly in standstill and severe restraint. Under the early warning arrangements proposals for price increases have been notified and have been fully examined, and in a number of
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important cases increases have been deferred for some months—for example, in the case of bread, flour and beer—or have been postponed for the duration of the standstill or severe restraint.
The charge has been made that the standstill and the severe restraint periods have been wholly negative. I well recall those, in particular the noble Lord, Lord Byers, who expressed their anxiety that there would be discouragement in the field of negotiations to raise productivity. During the first six months, quite naturally, there could be no increases, whatever the circumstances might be; but during the period of severe restraint there was special provision for the implementation of new settlements under genuine productivity agreements, and since January, 1967, some 250 productivity agreements, covering over 100,000 workers, have been accepted under the criteria of Command Paper 3150.
Your Lordships will be aware, too, of the valuable work carried out this year by the National Board of Prices and Incomes in the study of productivity and pay. Their Report has now been issued and will no doubt be studied by all those who are interested.
There is another vital aspect in which the policy has not been negative; namely, the treatment of the lower-paid worker. It has been our aim to encourage priority for the consideration of the needs of the lowest paid workers, and the practical evidence of this can be summed up in the fact that since the beginning of the period of severe restraint increases in pay have been approved under the criteria for lowest-paid workers in industries employing some 2 million workers.
It is clear that the prices and incomes policy during the past year has been highly effective and, above all, that it has commanded widespread support, in spite of misgivings about the nature of the powers taken by the Government. The fact about the extent to which Part IV powers have been used speak for themselves. I give them because we have not had the opportunity of debating the various Orders that have been made by the Government. Fears were expressed in your Lordships' House some twelve months ago about trade union leaders going to prison. Fourteen orders

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only have been made with regard to pay dealing with some 36,000 workers out of a total of some 23 million workers in this country. I suggest that that in itself is evidence of the widespread voluntary support of our working folk.
Part IV will lapse automatically on August 11. There is no question of the Government seeking to extend the Prices and Incomes Act on the lines of Part IV. There will undoubtedly be a testing time ahead now that the period of severe restraint has come to an end, but the policy in the coming twelve months is not intended to be one of severe restraint under another name. But it is a policy for moderation in prices and incomes, with a return to basically the criteria which had been worked out by management and by the unions earlier last year.
The important difference is that for this next year the prime interests of economic recovery and the strengthening of the balance of payments require that nobody shall have an automatic right to a minimum increase in income. As the White Paper made clear, the Government accept the desirability of maintaining priorities for encouraging settlements which promote productivity and which improve the relative position of lower-paid workers.
The Government believe that it is now right to return to a situation in which any reserve powers over prices and in-comes should be related to the process of examination by the National Board for Prices and Incomes. The powers under Part IV are totally different, because they are exercisable under the Government's own hand outside the process of reference to the National Board. The limited powers which the Government are now seeking are not within this process of reference to the Board.
Before I come to the proposals, I should like to say something about the basis of our recent discussions with the C.B.I. and T.U.C., and particularly with the latter, because there are those who have sought to establish that the Government and the T.U.C. are poles apart about the development of a productivity, prices and incomes policy. These discussions have shown that there is a great deal of common ground between the three parties. All recognise the need for moderation
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in the coming year. The C.B.I. and the T.U.C. have accepted that decisions about prices and incomes should be related to the interests of the community as a whole—the third party to the agreement. There is no question of the Government seeking to impose a rigid policy on management and unions. The Government's aim is to work as quickly as possible towards the operation of an effective voluntary policy—recognising the determination of the C.B.I. and the T.U.C. to play their full part.
The main difference, particularly with the T.U.C., has been over the retention for a limited period of reserve powers. The Government have carefully weighed the views of industry, but they remain convinced that some limited powers should remain available in reserve to help to move from the rigorous restraint of the past year to the more flexible arrangements in line with longer term aims of policy.
The Government have warmly welcomed the main steps now taken by the T.U.C. to develop their wage-vetting machinery. This is one of the most notable steps in trade union history and one which reflects a growing understanding of the need for a more effective policy on prices and incomes. I would remind your Lordships of the report by the T.U.C. to their conference of executives last March, when they made it clear that:
"Governments are entitled and indeed required to ensure that the attainment of these objectives (i.e. national economic and social objectives) is not jeopardised by selfish pursuit of sectional aims."
I will now turn to the Order and to the White Paper containing details of the Prices and Incomes Bill. In the White Paper, Prices and Incomes Policy after June 30, 1967, the Government announced their intention to activate Part II of the Prices and Incomes Act 1966. They are now doing so after consultations with the T.U.C. and the C.B.I. as is required under Section 6 of the 1966 Act. The Order is now before your Lordships' House. It provides for Part II to come into force in a period of 12 months beginning August 12, 1967. That is when Part IV of the Act lapses. The Order is required to be approved in draft by both Houses of Parliament. The new powers conferred on the Government by Clauses 1, 2 and 3 I of the Prices and Incomes (No. 2) Bill,

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which are designed to provide a limited strengthening of the powers in Part II for a period of 12 months, are also intended to come into effect on August 12.
Part II of the 1966 Act gives the Government power to make orders requiring the notification of proposed increases in particular prices or charges, or increases in company distributions, or, in particular, of pay claims or awards and settlements, and for a temporary standstill to be imposed on the implementation of proposed price increases, awards and settlements referred to the National Board for Prices and Incomes.
Part II provides for an early-warning period of up to 30 days during which the proposed price increases, awards and settlements can be considered by the Government, and a further standstill of up to three months on the implementation of a price or pay increase which is referred to the Board. A standstill of up to three months can also be imposed on prices and pay proposals which have been referred to the Board but have not been subject to compulsory notification. In either case the stand-still is terminated at once on the publication of the Board's report. There is no statutory bar to the implementation of a price or pay increase regardless of the Board's findings. The Government have made it clear that they intend in practice to rely to the fullest extent possible on the arrangements for voluntary early-warning, and orders will not be made under Part II requiring statutory notification in any sector covered by the voluntary arrangements unless it appears to be necessary to maintain the effectiveness of these arrangements.
The purpose of Clauses 1, 2 and 3 and the Schedule to the Bill is temporarily to strengthen the provisions of Part II. The powers conferred by these clauses are fundamentally different from those conferred by Part IV of the 1966 Act. Under Part IV it has been possible by order to prohibit any proposed price or pay increase and, where an increase has been implemented, to enforce a return to the level ruling before July 20. These powers have been available for use by the Government at their discretion over the whole field of prices and incomes, but the powers conferred by this Bill, while they are important additions to the powers of Part II, are tied to the references to and the recommendations
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by the Board in the particular case involved.
Clause 1 enables the Government to delay the implementation in part or in whole of a price or pay increase for a further period up to three months after the Board has reported—and I stress the fact that this is where such further delay is recommended by the Board. The maximum period of standstill under this clause is six months from the date of the reference to the Board, so that in some cases where statutory notification is required the total standstill could be for seven months. The power to extend the standstill after the Board has reported will, it is hoped, help to ensure that the parties concerned will have the opportunity to pay due regard to the Board's recommendation. It is important to note, however, that it will be for the Government to decide, in the light of the Board's recommendations, whether to use these powers. They are free to exercise the powers either in a manner less restrictive than recommended by the Board, or not at all. In any event, by virtue of the provisions of the Schedule to the Bill they cannot take action which is in any way more restrictive than the recommendation of the Board. Under the provisions of Part II, a standstill can be imposed only in cases where a price or pay increase has not already been implemented.
Clause 2 enables the Government temporarily to suspend the implementation of a price or pay increase within three months of its implementation, either at the time it is referred to the Board, or subsequently if it has already been referred to the Board on the basis of a voluntary standstill and the parties implement it while the Board is still preparing its report. In either case, the standstill will remain in force until the Board's report is published, or until three months after reference to the Board, whichever is the earlier. But it may subsequently be extended, under Clause 1, if the Board's report so recommends.
Clause 3 enables the Government by order, after publication of the Board's report, to suspend a price or pay increase which does not accord with the recommendations of the Board, provided that the order is made within six months from the date of reference to the Board. An

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order may impose a standstill for up to three months.
Clauses 2 and 3 have been included to enable the Government to rely to the maximum extent on voluntary early warnings in the standstill arrangements. They provide only for powers which can be used to ensure that the working of the voluntary prices and incomes policy is not frustrated by the actions of those who refuse to observe its requirements. They are, in fact, an alternative to making orders under Part II requiring compulsory notification in all cases.
The Schedule contains a number of provisions relating to the operation of powers conferred by Clauses 1, 2 and 3. Among other things it provides that orders made under these clauses may not be more restrictive than the recommendations in the relevant report of the Board, and that such orders may be made only after the parties have had an opportunity to make representations.
It will be noted that Clause 6 provides that Clauses 1 to 3 of the Bill are to come into force on August 12, 1967. No order or direction can be made or given under Clauses 1 to 3 after August 11, 1968, and there is no provision for the renewal of these powers after that date. However, as was envisaged in the First Secretary's statement in another place on April 17, the Schedule provides that orders made under Clauses 1 to 3 before August 11, 1968, may continue in force beyond that date, subject to their maximum duration as limited by the clauses themselves.
Clauses 4 to 5 will come into force on the enactment of this Bill. Clause 4 modifies and clarifies the 1966 Act in a number of respects. In particular, it makes clear that the temporary prohibition on the implementation of awards or settlements under Part II applies in respect of any period before the standstill began, and that any contractual liability to pay an increase in respect of any period of prohibition does not automatically revive at the end of the period.
I now come, my Lords, to Clause 5, which I think is of particular interest. The principal purpose of Clause 5 is to give employers a defence against legal actions for the recovery of pay increases contractually due but withheld during
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the periods of standstill and severe restraint. The success of an incomes standstill has to a considerable extent been due to the voluntary withholding of such increases by employers, and to the express or implicit acceptance of this position by the employees. In this set of circumstances there would be obvious difficulties if some employees sought to secure back payment of increases, after the end of severe restraint, by court action, or threat of court action, against their employer. It is, of course, of national importance that the benefits of the standstill and severe restraint periods should not be eroded, which they might well be if widespread retrospective payment of increases withheld in accordance with the requirements of national policy were to take place.
I appreciate that I have already spoken longer than I intended, but in fairness to the House, and in view of the fact that I hope we shall be taking the stages of this Bill fairly quickly, I think that I ought to take a few moments longer to speak specifically about subsection (7) of Clause 5. Clause 5 does not introduce any new principle. Your Lordships will recall that Section 30 of the Prices and Incomes Act passed last year was intended to provide a defence for employers against liability for breach of contract where pay increases were withheld from employees. The protection in that section is, however, available only in certain circumstances. In particular, it is available only in relation to pay due for the period after October 6, 1966, when Part IV was brought into force. Moreover, the protection is available only where the employer has given statutory notice in accordance with Section 30(2) of the 1966 Act. Many employers have, understandably, been unwilling to issue formal notices of this kind when their employees have, in practice, accepted a deferment. But the fact remains that where there is a contractual right to deferred increases, actions for recovery of the back pay can be instituted at any time within six years of the date of deferment.
It is important to bear in mind that Clause 5 relates only to the withholding of pay increases due in the period from July 21, 1966, to July 1, 1967, or before July 20, 1966, and not actually paid on that date. The clause does not prohibit

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the payment of such increases, nor does it give any right of recovery of remuneration actually paid. What it does is to affect the position in relation to contractual liability in relation to what has actually taken place over the last 12 months. It does not alter the situation except to recognise in law the deferments which have already taken place.
Your Lordships will have noticed that it is proposed that the protection afforded by Clause 5 should be effective even to the extent of proceedings instituted before the enactment of the Bill. To this extent the provisions contain a retrospective element, but this is subject to two very important qualifications. In the first place, the clause cannot provide a defence in any legal proceedings instituted before June 5; that is, the date of publication of the Bill. Any proceedings started after that date are likely to be with the express intention of "beating the gun" before Clause 5 can be enacted. If there were a rush of such cases, clearly there would be a serious risk of undermining all the benefits about which I have spoken, and it would certainly have serious effects and consequences for the great majority who have loyally abided by the requirements of the policy and would feel that they were put at a disadvantage compared with those who were not prepared to co-operate.
The second important qualification is that the clause cannot be effective, even in cases instituted after June 5, where judgment has actually been satisfied in whole or in part before the enactment of the Bill; that is to say, there could be no question of setting aside judgments where the money has actually been paid. The Government regret having to introduce a measure involving retrospective operation on pending proceedings, but, as the House is well aware, there are statutory precedents for this, and it is only in these exceptional circumstances that we have felt it right to do it in this case.
Perhaps I should stress that the Government are not seeking to reverse the Court of Appeal's recent decisions in the cases of Griffiths v. The Metropolitan Police District Receiver or of Allen v. Thorn Electrical Industries Limited. Although those judgments were not made until after publication of the Bill on
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June 5, the proceedings had been pending for many months, and the judgments have already been satisfied; that is, the money has been paid to the employees concerned. I should, however, explain to those noble Lords who may not have followed these court cases that the Court of Appeal's decisions are in fact of very limited application. They affect the interpretation of a minority of the Orders under Part IV of the 1966 Act.
My Lords, I hope I have covered this Order, and explained the details of the Bill contained in the White Paper. I get no joy from having to ask your Lordships to accept this class of legislation, and certainly it is repugnant to my Party; but in all the circumstances I do not believe we have an alternative. There are some who say that we should run our economy in such a way that we do not really need a prices and incomes policy, but I think those who have considered the recent past—since the last war, shall we say—will recognise that unless we have some orderly control in our incomes, in relation to our national output, we shall have no alternative but to take other measures which can result only in a much larger number of unemployed than we have experienced this year—perhaps a figure comparable to that in 1962–63; and none of us would wish to see that. Certainly, those measures would have a very savage effect upon those we might call our weaker brethren and those who live on fixed incomes.
I believe that if we can gain some 12 or 24 months, moving from this period of standstill to severe restraint, if we can have some orderly progress, we shall then be able to obtain a voluntary, co-operative prices and incomes policy, controlled and organised by management and by the trade unions; and since both those bodies now recognise that there should be a third party—that is, the consumer—within their agreements, I believe we could see a stable development in our economy in that particular field.
My Lords, in a few days we shall have an opportunity to discuss, under the Finance Bill, many other aspects of our economic policy. I do not pretend that the prices and incomes policy is the panacea for our economic difficulties, but I do believe that unless we can achieve a solution in this field none of the other

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steps that we are taking will bring the end that we wish to see. It is with some degree of regret that I move this Order, but I certainly move it with the conviction that we have no other alternative at this present stage. My Lords, I beg to move.
Moved, That the Prices and Incomes Act 1966 (Commencement of Part II) Order 1967, be approved.—(Lord Shepherd.)
3.25 p.m.
LORD ERROLL OF HALE: My Lords, I am sure that all your Lordships would wish me to thank the noble Lord who has just sat down for an extremely lucid speech and a very clear explanation of the White Paper. I would only say to noble Lords that if we do not understand it now, certainly it is not the fault of the noble Lord, Lord Shepherd, who explained it so clearly and lucidly to us. I should also like to say that I wholeheartedly endorse the noble Lord's proposals for dealing with the Bill when it actually comes to us from another place.
To me, one of the most interesting features of this Chamber, having served so long in another place, is the flexibility of our procedure which, as the Summer Recess approaches, enables us to abandon certain formulae and to compress our business so that we are able to get a move on without having to face the awful prospect of sitting into August, as we did last year. So I hope noble Lords, particularly those on this side of the House, will agree with me when I suggest that we should support the noble Lord's proposal for the expediting of the Bill when it comes our way. The noble Lord told us that something like 102 Bills had been passed through Parliament in this Session.
LORD SHEPHERD: My Lords, if we achieve our end, we shall have reached that number.
LORD ERROLL OF HALE: Let us say some 90 by now. The noble Lord seemed to take some pride in this fact. I can assure him that we on our side view the situation with the utmost dismay. Of those 102, I would say that at least 100 are bad Bills; most of them are quite incomprehensible, and those which are not incomprehensible are unnecessary.
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Before I turn to the subject of the Bill itself, I think there is one feaure in the noble Lord's comments on the situation in general that I really ought to mention to your Lordships; that is, the pride which the noble Lord took in the improvement of the adverse balance of payments situation. I would have preferred the noble Lord to have given due credit to a factor which was quite outside the control of Her Majesty's Government; namely, the alteration in the terms of trade from 1964 to April of this year. During that time, export prices rose by something like 8 per cent., whereas import prices rose by only 1 per cent.; the resulting benefit to the balance of payments running at the rate of £300 million a year in Britain's favour.
This is a very fortunate windfall, and the Government, and indeed the country, were fortunate that there should have been a windfall of this size at this time. But do not let the Government take credit for this windfall, because if they do they will only be deceiving themselves. I listened to the noble Lord very carefully, and while I noticed that he did not in fact take full credit for the improvement in the balance of payments situation, I am very afraid that his colleagues in the Government might take the credit when in fact we have gained a windfall benefit at the expense of the less-developed countries who are selling their products to us.
Now I want to turn to the events which led up to this Bill which we are virtually discussing to-day, because I think it is important to look at the history of events in the last 18 months or so. During the last Election, we had a number of responsible statements made by the then Government on the subject of prices and incomes. Mr. Wilson, in Election Forum on March 10, 1966, said:
"As to the idea of freezing all wage claims, salary claims…I think this would be monstrously unfair."
He won the Election on April 1, appropriately enough, and then we began to see events take shape.
Here, I should like to reassure noble Lords in all parts of the House that when things go wrong it is never the fault of the present Government. I hope that I shall not at any stage this afternoon attach any blame to the Government for things which have gone wrong. It is always

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somebody else's fault, and, in any case, they never make any mistakes themselves. So, naturally, when in May, 1966, there was a seamen's strike, it was not the Government's fault—it was those naughty seamen who upset Britain's trading position; seamen who, probably in the main, had voted for their own Labour Government. And so we soldiered on into July, and we were assured by Ministers at that time that there was no need to take any further economy measures; that everything was perfectly all right. It was such bad luck for the Government that there were some disgusting people who went and sold sterling forward—and did it on such a scale that even the Prime Minister had to become aware of the situation. The Bank had been coping manfully with the situation by supporting the forward pound, which they had never had to do before in their whole history. It was the seriousness of the forward situation that compelled the crisis and panic measures of July, 1966—which included, for good measure, a backward swipe at the surtax payer in respect of his earnings in the previous year.
So we come to July 21, when we had placed on us both a squeeze and a freeze; and in August, 1966, the No. 1 Bill of this series was passed. A great deal was said at the time about the principle of voluntary co-operation; and I think the noble Lord opposite is not quite entitled to make the claim he has of voluntary co-operation. I have never thought much of the principle of voluntary co-operation if you have a big stick behind you to knock those into shape who do not choose to co-operate voluntarily. It is rather like saying that the speed limit of 30 m.p.h. on the roads is a voluntary one, but that if you exceed it you will be arrested and fined. That was the situation in respect of that Act. There were some who did not co-operate; and what happened? Orders were issued against them. There were no fewer than 14 of them in respect of wages claims and only one in respect of prices—and that in the field of laundry charges. That shows, in fact, how much the Government are really concerned with the relative order of importance of the country's economic affairs. They took a great bang at the laundry industry. That was their contribution towards economic stability in 1966–67. So do not let us believe too much this story of voluntary co-operation.
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It was voluntary only because the Government had powers of compulsion under the Act and did not hesitate to use them, whenever they wanted to.
We naturally wondered how long this was going to last. We were told it was going to last for only one year and that the Act was going to die in August of this year—
LORD SHEPHERD: Part IV of the Act.
LORD ERROLL OF HALE: Yes, my Lords, Part IV. But some of us had our anxieties about the next stage, and we looked around and naturally turned to what Ministers were saying at the time. Mr. Wilson, on October 6, on the B.B.C. programme "24 Hours", was asked by Mr. Harris whether there would not have to be a continuation of the powers of the Act. Mr. Wilson answered:
"In terms of legislative powers, No."
My Lords, I know that television is a difficult medium and Ministers, perhaps, should not be chased too much on exactly what they say during such interviews. So let us turn to Mr. Stewart who by then was Minister of Economic Affairs. Speaking in his own constituency, Fulham, on October 17, 1966, Mr. Stewart said:
"To be exact",
the powers
"expire on August 11, 1967, and there is no intention of prolonging or renewing them."
That seemed pretty definite. So we soldiered on during the winter. The squeeze was operating, industry was despondent, unemployment rose. We were told that the freeze was needed in order to prevent unemployment, but in fact we had unemployment and the freeze and the squeeze as well. Production was stationary or falling; the National Plan was quietly scrapped, embalmed by Mr. Stewart's expert team of embalmers; and the balance of payments was saved by the fortuitous windfall of a change in the terms of trade. Looking back, we see it is clear now that it was the squeeze that did the job and that, basically, the freeze was unnecessary. Even so, it worked imperfectly.
The selective employment tax (a bad device on its own) was nevertheless accepted as being one of the many charges that could be passed on to the customer.

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Typically, it was one of the nationalised industries who first took advantage of this loophole and put a surcharge on all bills in British Railways hotels, thereby setting a fashion that everybody copied. Also there was the disturbing feature which I might describe as the "side-slip" where employees were leaving one firm to go to another where the rate for the same job was actually higher; and employees in the other firm moved back to the first firm who, in their turn, could offer a higher rate for a new employee. There has been a substantial degree of increased remuneration through this form of job-swapping in categories where particular skills were in short supply, whether shorthand-typists, telephone operators, draughtsmen, or what you will. There has been a considerable degree of salary inflation in that way, with people needlessly changing their jobs in order to get more money.
My Lords, there was a glorious moment of light relief about which I should remind your Lordships. It was in regard to poor Miss Lee and her pay rise that never was. There she was, promoted from being Parliamentary Secretary to Minister of State, confidently thinking she was going to get the rate for the job; which she did not. Noble Lords opposite dissent; but it was quite clear, because it would have been announced at the time that she was not to get the pay rise. But it was only announced 48 hours later, when my colleagues in another place raised the issue. Now that the period of complete freeze is over, I hope that her great, serious and real contribution to culture will be recognised and that she will be allowed to have one of the many flexible rates now permitted for the office of Minister of State.
LORD SHEPHERD: My Lords, knowing that the noble Lord is a generous man, particularly where ladies are concerned—and, certainly Miss Jennie Lee does not need a great deal of protection from me; she can quite well look after herself—I think we should put it on record that when my right honourable friend was appointed to the new post she was in the United States, a few thousand miles from London. I think it is on record that she was not consulted; she was merely informed of her appointment.
LORD ERROLL OF HALE: I still do not know that that invalidates what I have said; but I will accept what the noble Lord has said.
Having been told that there was to be no further legislation, we now find that along comes the No. 2 Bill which we have to-day in White Paper form—and next summer, the No. 3 Bill. Unlike the No. 1 Bill, this Bill, I think, really does depend on voluntary co-operation, because, at best, it merely confers on Her Majesty's Government certain delaying powers. If I have understood the noble Lord aright, if a proposed increase is voluntarily notified to the Government they can, if they wish, refer it to the P.I.B. and await its judgment. Whatever the P.I.B. decide, there can be a further delaying period only of something like three months. So it is no more than a vessel of delay. It is a Bill whose powers can be used only sparingly, it is not to result in a complete overloading of the work of the P.I.B., a Board which has a relatively small staff and which is already engaged on a number of long-term investigations. But the fact remains that if the Government were to be swamped with applications, they would either have to accept them or let them through, because only a small minority could be referred to the P.I.B., even if its staff were to be increased as rapidly as possibly.
The question therefore arises: how effective is any delaying procedure likely to be? The Times yesterday had a very serious article under the heading "Prices dam may be about to burst". It says:
"Early signs of a long-predicted across-the-board upward movement in consumer prices were detected yesterday as housewives started their first shopping week since the Government's six-month period of severe restraint came to an official end … A not untypical selection of varied products affected by manufacturers' recommendations of higher shop prices effective yesterday or at the week-end include …"
Then followed a long list of products with the names of which I will not weary your Lordships, for the list is extensive and detailed. It goes from Vaseline to chocolate biscuits, with a whole range of products in between.
LORD SAINSBURY: My Lords, I do not like to interrupt the noble Lord, but could he, for our enlightenment, not read

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the list but tell us the number in relation to the 2,000 to 3,000 items stocked by the average food store?
LORD ERROLL OF HALE: This was only the first list but it included at least some dozen products of every-day use. They include things such as Scott's Porridge Oats; Ocean Preserving; "Epicure" branded pickle products—a complete range, doubtless of great interest to the head of a famous store whose contribution to this debate later this afternoon I am sure we shall eagerly await. The Times goes on to say:
"There is plenty of evidence that manufacturers generally are preparing for a round of pent-up price rises".
I think that answers the noble Lord, it is not just two or three in a matter of two or three thousand; it is a matter of hundreds.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK): My Lords, it is an answer to noble Lords on that side of the House, too.
LORD ERROLL OF HALE: Yes, my Lords. So we have the prospect of a prices dam about to burst, with the Government unable to control the situation with the powers that they are about to ask your Lordships to concede to them.
LORD PARGITER: My Lords, may I ask the noble Lord whether he is speaking from fact or conjecture?
LORD ERROLL OF HALE: My Lords, I am speaking on such facts as are available at this moment; namely, that a number of manufacturers have already announced their increased or recommended prices, and it is known that many others are proposing to do so. I should have thought that fairly reliable evidence of a trend about which we ought to be aware, and which we should take into consideration in studying whether or not this Bill is likely to be effective in its purpose.
To-day, we read that the Government, as evidence of their concern in the matter, are considering setting up a number of prices commandos who are going to rush into the shops and investigate price increases. That surely shows that the Government are taking the matter seriously,
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even if the noble Lord is not. But what on earth these commandos are going to do when they have had their little shopping spree in various supermarkets and the like, I do not know: they have no power to act at all.
LORD SHEPHERD: My Lords, perhaps the noble Lord, Lord Erroll of Hale, can help us, since he appears to be complaining that the Government have not taken powers. With his experience at the Board of Trade, what would the noble Lord recommend we should do in these circumstances?
LORD ERROLL OF HALE: My Lords, I was coming to that question, and the answer will probably take the form of my peroration—if I am not too "longwinded". I would also say it is quite plain that the Government have no possible solution, because Mr. Austen Albu, when a Minister, said: "I believe it is impossible to control prices, except for one or two". So the noble Lord, Lord Shepherd, will find that he will get very little support from his own economic Ministerial colleagues, past and present.
We are being invited to-day to discuss, with a view to passing it later, a Bill with no teeth in it; a Bill which can achieve very little and which is merely a façade. It is a sorry little Bill, and I, for one, believe that it is doomed to failure. But I am quite sure that next summer up will come the noble Lord with Bill No. 3, and there will be very good reasons why, although there was never going to be another one, there should in fact be one. This time, of course, the villains of the piece will be the oil prices, and Britain's deteriorating balance of payments. We shall be told it is these that necessitate further measures of economic stringency: next year, maybe, the corner will be turned; but this year we must have a further period of restraint—with voluntary co-operation, of course. Nevertheless, the Government must have reserve powers to deal with those who fail to co-operate.
If I sound cynical, my Lords, or sarcastic, it is because I heard all this before, in the period of the last Labour Government. This was the sort of stuff we heard from 1948 to 1951, and we are now going through it all over again. It is like some of those tired old films we see on television. The only difference is

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that we cannot switch off this Government until the next Election.
What is wrong? Why have we this sense of lassitude, of ennui, throughout the economy? Why are industrial investments so substantially down, and the forecast down, according to the Board of Trade's own estimates? The fact is, in my belief, that Her Majesty's Government are pursuing the wrong objectives. While they preach expansion they act to stop or hinder people from doing what they want to do. This is the trouble. The Government think that by stopping people from spending their holiday money abroad—to take a light-hearted example—they are going to save money. It never seems to occur to the Government that the maximum becomes the minimum. Someone who would have taken £40 abroad, now takes £50. A businessman who used to go abroad with what he needed now takes the £20 a day to which he is entitled, and probably spends it.
The whole attitude is one of stopping people. Stop them from building offices in London, for all good reasons maybe—but stop them. Stop them from having the investment allowances, which they liked, and make them have investment grants instead. Stop people from making capital gains if they are able; and if they are successful in doing that, take away the money. Let them earn more—oh, yes!—but make quite sure that it is well and truly taxed; and then have the impertinence to tell the recipient that surtax is not a deterrent from further activity! It does not make sense. It is actions of this sort that lead to the sense of lassitude and ennui in the economy, and in the course of a brief speech I can give only one or two examples.
We, as a Conservative opposition, have a clear and constructive alternative, but I do not see why, every time the Government get themselves in a mess, we should have to burn the midnight oil working out an alternative. I remember that at the time when the selective employment tax was imposed people said: "What would you do?" And I said. "Well, we would not introduce the silly thing." That is our alternative in many cases. We have a clear and constructive alternative, but, as the noble Lord said, we are to have a general economic debate on the Finance Bill, so I will reserve for
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that occasion what I should like to say. However, I would say this now. We believe that it is the duty of the Government of the day to create the right economic conditions, conditions in which people feel that they can get a bit more for doing a bit more and will not have it all taxed away. We believe that there should be more competition, not less; that we should not be afraid to let the inefficient firms go down, and, if necessary, let inefficient workers lose their jobs, for the time being, until they are retrained.
We believe that not only should ordinary savings be encouraged, but people should be encouraged to put their money into risk investment. It is rare to-day to see a new issue of ordinary shares. The Government's fiscal and other arrangements have made it practically impossible for a company to raise money in this way. So there is another channel for the enterprising which has been closed off. We on this side of the House believe that there should be lower taxation both on the individual and generally. Is it fully realised in your Lordships' House that the Labour Government, since they came to office, have taken away from the public an additional £1,000 million in increased taxation? Where has all the money gone? They would find it very difficult to explain where it has all gone, but we know that it has been taken from us—I repeat: an extra £1,000 million since the Labour Government came to office. It has disappeared in additional taxation.
We also believe that there should be a new deal for the trade unions. I accept that they have co-operated with the Government—and so they should: they support Labour Governments, and they ought to co-operate with them. But that should not disguise the fact that a new deal is required for trade unions. This has been detailed by us in our Election Manifesto and in the speeches of my friends subsequently. There is no time to go into that in detail.
LORD COOPER OF STOCKTON HEATH: My Lords, could the noble Lord, Lord Errol of Hale, give us some indication? I have read the documents and I find it difficult to understand them.
LORD ERROLL OF HALE: No, my Lords; I will not go into detail. I have

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been on my feet for nearly half-an-hour, and I said that I could only sketch out the alternatives. But a new deal for the trade unions is one of our proposals. Another point is that Government expenditure simply must be reduced; and of that there is no sign. Let the people spend the money as they wish, and not have it taken away from them by the Government and spent as the Government think best.
My Lords, I have done my best to give, briefly, what will be our constructive alternative proposals to the present economic situation—the situation which noble Lords opposite have said necessitates this Bill. All I can say to your Lordships is that I think we ought to let the Government have their little Bill. It will be a dead letter in a few months.

THE ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT
3.50 p.m.
LORD BESWICK: My Lords, with permission I should like to repeat a Statement made by my right honourable friend the Minister of Defence in another place. The Statement is as follows:
"The French Government have informed Her Majesty's Government that they have decided that for budgetary reasons they must withdraw from the Anglo-French variable geometry aircraft project. They have been forced to take this step solely because of the pressure on their budget for a number of years ahead; full agreement was reached on the specification, the development cost, and the production cost of the aircraft. M. Messmer has assured me that the decision will have no effect on the French attitude towards the other projects, both civil and military, on which agreements have already been reached, or indeed towards the possibility of further collaboration in the future.
Her Majesty's Government have received this decision with great regret. It raises a number of fundamental issues. We are now giving urgent consideration to alternative ways of replacing the V bombers in the conventional role in the mid-seventies, including the possibility of collaboration with other countries. In the meantime, in order
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to preserve as wide a range of options as possible we are authorising British firms to carry out a project study on a variable geometry combat aircraft to a modified specification. Exploratory talks with potential partners will be held as soon as possible.
I will, with permission, circulate in the OFFICIAL REPORT the joint communiqué reporting the outcome of my meeting last week with M. Messmer which is being issued this afternoon.
The communiqué referred to was as follows:
"Mr. Denis Healey, Secretary of State for Defence, Mr. Stonehouse, Minister of State for Technology, and M. Messmer, the French Minister of Defence, met in London on 29th June.
2. M. Messmer informed the British Ministers that the French Government had been forced to make a number of budgetary economies and in particular in the defence field to withdraw from the Anglo-French variable geometry aircraft project which was being negotiated.
3. This decision, which has been taken on purely financial considerations, has no effect either on the agreements already reached on the other aeronautical programmes, or on the possibility of new agreements.
4. The Ministers signed supplement number three to the Memorandum of Understanding of 17th May, 1965, authorising the second stage of the development programme for the Jaguar.
5. The Ministers decided to hold a meeting in September to discuss the progress of the collaborative helicopter programme."
EARL JELLICOE: My Lords, I am grateful to the noble Lord for repeating that Statement, but I must say straight away that it is a sorry one. It is grave in its implications for our defence posture in the 'seventies; it is grave in its potential impact on future collaboration on advanced projects with our neighbours; it is grave for the British aircraft industry. And it is grave, not least, for the Government and the Secretary of State for Defence. It means, in fact, the complete collapse of Mr. Healey's longer-term plans for military aircraft. I need only remind your Lordships that this joint project was proudly proclaimed by Mr. Healey in his 1966 Defence White Paper as being the goal, both operationally and industrially, of our long-term aircraft programme.
Quite clearly, we shall have to debate this important Statement in the near

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future. No doubt we shall have an opportunity later this month if, as I trust we can, we then discuss the last instalment of the Government's series of White Papers on Defence. In the meantime, I should like to put two questions to the noble Lord. First, can he categorically assure the House that the other agreed Anglo-French aircraft projects are in fact going ahead full blast? I ask this in view of the rather careful wording of the Statement on this point and in view of Press speculation that the Anglo-French helicopter deal is turning sour. I do not necessarily give credence to that myself, but I should be glad of a satisfactory assurance, if the noble Lord can give it to us.
Secondly, I must confess that I am puzzled by what the noble Lord said about alternative ways of replacing the V-bomber in its conventional role. Surely the noble Lord would agree with me that the original specifications for the British version of this aircraft—the Anglo-French variable geometry aircraft—covered a far wider role. Does this phrase mean that the modified specifications—I am glad to see that a project study is going to be carried out—will in fact be down-graded?
LORD BESWICK: My Lords, I agree with the noble Earl that this is an unfortunate Statement, but, of course, we are dealing with a situation which he will recognise is not of our making. I can give the noble Earl the assurance that he asks. I am glad to give it to him. I, too, have read the extraordinary report in the Daily Telegraph this morning. I should be most distressed to feel that there has been anything of a "tit-for-tat" as a result of a decision made by the French on this one aircraft. That report in the Daily Telegraph, I am assured, is wholly false and I am surprised that a paper of its reputation should have published it. So far as the future is concerned, I note what the noble Earl says about a debate. No doubt it can be arranged. I think I had better leave until that debate any consideration of what is entailed about the future of the V-bomber or its replacement.
LORD GLADWYN: My Lords, are the Government really convinced that a replacement of the nuclear V-bomber in the 'seventies could, in our present
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economic conditions, really be considered as what is called a credible deterrent from the political point of view? If not, among other alternatives that they are now considering, would they not also consider that of not replacing the nuclear V-bomber force at all?
LORD BESWICK: My Lords, I think that that is a leading thought which the noble Lord would do well to develop in the debate which we have been promised by the Opposition. It raises an aspect of the matter beyond the immediate situation.
LORD ST. OSWALD: My Lords, in the opening words of the Statement just read out by the noble Lord we heard that the French Government had decided, for budgetary reasons, that they could not continue. Can the noble Lord give us an assurance that they are only budgetary reasons?
LORD BESWICK: My Lords, that is an assurance which I am entitled to give. As the noble Lord will see from the communiqué when it is published, the French have agreed that this is the reason. Moreover, at the meeting which took place between the Secretary of State and M. Messmer, in May, when specifications were agreed, there was then absolutely no question of any hesitation on their part in regard to specifications, and we had no reason to think at that time that they would not find the aircraft project acceptable to them.
LORD MERRIVALE: My Lords, could I ask the noble Lord two questions? On November 30 last in another place, the Minister of Aviation, Mr. Mulley, announced that the Government were very well advanced in contingency planning should the Anglo-French V.G. aircraft project be cancelled. Can the noble Lord say what has been achieved so far in that respect, particularly with regard to the project study, now to be set up, being able to proceed rapidly? Secondly, may I ask with whom these exploratory talks are to be held? Can the noble Lord tell us who these potential partners are to be?
LORD BESWICK: I do not have the statement to which the noble Lord referred before me and will not therefore comment on it. So far as potential partners are concerned, I was referring to

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industrial firms, not overseas partners; but, of course, if we decide to go ahead with an aircraft of our own then we should hope that it would be possible to find potential partners, possibly on the Continent, for such a project.

PRICES AND INCOMES ACT 1966 (COMMENCEMENT OF PART II) ORDER 1967
3.58 p.m.
Debate resumed.
LORD HENLEY: My Lords, may I bring your Lordships back from that statement on defence to the prices and incomes policy? First of all, may I congratulate the noble Lord, Lord Shepherd, on having so skilfully brought together the three things we are talking about to-day—the Order, the White Paper on the Government's No. 2 Bill and the Motion to take note of the Government's policy on prices and incomes? We are having what in fact is a Second Reading debate on the Prices and Incomes (No. 2) Bill, but we are able to range far and wide and discuss not only what is in the Bill but what is not in it.
May I start off by saying a word or two about the Order and the No. 2 Bill which we shall be getting shortly? First of all, Liberals accept the machinery that is in this Bill and in the Order. I do not go entirely with the noble Lord, Lord Erroll of Hale, as to the previous history which led up to this state of affairs; nor can I go with him any way in his chief criticism of the Bill, which really is that it should contain no sanctions. It seems to me that there is nothing incompatible in having a voluntary system and, at the same time, having an ultimate sanction to prevent those clever boys who think that they can get away with things to their advantage from doing so. Any voluntary system must have sanctions of this kind. After all, a social club has sanctions, and that is a voluntary association, if ever there was one. If a member of a social club chooses to behave in an outrageous way to the detriment of his fellow members, then an ultimate sanction comes down on his head. This is what the Bill is doing, and it seems to me to be reasonable. It applies not only to the employers, but also to the unions.
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I do not feel that the Bill will be a dead letter. I thought that the noble Lord, Lord Erroll of Hale, in his admirably racy speech, was a bit rough. It is, after all, a piece of machinery. The noble Lord may disagree with the Government for having got into the jam which necessitated them taking this action in the first place; but the Government having taken the action, I disagree with the noble Lord's version of the history. This is a piece of machinery, and it seems to me to be a perfectly reasonable piece of machinery. As I think one of my honourable friends in another place said, it is a perfectly civilised piece of machinery. I say that in spite of the fact that the noble Lord, Lord Shepherd, said that he moved the Bill with some reluctance, and even went so far as to say that he moved it with some repugnance. I do not think he need have felt that. It seems to me, so far as it goes, to be a perfectly well balanced piece of legislation. It is adequately safeguarded.
I welcome Clause 5, particularly subsection (7), as probably most of us do. I do not see why the noble Lord, Lord Shepherd, should have any great regret or repugnance about it. It is a fair and reasonable piece of machinery for what it is supposed to do, which is to provide the transition from the stringency of pre-last year, as a result of the Government's prices and incomes policy, and as such, it seems to me all right. But—and this is where I think we on these Benches feel a certain uneasiness, and indeed a disquiet—we feel that we are still getting nowhere in the whole problem of pay structure. Pay structure is really the central problem of the two things we are discussing; namely, the Order and the Bill.
On the other aspects covered by the noble Lord, Lord Erroll of Hale, such as the Government's own expenditure and the rise in prices, I should prefer to talk about those when we come to the Finance Bill in a week's time. I want to talk now about our disappointment at the fact that we do not seem to be getting anywhere with regard to this central point of pay structure. I say, also with regret, that getting nowhere seems to be one of the things which happens so much with this Government. So many people

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who voted for this Government expected certain things to happen which just are not happening. That is exactly the case with regard to this problem of pay structure. The Government have taken action in a number of different ways, but all the actions that they have taken—mostly small ones—seem to us on these Benches to have distorted the economy and shown no evidence anywhere of increased productivity.
I think it is reasonable to claim—and this is what the noble Lord, Lord Shepherd, said—that the Government's prices and incomes policy has so far done well, in that it has weathered this storm of crisis of July, 1965, and I think it is too early to expect the sort of results which we on these Benches wished and are disappointed have not been achieved. On the question of pay structure, and the matters that go with it—balance of payments, inflation and productivity—I think a case can be made for saying, as the noble Lord said, that it has proved itself. It has been highly effective, and some progress has been made; and some of the statistics which the noble Lord, Lord Shepherd, put forward as to prices, as well as support for the voluntary system, impressed me. Nevertheless, we on these Benches feel that the Government have, in effect, merely bought time, and that they do not seem to know what to do. It might be asked whether any of us know what to do. The problem is extremely complicated. The attempt which the Conservative Government made earlier was even more of a failure than they suggest this Government's attempt may well be. So it is not a problem that is easy to solve; and I should be the last to suggest that we on these Benches would solve it better than anybody else. But what one is doing is trying eventually to hammer out some way of getting to the bottom of the problem.
This Bill is said to be the beginning of a return from the necessary compulsion of last July. I accept that that compulsion was necessary, although I am not sure how far some of my noble friends would go with me in that respect. Nevertheless, one can cover oneself by saying that the Government should not have got into this position in the first place. Therefore, I can say that I think the Government did the right thing last July.
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The noble Lord, Lord Shepherd, asked for an orderly 12 to 24 months, which is what this Bill is designed to cover, and he pointed out that support for the severe restraint has been widespread. Indeed, his figure of 14 Orders really shook me. It is a remarkable thing; I had no idea it was so small. But, again, this is a transitional policy; it is a stop-gap. The noble Lord, Lord Erroll of Hale, says: "Here we are with the No. 2 Bill; next year we shall have the No. 3 Bill." I hope he is not right or, at any rate, that when the No. 3 Bill comes along it will show the sort of wider strategy to the whole problem that we need. The Government assure us that their prices and incomes policy is not a substitute for this wider strategy, and that this Bill only prepares us for the return to the point the Government's prices and incomes policy reached last July. I hope that this is true, because if the noble Lord, Lord Erroll of Hale, is right, that this is going to be one among a whole series of Prices and Incomes Bills, this would not be what we want to see. We want some sort of wider strategic policy.
The Government want this scheme to be voluntary and effective. So do we all. The noble Lord, Lord Shepherd, said that there had been an overwhelming response in this direction. I agree with him; I think there has been. I believe that it should be voluntary, and I disagree with the noble Lord, Lord Erroll of Hale, in saying that there is incompatibility in the voluntary system having a sanction. Nor—and I say this with some backward glances to my own Benches—is "voluntary" in any way synonymous with a free-for-all. A free-for-all really is something which I feel only the dinosaurs want. I would also go further, in the context of dinosaurs, and say that the voluntary system is not synonymous, either, with the ganging up of the employers and unions to milk the public. I think the Government have this in mind, and have very strongly in mind that there is a third partner in any negotiations: not just the unions and the employers are involved, but also the public.
As regards a voluntary system (and this is where we are getting down to the problems that bother me so much, because I do not know the answer, and one

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can only pose the question), can an effective voluntary system be devised which prevents this aspect of negotiations, which seems to me to be a built-in part of the inflationary spiral? I refer to this collusion between the employer and union to milk the public. I cannot help the feeling, reading between the lines, that this is exactly what the employers and the union delegations do when they confront the Prices and Incomes Board. I say, "reading between the lines" because I have no evidence of it; but that is how it appears to me sometimes. It is rather like the medieval barons carving out the fiefs among themselves: the over-mighty subjects confronted by a powerless king. I know that the Government are fully aware that there is this third party. Whether the Prices and Incomes Board is the powerless king, or whether the public is the powerless king, I do not know. But, somehow or other, these two over-mighty subjects have to be got under control; and until that happens this inflationary spiral—and they are the chief cause of it—will continue.
That, of course, is the central argument against the old free collective bargaining system: that it is not, in fact, bargaining between equals, but a collusion between employers and unions to hold the public to ransom, and a collusion also in fact to present a united front to the Prices and Incomes Board. As I say, I think the Government are fully aware that this is a very important point. I suggest that it is a central point of the inflationary spiral.
The question then arises, how to devise a system which can overcome this. The Government have put forward a system which I suppose is called one of central direction. There are so many difficulties in the problem of a system of central direction that quite a number of people, who are not necessarily dinosaurs, have rejected it. The difficulties are really technical difficulties: difficulties as to whether in fact it is impossible to devise a kind of national grid for wages. There are so many different complexes coming in that this cannot be done. There is the difficulty of collusion beforehand. There are all the pitfalls that appear in trying to devise productivity agreements. Productivity agreements sound so easy—and we on these Benches are always talking about productivity agreements—but
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when it comes to trying to negotiate a productivity agreement all sorts of apparently insuperable problems, as noble Lords opposite will know only too well, begin to appear. I do not mean the obvious problems like devising some scheme of "blackmail" vis-à-vis a restrictive practice which ought never to have cropped up, or problems as to who deserve productivity bonuses and who do not, and the difficulty about making a straight estimation of what the future is going to be. Problems like this are all very difficult. Trying to devise a national grid for wages is also so difficult that some people have almost despaired of it.
One can swing slightly towards the central direction system; and, without being a dinosaur, one can swing slightly towards the other system—some sort of half-way house in which the old system of free collective bargaining is not left as a free-for-all, but is modified and safeguarded in such a way that it might still go on working. I think that although a very strong case has been made out against the old free collective bargaining system, it has not been totally demolished; and in so far as it has not been totally demolished there may be scope for reforming it in some other way which might well be better, and possibly more elastic, than a central direction system.
Some of my colleagues have suggested that there might be bargaining in two ways. It might be possible to have the basic wage negotiated at industrial level, where agreement reached would apply only to people on the minimum: there would be no straight increase across the board for people not on the minimum. But fringe benefits, variations in pay, overtime rates, and all matters of that kind, would be negotiated at plant level. I have no experience of this kind of negotiation, and I do not know whether it would be possible; but on the face of it it does not sound unreasonable. Indeed, if it were adopted it would cut out some of the very strong inflationary pressures for these rather over-simple straight increases across the board. That would deal with the inflationary aspect of it.
As to the other aspect, the prevention of collusion between the employer and union, I think again that one might build into this reformed form of the old free collective bargaining system some kind of anti-social practices court, which would

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run on the same sort of lines as the Restrictive Practices Court—something with teeth, which would effectively prevent this sort of collusion; and, at the same time, one might have some kind of supervisory board representing the public interest. The Government themselves would possibly help in providing research on the statistical side of the labour market, which would be of very great assistance.
The Government may say, and supporters of the central directive system may say, that this is just as easy to do in a central direction system. I do not know. I think that my colleagues are swinging the other way. They would prefer to try to reform the old system, with safeguards. Most important, so far as social justice is concerned (I am inclined to think that this comes into using the free collective system instead of the central one), you can probably achieve what you want in regard to social justice by means of taxation and security payments, rather than by straight wage increases across the board, large amounts of which go to people with no dependants and no very great responsibilities. So much for the egalitarian side of social justice. So far as the qualitative side of social justice is concerned—what is the value of this job as against that, and what is the value of so-and-so's contribution?—all I can say is that this is so difficult a problem that it rather reminds one of what Hamlet said in another context: "If we all got our deserts, which one of us would escape a whipping?" So far as trying to assess the value of anybody's qualitative contribution is concerned, it is so difficult to do that I think perhaps one should leave it alone—it is not something that would fit into a national grid—and try to get the same result by removing obvious injustices.
So much for the two possible ways in which one approaches that central point of the prices and incomes policy, which really is wage structure. You can look at it either way. You can probably make either of those systems work, with good will. But both of them must have teeth. So far as "taking note of the Government's Prices and Incomes policy" is concerned, as the Motion asks the House to do, what we feel (in spite of all the kind things, I hope, that I have
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said about the Bill, so far as it goes) is that we are very disappointed that the Government have not in fact got farther than they have done. We have had an admirable Statement of Intent, and we have had a bit of stop-gap tinkering; but I think the Government have been in long enough now to get back to something rather better.
4.20 p.m.
LORD CHAMPION: My Lords, at the beginning of this debate we had an excellent and informative speech by my noble friend, Lord Shepherd, which gave the House the information necessary for a serious consideration of the matters that are before us to-day. Then we had from the noble Lord, Lord Erroll of Hale, the delightful "cheeky chappy", frothy sort of speech that we have come to expect from him, always entertaining to listen to but seldom having very much body in it, rather like the froth on a very poor glass of beer. Following that we have had the speech from the noble Lord, Lord Henley, which I thought certainly was quite sensible in parts. I did not quite follow him in his reference to the free-for-all and the dinosaurs, but if the dinosaurs did have a free-for-all, they expired—they are no longer on the earth—and I imagine that if we, in our society, attempt to get back to anything like a free-for-all we, too, shall expire.
Criticism of the Government's incomes and prices policy seems to me to come ill from those who, in a long period in Government, failed to solve this problem—and it is a very serious problem—the problem of incomes and prices. I do not blame them for their failure. The simple fact is that no advanced industrial country in the world has yet been able to solve completely this great problem—and it undoubtedly is a great problem. I recognise, of course, that it is the job of the Opposition to oppose, but I think in addition to opposing and making the sort of speech we heard to-day from the noble Lord, Lord Erroll of Hale, it is their task to put forward serious alternatives that will stand up to examination, and I honestly do not think that the suggestions made by the noble Lord in the closing paragraphs of his speech would for a moment bear serious consideration.
What I am going to say to-day will have greater reference to the income,

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or wages, side of the problem than to prices. I rather hope to hear from my noble friend, Lord Sainsbury, on that aspect of the policy which we are now considering. Twenty years ago, in a paper written for a Labour Party group in the other House, I said:
"There is an urgent necessity for a recognition of the need for a short-term and a long-term policy which will ensure overcoming our immediate maldistribution of labour and will provide a means of solving the labour and wage problems that are the inevitable concomitant of full employment."
Re-reading that, I realise that it was hardly a notable example of good English, but the sense of it was just about right, for the problems of full employment are vastly different from the problems in a situation where there is massive unemployment.
The twenty years that have intervened since I wrote those words have proved beyond a shadow of doubt that I was right: that full employment brings problems—problems of discipline in industry, problems for the employers, problems for trade unions—which we scarcely dreamed of in the years between the wars. This is something that we are attempting to tackle. I know that in the period 1945 to 1950 Sir Stafford Cripps, by a combination of the force of his personality and using the allegiance which the unions felt they owed to the Labour Government, did, for a period during the post-war Labour Government, succeed in checking the wage-price spiral. Inevitably, under the pressures which every intelligent observer understands, eventually the walls of restraint burst and we were back in the inflationary spiral. This is not only a wage-price spiral; it is also a wage-wage spiral. Perhaps I should explain that the wage-wage spiral is the leapfrogging which takes place when one union jumps over the back of another union in securing wage concessions, and the other then has its turn; and this leapfrogging can, and does, take place quite apart from the pressures imposed by the upward movement of prices.
Since 1964 the Government have, by their prices and incomes policy, made a brave attempt at solving what has up to now proved to be an intractable problem. I make no pretence, and I am sure the noble Lord, Lord Shepherd, would make no pretence, that the Government have
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solved the problem, but by the Declaration of Intent of 1965, the setting up of the Prices and Incomes Board and the Prices and Incomes Act 1966, and especially the drastic powers contained in Part IV of that Act, they have given us a pause. It is only a pause. But it was not only those powers that held back the flood, because the powers were taken at a time when the general public was heartily sick of the existing situation, and so there was a general social consent, besides which there was also an act of self-discipline by the unions.
Here I would completely disagree with the noble Lord, Lord Erroll of Hale. There was an act of self-discipline by the unions, despite the fact that the Government had taken reserve powers. That self-discipline was amply demonstrated by the noble Lord, Lord Shepherd, this afternoon, when he said about Part IV, that
"Fourteen orders only have been made dealing with pay covering some 36,000 workers out of a total employed population of some 23 million."
The general atmosphere prevailing and the courageous Act of 1966 enabled trade union leaders to resist the pressures which understandably build up behind them—and just how great those pressures can be is known to everyone who has ever held a responsible position within a trade union. Here I am sure my noble friend, Lord Cooper of Stockton Heath, who holds such a position would agree with me. I think that my noble friend Lord Shepherd was right to claim on behalf of the Government that up to now there has been a fair measure of success flowing from the Government's policy. But from the Declaration of Intent to the Order in Council which we are considering to-day is very much in the short term only. To bring about a generally accepted and demonstrably long-term solution of the prices and incomes problem is the task facing us all to-day.
Freezes are usually followed by floods. I am not sure whether the noble Lord, Lord Drumalbyn, used those actual words when we were discussing this matter once before, but he certainly used words very similar to those. I agree with him absolutely that there is always the danger, when we have had this sort of thing, that eventually, when there is a thaw, there will be the sudden flowing of waters leading to floods. The question

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at this moment is will the dam of trade union restraint burst under the pressures already building up and will our condition soon be as bad as, or worse than, it was before the measures to which I have already referred, came into being? Now the real test begins. Within our sort of society compulsion of the kind contained in Part IV of the 1966 Act can be used for only a limited period, and I think the Government were right to recognise that fact and to act in the light of it. We have had a pause, but where do we go from here?
The T.U.C. is in process of developing its own system for securing notification and the vetting of wage claims. I wish the T.U.C. well in that great task, but one wonders whether the channels of general consent within the individual trade unions which make up the T.U.C. have been dug deep enough to enable that body to exercise the necessary authority. We have to remember in this connection that the Trades Union Congess has no power whatsoever to instruct the individual unions affiliated to it. The T.U.C. can provide the central leadership, but it cannot control the policies of the individual unions. I am hoping that out of this attempt by the T.U.C. at securing a rational wages policy will emerge not purely an advisory body, as it is at present, but one with a much greater degree of real authority. I understand that the T.U.C. does not favour the implementation of Part II of the 1966 Act, but I should have thought that the little additional time and discipline provided by the Order in Council, and the powers under the Bill which will eventually come to this House, will give the T.U.C. and the individual unions a little more time for doing what I have called "digging the channels of consent" a bit deeper than they are at the moment. I hope, too, that the T.U.C. will be able to help to develop a pay structure, the sort of pay structure mentioned by the noble Lord, Lord Henley. This is a wages policy. A wages policy includes and must, of course, contain a rational and generally accepted pay structure within it.
In the meantime the criteria for incomes behaviour set out in Command 3235 and the guidance on productivity agreements given by the Prices and Incomes
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Board appear to me to be just about right. But in connection with the productivity agreements I would utter this word of caution. Everyone concerned must always take into consideration the fact that not all works or industries can raise their productivity and so their wage packets, by work study, work measurement, work standards and the like. In certain types of industry the raising of productivity is comparatively easy, given the right atmosphere; but those engaged in other types of industry and the services cannot be expected to stand idly by when others are leaping ahead in their living standards—their living standards leaping ahead, that is, as a result of productivity agreements. I recognise that we have to take other things also into consideration. The demonstration, as mentioned by the Prices and Incomes Board, that a part of the result of the productivity agreements is being devoted to lower prices or the maintenance of existing prices will not be enough to keep those not directly affected quiescent. They just will not stand idly by when they see others' standards of living leaping ahead.
It is true that Article (vi) of the guide lines of the Prices and Incomes Board says:
"An agreement covering part of an undertaking should bear the cost of consequential increases elsewhere in the same undertaking if any have to be granted."
That is excellent, as far as it goes; but the consequential increases elsewhere will stretch out far beyond the individual undertaking. To take that into consideration must somehow be the task of a body, such as I hope the T.U.C. will develop into, or perhaps the Prices and Incomes Board. That is to say, there must be a body capable of considering the effects as a whole and having the power to keep such advances under some sort of control.
I must briefly mention the fact—I suppose it is so self-evident that I scarcely need to do it, but I feel I must—that if we do not somehow manage to resume a reasonable rate of growth in our economy, the task of securing an accepable wages and incomes policy is going to be rendered well-nigh impossible. I need not overstress this. The noble Lord, Lord McCorquodale of Newton, shakes his head.
LORD MCCORQUODALE OF NEWTON: My Lords, I nodded my head.
LORD CHAMPION: My Lords, I should have said that; I should have said it was a friendly, acquiescing nod, which I welcome from the noble Lord, having regard to his knowledge of this whole matter. I hope I have put that right.
LORD ROBERTSON OF OAKRIDGE: My Lords, would the noble Lord allow me to intervene with a question? Bearing in mind what he has just said, does he feel that the prophecy that has been made by the Government with regard to the rise in wages during the coming year, which is at least twice as large as the prophesied rise in the rate of productivity, has been a helpful thing for the trade unions?
LORD CHAMPION: My Lords, it inevitably raises difficulty for the trade unions. I am not at all happy about it, I must admit. But I would also agree with something which I heard the noble Lord, Lord Boothby, say in this House recently: that a moderate inflation is inevitable, or seems to be inevitable in a situation in which there is prosperity of the whole country. I hope we shall get over that eventually, because inflation is so disastrous for certain people. I think our experience in the past is that a moderate degree of inflation has always accompanied prosperity in any country. But I just do not like it and hope we shall be able to find some means of avoiding any inflation because of the difficulties it brings.
The Government have undoubtedly suffered in popularity as a result of their incomes and prices policy. If they do succeed in this policy, even if they lose the next Election as a result, the country, in my opinion, will still owe them a great debt of gratitude, if we can solve this seemingly intractable problem. I end by wishing the Government well in this difficult task to which they have set their hands.
4.38 p.m.
LORD MCCORQUODALE OF NEWTON: My Lords, if I may say so, the whole House is indebted to the noble Lord, Lord Shepherd, for the admirable way in which he explained this measure and the reasons behind it, which the Government have announced in so many
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different bits of paper that it was difficult to gather them all together. We then had what I thought was a delightful, amusing and very "meaty" speech from the noble Lord, Lord Erroll of Hale. But as he seemed to be in a matter of some collusion with the noble Lord, Lord Champion, about when to leave this Chamber I do not think I had better pursue that further.
We had from the noble Lord, Lord Henley, criticism of the Government because they had not got anywhere, but then (I say this without wishing to cause any offence) he himself did not seem to get anywhere in his speech either, except to ask quite a number of questions to which he gave us no answers. I would take him up on one point. He made much If fear of collusion between the trade unions and the employers to rob the general public. But who are the trade unions and the employers? They are the general public. The trade unionists and their wives and families are, I suppose, 20 million or 25 million—more than half the population. There are I do not know how many shareholders in public companies in this country—one million or more with their wives and dependents. Indeed, they are the public. I think this nonsense about the collusion between the two sides of industry to sweat the public should be condemned once and for all. I have been in industry for forty years, and in my opinion it is quite nonsense and I have never heard a single substantiated case of it. I am sorry to get slightly hot under the collar, but I do object to industry being slandered in this way.
LORD HENLEY: My Lords, will the noble Lord allow me to interrupt him? What I stressed also—and possibly this was the more important part—was that although I had no evidence, I suspected from reading between the lines that there is a tendency for employers and unions to get "in some sort of cahoots" between themselves to decide what exactly they were going to say to the Prices and Incomes Board.
LORD MCCORQUODALE OF NEWTON: Well, my Lords, the noble Lord may have quite a bit of information about that. I have none. But from what I know of the behaviour of the British Employers' Confederation, in the old days, and the C.B.I. now, and the

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T.U.C., although we do agree on many important matters they are largely agreements in common sense and are not agreements to sweat or persecute any third party.
The noble Lord, Lord Champion, made one of those attractive, reasonable speeches which this House has come to expect from him, and which I think everybody enjoyed. I should have liked to be able to criticise it, but I cannot really find anything much in his speech with which I did not cordially agree, and I hope that it will be studied and read in certain quarters because it gave both management and trade unions some wise advice as to the future.
The White Paper on Prices and Incomes which the Government presented in March is, of course, the basis of this debate. The Government told us about the Orders and the Bills that provided the background for our proceedings, and I must confess at once that this statement was largely platitudinous, although many of the platitudes were quite unexceptionable. But even if I say that I think that Mr. George Woodcock was too hard on it when he described it as, "a plaything, a bauble". I think it has some substance in it, though possibly not so much as the Government hoped. Nevertheless, the White Paper was a useful guide for this next year; and I hope, as I think we all do, that some effect in steadying and moderating any excesses in demand both in regard to prices or incomes may be the result of it. If it does that, then it has my modified blessing.
But if I may say so in passing, there is one phrase in this White Paper to which I take exception. I think it deserves close attention. Possibly it slipped in by mistake, but I think it needs criticising and considering. On page 5 of the White Paper (Cmnd. 3235), which was presented in March, and which is the subject of this debate, paragraph 19, talking about incomes, says:
"… the continuing objective of the incomes side of the policy is to develop effective arrangements for ensuring a closer relationship between the overall growth of money incomes and the growth of national output"—
of course, we all agree on that—
"to raise productivity and efficiency"—
which I think goes without saying. Then it says:
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"and to promote social justice".
That at first sight sounds quite reasonable, but I think we should look into it a little more closely. Social justice in relation to wages and salaries has, I would suggest, almost a sinister ring. Surely history shows that in this connection social justice all too easily means the superseding of a pattern of economic rewards resulting from the play of markets courses and the efforts of people, by a pattern which is dictated by the preference of politicians. For who else is in a position to judge, and to enforce what they think is social justice?
I consider that this might be a most important step, if it were seriously undertaken, towards what has been well described as that most tyrannical of societies where all social values are dictated and subscribed to by politicians. I think that when the Government put this in, they were thinking about people on very low incomes. But social justice is not something that can be established by law in regard to wages and incomes, and yet remain a free country.
It will be recalled that the Prime Minister at the General Election, I think on March 10, 1966, said:
"I don't think that you can ever legislate for wages increases … once you have the law prescribing wages I think you're on a very slippery slope. It would be repugnant, I think, to all parties in the country".
The Prime Minister makes some sensible and pregnant remarks. I think the great criticism, if one criticises these things, is that they so often do not get any further. But in this case I am quite sure he is right; yet three months later we had, and had to have—I am not denying it—the squeeze, the freeze, and all the unpleasant things which the economic crisis compelled upon us.
But now that we come to another stage I think we should clearly distinguish between the freeze, the stop and the period of severe restraint. What we are coming to now I would call perhaps the minimum freeze, or the minimum restraint, or, as is perhaps the popular phrase in these days, the mini-restraint. As I say, I do not myself criticise the Government for taking drastic measures last July. If criticism lay, it lay of course in permitting conditions to get so out of hand that the emergency came about.

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I agree most sincerely with the noble Lord, Lord Shepherd, that the trade unions, the employers, manufacturers and industry generally, played their part in the freeze, to a large extent voluntarily, and in the way that we would expect everybody in this country to behave in a state of emergency, because whatever the Government, when we are in an emergency the country really does its best to put it right. But the period of restraint and the activation of Part II which these proposals bring about exactly contradict what the Prime Minister had in mind. They set out to fix and to legislate for State-administered wage increases, which the Prime Minister specially singled out as being impossible. We shall have such a system with us for another year. It is going to be very difficult. I am not going to condemn it, because anything which could introduce moderation must have our support; but I do not think it is a very good idea. I believe that it promotes injustice in the name of social justice. I believe that it bites arbitrarily, unevenly, and I am not sure that it is going to do anything like the Government hope it will do.
Both the Confederation of British Industry and the T.U.C. pressed the Government, when the crisis was over, to get out of the way and let the T.U.C. try out their brave vetting system, and to let manufacturers, commerce, and the like, restrain dividends and prices, so that the Government themselves could concentrate on creating the proper economic climate, under which these things might work. I say most sincerely that the T.U.C. deserve considerable credit for pledging themselves to do their utmost to make this voluntary vetting system—and it is a most difficult task—a success. It has got off to a good start, and I hope that it succeeds.
May I digress for a moment to say something about my own experience and pass to more controversial ground? When I came back to Parliament just after the war I was privileged to have many conversations on these subjects with my old war-time chief, Mr. Ernest Bevin, for whom I had the highest regard. He passionately believed in free negotiating machinery between employers and trade unions, to which of course he had given a great deal of his life. As many of your Lordships know, one of his proudest boasts was that he had never in the
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whole of his industrial life gone back on any agreement he had made.
He saw quite clearly that after the war, in conditions of full employment, to which the noble Lord, Lord Champion, has referred and to which we all subscribe—and nobody in his senses wants to go back to the pre-war conditions, which some of us knew in our constituencies in the 1930s—the trade unions were going to be much stronger from a bargaining point of view than the employers. He feared that this strength, if wrongly used, might wreck the system. Indeed, he strongly urged me, when I left Parliament, to do all I could with the old British Employers' Confederation to strengthen the employers' side in their bargaining power with the trade unions. He saw the danger which is at the root of a great number of our economic troubles at present: the imbalance between the great strength of the trade unions—a strength which they have rightly built up, especially in the war—and the employers, in times of full employment. But while we have full employment and the T.U.C. and the trade unions are above or outside the law, it is very difficult to combat this danger.
I have come to the conclusion, having studied the question over many years—and I believe (though I have no inside knowledge) the majority of the Royal Commission are likely to come to a similar conclusion—that the trade unions must come under the law and be legally responsible for their actions in these modern times. We are not back in the old Taf Vale days, in the year 1906. We are now surely in an adult world in which the trade unions are one of the strongest forces in the land. I do not believe that they need any longer to be in this exceptional position, as if they are frightened of the law. I believe that they should be legally responsible for their actions and that their collective agreements should in equity be legally enforceable by both sides in the industrial world. I believe that we are the only industrial country in the world where the trade unions are in this position vis-à-vis the law. I am convinced that, in practice, the legal framework would be a help, not a handicap, to both sides in achieving sensible, honourable, voluntary relationships in industry. It must encourage more thoughtful and responsible actions

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by both sides or both parties to any bargain. At present, no less than 90 per cent. of the stoppages in this country are unofficial. Powers of this sort under the law by the trade unions might enable them to deal with the stoppages in a way which they cannot at present.
Speeches by senior Ministers and the relaxations in this Bill have tended to suggest that our financial and economic crisis is past, or almost past. This is not so. If Mr. Stewart's estimate of a 6 per cent. rise in the scale of wages and earnings over this year is correct, then, coupled with all the difficulties overseas, in the Middle East, in Rhodesia and in other parts of the world, which cause pressures on our balance of payments, I believe that we are not yet by any means out of the wood. I urge the Government to take the necessary steps in time to see that we do not drift back into the position from which the freeze and the squeeze has just brought us clear. If and when we do get through these troubles—and we shall get through in the end; this country always does—I am quite sure that the Government's duty is to maintain the proper economic climate in the country and to allow the trade unions and the employers, both under the law, to return to a system of voluntary industrial negotiations which has served us well in the past and, with it proper understanding that education has given us, will serve us well in the future.
4.59 p.m.
LORD COOPER OF STOCKTON HEATH: My Lords, I, too, should like to pay my tribute to the noble Lord, Lord Shepherd, for the manner in which he introduced this complicated matter. But, as a practising trade union officer, I cannot help but take note of some of the advice we have had and to comment upon it. The noble Lord, Lord McCorquodale of Newton, referred to the strength of the British trade union movement. I do not really see how one assesses this strength; I think that the public are getting a little confused on the matter. We are certainly nothing like as strong as the Swedish trade union movement. We do not represent much more than 50 per cent. of the work-people in this country. I should like to see the unions much stronger, so that
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they could be more representative of work-people. The real point is not the strength of the trade unions, but the social aim to which all Parties pledged themselves during the war—to do all they could to provide full employment. There is an indirect strength which flows from that, but it is not the organised strength of the trade unions.
The noble Lord, Lord Erroll of Hale, referred to the "new deal" for the unions. That is a little wide of this debate, and the time to talk about that will be when the Report of the Royal Commission comes up for consideration. But, so far as I can understand it, the "deal" that the noble Lord wants to give us would be a case of encumbering us with his help. I do not think the trade union movement is asking for any help in this direction. The question of responsibility was referred to, but under any examination the trade union movement will prove to be a very responsible body indeed. I can elaborate that point. In the post-war period of full employment we have had an indirect power. A trade union cannot be in a better position to negotiate than when everybody is employed, and anybody who has had the experience of negotiating when there are 2 million unemployed will understand the point. So we have been in a very strong position. But centrally—and this is the important point—we have had enough sense to know that when the ball is at our feet we shall bring the whole economy down if we kick it too hard. We fully understand this, and during the whole of the post-war period we have behaved in a very responsible manner.
In this debate we are asked to take note of the prices and incomes policy of Her Majesty's Government, and therefore I should like to refer to the Command Paper which was published in March where the immediate aim of the Government's policy was set out in paragraph 4. The Paper states that the first objective is:
"to create conditions favourable to sustained economic growth and to avoid the 'stop-go' cycle."
I accept the warning, which has just been uttered again by the noble Lord, Lord McCorquodale of Newton, that it is already estimated that by existing commitments earnings will go up this year by about 6 per cent., and that a 3 per cent.

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increase in productivity is hoped for. We now have this very real difficulty in the Middle East, and there is the trouble about oil which could easily seriously affect our balance of payments. It may well be, as the noble Lord, Lord Erroll of Hale, says, that this can cause future difficulty for us, but it is not of the Government's making. This is one of those outside, fortuitous things which happen and which have a serious bearing on what trade unions and employers ultimately have to negotiate about.
For a short time I belonged to what is referred to as "the other place". What went on there was cut-and-thrust, but here—there are ladies here, so I cannot say that we are gentlemanly, but the kid gloves are on. Now and again there is the odd aberration here, and colleagues who were in the other House are sometimes as political as ever they were. But I am sure that this is the value of the Lords. We are gradually getting more trade unionists in here, which is a good thing in establishing a balance. I see captains of industry on both sides of the House, and this is all to the good. But there is a difference in the confidence of the politician as to how he is going to sort things out.
I think our position in this country, if we can only rally and organise ourselves, is absolutely marvellous, because there is a willingness on the part of both the T.U.C. and the C.B.I. to do all they can to get this country economically viable. But when you start talking about how to do it—I was sitting on "Neddy" this morning, and the day before we had a joint meeting with the C.B.I.—you come up against difficulties. As we all know, in recent years we have had two plans, and other plans are being considered now, all with a different basis. How are we to do it? The noble Lord, Lord Erroll of Hale, alleges—I do not know whether it is true—that the export market has moved in our favour. Nevertheless, British industry—and it is British industry which in the last resort sells the goods—has done a good job. If it is quite as easy as the noble Lord suggests, we should have done a lot more. But we do not want to be critical about this matter. British industry has done a marvellous job on export growth in recent years, but not good enough to get over the awful trouble of having these balance of payments crises from time to time.
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The next objective of the Government, as set out in paragraph 4 of the Command Paper, is:
"To work as quickly as possible, consistent with the considerations set out in (i), towards the operation of an effective policy on a voluntary basis in agreement particularly with the Confederation of British Industry and the Trades Union Congress."
Set against that—and this is the subject upon which I want to spend my time—is the attitude of the trade unions, and the T.U.C. in particular. There is no doubt about where they stand; they want "voluntaryism", and they want it absolutely. This has been made quite clear and is understood, and the wish of the Government that we should work towards "voluntaryism" has been well expressed in speeches by the Prime Minister and by the First Secretary of State. The Government have paid tribute, as has also been done this afternoon, to both sides of industry who have worked and given every endeavour in support of the whole policy. I think I should pronounce here that it is not just an incomes policy; it is a productivity, prices and incomes policy.
LORD McCORQUODALE OF NEWTON: My Lords, I wonder whether I may interrupt. I hope the noble Lord will agree with me that in spite of this working together there has been no collusion to "sweat" third parties, as was suggested.
LORD COOPER OF STOCKTON HEATH: My Lords, I understood the comment of the noble Lord, Lord Henley. This is a new situation, and this is the trouble when we are moving into new situations all the time, especially on this subject. When the Prices and Incomes Board—and they are feeling their way—set up about six to eight hurdles over which you have to jump before you can get a productivity agreement approved, it forces employers and work-people almost into a straitjacket of negotiations, because though they may negotiate freely they know that ultimately they may well have to go to the Prices and Incomes Board to justify that agreement. Therefore, they have to look into factors of justification to which they normally would not have regard, and about which there may be great merit. This is not a plot against

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the community, but it is rather interesting. This is my theme. As I see industry, employers and labour are coming together more and more, as they must do, and we appreciate that they must do, if we are to get out of our difficulties.
As a measure of the way management and work-people have worked together on restraint, we find that wages hardly moved at all during the period of the six months' standstill, and during the whole of 1966 dividends were just less than they were in 1965. This gives us a reasonable measure of how genuine the effort has been. But throughout this policy the T.U.C. have said that the restraint can work only on the basis of consent, and they have always resisted legal provisions. When the first restrictions came in, in, I think, September, 1965, the T.U.C. accepted the equivalent of Clause 2, but the argument now is that, having had long experience, they feel that it is better to be completely free and not to have this reserve legislation.
The main preoccupation of the T.U.C. in regard to the incomes policy, however, is with the development of a long-term policy. Generally, we take the view that few people now argue against having a productivity, prices and incomes policy. Although I appreciate what the noble Lord, Lord McCorquodale of Newton, has said about his town in regard to collective bargaining, I do not feel that either the employers or the trade unions in this country can take pride in the post-war achievements in negotiation. Because, as the noble Lord, Lord Henley, has said, it is not happening just now; it has been happening since 1945—a distorted wage pattern; and with every phase of wage increase that wage pattern has become more and more distorted.
This may well seem self-criticism, but there is much more to it than that. Because of full employment, as everyone knows, we have had areas in this country in which there has been an excessive shortage of labour, with the inevitable result that without the trade unions' lifting their hands wages in those areas have gone up; and we have had other areas where there has been excess labour and where, therefore, the wages have not moved. I have often said—I say it without fear of contradiction,
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and it can be confirmed by a little search—that often it is the case that a man's wages are dependent on where he lives, and not on what his job is. In this country, for the same job there can be £5 a week difference in wage, according to the geographical area in which a man lives. I call that a distorted wage pattern; and I would say that under a voluntary system neither the employers nor the trade unions can get out of that. This is the market controlling the situation. "Leapfrogging" has been referred to, but in many other ways it would be difficult, unless you can get comprehensive control, national control, over collective bargaining. That is the only way.
LORD HENLEY: My Lords, would the noble Lord agree that we might have the best of both worlds by having the basic rate agreed at industry level and fringe benefits and all other minor changes negotiated at plant level? This, of course, would get over what the noble Lord has been saying about the regional differences.
LORD COOPER OF STOCKTON HEATH: For many other reasons I think we are going to turn back again and move from the centre to the plant level. But, again, we cannot talk of British industry wages like this, because if we take one industry, such as engineering, with perhaps 3½ million people, we see that their basic rate did not mean anything, and everything was negotiated on the shop floor. On the other hand, if we take other industries, like the chemical industry, we find that they had a pretty tidy pattern nationally, and therefore the shop floor became less significant. But it is very difficult to generalise. But I will just proceed on the objectives of the T.U.C., which I think the House will find of interest because it gives an indication, at least, of how people are thinking. Whether it is the perfect answer, whether it is going to work, is another matter, but it is an indication of how people are thinking.
First of all, the T.U.C. were able to get approval for their proposed scheme of dealing with wages at a conference of executives of unions held in March of this year; and it was approved by 90 per cent. Roughly, this is their positive approach to this problem. The T.U.C. would want, in the autumn of every year, to have discussion with the Department

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of Economic Affairs—and this, I think, is about the place where community interests can be brought into consideration. They would also wish to have discussions with the C.B.I.; and the purpose of these discussions would be very similar to the exercise that takes place in Sweden every other year, I think it is—namely, to try to make a reasonable assessment of what the economy can afford by way of incomes distribution. They would not take any power away from any of the unions from the point of view of collective bargaining. All they would expect the unions to do would be to behave in a civilised manner and conform to the collective view of what is reasonable from the point of view of the economy—and they want to operate this system without any form of legal sanction.
As I have said, they would give this consideration in the autumn of the year. They would take their views for collective consideration to the whole of the executives of the unions, as they have been doing lately; and this would be in the following spring. Then, if that was approved by the unions—and this is the control—if the unions, collectively through their executives, accepted the assessment worked out by the T.U.C., then the T.U.C., through its Incomes Policy Committee, would endeavour to implement this kind of arrangement.
I do not want to go into a lot of detail, but in this there is a great prospect for the social justice that was referred to by the noble Lord, Lord McCorquodale of Newton; and, in fact, it can be demonstrated that in the standstill and in the period of severe restraint the lower paid have been catching up. For instance, the Prices and Incomes Board have issued a report on Government manuals which is rather a dramatic thing and which has now been implemented. It will mean considerable increases for those who have up to now been regarded as low-paid workers. They have also issued a report with regard to municipal employees and gas, water and electricity employees. They are very interesting reports, and show very good and positive work by the Prices and Incomes Board.
To come back again to the policy of the T.U.C., they would envisage, first, a conference in the autumn, followed by a meeting of executives in the spring to
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approve what they have decided. Now this policy, which has been accepted by the trade union movement and therefore will be attempted, will give an indication only this coming autumn, and will be approved only in March of next year. I am not making a clever point, but am simply saying that without the proposed legislation we are in No-man's-land. There is no T.U.C. policy. We are trying to carry out the Prices and Incomes Board's standard through the T.U.C. but, if I may say so, with much more flexibility, because I believe that our General Secretary is absolutely right when he says that we understand this job better than anybody else; we have been doing it for many years. People must not minimise the detail of difficulty that exists in the industrial scene; and this will never be done by legislation.
On the other hand, my personal view is that I go with the T.U.C. collectively 100 per cent. for "voluntaryism". I would fight to the last ditch for "voluntaryism". However, there is this problem. I thought Part IV had been activated only five times, but I think it was said to be fourteen times; but it is a very small number, affecting only a very limited number of people. So again the voluntary system did extremely well. I think the object of the Government has been made clear: that in activating Part II they feel they are contributing to a long-term solution by putting a prop underneath the T.U.C.'s policy during the period when the T.U.C.'s policy is finding its feet.
I have referred to the dangers of inflation in the present year, and it is going to be a great problem to hold the fort, if I may put it that way. It would be a tragedy if, after the wage standstill, or the incomes standstill, and then the period of restraint, the whole thing "bust" and we went back to square one. If we did, we should probably have to start the process all over again, and that would be awful. So my view—and I say it very sincerely—is that no well-conducted union has anything to fear from Part II. The policy the T.U.C. are operating now is a policy that any trade union can easily be made aware of, because it means this at the present time. If a trade union wants to promote a case, it first puts that case to the T.U.C., who make a judgment on it. If the union gets approval by the

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T.U.C., it has nothing to worry about. But if it does not get approval and ignores the T.U.C., and goes ahead with an extravagant claim, what is to be done in face of that kind of behaviour? In my view, this is a form of anarchy which we cannot afford in our industrial situation at the moment. Therefore, while the T.U.C. go for absolute "voluntaryism"—and, after all, we are a negotiating body, so we still keep a little bit up our sleeve—nevertheless, for my part, I do not feel strongly against the Government for taking and providing this reserve power.
I have spent most of my time describing the endeavours of the T.U.C. in what is a dramatic revolution in thought and action in relation to wage determination. I appreciate all that the noble Lord, Lord McCorquodale of Newton, has said, but I firmly believe we are moving in very considerably changing times. If we are to give our workpeople full employment and security, I think the community are entitled to expect in return that the workers should accept a measure of restraint—not that they should be pushed too far, but that they should be willing to accept improvements which are relevant to the need to increase production. If we stick to that principle, then I think there is a chance that we shall get through our difficulties. In this brave new world I would fight, as I have said, for consent and the voluntary principle; but should this fail, I think the Government, any Government, are entitled to powers to make their intervention possible.
5.21 p.m.
LORD SAINSBURY: My Lords, in a debate such as we are having this afternoon it is difficult not to mention points that have been covered by previous speakers. I therefore apologise for so doing. Further, I am very conscious of the fact that I follow my noble friend who is one of the great trade union leaders of the present time and that, in my turn, I am followed by the noble Lord, Lord Citrine, one of the great trade union leaders of an earlier period. Therefore, I have a sense of humility and the feeling that perhaps I should not talk about a wages or incomes policy at all.
My Lords, I strongly support the Government's prices and incomes policy; I believe that such a policy is essential if
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we are to eliminate our balance-of-payments deficit and to achieve a steady economic growth. As has been pointed out several times during the course of the debate, the prices and incomes policy has three phases: first, total freeze; secondly, severe restraint; and, thirdly, the phase we are now entering into, one of moderation. The first two phases, in my opinion, have achieved considerable success. The noble Lord, Lord Erroll of Hale, whose speech was aptly and very kindly referred to by my noble friend Lord Champion, tried hard to show that the prices and incomes policy so far has not brought any real results. In spite of his usual debating skill, he did not make out a very convincing case—and this is not really surprising, because the facts are not on his side.
What are the facts? They are that between July, 1966, and May, 1967, prices rose by less than 2½ per cent. in spite of the effects of increased taxation, compared with approximately 3½ per cent. in the previous corresponding period. Earnings in the same period rose by less than 1 per cent. Let us turn our minds back. How different a picture is this from the one that faced us in the debate on the July measures! Then, hourly earnings were up by 10 per cent., and prices by 4½ per cent. But statistics are only part of the story. I believe that on both sides of industry there has been an acceptance of the need to restrain inflation and a constant willingness to try to work out, with the Government, the best means of achieving this end. The deterioration in industrial relations, so frequently predicted by opponents of the prices and incomes policy, did not materialise. This is vividly illustrated by the figures showing the numbers of days lost through strikes between July, 1966, and May, 1967, as published in the Ministry of Labour Gazette.
But our success so far does not mean that we can now relax. We are entering a period of re-inflation, and in these circumstances it is in my opinion important to have an effective long-stop procedure. Only this can ensure that those who co-operate are not put at a disadvantage by those who may not; for if they were, voluntary co-operation by the great majority would be put at risk and the present controlled re-inflation could turn into a run-away boom. As your Lordships know only too well, this would

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hinder our progress towards achieving a long-term balance of our external account. The Order and the new Prices and Incomes Bill are part of the Government's policy for the period of moderation. This entails, as has been stated frequently this afternoon, a move back to the voluntary system or as The Times said in a recent editorial, the phasing-out of compulsion.
My Lords, I need not go into the proposed procedures to halt increases, but the National Board for Prices and Incomes has the key role to play, and it is opportune now to pay tribute to the valuable work that they have already done. As the Economist states in its latest issue:
"One of the most promising institutional creations of the last three years is the Jones's Board. Its reports have begun to instil more realism into at least some thinking about wage claims."
Obviously, no incomes policy can succeed without the confidence of the trade unions. To retain this confidence, the incomes policy from now on must be consistent with a reasonable annual rise in money incomes; but that rise must not be such that it endangers the competitiveness of British goods in foreign markets. And a rise in money incomes will endanger the competitiveness of British goods in foreign markets unless we get an annual increase in productivity. We shall not get this increase in productivity if we do not have the confidence, not only of the trades unions, but also of industry. It is only when industry has confidence in the future that private investment grows. Investment incentives help, but they do not do away with, or in any way lessen, the importance of business confidence.
We also have to consider the other side of the coin, which is the general stability of prices. This is a different, and perhaps more difficult, problem than that of incomes. To my knowledge, no Government spokesman has ever suggested that under the prices and incomes policy no prices would go up. What they have said is that there has to be sound justification for increases. I believe that the compulsory notification system has been effective in preventing unjustified increases. Certainly in respect of food, about which I claim to have some special knowledge, there has been a long period of stability, with increases balanced by
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decreases, so that the average housewife's shopping basket differs very little in cost from a year ago.
In conclusion, my Lords, may I say that we must never lose sight of the fact that the prices and incomes policy is part of a much wider economic policy, which includes the work of the Monopolies Commission and the Restrictive Practices Court; changes in the industrial structure brought about by the Industrial Reorganisation Commission; special help for the Development Areas; the work of the little "Neddies", and the work of the Ministry of Technology. These are all aspects of this wider economic policy and I believe that profound changes are taking place that bode well for Britain's industrial and economic future.
5.32 p.m.
LORD CITRINE: My Lords, while the debate has been continuing, and in the light of what other speakers have said, I have been busy tearing up the notes I had prepared. The very thoughtful speech from the noble Lord, Lord Sainsbury, to which we have just listened, is an indication of what I would call the depth of the matter which we are discussing to-day. I am going to try to concentrate on two main points. The first is the need for the Government's reserve power, and the second is whether this is, in effect, a purely temporary expedient which can be abolished in the course of a few years. We have known the basic problem certainly since 1951, with the warning that Mr. Gaitskell, then Chancellor of the Exchequer, gave to the T.U.C. that we were paying ourselves more than we were earning and so were causing inflation and rising prices. This has been reinforced many times by statesmen and Chancellors of the Exchequer, and various expedients have been used to try to secure some measure of restraint on those who were pressing for higher incomes unaccompanied by a corresponding increase in national production.
I remember the "Three Wise Men" appointed by the Conservative Government. They were men experienced in their own particular professions and from time to time they issued what in my opinion were reasoned, intelligent reports. They were trying sincerely to grapple with what, up to now, has proved a problem almost impossible of solution. I did

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not notice any marked effect upon any section of the community from any of the various appeals and warnings that were issued over the whole period—as I say, certainly since 1951—including the reasoned statements from the T.U.C. as to the dangers caused by the absence of restraint and the continuation of inflation. The trade unions certainly exercised more restraint as an organised body than was discernible among income receivers in other quarters; but, none the less, it cannot be argued that a system of completely voluntary restraint, without any kind of power in the possession of the Government, has succeeded.
After thirteen years of attempts by the previous Government to grapple with this problem without very much success we had a change of Government. The new Government recognised right from the beginning that they could not rely on the effectiveness of a purely voluntary restraint and that they would have to have some power. They did not want power to exercise rapidly or arbitrarily but to use if the necessity revealed itself. They took power in reserve, and the question is, has that succeeded? I believe the answer is that it has succeeded in retaining a better balance between national production increase and increases in incomes to a far greater extent than was expected. I do not say that it has eradicated the differences, but certainly the progress in that direction was greater than with any previous policy. I do not speak now with any idea of securing political kudos or anything of that kind, but after looking at the matter as a purely social and economic problem.
My Lords, I declare my faith, such as it is. I do not believe any policy of any Government of this country can succeed in maintaining the balance about which I have spoken unless some power resides in the Government. When the Government exercise that power we shall be able to judge whether it is an evil thing which ought to be stamped on by the community, or whether it is an essential and wise thing to possess.
In any community there is an unresponsive—I was almost going to say an anti-communal—body of people. Sometimes they are organised. It is for that type of person and that kind of
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organisation that this power is so clearly needed. All this has been stated in White Papers, and goodness knows! where, but at the same time it does not appear to be fully appreciated; and the assumption is that the Government somehow want power for its own sake. I do not believe that at all. I understand the objection to compulsion. No one likes compulsion. No one in any community, either as individuals or as members of an organisation, likes being told what to do; or that there should be the power to compel people to do certain things which they may dislike. Employers do not want Government interference, but do they believe that this problem can be solved without some measure of Government interference? Trade unions do not want Government interference, but at least they have created a voluntary system which so far has worked reasonably well.
I would not pin my faith on any voluntary system in this connection, but at least some attempt has been made, and we should be able to judge its effectiveness in the next year or so, or possibly within the next few months. I am satisfied that without the Government possessing power in reserve—and I emphasise in reserve—this system could not possibly succeed. The Government want a voluntary system, and they will do everything they can to work towards a voluntary system; but they cannot abandon their intention of having some power in reserve.
As to my second point: is this a purely temporary expedient? I do not suppose that any of us can say with authority "Yes" or "No" to that question. I cannot escape the conclusion that we are somehow groping for a solution to this problem; nor can I believe that any single measure such as this can be wholly and completely effective in dealing with a major problem and those that arise from it.
I sometimes wonder by what mechan ism we can effectively control incomes and prices. Reference has been made to this by the noble Lord, Lord Sainsbury. When I think that in two world wars Governments failed to keep prices in check as they thought they should be, I ask myself the question: is this a possibility? What size of organisation do we need? Can the Prices and

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Incomes Board, with its present staff, which I think is not much more than a skeleton one and which so far has done some useful work, deal with the whole range of prices that exist over all the various commodities? The best it can do is what accountants do with balance sheets of big companies: make tests and operate on those. I am puzzled on this question of how far this machinery or any others can become effective in the realm of prices.
Can we all be sure that we can surmount our temporary difficulties unless we find the good will in all quarters of the community? Are we sure that we are not entering on a system which may have all the ingredients of permanence, of a system of collective bargaining and of regulating the income of the community? I am not sure of it. I cannot see that for all time we have settled the balance-of-payments problem. I cannot see that we can sacrifice some means of ensuring that increases in national production and in income are kept in proper balance. Therefore, while I hope that it will not be necessary to introduce the battery of measures to deal with this problem that was mentioned by a speaker in another place during the debate there, I am by no means convinced that that is not the case. We may have to go far more thoroughly into this general problem than anything we have done up to now. I am not talking for the purpose of frightening the trade unions or anybody else. I am simply trying to point out that this is a profound problem which, in my judgment, will be with us for a very long time. Therefore, I would not encourage the assumption that this is a purely temporary expedient. We are probably at one stage in a much longer range policy.
While I have had sufficient connection with politics in the course of my life, and while I have been a firm adherent of the Labour Party all these years, and have believed basically in its measures, I cannot understand why we are all so polemical about this problem and approach it from a purely Party point of view. It is basically an economic problem, a social problem, and I hope that we shall find some means of facing these things free from the trammels of Paryt politics. I have not seen much signs of it. I have seen some attempts to capitalise the prejudice that exists among
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trade unions against any form of Government intervention. Perhaps we shall reform some time. I have assumed that this House is more of an objective body than another place, and as a Member of your Lordships' House I congratulate myself on that. But I think that we are dealing with the imponderable. As I said earlier, we are groping. Nobody knows the answer, I am sure of that. Time will be needed, and perhaps trial and error on a large scale will be necessary before we have found the means of dealing with what seems to me to be a most intractable problem.
5.45 p.m.
LORD REDMAYNE: My Lords, I had not intended to intervene in this debate and I shall be brief. I came down to the House in the hope of hearing more details about prices rather than incomes. I have been disappointed. But prices are only the child of incomes, and it was to be expected that the debate should take that line. My attention has been drawn to this strange story of "price control commandos" which I read in the newspapers this morning, and I think it fair, as nothing was said about this except a passing reference by my noble friend Lord Erroll of Hale, to ask the Government for some information. I admit that it was a newspaper story, but it bears all the stamp of having come from the public relations officer of one or other Department of the Government.
The proposal is that there should be mobile teams to investigate retail price increases on the spot. The Financial Times and The Times had the story in much the same terms. I do not doubt that it has some fairly solid foundation, and has been in the minds of the Government. I should like to know whether there is truth in it, and the details of it. Of course, it could have been put out simply to counter-balance, without much foundation, a statement in The Times on Monday that there was a large number of price increases in the pipeline. Although one does not doubt that that story was well founded, I do not believe—and the noble Lord, Lord Sainsbury, said something of the sort—that a very large number of increases are now in the offing. But if the story is based on some truth, it is fair to ask the noble Lord, Lord Winterbottom, what are the likely mechanics of such a

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scheme. What does "on the spot investigation" mean? What sort of powers are these teams likely to be armed with? How is it proposed that the price increase of any one article in retail stock can be investigated without reference to a large number of articles of the same class? How would such teams take account of the wide variation of other factors which may force retailers to increase their prices?
I would also ask whether these teams will be sufficiently instructed to take account of the many ways in which Government policy has put retail prices under pressure, notably by S.E.T. and the loss of investment allowances and, in local government, disproportionate increases in rates. If this job is to be done at all, it will need a great number of teams to achieve any effect. It will be interesting to know to what extent that is being planned, or whether in fact this is only a propaganda exercise as a counterbalance to actions the Government are taking in the incomes field and really will not amount to very much at all. On the other hand, these teams could fulfil a useful purpose if they were sympathetic to the retailers' problems, really looked at them with unbiased judgment, and were prepared to take a broad view of the many factors which lead to price increases. The report in the Financial Times stated that the D.E.A. will study this proposition with care in order to be sure that there is no risk of antagonising the C.B.I. I should like to ask the noble Lord what it has to do with the C.B.I., as opposed to the distributive trades. It seems to me that that remark proves that the story came from Whitehall and not from any other source.
I suspect the noble Lord will say that he is unable to give me an answer; and I do not blame him. I know he will do his best. I hope, however, that he will not leave it at that. If I may say so without grave disrespect to the Government, "kite-flying" is one of their major hobbies, and it has greatly increased during the term of this Government. I consider that all Ministers replying to a debate of this sort should be able to say what kites are flying, who is flying them, and why.
I conclude by saying that if there is anything in this story perhaps the noble
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Lord, if he cannot give an answer, will see that the answer is made known both to me and perhaps to the House in some way very soon. If this scheme is going forward in any form there should be adequate consultation, not with the C.B.I. but with the distributive trades, both through the new consortium of those trades which has just been formed and through the E.D.C. for the distributive trades which has proved a good friend to us. The noble Lord, Lord Sainsbury, referred to that E.D.C. It is, as I say, of great benefit to the distributive trades which I for one should like to acknowledge.
5.52 p.m.
THE EARL OF DUNDEE: My Lords, my noble friend Lord Erroll of Hale has expressed our acceptance of the business arrangements in regard to this measure and subsequent measures on prices and incomes. I think perhaps it should be added that we hope this will not be regarded as a precedent in future, because it really would be better if arrangements could be made to introduce measures of every kind in either House at the right time. However, we accept this arrangement now.
I have often said, both from the opposite side of the House and from this side, that I wish we could discuss this question of prices and incomes and inflation without any overtones of Party politics. And I think perhaps the noble Lord, Lord Champion, was feeling the same thing when he said in his peroration that if the Government could succeed in solving this prices and incomes question, they would have done a great work, even although as a consequence they lost the next General Election. It really is all wrong that Parties should have to discuss this in the context of winning and losing General Elections.
When we brought in our National Incomes Commission, a long time ago, we had a good deal of opposition and no support from the trade unions. The reason given by the trade unions for this was, I think, a mistaken one. They said that the National Incomes Commission was not empowered to deal with dividends and profits, whereas, in fact, it was expressly empowered to deal with dividends and profits in the Statutory Instrument by which it was set up. Now

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the present Government have had the great advantage of having the support of at least half of the trade union movement. Mr. Frank Cousins and his followers have proved to be in a minority, though a substantial one. I am afraid that even Mr. George Woodcock has recently expressed some pretty disparaging comments about this Bill. But, at least, the trade unions are cooperating in the Government's Prices and Incomes Board, and I think this is a great gain. But we are still heavily handicapped by fears of Party gains or Party losses in connection with this. I do not think it would be unfair to describe this Bill—indeed, it would be only a plain statement of fact—by saying that it is a continuation, which we were told last autumn would not be necessary, of a policy which the Prime Minister said at the General Election would not be adopted. That is about the best you can say for the Bill.
I do not believe that any prices and incomes policy will succeed unless it is accompanied by measures to promote economic growth, by measures to increase competition and make it more keen, and by the elimination of restrictive practices. We must get rid of the idea, which is held by a lot of people—not only by wage earners—that everybody has a kind of natural right, whatever happens, to an increase of 2½ per cent. every year, or something like that, and that if they do well and produce more, they should get more than what is regarded as the normal thing. There is no normal thing. We have no natural right to get an increase of wages or incomes of any kind every year if it is not accompanied by more productivity, which does not necessarily mean more production, or more production, which does not necessarily mean more productivity. It is better to have both at the same time.
I hope the Government will not think that I am mocking them or trying to speak in any irreverent tone when I say that what we need is a National Plan designed to promote economic growth. In the six years when I happened to be in the last Government, from 1958 to 1964, I thought we did quite a lot of rather good planning; and although we were always told by our opponents that industry was stagnating, during those six years our gross national product increased
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by 25¼ per cent. When our opponents came in, I genuinely hoped that they would produce a good National Plan. I thought that the Plan they produced—and it was produced about eight months after it was supposed to begin—was not very much more than an estimate that we would increase our gross domestic product in the next six years by 25 per cent., which was actually a fraction less than the amount by which it had increased in the previous six years, which we have always been told by the authors of the Plan was a period of stagnation. But for the first year, 1965, the growth was only 2½ per cent., and for last year only 1½ per cent. So now we have had one-third of the time with only one-sixth of the growth.
I think this is all vitally relevant to the question of prices and incomes. You will not be able to keep control of prices and incomes if you do not have growth. You will have to appoint more people to try to prevent rises in wages and prices, until you reach the stage when half of the people will be employed in trying to prevent the other half from getting more money. What you want is more incentives to earn, and less punitive taxation.
As for competition, one thing has been done. We have had what you might call a half Kennedy Round—I think rather more than half, though not quite so much as the late President Kennedy proposed in the last year of his life. Now, at last, after all these years of difficult discussion, this much has been agreed to. Its effects may not be felt for a little time, but when they are felt it will, I hope, produce healthy and salutary competition to a far greater extent than we have now.
But let us remember this. My noble friend Lord Erroll of Hale quite rightly pointed out that the improvement in our balance of trade in the last year or two had been due to improvements in what we call the terms of trade: that is, we have imported cheaper primary commodities, and industrial products we export have earned higher prices. But now, what the great trading nations of the world are all trying to do, in co-operation with each other, is not only to have more competition, which will mean that export prices for our goods will be keener and may have to come down; they are also trying to keep up the prices of primary

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products like wheat, under the International Wheat Agreement, because our experience has always been that, in the long run, if producers of primary products do not earn enough they cannot buy the exports of the industrial countries, and you have a world decline in trade. So, although it is temporarily advantageous to a country like Britain, in the long run it is better to have fair prices. And that may not be so good for our balance of payments next year.
Finally, on restrictive practices I should like at least to pay a tribute to the Minister of Transport on the stand which she has taken about liner trains, and I hope that she will be successful in getting back the business for the railways. But I must conclude by saying that you will not make a success of your prices and incomes policy unless you have the courage to deal with restrictive practices. That, I think, will need legislation; and it is my belief that compulsory legislation, although it may be unpopular, to bring an end to restrictive practices will do vastly more good to our economy than compulsory legislation to restrict prices and incomes, which is not accompanied by the necessary measures for accelerating our economic growth.
6.2 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): My Lords, I am glad that my noble friend Lord Shepherd has returned in time so that I may add my congratulations to those voiced by speakers from both sides of the House on the very useful framework that he provided for our debate. His speech was a great help to me in getting my thoughts into perspective, and I am glad that the House has also recognised this.
I am certain that the noble Lord, Lord Erroll of Hale, will not be surprised if I start my reply to the debate with a platitude. One of the recurring problems that all Governments, and all political Parties have had to face, and one that has provided political ammunition during the last three General Elections, has been about the means of achieving economic growth without excessive inflation, and without the customary
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balance-of-payments crises that seem to afflict us when our economy gets on the move. This has all been said before—I admit this—but the problem seems intractable, and has still to be solved. I know that the Party opposite have wrestled with this, with some successes and many failures, and I think the sense of the House is that the problem is not new and very difficult indeed to solve.
The noble Lord, Lord Henley, posed questions but said that he could not find the answers. Nevertheless, I think his questions produced a series of suggested answers from around the House which indicated a certain consensus on the direction in which we ought to travel. I will not particularly react to the pleasure of the noble Lord, Lord Erroll of Hale, in twitting us for perhaps not succeeding on every occasion when we tried to do something. But I should like to comment on one point he made, because I think it a serious one and one that is worth discussing. He brought to the notice of the House the fact that the improvement of our balance-of-payment, position is in part due to an improvement in the terms of trade. I do not know what was his source of information. My source, it seems, was probably the same as his own, which was a leading article by Samuel Brittain in the Financial Times.
The author of that article, I think, said that we have moved in the correct direction to the tune of £550 million, of which £300 million came from an improvement in the terms of trade, £100 million from our control of capital movements, and £150 million from the slowing down of the economy. So £250 million of the favourable movement was a result of squeeze policies, and £300 million from the shift in the balance of the terms of trade. I think the noble Lord is quite right to draw this to the attention of the House. We cannot and must not be complacent, particularly when, out of the blue sky, events such as the Arab/Israeli war blow up. We can always run into trouble from factors outside our control, and we must have sufficient reserves within our economy—and reserves powers of the Government—to enable us to face these unexpected difficulties.
In that same article Brittain infers that our prices and incomes policy had overall

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little effect on the improvement in our balance-of-payments position—which we must all admit is very substantial and very welcome. But I think we should say at this point that it was not without at least an indirect effect. Part of the problem last summer was a loss of confidence abroad in the economy of this country. There had been a long period of rapidly rising wage rates, and rapidly rising prices, and I believe it was the fact that the Government were willing to take very unpopular measures to put this matter straight that had a great effect on confidence abroad and effected a return to this country of substantial funds which had left it for a time. So I think this policy was of real value at that time.
The other aspect of value must be a long-term one. We are really entering into a period of re-thinking and of re-education of both management and the trade unions, to try to adapt ourselves to the economic situation which is creating great problems for us while at the same time bringing benefits. The fact that both management and trade unions, when negotiating for wage increases, now have to think in terms of productivity is one of the very valuable aspects of this policy. Productivity—again, an overused, platitudinous word—increased productivity, is entirely necessary if we are to recover our place among the competing nations of the world. I am certain that the prices and incomes policy has this extremely valuable by-product, in forcing both sides of industry to think about the implications of what we are trying to do.
We have had some extraordinarily fascinating speeches from men who were involved in this business of actually carrying into effect the policies of the Government under Part IV, and who will be doing so in the coming year under Part II. We have had speeches from three trade unionists, from an industrialist, and from the head of one of the largest retail organisations in the country; and I think that there was a very substantial measure of agreement between them all. None of them, I think, really liked Government compulsion. Everybody wanted to get back to voluntary co-operation and collective bargaining. Again and again the question had to be asked: Is this an impossible ideal? Can we really take the Government out of this particular field and, with new procedures devised by the
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T.U.C. and the C.B.I., leave trade unions and management to hammer out their own incomes and prices policy without the Government intervening?
I think that the noble Lord, Lord Citrine, was the most pessimistic. In his speech he posed it as a question, but the answer he gave was that in the background there must be powers and that we should be foolish to assume that one day those powers will wither away. Some other noble Lords were perhaps a little less pessimistic. The noble Lord, Lord Cooper of Stockton Heath, described the steps being taken for the trade union movement itself in the autumn of each year to relate the possible wage negotiations in the coming year with foreseen increases in the gross national product, and then to have detailed discussions with individual unions in the following spring. This idea is, I think, based on experience—admittedly on the experience of the Swedes—but it is not an idea plucked out of the blue. And it is one which, indeed, might accelerate the departure of the Government from the front of the stage even if, for some time in the future, they still remain lurking in the wings.
If the trade union movement can make this preliminary economic assessment each year there is no doubt in my mind that the claims put forward will be reasonable and much more capable of settlement by negotiation. But even the noble Lord, Lord Cooper of Stockton Heath, was quite certain that the Government had to retain powers during the coming year, until August. 1968, because even if the trade union movement does create an effective organisation within the coming year, the fruits of that cannot be harvested until 1968, and the Government must hold the reins until that time. I think that is generally agreed.
Whether or not by 1968 we shall have a further Prices and Incomes Bill is in the lap of the gods. I would not rule it out; I only hope that the experience of the coming year will make it unnecessary. I have been warned by the noble Lord, and so I will not make forecasts; but I think we shall have done well if experience in the coming year enables us, by the autumn of next year, to rely completely on a voluntary system. Nevertheless, it is worth trying,

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and, as we have heard to-day, both sides of industry are getting down to the job to see whether there can be a full return to the voluntary principle.
I think there was one measure of agreement in that everybody was agreed that something which the Labour Government had created was not bad; namely, the Prices and Incomes Board. In fact the noble Lord, Lord Sainsbury, paid tribute to the Board, and I am certain that its members will welcome that, because they must have been carrying a very heavy burden over the past year. I think the point made by the noble Lord, Lord Erroll of Hale, about their being overworked may be valid. I think it was the noble Lord, Lord Citrine, who said they were working with a skeleton staff. Perhaps we shall have to put a little fat on their bones, but I feel that in Mr. Jones, assisted by his team, we have found someone with an analytic mind who is trying to help us peer into the jungle which at the moment is preventing us from moving forward.
Also, as again noble Lords have said, it would be churlish not to pay tribute to those many millions of citizens, whether on the side of management or of the unions, who either have positively helped, or at least have refused to hinder, the Government's policies. The statistics given by my noble friend of the number of Orders that have been made and the very limited opposition by industrial action to Government policies reflect, I think, great credit on the trade union movement, and indeed, on the men and women of this country.
I share the view held by the noble Lord, Lord McCorquodale of Newton, and the noble Lord, Lord Cooper of Stockton Heath, that we have great reserves of strength in this country. The fact that both the trade union movement and the Confederation of British Industry are largely agreed on their objectives is surely a very great strength. The argument is about means and not ends, and I believe that it would not be too much to say that possibly the collaboration between the two sides of industry in this country is as close and fruitful as anywhere in the world. We argue freely and strongly, but, after all, that is our custom; and having heard various speakers in the debate to-day I
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feel that in due course we shall find at least partial solutions to our problems, or at least solutions that will enable us to hasten a little more quickly than we are at the moment.
May I answer a specific point made by the noble Lord, Lord Redmayne? I am rather glad that he raised the question of prices. The only other speaker who touched upon it was the noble Lord, Lord Sainsbury, and I think possibly the reason is that the prices aspect of this policy has gone remarkably smoothly—indeed, surprisingly so. However, when the noble Lord, Lord Redmayne, raised the question of "price commandos", as he saw he caught me somewhat unprepared. Fortunately I can give him a partial answer to-day, and there will be an appropriate time during the debates on the Bill when perhaps he can be given a fuller answer. I have been told that there are no firm plans for any developments on the lines which he has read about in the papers. I am not clear where the Press stories originated, but what is a fact—and I think I can commit the Department of Economic Affairs on this—is that no new arrangements would be contemplated without full discussion with the organisations concerned.
My Lords, we have come to the end of an interesting and valuable debate. We have a lot of work to do at the Committee stage, because although the Bill is a short one I find the clauses are complex and I fear that they will take quite careful explaining. Nevertheless, I think that all these discussions have shown a remarkable unanimity, and I hope that as the work progresses we shall gain experience of how to bring the natural demands of the trade unions and the growth of the national product in harmony, so that the Government can recede further and further from the front of the stage. While I believe that there will always be a place somewhere on the stage, even if only in the prompter's box, for the Government, nevertheless I believe that by the end of next year, if we progress as we have done in the past year, we shall be close to a voluntary system of bargaining and many of these irksome controls will have gone. That is my hope; it is the hope of my colleagues, and if we proceed steadily on the road on which we have already started I believe that that hope will be fulfilled.
6.19 p.m.
LORD SHEPHERD: My Lords, before the Question is put I should like to say that I was in some slight embarrassment when I returned to the Chamber and found that the noble Earl, Lord Dundee, was about to sit down and that my noble friend was about to speak. I should like to express an apology to those noble Lords I have been unable to hear. Unfortunately I find, as Government Chief Whip and as spokesman for the D.E.A., that there is a tendency for the duties to conflict, and I have been at the other end of the building to see whether some arrangement could be made to deal with our heavy programme of business later this month.
I was very grateful indeed to the noble Lord, Lord Erroll of Hale, and the noble Lord, Lord Henley, for their agreement to the use of our flexible rules in this House, as clearly the employers and the unions who may be involved in some difficulty should have their minds put at rest as soon as possible. I hope to be able to make a statement shortly as to the timing and progress of this Bill in your Lordships' House. May I therefore conclude by thanking all noble Lords who have taken part. If I did not hear them I shall certainly read what they said, and I shall certainly make sure that my right honourable friend the First Secretary sees the speeches that have been made this afternoon.
On Question, Motion agreed to.
LORD SHEPHERD: My Lords, in the circumstances I beg leave not to move the Motion on the prices and incomes policy that stands in my name on the Order Paper.

COUNTRYSIDE (SCOTLAND) BILL
Brought from the Commons; read 1a, and to be printed.
POST OFFICE (DATA PROCESSING SERVICE) BILL
Brought from the Commons; read 1a, and to be printed.

FUGITIVE OFFENDERS BILL
6.22 p.m.
Order of the Day for the Third Reading read.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I beg to move that this Bill be read a third time. As has been made clear throughout the proceedings on the Bill in both Houses of Parliament, its primary purpose is to implement the agreement reached at the Commonwealth Law Ministers Meeting at Marlborough House a year ago as to the arrangements which should in future govern the surrender of offenders between the independent countries of the Commonwealth. In arriving at that agreement, which was completely unanimous, the Law Ministers of the Commonwealth naturally gave considerable thought to the problem of political offenders, because in the Fugitive Offenders Act 1881, which has hitherto governed the return of offenders within what used to be the Empire, there are no safeguards whatsoever for political offenders as is customary in normal extradition law.
This is understandable in the circumstances of 1881, when the Act was passed, and when the countries of what is now the Commonwealth were all parts of one empire, with even less autonomy and independent authority than most of our remaining dependencies have to-day. And the Government, of course, recognise that where two countries acknowledge the same sovereignty and one is responsible for the other's defence, they stand in a special relationship to each other, and different considerations arise in relation to offences such as treason and espionage than in the case of two entirely independent countries. It is for that reason that the Bill provides, in relation to the dependencies, that Clause 4(1) shall not operate in its entirety, and the Secretary of State is accordingly free to surrender persons to dependencies in respect of offences of a political character, although, by reason of subsection (3) of Clause 9, he does not have to do so.
But the position as regards the independent countries of the Commonwealth is quite different. These countries, which were once part of one empire, now form a loosely-knit brotherhood of

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separate sovereign States, admittedly with a great deal in common, including, for the most part, a mutual heritage of law, but with the right to negotiate among themselves whatever arrangements for the return of offenders, including political offenders, they may consider appropriate. What they decided they wanted were the provisions set out in the Scheme, published at the conclusion of the Commonwealth Law Ministers' Meeting as Command Paper No. 3008, which we are now introducing into our law in this Bill. And, as regard political offenders, the provisions in Clause 4(1) of the Bill reproduce exactly the agreement contained in paragraphs (1) and (2) of Clause 9 of the Scheme.
It has been contended, in particular by the noble Lord, Lord Brooke of Cumnor, that the Commonwealth Law Ministers were mistaken in reaching an agreement in these terms and that the whole matter should be renegotiated, and it is therefore important to consider how it came about that this agreement was arrived at and why it is unlikely that further negotiation would achieve any different conclusion. In the first place the original memorandum which Lord Brooke of Cumnor caused to be circulated to the Commonwealth when he was Home Secretary in March, 1964, and which gave rise to the Commonwealth Law Ministers' discussions, put forward the following proposal in paragraph 10:
"It is therefore proposed that, subject to what is suggested below, the Agreement should contain a provision, comparable with those in the Extradition Act 1870 and in the European Convention on Extradition, prohibiting rendition for an offence of a political character."
The attention of the Commonwealth was specifically directed therefore to the safeguards for political offenders contained in Section 3(1) of the Extradition Act 1870, where it says:
"A fugitive criminal shall not be surrendered if the offence in respect of which his surrender is demanded is one of a political character …".
And also to Article 3(1) of the European Convention on Extradition, which is in roughly the same terms. And that was the foundation of Clause 9(1) of the Scheme, which has become Clause 4(1)(a) of the Bill. It is Article 3(2) of the European Convention on Extradition which goes on to deal with the possibility
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of a person's being prosecuted, punished or prejudiced on account of his race, religion, nationality or political opinions, and it was that provision, rather than the more limited provision in our own Extradition Act that the Commonwealth Law Ministers unanimously thought it right to include in Clause 9(2) of the Scheme, and which now appears as paragraphs (b) and (c) of Clause 4(1) of the Bill.
The reason why the independent countries of the Commonwealth wanted this is not far to seek. We were informed at the Commonwealth Law Ministers Meeting that a number of countries of the Commonwealth had already introduced, or were in process of introducing, legislation which had the effect of specifically precluding the surrender of political offenders, even to other Commonwealth countries. And, in the case of Malta, Section 44(2) of their Constitution itself provides that no person shall be extradited for an offence of a political character. The guiding principles were thus laid down for many member States. In addition to the countries which had already enacted safeguards before the Conference, which included Ghana, India, Sierra Leone, Uganda, Tanzania and Kenya, two other countries, Australia and Nigeria, have recently passed legislation in conformity with the Scheme. I see no hope of persuading these countries that they were, each and every one of them, wrong in having these safeguards, which we invited them to introduce, and that they should now change their minds. Indeed, the Government would regard it as most unfortunate if this country were to take the lead in suggesting departures from the Scheme having the effect of whittling away traditional safeguards of individual liberty which the Commonwealth has agreed to preserve. It is wrong I suggest to assume that provisions of this kind, which have formed the basis of extradition law for a long time past, act as a blanket protection for all persons who commit dastardly crimes and plead a political motive. As the decisions of the courts in the cases of Meunier and Schtraks, to mention only two, make quite clear, this is not the case. There must be a genuine political motive for a fugitive offender to be able to secure the protection which the safeguards provide.

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Finally, if two countries have a close political or defence relationship which causes them to consider that their mutual interests could be harmed if Clause 4(1) were to operate between them without modification there is in Clause 16 of the Scheme, and again in Clause 2(3) of the Bill, power to modify those provisions by way of bilateral agreements. The sort of case I have in mind is that of Australia and New Zealand. Whether we shall think it right to exercise that power in agreement with certain of our Commonwealth partners remains to be seen. But it is there if we do.
Adequate powers to protect the legitimate interests of the States of the Commonwealth exist, therefore, alongside the safeguards for political offenders. Even so, those safeguards follow a pattern which other countries have already thought it right to make the basis of their law without their becoming places of refuge for assassins and other types of political gangster, and I feel sure that the fears that have been expressed about this happening are greatly exaggerated. There can be no doubt that this Bill, which recognises the changing needs of a changing Commonwealth, is a very necessary measure. The agreement, which it is designed to implement, constitutes a milestone in inter-Commonwealth co-operation in that field of criminal law, and I trust that the House will recognise just how much has been achieved here and give this balanced but laudably liberal measure an unopposed Third Reading. My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3a.—(The Lord Chancellor.)
6.32 p.m.
LORD BROOKE OF CUMNOR: My Lords, we are all grateful to the noble and learned Lord the Lord Chancellor, for his summary of the Bill and of its history. I shall take up but a few minutes. It is certainly not my intention to oppose the Bill. Indeed, as the noble and learned Lord indicated, in a sense this Bill is my god-child, because it is based on a memorandum which was sent out at my direction in 1964 to all the countries of the Commonwealth and which formed the basis of discussion at the Commonwealth Law Ministers' conference that
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followed. I do not think that there is any dissension anywhere about the need for, and the importance of, modernising the old 1881 Fugitive Offenders Act. The only substantial difficulty arises over political offences and political offenders. With respect, it is not quite correct for the Lord Chancellor to say that the 1881 Act contained no safeguard whatever for political offenders, because undoubtedly the Home Secretary would have decided that it was not just to send back to be tried in his own country a political offender who was charged with seeking to get rid of an undesirable régime which had been established, perhaps by force of arms, in his own country, and who certainly would not have received a fair trial had he gone there.
What happened to change the situation during the Commonwealth Law Ministers' conference was that these two new provisions, paragraphs (b) and (c) of Clause 4(1), were introduced into the Scheme. They were not in my original Scheme, and if the courts are willing to operate them I think that they are a considerable improvement: that is to say, a person is not to be returned if
"the request for his return (though purporting to be made on account of a relevant offence) is in fact made for the purpose of prosecuting or punishing him on account of his race, religion, nationality or political opinions; or (c) that he might, if returned, be prejudiced at his trial or punished, detained or restricted in his personal liberty by reason of his race, religion, nationality or political opinions".
I am inclined to think that that is the effective protection which political offenders need and should have. We have never before had anything like that in our law, and I find it difficult to think of anybody deserving of political asylum in this country who would not be safeguarded by those two paragraphs. That is why I have changed my mind since 1964 and have come to the conclusion that it is not desirable to exclude from all possibility of return every person who is accused of an offence of a political character, and I take the view that the Extradition Act 1870 ought to be revised in this respect.
I cannot help thinking that the Government are somewhat complacent about the situation they are creating here. I can illustrate it best by using the example I used on Second Reading: that if the

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murderer of President Kennedy—undoubtedly that was a political murder—had escaped and had later been identified in this country, he could not, under the 1870 Act, have been extradited to the United States to stand his trial. We should have had to live with him, and he could have enjoyed political asylum here. I believe it would have horrified the British public, and it would have cast the most intense strain on Anglo-American relations. That would have been the result of the 1870 Act, and I think it is an undesirable result.
What the Government are doing in the Bill now before us is to reproduce for the Commonwealth that same undesirable, and I believe thoroughly dangerous, situation that exists for foreign countries under the 1870 Act. My best hope is that further thought will be given, as the noble and learned Lord suggested during the earlier proceedings of the Bill, to unifying the two codes for the Commonwealth and for foreign countries, because, as I think both he and I agree, there is no substantial reason now why there should be different codes in this respect for foreign countries and for Commonwealth countries. In that review, further thought can be given to this question of exclusion of political offences.
Every one of us is desirous that political asylum should be available in this country to those who have been seeking to restore proper democratic rights in another country, whether foreign or Commonwealth, by the overthrow of a tyrannical régime. But I believe that nobody in this House or elsewhere is anxious that political asylum should be given in this country to someone who has murdered, let us say, the President of India. That is the dilemma we are in; and I believe that some more precise definition of "political offence" is required so that we shall have the right demarcation line drawn.
I moved an Amendment in Committee to omit the paragraph relating to offences of a political character. I withdrew it after a debate and I did not move it again on Report, largely because I assured the noble and learned Lord the Lord Chancellor that I fully appreciate the difficulty of the Government in this matter. I only hope that they, for their part, will appreciate the potential danger
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in the situation now created. Had an Amendment to alter the Bill in this respect been carried, it would have been very difficult to go back to the Commonwealth Law Ministers and seek quickly to arrive at a new agreement. The Government were inevitably bound, for the time being at any rate, by the outcome of those Commonwealth Law Ministers' conferences. I am prepared to take my share of the responsibility for the organisation and eventual calling together of those conferences. I hope that the area of risk will be reduced by the British Government reaching agreements with some Commonwealth countries, under subsection (3) of Clause 2 of the Bill, of a character that may make the exclusion of political offences not an absolute exclusion. I trust that, whatever is done, it will safeguard the right of political asylum for those who genuinely might suffer in a way that would appal the British public were they returned to stand their trial in a country whose standards of justice were not the same as ours, or whose Government was not as democratic as ours.
When the noble and learned Lord speaks of political asylum as the traditional safeguard of personal liberty, I am absolutely with him, if he is speaking of the normal case of political asylum. But I am sure that he and others will recognise that the phrase "political offence" is very wide and that there are cases where it would be extremely hard for a court of law not to rule that a murder had been a political offence, though everybody in this country and in the other country would regard it as having been a dastardly murder. We are all in this difficulty together. My fear is that a situation may arise, when this Bill becomes law, that will create the most terrible tension between ourselves and some other Commonwealth country, arising out of the absolute exclusion from this Bill of offences of a political character.
However, I accept the Government's difficulty as something which cannot quickly be remedied. I welcome the steps which have been taken to revise the 1881 Act, and I venture to think that we can all join in hoping that the view of the Government, that the risk of a situation such as this arising is a slender one, will prove to be justified. It is a slender one,

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but should it arise the repercussions of it and the emotions aroused by the event might be terrible. It is for this reason that I have thought it right at each stage of the Bill to call attention to the difficulty, and I believe that I have been only doing my duty in so acting.
6.44 p.m.
LORD ROWLEY: My Lords, I find myself substantially in agreement with what the noble Lord has just said, but I was astonished when he said that undoubtedly most people consider that the assassination of President Kennedy was a political crime. I should not have thought that was the view of most of the American lawyers to whom I have spoken; nor is it my own view. Does the noble Lord suggest that if a person in a high political position is assassinated that is, ipso facto, a political crime? It may be that the person who committed the assassination is a lunatic. Surely the noble Lord is not suggesting that it has been established that President Kennedy's assassination was a political crime.
LORD BROOKE OF CUMNOR: My Lords, if I may reply to the noble Lord, it is certainly not for me to pronounce on that, and under this legislation it would be for a court of law to pronounce upon it. But I am quite sure that the noble Lord will appreciate not only that there are a good many people who believe that it was a political crime, but also that a similar tragedy might occur in which there was no doubt whatever that the crime was of a political nature. That establishes my point.
6.46 p.m.
THE LORD CHANCELLOR: My Lords, I have been most interested in what noble Lords have said. Of course, the difficulty of the noble Lord, Lord Brooke of Cumnor, is that when he was Home Secretary his reputation was such that when he said to the Commonwealth, "This is what you ought to do," they all said, "If he says this is what we ought to do, we had better do it." Now, unfortunately, that everybody has acted on it, the noble Lord has changed his mind. This makes things in a sense a little difficult.
I feel that the noble Lord is being unduly pessimistic. It would be difficult to find a definition of "political offence".
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We have never had one. The law has worked all right without it. Circumstances change and are so variable that I should have thought this was just the sort of thing that was best left to the courts. And the noble and learned Lord, the Lord Chief Justice, has said that he does not anticipate any more difficulty in the future than he has had in the past.
I know that all through the noble Lord has been oppressed with the thought that somebody like the President of India might be murdered and that his murderer might come here. I am not at all clear why such a man should come here. There are many countries with the same sort of laws as the European Convention. There are many countries which have abolished capital punishment and which are much nearer to India than we are. There does not seem to be any particular reason why he should come here. It is clear from the cases which have already been decided that the court does not asume that because the person murdered is an eminent politician, therefore it is a political offence. On the contrary, the decisions show that the courts take some satisfying that a violent crime of that kind is a political offence.
Where the noble Lord and I have throughout been agreed is in thinking that there is a great deal to be said to-day, having regard to the changed nature of the Commonwealth, for having one law which applies to all countries. It may be that one day this Bill, when it is an Act, and the Extradition Act may be married together; but extradition is so much a matter of agreement that I should have thought the time it would take to negotiate everything with all the countries concerned would be very considerable. I do not forget the points which the noble Lord raised during our discussions on this Bill as to respects in which he considers that the British Nationality Act needs an overhaul, and I know that is very much in the mind of my right honourable friend the Home Secretary. We have had a very interesting time during our discussions on this Bill, and if the noble Lord, Lord Brooke of Cumnor, has enjoyed it as much as I have, then I shall be happy about it.
On Question, Bill read 3a, with the Amendments, and passed, and returned to the Commons.

WIRELESS TELEGRAPHY BILL
6.50 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Baroness Phillips.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD OAKSHOTT in the Chair.]
Clause 1 agreed to.
Clause 2 [Notification and recording of transactions]:
On Question, Whether Clause 2 shall stand part of the Bill?
LORD DENHAM: This is a clause which puts an obligation on television dealers to inform the Post Office of the names and addresses of people to whom they sell or hire television sets, so that the Post Office can catch licence evaders. It is obviously much better in cases like this to deter than to punish. If this clause is to have a deterrent effect as well as a punitive one, it must be made clear to potential licence evaders that under the provisions of this clause they will almost certainly be caught.
Will Her Majesty's Government make arrangements for a notice to be printed and displayed in television shops, something on these lines?:

WIRELESS TELEGRAPHY ACT 1967
We are now required by law to forward the names and addresses of all those who hire or buy television sets to the Licensing Department of the Post Office."
This would make the dangers of licence evasion known to those most likely to incur them. It would also have the added benefit of being a safeguard to retailers, as it would make clear to their customers that they are giving these details to the Post Office as a result of a statutory obligation, and not just through a desire to do some sort of gratuitous informing. I do not, of course, expect an answer on this subject from the noble Baroness, but I should be most grateful if she would put this point forward.
BARONESS PHILLIPS: I am grateful to the noble Lord, Lord Denham, and
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I shall certainly put it to my right honourable friend. It is not an Amendment in the sense that the noble Lord needs a reply, but it seems to me eminently practicable, so I shall certainly pass it on.
Clause 2 agreed to.
Clauses 3 to 14 agreed to.
Clause 15 [Short title, citation, interpretation and extent]:
6.53 p.m.
LORD AIREDALE LORD AIREDALE moved, in subsection (1), to leave out "Wireless Telegraphy" and insert "Television and Radio". The noble Lord said: This is an Amendment to the Short Title. I hope I am right in thinking that the purpose of a Short Title to an Act of Parliament is to give people some clue as to what the Act of Parliament is about. I have read this Bill, and I hope I am right in thinking that it is about television and radio, but I should not have thought that the average person reading the title "Wireless Telegraphy Bill" would suppose that it was about television and radio.
We have had Wireless Telegraphy Bills on the Statute Books since 1904. In those days wireless telegraphy consisted of sending messages by wireless from person A to person B, from point X to point Y. It was 16 years before public sound broadcasting began, and I think it was 32 years before public television services began. I should have thought that "wireless telegraphy" meant to-day, to the average person, very much what it meant to the average person in 1904, and would not mean "television and radio". We pioneered television—this great marvel of recent years. We started it, we started the first public television broadcasting service. We have nothing to be ashamed about; we have no need to wrap up this great marvel in a brown paper parcel and label it "Wireless Telegraphy".
Unless we break away some time soon from this rapidly becoming obsolescent expression of "wireless telegraphy" we never shall manage to break away, because the next time television comes before Parliament in some Bill the Parliamentary draftsman will say, "Well, they were still calling it wireless telegraphy in 1967 and nobody made a fuss." So we shall "get stuck" with this antiquated expression forever, if we are not careful.

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I respectfully submit that now is the time to break away. Here we have a Bill about television and radio, so let us call it the "Television and Radio Bill", and then when people read the Short Title they will have a clue what the Bill is about. I beg to move.
Amendment moved—
Page 12, line 6, leave out ("Wireless Telegraphy") and insert ("Television and Radio").—(Lord Airedale.)
LORD STRABOLGI: I should like to support the Amendment which has been so ably moved by the noble Lord, Lord Airedale, and I have very little to add to the strong arguments which he has advanced. It is important that we should amend this Bill and bring it into line with current usage. I doubt whether anybody under the age of 40 now uses the word "wireless"—it is always radio—just as I doubt whether anybody under the age of 40 uses the word "gramophone". They always call them record players now. Like the noble Lord, Lord Airedale, when I first saw this Bill on the Order Paper I had not the remotest idea what it was about. I thought it had to do with wireless transmission. I had no idea that a great deal of it referred to control over the sale of radio and television sets. I hope that the Government will consider this point because, after all, the public will be affected by this Bill. The television and radio dealers have a good deal of work to do under it, and unless the Bill is amended in this way they will have no idea that it is the kind of Bill which is going to affect their business in the future.
LORD SOMERS: The noble Lord has just said that nobody under 40 uses certain terms, and he seems to imply that if you are over 40 you are necessarily out of date and possibly inaccurate. I am sorry he thinks that, because if that is so a very large proportion of your Lordships' House must be extraordinarily inaccurate and out of date.
BARONESS PHILLIPS: I should like to thank the noble Lord, Lord Airedale, and the noble Lord, Lord Strabolgi, for the clear and concise way in which they have made their points in connection with this Amendment. Merely in passing I would say, as one over 40, that "wireless" never seemed to me a very
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accurate description of something which was a mass of trailing wires. But that is a slightly different subject. For most people the expression "television and radio" means broadcast television and broadcast sound radio, but "wireless telegraphy", as defined in Section 19 of the 1949 Act and also in the present Bill, means much more. I think I tentatively suggested this on Second Reading. For instance, it includes aeronautical navigation transmission systems and point to point data transmission, so that "television and radio" would not be an acceptable substitute. Moreover, strictly speaking it would be saying the same thing to refer to "television and radio" in the Bill. Although for most people "radio" means broadcast sound radio, to the experts it includes television, which is one form of radio. Her Majesty's Government feel that, in all, it is better to stick to the expression "wireless telegraphy" in the Bill.
The noble Lord, Lord Airedale, pointed out in his speech on Second Reading, and again to-day, that the expression "wireless telegraphy" went back to the Wireless Telegraphy Act 1904. Although this is true, the Act of 1904 was superseded by the 1949 Act, which introduced a radically new definition of "wireless telegraphy". So the present use of the expression really goes back only to 1949, and not 1904. I wonder whether, having heard this, the noble Lord, Lord Airedale, would be prepared to withdraw his Amendment.
LORD AIREDALE: I am much obliged to the noble Baroness for her reply. What I should like to suggest is this. I do not know whether the Government plan to have a separate Report stage if no Amendments are accepted to-day, but assuming that they do, then I would suggest that I withdraw this Amendment now and that we should all think about it before Report stage. If that is acceptable, I am agreeable to withdrawing the Amendment now.
BARONESS PHILLIPS: I am in somewhat of a dilemma. Although I feel that I can safely promise the noble Lord that we shall think about it, I am not quite certain that our thoughts will produce a reply different from the one I am giving now. I am being quite honest about this. We shall certainly be having

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a Report stage, and I shall certainly ask my right honourable friend to think about it.
LORD AIREDALE: On that assurance, I am very pleased to beg leave to withdraw the Amendment now.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
The Schedule [Notifications and Records]:
7.3 p.m.
LORD DENHAM LORD DENHAM moved, in Part I, to leave out paragraphs 3 to 6 and to insert:
"3. The address of the premises at which the set is to be installed or to which it is to be delivered, if different from above."
The noble Lord said: This Part of the Schedule lists the information that must be sent by a television dealer to the Post Office licensing authority within twenty-eight days of each sale or letting. This will involve extra work for the dealer, which will be of no advantage to him. If we are going to saddle the dealer with this obligation, I think it is encumbent on us to make it as easy as possible for him. The Post Office will want to know details of hiring or buying transactions so that they can check up on whether the buyer or hirer has a television licence. All the information the Post Office can possibly need for this is the date of the transaction, the name and address of the buyer or hirer and, in case he is not getting the set for himself, the address at which it is to be installed. Also, perhaps, in case there is to be a different licence rate for colour, they may want information as to whether the set is capable of receiving colour. The other information for which it is proposed to ask under this Schedule is how payments are to be made, whether a hire-purchase company is involved and who actually installs the set. All these points are to my mind irrelevant at this stage.
If the licence inquiries sent out by the Post Office to the new owners of sets are unsuccessful, and if further proceedings need to be taken, all the additional information will be available from the records required to be kept under Part II of the Schedule. Is it fair to ask for all this information about every
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sale when it will be needed in only about 1 per cent. of the cases, and when in the case of this 1 per cent. it can easily be obtained later from the other records? To ask at the first stage for the information I seek to exclude will make unnecessary work both for the retailer and for the Post Office in having to go through these other details to get what they actually need. I beg to move.
Amendment moved—
Page 13, line 7, leave out paragraphs 3 to 6 and insert the said new paragraph.—(Lord Denham.)
BARONESS PHILLIPS: I should like to thank the noble Lord, Lord Denham, for his courtesy in discussing this with me previously. I have had the opportunity of passing on his comments to my right honourable friend, who appreciates very much the noble Lord's help with this Bill.
In order to explain Her Majesty's Government's attitude to this Amendment, I should like first to describe to the Committee the way in which the Postmaster General plans to arrange for the provision of notification and record forms to dealers. He intends to supply pads of forms to dealers, the pads containing, alternately, notification and record forms. The dealer, on completing the notification form—the first form in the pad—will, on the undercopy, the record form beneath it, have automatically provided himself with a record of the particulars required to be recorded within 28 days of the date of the transaction. The forms will be in simple and straightforward language. For instance, they will ask the dealer to write down only the address where the set has been installed if it is a different address from the customer's address. There will be full and simple instructions at the front of the pads about how to complete the forms.
The forms will be prescribed by the Postmaster General by Statutory Instrument in accordance with Clause 2(3) of the Bill. My right honourable friend's Department have already had discussions with the representative trade associations about the details of the forms. They will discuss the details further with them before the final version of the forms is settled. Dealers will, in accordance with

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subsection (4) of Clause 2, not be compelled to use the Postmaster General's forms for their records of transactions—the subsection allows them to use any other form which enables the matters required to be recorded to be readily ascertained—but if they do use the Postmaster General's forms they can be sure that they will be complying with the Bill; and it has been made clear in my right honourable friend's discussions with the trade associations that a great many dealers will find this system of using undercopies of the notification forms the most convenient one. The pads will of course be provided free of charge, and postage on them will be prepaid. I think this arrangement will, in spirit if not in letter, fit in with the suggestion advanced by the noble Lord, Lord Denham, during the debate on the Second Reading of the Bill, that special record books should be provided for dealers.
Her Majesty's Government are completely at one with the noble Lord's desire that the requirements of the Bill should be made as simple and as easy as possible for dealers to meet, and the contents of Part I of the Schedule were arrived at after quite thorough discussions between the Post Office and the representative trade associations. The conclusion my right honourable friend drew from these discussions was that on balance it would cause dealers the least trouble if they were asked to notify at the outset the particulars described in paragraphs 3 to 6 of Part I of the Schedule. Paragraphs 3 and 4 will enable the Post Office to know whether the transaction was one of a continuing type—a credit sale agreement, a hire-purchase agreement or a rental agreement—and, if so, whether to address themselves to the dealer or somebody else, such as a hire-purchase finance company, for any further information required about the transaction under Clause 3 of the Bill. It would plainly be a waste of time for the dealers, no less than for the Post Office, if these inquiries were addressed to people who cannot answer them; and that is the reason for paragraphs 3 and 4.
In summary, the purpose of paragraphs 3 and 4 is to put the Post Office in the position where it can direct future inquiries straight to the particular organisation which will have the answers, rather than
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to a dealer who, though he concluded the initial transaction, retains no further interest in it. But for these paragraphs of the Schedule he would have to look through old records to find to whom he should refer the Post Office's inquiry. For these reasons, I feel no doubt that the trade associations would on balance prefer the arrangements provided in the Schedule as it stands.
Paragraphs 5 and 6 ask for no more information than the noble Lord's Amendment, and they limit the request for information to circumstances in which the dealer must know the answer. If the noble Lord's Amendment were accepted, the Bill would require the dealer to notify the Post Office of the address at which the set was installed or delivered, even if he did not know it. For example, a customer might take the set away in his car, and the dealer would not then know where it was to be installed or delivered. I can assure the noble Lord that the form which my right honourable friend intends to prescribe will be easy to follow and will not be in the precise but perhaps sometimes difficult language necessary in an Act of Parliament. I am hoping that, having heard these explanations, the noble Lord will not find it necessary to press his Amendment.
LORD DENHAM: I am grateful to the noble Baroness for that full explanation. I am not entirely happy about all the answers I have been given; I have a sneaking suspicion that the Post Office already may have printed the forms and that is why they do not want to alter them. At this late hour I do not intend to press this Amendment, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
LORD DENHAM: If the Committee will allow me to do so, it would be convenient to speak to Amendments Nos. 3, 4, 5 and 6 together. They are all on the same point and are very minor drafting Amendments. As Part II of the Schedule is written, it is almost impossible, the first time one reads it, to understand what certain parts of it mean. On a second reading one begins to understand it. My wording will make it clear and, I hope, will make it understandable at a first reading. It will also make it more accurate; for when the form is filled in, the set will either already have been

719
installed or be due to be installed in the future. It seems to me unlikely that it will be being installed at the moment that the form is filled in—and especially so in a one-man business. I beg to move.
Amendment moved—
Page 13, line 31, leave out first ("is") and insert ("has been").—(Lord Denham.)
LORD STRABOLGI: I should like to support this Amendment. I think the argument that the noble Lord put forward has a great deal of weight, and I agree with what he said about the wording. I cannot understand this wording; it does not seem to have any grammatical sense at all. I quote Paragraph 4:
"If the set is or is to be installed by the dealer or another person to his order …"
I cannot understand that; and I agree that the substitution of the words "has been" for "is" would greatly improve the drafting of the Bill and make it much more intelligible to the general public.
BARONESS PHILLIPS: If I may, I will reply to all the Amendments in the name of the noble Lord, Lord Denham. These Amendments are useful improvements to the drafting of Part II of the Schedule. I thank the noble Lord for putting them down and I am happy to advise the Committee to accept them.
On Question, Amendment agreed to.
LORD DENHAM: I beg to move Amendment No. 4.
Amendment moved—
Page 13, line 32, leave out first ("is") and insert ("has been").—(Lord Denham.)
On Question, Amendment agreed to.
LORD DENHAM: I beg to move Amendment No. 5.
Amendment moved—
Page 13, line 34, leave out first ("is not") and insert ("has not been").—(Lord Denham.)
On Question, Amendment agreed to.
LORD DENHAM: I beg to move Amendment No. 6.
Amendment moved—
Page 13, line 34, leave out third ("is") and insert ("has been").—(Lord Denham.)
On Question, Amendment agreed to.
LORD DENHAM: I had not the opportunity of thanking the noble Lady for accepting the Amendments. I do so now. I am most grateful.
BARONESS PHILLIPS: I am not quite certain whether I can speak at this point. Perhaps I may do so with the permission of the Lord Chairman and the Committee. As the Committee has amended the Bill in this way, it would seem that corresponding Amendments will be needed in Part I of the Schedule, which we have already discussed; but perhaps we can put that right at a later stage.
Schedule, as amended, agreed to.
House resumed: Bill reported with Amendments.

DANGEROUS DRUGS BILL
7.15 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Stonham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord OAKSHOTT in the Chair.]
Clause 1 [Registration of dealers]:
On Question, Whether Clause 1 shall stand part of the Bill?
LORD SANDFORD: I rise to raise two matters on which I think I did not get entirely satisfactory answers at the Second Reading. One matter is, I think, for the attention of the noble Lord, Lord Stonham, and the other for that of the noble Baroness, Lady Phillips. This Bill is called the Dangerous Drugs Bill; but no drugs are specified by name in it. They are all scheduled in the principal Act, the Dangerous Drugs Act. But we know from what the Minister of Health said in Standing Committee G on April 20 (column 18) that he intends to specify heroin and cocaine, at any rate to start with, in the regulations that will be brought into force under the powers conferred by this Bill. We know there is a special case for starting with those particular drugs; but I think the impression has already been created, and is gaining ground in the Press and elsewhere, that

721
other drugs contained in the Dangerous Drugs Act are, for this reason, somehow less dangerous.
There have been suggestions on radio and on television that cannabis, in particular, and its derivatives—marijuana, for example—are really quite all right, quite tolerable. My information is that this is not so. I mentioned this fact on Second Reading and I believe there is every reason to keep these drugs in the Schedule of the Dangerous Drugs Act and treat them as dangerous drugs. At Second Reading the noble Baroness, Lady Phillips, kindly offered to have a private talk with me about this matter. There are few people in your Lordships' House with whom I should more enjoy a private talk; but that is not the point. The point is that I was asking the Government to make a public, authoritative statement now about this particular drug and other drugs which, although not covered by this Bill, are quite as dangerous from other points of view.
A Standing Advisory Council on Drugs Dependence does exist. It was described by Miss Bacon at Second Reading on April 6 in another place as being well-established under the new chairmanship of Sir Edward Wayne. Surely this is the time when the advice which is being tendered to the Government on matters like this should be made public. I think the passage of this Bill is the moment for Her Majesty's Government to make public some of the advice they are getting particularly on this point.
Now I will turn to the second matter. I do so with no apology that it is not dealt with in this particular clause, because it is to do with treatment centres, which also are not actually mentioned in the Bill, but, as the noble Lord explained when he introduced the Second Reading, the provision of treatment centres, their equipment and staff, is the linchpin of the whole scheme. Without treatment centres nothing can be done under the Bill and the regulations cannot be brought into force. It will be useless—indeed, fatal—to bring them into force before the treatment centres are available.
During the Second Reading debate on the 20th June last I said in my speech (column 1284) that my information was that the hospitals' response to H.M. (67)
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16, the memorandum from the Minister asking for the provision of treatment centres, gave considerable cause for misgiving; and we ought to hear, before giving approval to the Bill, what progress has been made in this matter, and what are the prospects and what are the Government's plans for ensuring the provision of rehabilitation hostels to match the treatment centres. In her response, the noble Baroness, Lady Phillips, said (column 1316), that she thought your Lordships would not want to know. I think that was a misjudgment and, not unnaturally, she got into hot water with the Press for saying this. They described it as dodging the issue. I myself would not perhaps have used those words, but I have given the noble Lady notice that I was going to raise the issue to-day, and I hope that, before we go further with the Bill, she will give us further details on this subject.
Since then there have been articles, notably the one in last Sunday's Sunday Telegraph, reporting more fully some of the misgivings which I have heard expressed about this scheme; for instance, that in the opinion of the journalist concerned these treatment centres will be in operation for only two hours a week. That would be quite inadequate and not the slightest good. But if it is true, how could the Minister, in answer to a Question asked last Monday in another place, say:
"In-patient services for heroin addicts are available in all, and out-patient services in 12 regional hospital board areas…"[OFFICIAL REPORT, Commons, 3/7/67; col. 1238.]
It may be true: I hope that it is. But what exactly is meant by this statement? What do the services consist of? How many addicts are actually receiving regular treatment at the present time at the centres? When will the centres be able to cope with, say, the 650 heroin addicts said to be known to the Home Office in January of this year? What happens if a general practitioner rings up a hospital and asks that an addict be admitted? Can the addict be accepted straight away? What is the actual situation?
I wonder whether the noble Baroness realises—I feel sure that she does—just how critical will be the stage we shall enter, when this Bill becomes law, before

723
the regulations are bought into force and the treatment centres are ready. At present, treatment is in the hands of a handful—or fewer than a handful—of dedicated general practitioners and others, who are doing their best to handle these very demanding patients in the course of their work. They believe, and they have reason to believe, that when the Bill is passed, and when, in due course, the treatment centres are ready, their right to prescribe for heroin and cocaine addicts will be taken away by the regulations which will be brought in under the provisions in the Bill. Their reason for believing this is the statement made by the Minister of Health in Standing Committee G on April 25 (column 53), that general practitioners will not be licensed under the regulations.
Is it really sensible to jettison by this legislation all the precious skill and experience which exist at present and have been built up? Such skill and experience are not readily available in the hospitals. The people who are doing the little work that is already going on there have little experience in handling these matters. Unless those people who are handling and treating addicts at the moment are given more consideration, there will be little incentive for them to carry on their good work and every reason why they should drop it straight away. All the more reason, then, not only for considering their point of view, to see whether it is possible to find some framework in which they could co-operate with the treatment centres, but also for getting on with the centres and for us to be informed at this stage of the proceedings on the Bill exactly what is being provided and what is the official attitude towards the provision of rehabilitation centres.
7.25 p.m.
LORD AMULREE: I should like to support a great deal of what has been said by the noble Lord, Lord Sandford. Like him, I was disappointed at what the noble Baroness said when replying to the speeches made on Second Reading about the provision of the treatment centres. I do not know what number will be available. As I said in my speech on Second Reading, I know of two London teaching hospitals where there are facilities. I have been told that four
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more will be available very soon, but I have no idea whether that is true, or when the centres will start to operate. I think that is a point on which we should like a good deal more information from the noble Baroness. As the noble Lord, Lord Sandford, has said, the treatment centres are the key to the whole matter, so I hope that we shall be able to get a little more information on that very important point.
There is one question that I should like to ask, and I think that this is the right time to do so. I did not give the noble Baroness notice of my intention to ask this question, and so I do not expect her to be able to reply now. It refers to the people who can carry out the treatment. The noble Lord, Lord Sandford, referred to the general practitioners who, we think, will not be allowed to continue to give treatment. But suppose a patient is being treated by a consultant psychiatrist, will the psychiatrist be allowed to continue the treatment, or will the patient automatically be transferred to a treatment centre? If that is so, I think that we shall run into trouble. As I mentioned during the Second Reading debate, these drug addicts are rather difficult people to pin down, and they like a certain amount of continuity in their treatment. If there is a patient who is being successfully treated by a consultant psychiatrist now, I trust that the psychiatrist will still be able to carry on with the treatment when the Bill becomes law.
LORD SEGAL: While I fully agree with everything that has been said by the noble Lord, Lord Sandford, and by the noble Lord, Lord Amulree, I tend to the view that this problem is one of such extreme urgency that the emphasis must be laid first of all on control by means of notification. I would even accept that, once notification had been made compulsory, doctors and specialists who receive licences should be allowed to carry on with the treatment to which the addicts have become accustomed, even if it is no more than control. I therefore suggest that licences should be issued as liberally as possible, so that an appreciable number of general practitioners, who already have experience in the handling of these addicts, may receive licences from the recognised authority.

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It may be necessary to grant them on a temporary basis, to tide over the immediate phase, when, as I believe, the number of notifications may be so high that the specialists designated and licensed by the central authority may not be sufficient to cope with the flood of notifications.
There are two matters that I should like my noble friend to make clear. It was recommended by the Brain Committee that access to the list of notifications should be made available to doctors at all hours of the day and night. I hope that that recommendation will be observed and facilities made available to doctors who may be confronted with an emergency case. An addict may suddenly present himself to a doctor, and the doctor should have ready access to the list of notified addicts so that he can make sure that the addict is not already receiving treatment from another specified and licensed doctor.
The other point which I think it would be helpful if my noble friend would make clear is this. Is there to be a definite provision that the list of addicts notified will not be made available to any person other than a doctor? It seems to me that unless this is definitely specified it will be possible that knowledge that someone has been notified as an addict may leak out and be put to some improper use. There is a latent fear in the minds of many addicts that the fact that they have been notified may be taken advantage of by someone who ought not to be given access to that information.
At one time I thought that an addict could be notified not by name but by means of a number, parallel somewhat to the notification existing at present in the case of venereal disease. The more I thought about it, the more I realised that this is not a true parallel, because notification of venereal disease is a purely medical problem, whereas the notification of addicts may in some cases have possible criminal implications. So I should like my noble friend to make clear that the list of addicts notified to the central authority will not be made available to anyone who is not a fully qualified doctor.
7.22 p.m.
LORD STONHAM: I am bound to point out that this is a Committee stage,
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and that we appear to be in grave danger of having a second Second Reading before we have even considered the first Amendment. I am sure that my noble friend and I are anxious to give the maximum possible information, but in 22 years of Parliamentary experience I have never known a Motion, That the clause stand part to give rise to a Second Reading debate of this kind. I shall do my best to answer the points raised, but I hope that we do not have a debate of this kind every time we have a Motion, That the clause stand part.
Although this Bill is my responsibility as representative of the Home Secretary, obviously there is a clear division of responsibility between the Department responsible for the enforcement of the Act and the Ministry of Health, which will be responsible for what I regard as treatment. Therefore I will answer some of the points raised and leave it to my noble friend Lady Phillips to answer the questions on treatment. I hope that your Lordships will not mind my reading a few words from Clause 1, which says:
"Without prejudice to the generality of section 11 of the Dangerous Drugs Act 1965 … the powers of the Secretary of State under that section (which authorises the making of regulations for preventing the improper use of drugs) shall include power to make regulations—".
That is virtually what we are talking about, and the drugs referred to are given in Part I of the Schedule to the principal Act.
It will be within the recollection of the noble Lord, Lord Sandford, that in my Second Reading speech I made it clear that my right honourable friend proposes to make regulations in relation to the hard drugs, the drugs of addiction, heroin and cocaine. The noble Lord mentioned cannabis, which I am advised is not a drug of addiction, but I agree with him that the use of this drug is greatly increasing. Sir Joseph Simpson, the Metropolitan Police Commissioner, in his report to-day to the Home Secretary, refers to the rise in the use of drugs and in crimes of violence as being, unfortunately, the two noteworthy developments of the past year. Of course, the question of cannabis is a serious one, and I deprecate any Press suggestions to the contrary. But I want to make it clear that it is not the present intention to use this Bill, when it becomes

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an Act, to make any change as compared with the Drugs (Prevention of Misuse) Act 1964 in dealing with cannabis.
This drug, which is also known as Indian hemp, marijuana and "pot", is scheduled under the International Convention on Narcotic Drugs 1961, to which Her Majesty's Government are party. Strict control is applied to the drug by Part I of the Dangerous Drugs Act, which reflects the requirements of this Convention, most of which have been a feature of dangerous drug law since this drug was placed under international control in 1928. I am advised that there is virtually no medical and scientific use for the drug in this country.
The law was strengthened in the Dangerous Drugs Act 1965, when it was made an offence to permit premises to be used for smoking cannabis and an offence intentionally to cultivate the cannabis plant. There is probably more traffic in and consumption of cannabis than of any other drug under international control, but in this country, as in other parts of Western Europe, cannabis smoking has become extensive only very recently. Before the war it was no problem. Yet last year there were over 900 convictions involving cannabis. We have no long or clear experience from which to judge the effect of this drug or its links, if any, with other forms of drug abuse. Expert opinion in this country, as elsewhere, seems to be somewhat divided about the danger of cannabis smoking. That may be partly due to our lack of experience, but it may also be due to the general lack of clear information about the experience elsewhere Cannabis indeed is a drug about which there is a considerable area of no knowledge.
On the other hand, the World Health Organisation, the International Narcotics Bureau and the United Nations Narcotics Commission all consider that the consumption of this drug is harmful to the individual and society, and that international control should be maintained. For this reason, cannabis is now banned in virtually every country in the world and could not be freed from that ban in one or two countries without consequences to all, as all are bound up in this.
Having regard to the circumstances which I have described, the Government are convinced that the first, the essential,
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starting point before action is a careful assessment of all that is known about this drug. Although there must be a fairly lengthy study, I am glad to be able to tell the noble Lord that his suggestion was adopted two months ago, and that an Advisory Committee on Drug Dependence, under the chairmanship of Sir Edward Wayne, has been studying for two months and is still studying the pharmacological, legal and social aspects of the cannabis question. Obviously their report will be of the greatest importance. But until the Committee have made their report and are able to offer comprehensive advice it is premature to consider whether any, and if so what, amendment in the law should be made. But the study that we have invited is evidence of our determination to ascertain the facts and to do whatever is necessary.
The other point with which I would deal is that raised by my noble friend Lord Segal with regard to anonymity in respect of drug addicts; that is, the addicts to the hard drugs who will be affected by this Bill. I would say at once what I said on Second Reading, that the opportunities of the fact of notification will be completely safeguarded by the Official Secrets Act, and there will be no disclosure except to a doctor who is attending on the addict and who seeks from the central authority confirmation whether or not he has been notified. It is at that stage that the central authority, after suitably satisfying itself that the inquiry is genuine, will put the inquiring doctor in touch with the doctor who made the notification, and will then leave the two doctors to exchange information in accordance with their professional ethics.
It is difficult to see how we could introduce anonymity into a procedure of this kind. Even if we had a series of numbers, we must somewhere relate the numbers to names and, so far as the doctors are concerned, the names to the persons, or perhaps the persons to the names. If my noble friend is concerned with anonymity during treatment, I will gladly consult my right honourable friend the Minister of Health to see to what extent this is possible. But there seem to be difficulties. One is that young, unstable addicts of the kind with whom we are dealing to-day tend to move from one area to another; and we must have a system of identification to prevent them

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from obtaining prescriptions from two centres at the same time, or even from a centre and a general practitioner.
Another difficulty is that if the addict who is being treated at an out-patient centre is to have the help in his social difficulties which may eventually lead him to seek cure by in-patient treatment, then the out-patient staff must feel encouraged to arrange for other local agencies, and indeed social workers, to take an interest in his case. My noble friend mentioned V.D. I think I should agree with him that in this respect the addict is not at all like the patient who seeks treatment for V.D. But social help will do no good if it is thrust on the addict. On the other hand, I am not sure that it would be wise for the treatment centre to leave the addict to ask for any help with his social activities or to approach the whole matter as though his addiction were a social stigma. For a minority perhaps addiction seems a stigma. But I should have thought that, for the majority, living rootless on the fringes of society, we should do better to show recognition that they have a problem in which we have an interest and a desire to help.
In other words, I think the answer to my noble friend is that we should preserve the confidentiality of central records, on the lines I have mentioned, but extend as widely as we possibly can the network of help available to addicts who can be persuaded to take advantage of it. I hope that, so far as those two points are concerned, I have done something to answer them, and I will now leave the rest of the field to my noble friend Lady Phillips.
7.45 p.m.
BARONESS PHILLIPS: I am glad that the noble Lord, Lord Sandford, has asked this question, supplemented by the noble Lord, Lord Amulree, because it provides me with an opportunity to make a personal apology in respect of what some seem to have regarded as evasion. I may say that I will never do this again, but there has quite frequently been free criticism of the length of speeches. And on the occasion of which I am speaking I had been on my feet for 40 minutes—I timed this in Hansard. Each stage of a Bill in your Lordships' House is carefully examined and, if I dare suggest it (I am
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a little recalcitrant), I think we sometimes do repeat ourselves, and it seemed to me that noble Lords in the House at that time would perhaps have preferred to go and have their tea. I am sorry to say that my simple action, which was that of courtesy, has been misconstrued into evasion and dodging the issue; and, apparently, I almost brought down the Government. I am sorry for this.
I would say that I have never evaded even the most difficult question with which I have been confronted personally, and the Government had no reason to. I am bound to say to the noble Lord, Lord Sandford, that, while I apologise humbly to him, to the noble Lord, Lord Amulree, and to those of your Lordships who were in the House at the time—and I recollect that it was not many more than about six—I do not feel myself under any compulsion to answer to the Press. The Press of this country have a complete freedom of expression, and they utilise it. I should not like to say that they are always completely accurate. They appear in this particular case to have been flying a few kites, and I do not find myself under any obligation to reply to the particularly pompous article referred to by the noble Lord, Lord Sandford.
Having said that, I will now deal with the treatment centres, and if this reply seems a little lengthy, I can only say that it is because the matter is one on which your Lordships have asked for a lot of information. Perhaps before I do this I might say to both noble Lords that my noble friend Lord Stonham did make it clear on Second Reading that the existing machinery would be in being until new machinery was introduced. I think those were his actual words, which I repeated, and perhaps I can give your Lordships an assurance from the words of my right honourable friend in another place, who said:
"I am satisfied, and I have already made it clear, that we shall not bring in the regulations prohibiting prescription by general practitioners for addicts until we are satisfied that the hospital facilities are adequate."—[OFFICIAL REPORT, Commons, col. 1239, 3/7/66.]
I hope noble Lords will accept this.
As to the form hospital treatment centres will take, I have discussed this subject with my right honourable friend the Minister, and he has incorporated the

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advice of medical experts in a memorandum of guidance issued to hospital authorities in March. This recommends that in-patient treatment for the withdrawal of heroin be provided for small groups of patients, usually not more than 12, in mental illness hospitals or psychiatric units of general hospitals. Treatment in small groups is to be preferred, because patients and staff are better able to help each other, there is less likelihood of drugs being brought in to addicts, and there are more favourable conditions for research. It may be considered desirable to treat separately heroin addicts and patients addicted to other drugs or to alcohol, or to separate the younger heroin addicts from the older ones. Arrangements for treatment are a matter for clinical discretion and accommodation will need to take into account possible subdivisions of this kind.
For addicts who are unwilling for the moment to accept withdrawal treatment—and these are expected to be the majority—the Ministry's memorandum recommends the provision of out-patient services. The aim is to contain the spread of heroin addiction by continuing to supply this drug where necessary in the smallest quantities considered advisable by the hospital doctor, and to persuade addicts as far as possible to accept withdrawal treatment. The out-patient clinics will provide medical supervision including attention to those physical illnesses to which addicts are prone. Addicts will usually be separated from other patients by treating them either at different times or in different premises.
The treatment and supervision of addicts is demanding and time-consuming and it is important that the load should be shared among the hospitals, especially in London, where there are most addicts. The plan is for the psychiatric hospitals in and around London to provide most of the in-patient services, and for the London teaching hospitals and psychiatric departments to provide most of the outpatient services, although some hospitals will provide both. All out-patient clinics will, of course, be linked with in-patient services, either at the same or at another hospital. Noble Lords will be delighted to know that there are now in operation eleven out-patient clinics in London, and
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plans for four other centres are under urgent discussion.
I should now like to mention the results which the Ministry hope to see from these new arrangements. Authority to administer, prescribe and supply heroin will be confined to licensed doctors at a relatively small number of centres. Addicts will be identified and checked against the central records to ensure that they are not being treated at more than one centre. The Ministry do not, however, expect identification cards to be issued to addicts. Where a supply of drugs is authorised by a hospital doctor and it is appropriate for a retail chemist to do the dispensing, new precautions will be adopted to prevent a patient from misusing the prescription. The addict who is not willing for the time being to accept withdrawal treatment will usually be invited to enter hospital for a short period in which dosage may be accurately assessed. By these means, excessive prescribing should be reduced and perhaps eliminated, and the spread of addiction checked—a substantial gain. For those who are addicted, medical supervision at out-patient clinics by psychiatrists should lead to more addicts agreeing to accept withdrawal treatment; also to greater specialisation, and to opportunities for research, so that more effective methods of treatment can be developed.
I think we all recognise that withdrawal treatment is not in itself a cure. Physical dependence on a drug may be removed fairly easily, but psychological dependence is more persistent and carries with it the possibility of relapse, which is a characteristic of addiction. While there is clearly a need for some form of treatment after withdrawal in hospital, the form it should take is less certain. This stage is conveniently described as rehabilitation, but the problem of providing effective rehabilitation is a very difficult one. The Minister has arranged two conferences on the subject: the first with psychiatrists and the second with voluntary bodies and local authorities. There seems to be support for the idea that after completing withdrawal treatment in hospital addicts would benefit from staying in hostels in which they could receive social support and some continued medical supervision while going out to work. But it also seems,

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most unfortunately, that only a small minority of addicts who undertake withdrawal treatment can be expected to complete a period of rehabilitation. In view of this, it seems appropriate to make no initial large-scale provision of hostels for addicts, but instead to build on the experience of a few experimental hostels. Several of these have been started by voluntary bodies, as we know and as was discussed on Second Reading, and the Government welcome this initiative.
On the relationship and timing of events, the Government have it in mind to bring the notification regulations into operation in the autumn. Before then they hope to have set up a panel to advise doctors who are in doubt whether a patient is an addict, to have introduced in connection with the central records of addicts a special scheme for the identification of heroin addicts which will be used by the treatment centres, and to have introduced, also in the treatment centres, new precautions against the misuse of prescriptions. It is hoped to bring the prescribing regulations into operation early next year. Before then adequate treatment facilities must be provided, arrangements made for the transfer of addicts from general practitioners to hospitals, and for the licensing of doctors at treatment centres to administer, prescribe or supply restricted drugs. I hope I have given your Lordships an outline of the work of treatment centres and what they hope to achieve.
I believe that one further question was put by the noble Lord, Lord Segal, on the 24-hour service for doctors, and this appears to be related to the suggestion that there should be a 24-hour service in hospitals. My right honourable friend has been considering this, but he does not feel justified in making this a standard arrangement, although he would, of course, welcome a 24-hour service at any hospital which was able to provide it. It may be of interest to noble Lords to know that in Birmingham the hospital out-patient clinic is not open for 24 hours a day, and in at least one hospital in London a weekly clinic appears to provide a satisfactory service. I will endeavour, after I have studied Hansard, to obtain further answers to any points that have been missed, and I am sure we shall return to this matter at the next stage of the Bill.
LORD SANDFORD: I am sure we are most grateful to the noble Lady for adding that considerable amount of information on this question of treatment centres, but I assure her that we will pursue this matter at a later stage, because a great deal of what she said about treatment centres was no more than a précis of the Hospital Memorandum, No. 6716, to which I referred. What we are interested in is not what the Minister of Health's plans are, but how they are being carried out; and I am sure the noble Baroness will be the first to admit that we have not much extra information about that. Nevertheless, we are grateful for what we have had. We are also most grateful to the noble Lord, Lord Stonham, for his statement about cannabis, which I am sure all noble Lords will agree is very helpful at this stage.
Clause 1 agreed to.
Clause 2 [Investigation of contraventions of regulations]:
7.57 p.m.
LORD STONHAM: I beg to move Amendment No. 1. This is purely a drafting Amendment.
Amendment moved—
Page 3, line 17, after first ("or") insert ("referred").—(Lord Stonham.)
LORD AIREDALE: I appreciate that this is only a drafting Amendment, an Amendment to a paragraph only two lines long. I am sorry that the paragraph still will not be word perfect. It uses the expression "referred back to the tribunal". If "referred" means—
LORD STONHAM: I am not sure of the line to which the noble Lord is referring.
LORD AIREDALE: I am referring to line 16, where the paragraph uses the expression "The case be referred back to the tribunal". If "referred" means "sent back", what does "referred back" mean? I suspect the intended meaning is "referred again", and I look forward to a Lib-Lab pact on the Report stage, at which we may make this very short paragraph word perfect.
LORD STONHAM: I can hardly wait.
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 agreed to.
LORD STONHAM LORD STONHAM moved, after Clause 3, to insert the following new clause:
Safe custody etc. of drugs

" .—(1) The Secretary of State may by regulations make provision—

(a) for requiring precautions to be taken for the safe custody of drugs of any description specified in the regulations which are kept on premises of a description so specified;

(b) for requiring the keeping of records of drugs in respect of which such precautions are required to be taken;

(c) for the inspection of any precautions taken or records kept in pursuance of this section; and

(d) as to the manner in which drugs are to be packed for sale by a person who, within the meaning of the regulations, is a manufacturer of drugs or a dealer in bulk in drugs.

(2) Regulations under this section may provide that such of the requirements imposed by virtue of paragraph (a) above as may be specified in the regulations shall not apply to drugs kept on premises occupied for the purposes of his business by such a person as is mentioned in paragraph (d) above; but the Secretary of State may, by a notice in writing served on such a person in such manner as may be specified by regulations under this section, specify the precautions or further precautions to be taken for the safe custody of any drugs specified in the notice which are kept on premises so specified and occupied by him as aforesaid, and the precautions specified in such a notice shall be deemed to be required by regulations made in pursuance of the said paragraph (a).

(3) Regulations under this section may also provide that where a person of a kind mentioned in section 1(2) of the Drugs (Prevention of Misuse) Act 1964 is convicted of an offence against the principal Act consisting of a contravention of regulations under this section the Secretary of State may, by a direction given in such manner and after such consultations (if any) as may be specified in the regulations, provide that the said section 1(2) shall not apply to that person while the direction remains in force.

(4) Without prejudice to the provisions of section 5(2) of this Act, section 14 of the principal Act (which relates to the entry and search of premises to obtain evidence of offences) shall have effect as if the reference to Part III of that Act in subsection (1) included a reference to this section and as if references to Part I of the Schedule to that Act included references to the Schedule to the said Act of 1964; and section 16(2) of the principal Act (which among other things limits the penalty in respect of an offence relating to the keeping of books which was committed through inadvertence) shall have effect as if the reference to the keeping of books included a reference to the keeping of records in pursuance of paragraph (b) of subsection (1) of this section.

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(5) Nothing in this section shall be construed as derogating from the provisions of any other enactment relating to matters in respect of which provision may be made under this section.

(6) In this section 'drug' includes any drug to which Part I of the principal Act applies and any substance for the time being specified in the Schedule to the said Act of 1964".

The noble Lord said: I beg to move the new clause as printed on the Order Paper. Your Lordships will recall that, on Second Reading, I said:
"My right honourable friend the Home Secretary has for some time felt concern about the inadequacy of present arrangements for the safekeeping of drugs in the premises of manufacturers, wholesalers and pharmacists. When addiction is increasing, and abuse of soft drugs appears to be widespread, the need for effective security becomes vitally important".—[OFFICIAL REPORT, 20/6/67; col. 1280];
Before I comment further on the inadequacy of the present security powers, I should like to make it clear that, so far as hard drugs are concerned, the pharmaceutical industry has complied most responsibly with the strict requirements laid down by the Home Office, and there is no evidence—I should like to repeat that: there is no evidence—of diversion of hard drugs from trade channels.
To some extent the inadequacy of present powers is this. Broadly speaking, the Dangerous Drugs Act, 1965, gives the necessary powers by regulation and licensing to impose requirements for safe keeping and record keeping of hard drugs. The weakness is that the power to inspect to ensure compliance with the requirements does not extend to all premises where drugs may be kept.
The position with soft drugs, however, is altogether different. There are no provisions whatever in the Drugs (Prevention of Misuse) Act 1964—that otherwise so excellent Act—to require or enforce safe keeping by any of the persons authorised under that Act to have possession of soft drugs. Because of the terms of Section 12 of the Dangerous Drugs Act 1965, "soft" drugs cannot be scheduled under that Act. The only way in which safe keeping of "soft" drugs could be required would be by regulating their "storage" as listed poisons under the Pharmacy and Poisons Act 1933, and even then the powers of inspection would be very limited. I need not remind the House that penalties for

737
offences against the 1965 Act, the 1964 Act and the 1933 Act are all different.
I shall be moving later on a new clause providing the police with powers of search on suspicion, and I shall hope to convince your Lordships that this is essential if the police are to make an effective effort against trafficking. That effort, however, would be frustrated if the standards of safe keeping of drugs by those who have legitimate possession are not tightened up. For some time, the police have been very concerned about pilfering of "soft" drugs. Last year, with the full co-operation of the Association of the British Pharmaceutical Industry and the National Association of Pharmaceutical Distributors, the Home Office collected information about the security arrangements of all manufacturers and dealers registered under the 1964 Act. The Home Office Drugs Branch inspectors also visited selected premises to observe current practice. This survey showed that while security standards in a number of firms were high, safeguards against theft or pilfering of "soft" drugs in a number of others were ineffective or even nonexistent.
The police have also been worried about pharmacy-breaking. In 1966 there were at least 60 cases of pharmacy-breaking in London, 35 in Manchester, 25 in Lancashire and 14 in Liverpool. Well over half a million tablets were stolen. In some areas it has been quite clear that pharmacy-breaking has been a significant source of local drug abuse. Accordingly, the representative bodies of the pharmaceutical industry and the pharmacists have been consulted, and general agreement has been reached on the principles of the new clause which I am moving to-day. Its general purpose is to give the Secretary of State a comprehensive power to impose a unified code of requirements for safekeeping, record keeping and packaging of "hard" and "soft" drugs, and to empower the police and persons authorised by the Secretary of State to enter premises to see that the requirements are complied with. The new enabling powers will allow my right honourable friend opportunity to impose or modify controls as the situation develops.
The initial intention is to make regulations applying to the premises of retail pharmacists and to give appropriate
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notices to manufacturers and wholesalers who handle "soft" drugs in large quantities. The clause provides appropriately flexible powers. Under subsection (1), for example, it will be possible to make different regulations for different classes of premises and for different drugs and preparations, and to exclude particular drugs and preparations and classes of premises from control. The representative bodies have emphasised the need for new controls to take account of the variety of local circumstances which may be met within the thousands of retail pharmacies in this country, and of course in the premises of manufacturers and wholesalers.
It will be the Government's intention, as I made clear during my speech at Second Reading, to have the fullest consultations with the interested organisations before any new requirements are introduced. We have, of course, had consultations already and we have reached agreement in principle, but there will be full consultations about detail. The Association of the British Pharmaceutical Industry is already preparing a Code of Practice which should be of great assistance in considering the question of the statutory notices. Our aim will be to hammer out really effective arrangements. This is not a "window dressing" exercise. We are not looking for controls for controls' sake. We mean business, and I am sure that the representative bodies, who have given such ready and full co-operation in reviewing present controls, understand this very clearly.
I ought perhaps, by way of clarification, to add a word about enforcement although, of course, we have no reason to think that the industry or pharmacists will not co-operate to the full in whatever controls are imposed. In the first place any breach of, or failure to comply with, a regulation will be an offence against the principal Act and liable to the penalties provided in the section. In other words, the sanctions for safekeeping of "soft" drugs will be brought up to the level of those already existing for "hard" drugs. But there will be another possible sanction namely, the withdrawal of a licence or registration, as the case may be, or removal of authority to possess "hard" or "soft" drugs. It is already the position under the principal Act and Regulation 22 of the Dangerous Drugs (No. 2) Regulations that the Secretary of State has

739
power to withdraw authority to possess dangerous drugs if a person has been convicted of an offence against that Act. Subsection (3) of the Amendment makes provision allowing him in effect to withdraw from any person authority to possess "soft" drugs conferred by Section 1(2) of the 1964 Act.
I do not want to mislead your Lordships into thinking that the formulation of controls over either "soft" drugs or their safe keeping will be an easy matter. The number of tablets legitimately produced and prescribed is enormous. In the United States the law does not yet regulate the safekeeping of these drugs. We have a large problem to tackle, therefore, but with the help of the industry and other interested bodies we are confident that we can raise the present standards of security in a substantial way and so reduce the thefts which form a substantial source of supply for the traffickers. Above all, by taking these powers to integrate control over "hard" and "soft" drugs within the legitimate channels, the Government feel that it may be easier in the future to consider more diverse treatment of the social and medical problems presented by "hard" and "soft" drugs should the need for this arise. I beg to move.
Amendment moved—
After Clause 3, insert the said new clause.—(Lord Stonham.)
LORD DERWENT: In self-defence, may I say that in 1964 it was not so apparent that this kind of legislation would be so urgent and necessary in 1967. But it is urgent and necessary. One might have had a little doubt about this clause if the noble Lord had not said that the pharmaceutical industry and the pharmacists were to be consulted. That being so, from this side of the Committee we most sincerely welcome this clause.
On Question, Amendment agreed to.
BARONESS PHILLIPS: With permission I will take Amendments Nos. 3, 4 and 6 together. Clause 4 enables regulations under the principal Act to provide that: (a) the contravention of particular regulations shall not constitute a criminal offence under Section 13 of that Act; and that (b) the provisions relating to tribunals and advisory bodies shall apply
740
to any proposal by the Secretary of State to withdraw authority to prescribe, possess, supply or otherwise deal in drugs conferred by regulations made under that Act.
These Amendments are consequential on Amendments to page 4, lines 17 and 22. They provide that regulations for the purposes of Clause 4 should be made, not under the principal Act, but under the Bill. Regulations under the clause dealing with safe custody will relate, not only to 1965 Act drugs, but also to 1964 Act drugs, and it would be inappropriate to make these regulations under the former Act. Clause 4 as proposed to be amended would also relate to 1964 Act drugs, and it is appropriate therefore to provide that regulations under that clause are to be made under the Bill. I beg to move.
Amendment moved—
Page 4, line 7, leave out from beginning to ("provision") and insert ("The Secretary of State may by regulations make".)—(Baroness Phillips.)
On Question, Amendment agreed to.
BARONESS PHILLIPS: I beg to move.
Amendment moved—
Page 4, line 9, leave out ("that") and insert ("the principal").—(Baroness Phillips.)
On Question, Amendment agreed to.
8.10 p.m.
LORD STONHAM LORD STONHAM moved, in paragraph (b)(i), after "State" to insert:
"to give a direction in pursuance of subsection (3) of section (Safe custody etc. of drugs) of this Act or".
The noble Lord said: Subsection (3) of the new clause which your Lordships have just accepted enables regulations made by virtue of that clause to include provision that where a person of a kind mentioned in Section 1(2) of the Drugs (Prevention of Misuse) Act 1964 is convicted of contravention of such regulations the Secretary of State may, by a direction, provide that Section 1(2) of the 1964 Act shall not apply to that person while the direction remains in force; that is to say, may remove his authority to possess substances scheduled under that Act.
Clause 4, paragraph (b), enables regulations under the principal Act to apply the provisions relating to tribunals

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and advisory bodies (with such modifications as may be specified) for the purposes of regulations under the Act generally, and in particular to any proposal by the Secretary of State to withdraw authority to prescribe, possess, supply or otherwise deal in drugs conferred by regulations made under that Act. This Amendment extends the proposals to which, by regulations made by virtue of Clause 4, as amended by Amendments Nos. 3 and 4 (and as it will be amended by Amendment No. 6), the provision relating to tribunals and advisory bodies may be applied, so as to include any proposal by the Secretary of State to give a direction as provided by subsection (3) of the new clause.
Thus, it will be possible, if desired, to establish, by regulations, a common procedure for dealing, by means of the tribunal and advisory body machinery, with any proposal in effect to withdraw a practitioner's authority to prescribe, possess, supply or otherwise deal in drugs scheduled under the principal Act or, if he is made subject to regulations about safe custody of drugs and is convicted of contravening such regulations, to possess substances scheduled under the Drugs (Prevention of Misuse) Act 1964. This is the necessary provision, looking forward. I beg to move.
Amendment moved—
Page 4, line 17, after ("State") insert the said words.—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM: I beg to move Amendment No. 6.
Amendment moved—
Page 4, line 22, leave out ("that") and insert ("the principal ").—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM LORD STONHAM moved to insert after paragraph (b):
"(c) for the application of any of the provisions of this Act, the principal Act or regulations under either of those Acts to servants or agents of the Crown, subject to such exceptions, adaptations and modifications as may be so specified."
The noble Lord said: As your Lordships will be aware, in the absence of express provision the Crown is not bound by the principal Act. But the Government consider it desirable, for the effective organisation of the new arrangements
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proposed for notification of addicts and prescribing for addicts, that medical officers in special hospitals, the Prison Service and the Armed Forces should be under the same statutory obligations as other practitioners as regards these requirements. It is conceivable, however, that circumstances may arise in which it would be appropriate to apply other regulations or substantive provisions to these medical officers and to other persons employed in the service or acting on behalf of the Crown. Accordingly, this Amendment enables regulations made under the principal Act or the Bill to be applied to servants or agents of the Crown with adaptations.
As your Lordships will be aware—or at least Ministers and ex-Ministers will be aware—at a later stage of this Bill a noble friend who is a Privy Counsellor will state that he has it in command from Her Majesty to acquaint the House that Her Majesty, having been informed of the purport of the Dangerous Drugs Bill, has consented to place her interest, so far as it is affected by the Bill, at the disposal of Parliament for the purposes of the Bill. I beg to move.
Amendment moved—
Page 4, line 22, at end insert the said paragraph.—(Lord Stonham.)
LORD DERWENT: I imagine that this is somewhat unusual; in fact I should think very unusual. I have never seen it happen before, but I think it is absolutely necessary.
On Question, Amendment agreed to.
LORD STONHAM: This is a paving Amendment to Amendment No. 10, the definition of "drug" in Clause 5. I beg to move.
Amendment moved.
Page 4, line 22, at end insert—
("( ) In this section 'drug' includes any drug to which Part I of the Principal Act applies.")—(Lord Stonham.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
LORD STONHAM LORD STONHAM moved, after Clause 4, to insert the following new clause:
Further powers to search and to obtain evidence
" .—(1) If a constable has reasonable grounds to suspect that any person is in possession of a drug in contravention of the

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principal Act or regulations thereunder or in contravention of the Drugs (Prevention of Misuse) Act 1964, the constable may—

(a) search that person, and detain him for the purpose of searching him;

(b) search any vehicle in which the constable suspects that the drug may be found, and for that purpose require the person in control of the vehicle to stop it;

(c) seize and detain, for the purposes of proceedings under either of the Acts aforesaid, anything found in the course of the search which appears to the constable to be evidence of an offence against either of those Acts.

(2) Nothing in subsection (1) of this section shall be construed as prejudicing any power of search or any power to seize or detain property which is exercisable by a constable apart from that subsection.
(3) In subsection (1) of this section 'drug' includes any drug to which Part I or Part II of the principal Act applies and any substance for the time being specified in the Schedule to the said Act of 1964.
(4) Section 14(2) of the principal Act and section 3(1) of the said Act of 1964 (which provide for the issue of a search warrant authorising any constable named in the warrant to enter and search premises in connection with suspected offences under those Acts) shall have effect, in their application to Northern Ireland, with the omission of the words 'named in the warrant' and, in their application otherwise than to Northern Ireland, with the substitution for those words of the words 'acting for the police area in which the premises are situated'; and at the end of section 15 of the principal Act (which provides for the arrest of a suspected offender who may abscond or whose name and address are not known) there shall be inserted the words 'or if he is not satisfied that a name and address furnished by that person as his name and address are true'".
The noble Lord said: I beg to move the new clause after Clause 4. Your Lordships will remember that on Second Reading I gave notice of intention to introduce this Amendment, and said that the Government were determined to look after the pedlars and pushers; we were not going to let them get away with it. This clause, which has four main purposes, is the fulfilment of that proposal. It gives the police power, where they have reasonable grounds to suspect that drugs, whether hard or soft, are unlawfully possessed, first, to search the person concerned and secondly, to search any vehicle in which the drugs are suspected of being. Thirdly, it will remove the requirement to name in a search warrant under the 1965 or 1964 Act the individual officers who will execute it, and fourthly, it will
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empower a constable to arrest a suspected offender if he is not satisfied that the name and address provided by him as his name and address are true.
It may be convenient if I dispose first of subsection (4) of the clause, which deals with the last two purposes I have just mentioned. The requirement to name police officers in drug search warrants first appeared in the Dangerous Drugs Poisons (Amendment) Act 1923. Home Office records do not disclose why. It may be, as the noble Lord, Lord Derwent, surmised a few minutes ago, that in 1923 it was not envisaged that search warrants would be used to authorise police raids of the kind or on the scale familiar to-day. Nowadays, when large numbers of police may have to be employed, it is a needless and unwelcome complication to have to decide in advance which officers will be taking part. If a further raid is to be made on the premises during the one-month validity of the warrant it is often difficult, because of changes in duty rotas, for the same officer to be available. A second raid therefore may have to be carried out by fewer officers or a second warrant obtained.
At Second Reading I referred to this requirement as an "anachronism". I should perhaps have said "anomaly", because this requirement is not common to search warrants generally. The Amendment will, in fact, bring the practice as regards drug warrants into line with other warrants. It will not have any prejudicial effect either upon the significance of warrants generally or upon the exercise of police powers there-under. I think, if your Lordships agree, that this anomaly should be removed. The concluding part of subsection (4) does no more than bring the restrictions imposed on powers of arrest by Section 15 of the principal Act into line with those imposed by Section 3 of the Drugs (Prevention of Misuse) Act 1964.
I turn now to the major provisions in the clause. Most features of drug trafficking are well known. The evil has spread widely. It is not only around the cafés—or "caifs", as I think they are often called—clubs and dance halls of towns and cities. Coastal resorts, even camping areas, are visited by the pedlars and pushers, some of them sleeping rough, others delivering the goods well concealed in their vehicles. However loosely the

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supply is organised, the places where drugs can be obtained seem to be well known in most localities, and they are also well known to the police. It is a very large problem, complicated by the ease with which drugs can be concealed.
As the police have accumulated evidence of the extent of drug abuse and the increase in trafficking, they have become more and more concerned about their lack of powers to deal with it. Their difficulty is this. If they make an arrest they can, under Common Law, make a search. If they do not make an arrest, they can search a person or his property only with his consent or under a warrant. However, under Section 15 of the 1965 Act, or, as the case may be, Section 3 of the 1964 Act, a constable cannot make an arrest unless he has reasonable grounds for believing that that person will abscond unless arrested, or if the name and address of that person are unknown to him and cannot be ascertained by him. In other words, before the constable can make first his arrest and then a search, he has not only to have reasonable grounds to suspect that the pusher is in unauthorised possession of drugs, but must also have reasonable grounds for suspecting that he will abscond or has given false particulars of his name and address.
A number of chief constables have reported that experienced traffickers are very conversant with the limits of police powers and refuse voluntarily to satisfy the police that they are not in unauthorised possession. In this case they get away with it because the police are either placed under undesirable restraint, or tempted to take a chance in making an arrest. If they take a chance like that and they are wrong, it has severe consequences, and rightly so, for the police.
In a few areas—and London is a prime example—there are local Act powers which have enabled the police to get over this difficulty. For 128 years under the famous Section 66 of the Metropolitan Police Act 1839 the police have been empowered to:
"stop, search and detain any vessel, cart or carriage, in or upon which, there has been reason to suspect that anything stolen or unlawfully obtained may be found, and also any person who may be reasonably suspected of having or conveying in any manner anything stolen or unlawfully obtained".
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The Central Drugs Branch of the Metropolitan Police estimate that the majority of arrests they have made—they had nearly 3,000 drug cases last year—follow from the exercise of the power to stop and search under Section 66 and that the majority of searches made under this power result in an arrest. This indicates both the importance of the power to stop and search and the fact that it is used only when there is very good reason to use it.
The Association of Chief Police Officers have recently made a full review of the adequacy of police powers in relation to the drug problem. They feel strongly that to deter pushers and enforce restrictions on unauthorised possession of drugs the police everywhere should be given power to stop and search suspected persons and vehicles. The Government recognise fully that to extend police powers in this way is a serious matter, but we must balance the seriousness of the drugs problem against the potential for infringing individual liberty. I gave some truly alarming figures at Second Reading to show the trends in addiction, and in convictions under the 1964 and 1965 Acts. These trends are continuing, and are likely to do so unless we take action to check them.
I have recently seen suggestions that the drug problem is being exaggerated. I think that those come from some newspaper reports referred to by my noble friend Lady Phillips. Some people say that more harm than good will be done if police powers are strengthened. The idea seems to be that the new powers of search may bring the police into undesirable conflict with drug takers, some of whom have declared their habit to be neither damaging to themselves, nor to society. One aspect of that argument is, of course, important. We cannot hope to control abuse of drugs without having a proper recognition of the dangers of drugs and the case for control. There is another point which must be recognised: that the drug taker is not a man apart. He does not get his drugs like manna from Heaven. He depends on a pusher, a supplier, at consumer level. It would not be wise, therefore, or realistic to ignore the drug taker in looking for the pusher.
I must draw your Lordships' attention to an alarming trend—the age of the victims. Between 1960 and 1962 there were only two known heroin addicts under 19 years of age in this country. In 1965, five years later, 19 came to notice at the age of 17, 5 at 16, and 8 at 15. That was a total of 32 at aged 17, or under. Last year, in 1966, 68 came to notice aged 17, 26 aged 16, 17 aged 15 and one aged 14, a total of 112. There was one aged only 14—an addict to heroin.
Somewhere behind every one of these young people was a pusher and a supply. No one doubts that, as compared with heroin, a far greater number of young people have had experience of cannabis or amphetamines. The Government believe that there is a strong public demand that young people should be protected from the pushers and pedlars who exploit them. And we are convinced that the best way of affording that protection is to enable the police to play their part, by giving them the powers to stop and search, as provided in the Amendment.
All experience suggests that the most effective way of apprehending pushers—the pedlars' lieutenants—is by finding them in "possession". That is still the position. In fact pushers are hard to distinguish from their clients; they do not necessarily have large quantities of drugs in their possession at any one time. In addict circles the client is often the pusher as well. We cannot easily separate the two. They often get "hooked" and stay "hooked" together. The clients of to-day may well be the pushers of to-morrow, such are the rewards, the abominable, filthy rewards, of the drug traffic. But that is no argument for not pursuing the pusher.
The problem we have to realise, and towards which we must look ahead, we may get some idea of if we read the remarkable articles published last week in the Evening Standard about the half-world of the young "hippies" in California. The half-world!: it seems to me to be no world at all, and the difference appears to be as between us and the inhabitants of Mars. I think your Lordships will be as much concerned as I am that such a phenomenon should not arise here. That is not because those of us who were born in the reign of the Seventh
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Edward, or the Fifth George, do not want to understand young people. It is not because we do not admire them and have no affection for them, because we have. It certainly is not because we do not understand them. We want to do these things because they are the future; because in whatever difficulties they encounter we do sympathise with them and we want to help. That is our standpoint to-day with drugs.
The problem in Britain is already serious and it is growing. In balancing the seriousness of the problem against the slight possible risk of misuse of police powers there can surely be no question about the decision we must take. Your Lordships may remember earlier in the Session agreeing that it was reasonable to provide similar police powers of search for the protection of eggs of rare wild birds from egg thieves. I am confident you will agree that we should provide the same police powers to protect the lives of human beings, mostly young ones, from the attacks of the drug traffickers. I beg to move.
Amendment moved—
After Clause 4 insert the said new clause—(Lord Stonham.)
8.30 p.m.
LORD DERWENT: I am extremely grateful to the noble Lord, Lord Stonham, for his speech, and I shall take only a minute or two to make a few comments. There have been criticisms, though not in your Lordships' House, that this new clause has nothing to do with the Bill; that it deals with police powers and not with the medical profession. Whether that is true or not, I believe that Her Majesty's Government are absolutely right to take the first opportunity of bringing this new clause into some Bill, and this seems to be a very good vehicle for it. As regards subsection (4), which does away with the naming of the constable in the warrant, the noble Lord referred to it as an anachronism or an anomaly. I would prefer to call it simply nonsense.
As the noble Lord said, we must do our best to stop this traffic if we can. When I say "stop", I am not talking about dealing with addicts; I am talking in particular about stopping the "pushers" getting new clients. At the moment the police have not the powers to do what they ought to do. A great

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deal of "pushing", particularly in the early stages, is done on the street corner. The policeman may be watching, but he may not be close enough to see what is being passed. He knows very well what is going on, but there are difficulties about arrest and search. Therefore, it is absolutely essential to stop this "pushing". The numbers of "pushers" are growing very fast, and it is essential that the police should have these powers. I seldom think that anything which is done by this Government is ever right, but because of this new clause I forgive them nearly all their sins.
LORD SEGAL: Before we pass beyond this clause, I should like at the outset to make it quite clear that I am wholly in support of the Government in adding these provisions. I think that everything possible ought to be done to strengthen the hand of the police in every way to stamp out this traffic. Having said that, I should like to ask my noble friend about paragraph (a) of subsection (1). That says:
"search that person, and detain him for the purpose of searching him".
I confess that I am a little uneasy that, as the wording stands at present, it gives full power to the police to search a person in the open street; and the noble Lord, Lord Derwent, has just mentioned that a great deal of the traffic in these drugs takes place on street corners. It is somewhat undesirable that a police constable should have the power to search, or insist on searching a person in the open street, if he so judges it necessary. Equally, I am a little uneasy whether a person would be committing an offence under this clause if he were to refuse to be searched in the open street, and whether he should not always be given the alternative of saying that he would rather accompany a police constable to the police station, and in that way not be considered in any way interfering with the duties of the police. I do not want to dwell on this matter too much, but there is no parallel with the right of search in the case of the eggs of rare wild birds. Birds' eggs of that species are not usually found in crowded streets.
I should like my noble friend to make it clear that anyone who objects to being searched by a police constable in
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the open street should be quite free to say, "I would rather accompany you to a police station and put myself fully at your disposal", and by such action should not be guilty of committing an offence. There is the possibility that on his way to the police station he may by some means or other divest himself of some drugs which are concealed on his person; but I think that a police constable ought to be well on the look out for that; and even if he is not, if he eludes the police constable or throws away some of the drugs, or gets rid of them somehow, I think that it is a risk worth taking rather than that people should be subjected unnecessarily to interference in an open street.
LORD DERWENT: Before the noble Lord, Lord Stonham, answers, may I say that I have had a little experience of these matters—not experience of having been searched myself, but experience gained during my time at the Home Office. One of the main points to be borne in mind is that the person concerned may have two or three pills of some kind in his pocket which you cannot prevent his throwing away unless you search him. The process of searching in the street sounds rather like a case of standing in the middle of Piccadilly Circus. But when the police are going to search someone they do not search a person in the middle of the street; it is often carried out in a doorway. I think they must have this power of immediate search, otherwise there would be no evidence against a man and the drug would be disposed of.
LORD STONHAM: The noble Lord, Lord Derwent, has given part of the answer, and we must leave to the police the carrying out of the powers which we give them. I cannot see that the power of search which your Lordships have discussed over the last two years in respect of valuable eggs of rare wild birds is any more an infringement of liberty than the power to search for dangerous drugs. I refuse to accept that difference. Nor is a power of search any greater if it is carried out at the foot of a fir tree in a Highland in Scotland than if it is done at the foot of Eros in the middle of Piccadilly. It is the same thing. I would remind my noble friend that in Metropolitan London we have had this power, in effect, for 128 years, and the police have exercised this power.

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It is not only a matter of a physical search, but the request, "May I see what is in your bag?". If the person concerned says, "No, but I will accompany you to the police station", or if he refuses, the police officer in London will then invite the person to accompany him to a police station. Many respectable people who have nothing wrong in their bag go to the police station and open it, or again, if they are perfectly respectable and have nothing to conceal, they do not mind opening the bag in public. That is how this is done now. The police do not want to create a disturbance in this matter, but if a police officer is as certain as he can be that he has had a "pusher" under observation and has seen what he thinks may well be drugs pass, he will only be doing his duty under the Bill, if it becomes an Act, if he stops that person and asks him to show what is in his pockets or in his bag.
LORD SEGAL: While I fully accept my noble friend's explanation—and I do not wish to press this matter—may I say that the reason I raised it was because I was a witness in a provincial town of a young girl who was stopped by the police with a request to produce cigarettes which she happened to have on her. This took place in a crowded street, and my impression was that it was a highly undesirable incident. I think that the girl in question would have been only too willing to accompany the police constable to the station, where the same search could have been conducted more thoroughly and under conditions rather more conducive to secrecy, and in the absence of unnecessary publicity. I am wholly in sympathy with the object of this clause, but we ought to try to avoid—and I am sure the police themselves would fully co-operate in this—sometimes unpleasant incidents which need not necessarily occur.
LORD SOMERS: I am wholly in favour of this new clause, but I should like to ask the noble Lord how the constable is to be able to tell whether the pills that he finds, which may be only two or three in number, are
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dangerous drugs or merely medicinal pills which any person may carry on him.
LORD STONHAM: Of course that is a risk but, as I explained to the noble Lord, when this Bill becomes an Act it will cover both 1964 and 1965 drugs—hard and soft drugs. That is a very wide range, and it will certainly cover what I broadly referred to as the amphetamines. A policeman may actually see them passed, or he may overhear one of these descriptions. The fraternity have various names for these drugs; some names are more powerful than the drugs. But the police know these things, too, and if they hear that kind of conversation and see things passed there is a reasonable assumption that that is what they are. After all, the police have been doing these things for a long time. A few years ago, before the new Act, you might have asked, "How is it that the police always know that the pieces of paper which they saw passed from one man to another were betting slips?" But they did know, and when they took them along to the station so they proved to be. They are very experienced people.
I agree entirely with what my noble friend Lord Segal said. I am quite sure that these duties will be carried out properly. I was puzzled by the example my noble friend gave of a girl, because there are so few places in the country, apart from Metropolitan London, where powers similar to the Metropolitan Act exist. While I cannot possibly comment on a single case which he saw, I would take leave to suggest that it would be most unusual as well as undesirable, on my noble friend's description.
On Question, Amendment agreed to.
Clause 5 [Interpretation, etc.]:
8.43 p.m.
LORD STONHAM: This Amendment alters the definition of "drug", so as to omit the application of the definition to Clause 4. The Amendment is consequential on the inclusion of further definitions of "drug" in the new clause about safe custody and also about search. But it is really a consequential Amendment. I beg to move.
Amendment moved—
Page 4, line 27, leave out from ("Act") to end of line 29.—(Lord Stonham.)
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Remaining clauses and Schedule agreed to.
House resumed: Bill reported, with Amendments.

UNFIT HOUSES
THE EARL OF KINNOULL: My Lords, in view of the lateness of the hour, I propose, with the permission of the House and with the consent of the noble Lord, Lord Kennet, to withdraw my Question to-night, and to replace it on the Order Paper for to-morrow's proceedings, when I hope it may come on at a more popular hour.
LONDON TRANSPORT (No. 2) BILL
The Chairman of Committees informed the House that the opposition to the Bill was withdrawn: the Order made on June 13 last discharged, and Bill committed to the Committee on Unopposed Bills.
UNIVERSITY OF ASTON IN BIRMINGHAM BILL
Reported, without amendment.
BRITISH RAILWAYS (No. 2) BILL
The Queen's consent signified, and Bill reported, with Amendments.

BRUNEL UNIVERSITY BILL
Returned from the Commons, agreed to.
House adjourned at sixteen minutes before nine o'clock.